Energy Security
I know it is obvious, but I wonder if knowing something can make a bitter pill more acceptable?
The U.S. imports something like 60% of our oil consumption, depending on who you quote. Domestic production will decrease no matter how much money we invest, and the best we can do is to plug a billion small holes in our production dam and slow the bleeding. Given world market oil costs anywhere under $100/bbl, and U.S. oil production will continue to increase year after year, if only from increases in population if nothing else.
The U.S. uses 1/4 of the world's oil production, and consumption is growing slowly, while China and India, the two most populous countries have their oil consumption still in an exponential increasing rate. Even if we can be sure they'll never catch up to us on a per capita basis, that is merely because supply won't exist for us all.
The U.S. imports something like 12 million barrels of oil a day, at $72/bbl, that's about $315 billion dollars/year bleeding from our economy. How long can this last?
The estimated U.S. trade deficit for 2005 was $710 billion.
http://www.cbsnews.com/stories/2006/01/12/business/main1203762.shtml
Crazy stuff, but the projected 2006 military budget was about $419 billion EXCLUDING the costs of the war in Iraq and Afghanistan!?
A priceless graphics in comparison with other countries countries: (2005)
I've mentioned such facts to people in the past and they say "Of course we spend more on our military, we're a rich country!" It is funny how "militant" the antitax movement is in reducing the government, but the military spending is a sacred cow no one dares touch, except dogooder peaceniks of course whom are to be ignored as unrealistic idealists.
Obviously as well, we all know that WE PRINT THE MONEY, so we're not really paying for our military, our imports, or debt, we're letting foolish foreigners take our worthless paper promises in exchange.
Anyway, of course this is all insane, but is there anything to do except wait for the crash?
If you imagined a rational public dialogue, what would it focus upon?
The issue of "Energy Security" for me is the simplest example of a measure for our future. We can be SURE without any doubt that oil cost will continue going up until the economy breaks down. THEREFORE, could we not suggest changing directions BEFORE that break down, at least to reduce our dependence now while we still have some economic motion for correction? Can we really trust a crisis economy will have the choices for reform we need WHEN it comes?
We have the Strategic Oil Reserve - a big 60 days of U.S. consumption, and 100 days of U.S. imports. When the two 1970's oil crisis occured, we didn't have any buffer, and so we're better off perhaps, but that's just a short term solution.
My MINIMUM response to danger is to set up an "Emergency Oil Conservation Program" which would define how oil consumption might be reduced significantly within a few months of a crisis beginning. Secondly it would consider what prices the economy can handle without complete collapse.
Well, you could say "let the market handle it", that's fine, and when oil hits $250/bbl and gasoline hits $8/gallon, people can pay or not as they like. Some will be able to conserve and that demand suppression will lower the prices.
BUT what about "price gouging" claims? Even if Oil companies only control a minority of oil production, they'll be profitting greatly from a shortage. If domestic production costs $20/bbl and oil sells for $250, can we just say that's okay, and tax their profits?
You can subsidize gasoline - offer nontransferable coupons for poor people, perhaps for $4/gallon gas. Well, I don't like subsidies, but for short term hardship, it makes sense. It's a messy thing, who is deserving? I'd probably integrate it into other aid programs - like food stamps. So THESE programs need to be able to handle HUGE quick increases in applications under times of crisis.
As always, subsidies are useful for short term crises, but ought to be considered temporary, like 1-2 years. That gives applicants one to two years to adjust their life demands for gasoline, assume the crisis/recovery continues that long.
NOW to PAY for this subsidy, my leaning is to increase the fuel tax. I mean we want the subsidy to smooth out the hardship, but someone has to pay for that.
Well, out of time, but these questions seem useful - what preparation can we have - ASSUMING we're not going to change before the crisis?
For longer term mitigation, I do have some leanings towards electricalization of transportation at least in cities - trains, maybe even buses - since I've heard they are more energy efficient. Plug-in hybrids may be useful, although I've not yet heard a good estimate of the battery replacement costs, whether they will go down over time. The good thing about electricity at least is wind power has a lot of room for expansion.
Overall, I accept higher prices are the only legitimate force for change, and so things will happen by necessity.
It just depresses me to see the things we could be doing now and chose not to because prices are still low.
The U.S. imports something like 60% of our oil consumption, depending on who you quote. Domestic production will decrease no matter how much money we invest, and the best we can do is to plug a billion small holes in our production dam and slow the bleeding. Given world market oil costs anywhere under $100/bbl, and U.S. oil production will continue to increase year after year, if only from increases in population if nothing else.
The U.S. uses 1/4 of the world's oil production, and consumption is growing slowly, while China and India, the two most populous countries have their oil consumption still in an exponential increasing rate. Even if we can be sure they'll never catch up to us on a per capita basis, that is merely because supply won't exist for us all.
The U.S. imports something like 12 million barrels of oil a day, at $72/bbl, that's about $315 billion dollars/year bleeding from our economy. How long can this last?
The estimated U.S. trade deficit for 2005 was $710 billion.
http://www.cbsnews.com/stories/2006/01/12/business/main1203762.shtml
Crazy stuff, but the projected 2006 military budget was about $419 billion EXCLUDING the costs of the war in Iraq and Afghanistan!?
A priceless graphics in comparison with other countries countries: (2005)
I've mentioned such facts to people in the past and they say "Of course we spend more on our military, we're a rich country!" It is funny how "militant" the antitax movement is in reducing the government, but the military spending is a sacred cow no one dares touch, except dogooder peaceniks of course whom are to be ignored as unrealistic idealists.
Obviously as well, we all know that WE PRINT THE MONEY, so we're not really paying for our military, our imports, or debt, we're letting foolish foreigners take our worthless paper promises in exchange.
Anyway, of course this is all insane, but is there anything to do except wait for the crash?
If you imagined a rational public dialogue, what would it focus upon?
The issue of "Energy Security" for me is the simplest example of a measure for our future. We can be SURE without any doubt that oil cost will continue going up until the economy breaks down. THEREFORE, could we not suggest changing directions BEFORE that break down, at least to reduce our dependence now while we still have some economic motion for correction? Can we really trust a crisis economy will have the choices for reform we need WHEN it comes?
We have the Strategic Oil Reserve - a big 60 days of U.S. consumption, and 100 days of U.S. imports. When the two 1970's oil crisis occured, we didn't have any buffer, and so we're better off perhaps, but that's just a short term solution.
My MINIMUM response to danger is to set up an "Emergency Oil Conservation Program" which would define how oil consumption might be reduced significantly within a few months of a crisis beginning. Secondly it would consider what prices the economy can handle without complete collapse.
Well, you could say "let the market handle it", that's fine, and when oil hits $250/bbl and gasoline hits $8/gallon, people can pay or not as they like. Some will be able to conserve and that demand suppression will lower the prices.
BUT what about "price gouging" claims? Even if Oil companies only control a minority of oil production, they'll be profitting greatly from a shortage. If domestic production costs $20/bbl and oil sells for $250, can we just say that's okay, and tax their profits?
You can subsidize gasoline - offer nontransferable coupons for poor people, perhaps for $4/gallon gas. Well, I don't like subsidies, but for short term hardship, it makes sense. It's a messy thing, who is deserving? I'd probably integrate it into other aid programs - like food stamps. So THESE programs need to be able to handle HUGE quick increases in applications under times of crisis.
As always, subsidies are useful for short term crises, but ought to be considered temporary, like 1-2 years. That gives applicants one to two years to adjust their life demands for gasoline, assume the crisis/recovery continues that long.
NOW to PAY for this subsidy, my leaning is to increase the fuel tax. I mean we want the subsidy to smooth out the hardship, but someone has to pay for that.
Well, out of time, but these questions seem useful - what preparation can we have - ASSUMING we're not going to change before the crisis?
For longer term mitigation, I do have some leanings towards electricalization of transportation at least in cities - trains, maybe even buses - since I've heard they are more energy efficient. Plug-in hybrids may be useful, although I've not yet heard a good estimate of the battery replacement costs, whether they will go down over time. The good thing about electricity at least is wind power has a lot of room for expansion.
Overall, I accept higher prices are the only legitimate force for change, and so things will happen by necessity.
It just depresses me to see the things we could be doing now and chose not to because prices are still low.
posted by Ares Olympus at 9:57 PM
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