Obama Energy Plan Won’t End Our Oil Addiction

March 31st, 2011 at 11:55 pm | 55 Comments |

| Print

Cutting oil imports by one-third, as President Obama proposed, is a fine goal. The biggest energy security problem we face, however, is not dependence on imported oil. It’s dependence on oil, period.

Oil dependence is a strategic liability because oil is traded in a globally integrated market, where events over which the U.S. has little or no control – rising demand in Asia, civil commotion in dysfunctional petro-states – can roil the market and drive up prices.

Sure, we could import more oil from those nice Canadians and hand over our public lands and territorial seas to oil producers. For anyone who believes Doc Hastings’ rhetoric that doing so would translate automatically into lower gasoline prices and less vulnerability to OPEC machinations, we’d be happy to mail you a prospectus about buying Brooklyn Bridge time shares.

The problem is that the U.S. is not an island unto itself. Oil produced here would enter a global pool for purposes of price setting. Further, we consume 25 percent of global production – which is three times what we produce – and hold only a 2 percent share of global reserves. U.S. dependence on the world market wouldn’t go away even if Congress acceded to every item on the American Petroleum Institute’s wish list.

In the years ahead, as a 2010 research brief from Resources for the Future pointed out, the oil market will be influenced by trends with worrisome implications for energy security – rising energy demand in Asia, more production from OPEC, more control over oil by national oil companies serving political as well as economic agendas, and longer, more vulnerable supply lines bringing in oil from costly, difficult production areas in the remote Arctic and in deepwater.

In March 17 testimony before the House Natural Resources Committee, Energy Information Administration chief Richard Newell tried to insert a few facts through the ideological filters that most members of that committee have stuffed into their ears.

“Long term, we do not project additional volumes of oil that could flow from greater access to oil resources on federal lands to have a large impact on prices given the globally integrated nature of the world oil market and the more significant long-term compared to short-term responsiveness of oil demand and supply to price movements.”

There is another thing to consider, Newell told the committee. Given the outsize importance of OPEC oil in the supply-demand equation, “another key issue is how OPEC production would respond to any increase in non-OPEC supply, potentially offsetting any direct price effect.”

In other words, if the U.S. insists on speeding up depletion of its 2 percent share of global oil reserves in a vain attempt to drive down prices, the House of Saud could dial back the valves to ensure that prices stay within the Goldilocks range that serves the kingdom’s interests – not too low, so the regime has enough money to smother domestic discontent with fiscal largesse, and not too high, so that the U.S. and other addicts in the shooting gallery don’t get uppity ideas about aggressively expanding use of oil alternatives.

Getting out of the oil dependence pickle will not happen overnight, on Obama’s watch, or on that of his successor. We would start moving in the right direction, however, if Congress were less interested in partisan games and more interested in seeking out energy policy agreements that both sides could live with.

Yes, more domestic oil production without giving the store away to oil producers would help a bit, but we’ll need tighter fuel efficiency standards and adequate funding for R&D into fuel and motive technologies that could compete with oil.

Someday, Congress might be willing to have a rational discussion about a revenue-neutral carbon tax. If and when that day comes, we’ll be closer to solving the energy security riddle.


Recent Posts by Jim DiPeso



55 Comments so far ↓

  • seeker656

    I appreciate your articulation of the problem. The “drill here drill now” approach doesn’t seem to be very promising. I think T. Boone Pickens proposal to increase our production of natural gas offers the possibility of a reduction in our reliance on oil.

    • Carney

      Natural gas can indeed help us break free of oil. But Pickens has the wrong approach. Rather than use natural gas AS a fuel, we should use it as a feedstock to MAKE fuel with. Namely, methanol. Unlike natural gas (methane), methanol is a liquid at normal temperature and pressure. So methanol can be used in a gasoline style irregularly shaped fuel tank that fills the space between the inner and outer surfaces of a car. (Methane has to be compressed, requiring fuel tanks in strong simple shapes like spheres or domed cylinders that take up passenger and cargo space, not to mention being heavy.) Even better, in a fully flex fueled car, methanol can be used interchangeably with gasoline, even mixed with gasoline in any ratio in the same fuel tank. Flex fuel costs only $130 per new car at the factory for automakers.

      Methanol also avoids us becoming locked in to natural gas, since it can also be made from coal or ANY biomass without exception, including crop residues, weeds, trash, even sewage.

  • Oil Indpendence: Coming Any Minute Now… – Clear, Concise, Collegiate Opinions

    [...] far, President Obama’s energy achievements have been laughable. He has done very little to decrease American dependence on foreign oil. The President was [...]

  • ggore

    I knew the Republicans would be opposing this, just based on principle rather than on any rational basis. Obama proposed it, so we must oppose it. Even here in oil/gas/wind-rich Oklahoma, which stands to benefit massively if we begin to emphasize oil & gas drilling and wind power, which is already being deployed here at massive rates, both our Republican Senators and all our Republican Congressmen have voiced opposition to Obama’s statement and proposals.

  • jerseychix

    Ya know, the GOP would have a hell of a lot MORE credibility if they didn’t reflexively hate everything Obama proposes. And those tighter efficiency standards you are talking about? Also opposed by the GOP.

    Plus, who cares if this particular plan won’t end our addiction right now. It is a good first step and we have to start somewhere. It is a dandy way to 1) employ Americans and 2) stop sending our money, borrowed from China to people who hate us.

    I can see why the GOP thinks it is such a God-awful plan.

  • Smargalicious

    We all know that BHO could care less about energy.

    He’s focused on his wealth re-distribution and reparations agenda, and nothing else.

  • talkradiosucks.com

    Excellent article. Not that it will convince the mouthbreathing crowd.

  • ottovbvs

    All broadly true, but are Obama’s proposals a step in the right direction? They are, and I’ve always been a believer in the Chinese proverb that it’s better to light a candle than to curse the dark. Dipeso is just cursing the dark while advancing conceptual remedies (notably conservation in its myriad forms) that are desirable but haven’t a snowball in hell’s chance of passage against Republican resistance. Instead of cursing the dark and the president who at least is making an effort to address the problem he’d be better off telling his conservative friends a few home truths.

  • cdorsen

    While I don’t necessarily agree with the GOP’s stance against anything other than carbon fuel production, it is not necessarily the GOP’s fault that nothing in Washington is getting done.

    The plans from the left that have been proposed all pretty much wreak of throw money at it and hope it solves itself. Even in Obama’s address, he said we don’t know how or where these technologies are going to come from, but we need to tax and spend to get them. If there is a noble goal that does not restrict freedom and which benefits outweigh the costs, even the GOP should agree with taxing and spending to get it. But, so far, the plan seems to be to tax to buy darts and a blind fold, then start throwing hoping they land somewhere good.

    So far, wind and solar is not going cut it. Ethanol is a bust. Potentially algae and some other areas are promising, but by no means proven and production ready. When someone has a viable step by step program that will put us on alternative fuels, it will then become viable to spend the money. And, I would imagine, like it or not the GOP would be forced agree to it especially if it didn’t require large tax increases on the newer technology. In the mean time, lets not cripple ourselves by drastically increasing the cost of traditional fuels.

    As to jerseychix’s comment about the GOP opposing everything Obama, not that it makes it any better, but the dems did that to Bush too. Right now, there are Dem proposals that the GOP currently oppose that were originally GOP proposals. The same goes for the Dems. Just look at the individual mandate. It was a GOP idea that the Dems opposed in the 90′s, now look. This is just politics pure and simple. No side is innocent of this.

    • ottovbvs

      it is not necessarily the GOP’s fault that nothing in Washington is getting done.

      It’s mainly their fault. Alternative energy can only do so much but they block every attempt to make progress there. The real payoff has to come from conservation and this means a huge government sponsored effort to produce more fuel efficient cars/trucks, alternative fuels and lower energy use in the home and office, integrated public transport systems that are more energy efficient, and a host of other remedies. The Republicans not only not interested in developing such strategies they are totally opposed to them. To suggest there’s the remotest similarity between the Republicans and the Democrats efforts to reduce our dependence on oil couldn’t be more wrong.

      • armstp

        cdorsen,

        The GOP blocks both the “stick and the carrot” of alternative energy.

        They are opposed to tough energy efficiency standards or new regulation regulating polution or cap n trade, ec. - the stick.

        They are opposed to tax incentives, subsidies, a national policy on energy, etc. – the carrot.

        It is funny, as this is not only an environmental issue, but also an economic and national security issue, which is something I thought the GOP cared about?

  • Nanotek

    I hope that is part one, with more to follow, Mr. Dipeso.

  • Stewardship

    New nuclear technologies, with reprocessed or use of spent fuel ‘as is’, natural gas and its myriad of possibilities… All in all I’d be happy if Congress just leveled the playing field (eliminate the $31 billion in tax dollars to be spent on subsidies to oil and coal over the next five years), set a national goal for clean energy, and then got the hell out of the way.

  • Gaddafi forces storm Misrata, rebels offer truce (Reuters) | DailyPost - Homepage

    [...] Obama Energy Plan Won't End Our Oil Addiction | FrumForum [...]

  • indy

    We will never escape oil dependence as long as so much of its true cost is hidden from the population.

  • Carney

    Oil dependence is caused by our cars’ inability to use non oil derived fuel. The changes needed to make our cars able to run on other fuels, like methanol (made from natural gas, coal, or biomass) or ethanol (made from plant starch or sugars) are relatively trivial, and cost only about $130 per new car at the factory for automakers. That’s so cheap (especially in comparison to the enormous economic and national security consequences of oil dependence) that we should just make this feature, called “flex fuel”, a required standard in all new cars, like seat belts.

    This is an achievable goal. Both Obama and McCain promised a flex fuel mandate as part of their 2008 campaigns. The Open Fuel Standards Act has attracted a wide range of supporters in the last two Congresses, including staunch conservatives like Jack Kingston, Sam Brownback, and Roscoe Bartlett.

    http://www.setamericafree.org/

    • ottovbvs

      Ethanol has turned into a bust in one way and another. It’s creating more problems than it’s solving. Just about only thing I agree with the WSJ ed page about (well there is one other…hysteria about recovered memory and other bs)

      • Carney

        Factually false. There were fifty E85 stations in 2001; now there are over 2,300. Ethanol is by far the biggest, most important, most widely used alternative fuel out there. As Obama has noted, it’s half the fuel used today in Brazil. (He neglected to point out that Brazil mandates that all new cars sold there be flex fuel.)

        And if you like the Wall Street Journal so much, note that the WSJ published a Merrill Lynch study showing that biofuels helped keep oil from rising 15% higher during the 2008 spike, saving US consumers well over $140 billion.

        http://www1.eere.energy.gov/cleancities/toolbox/pdfs/biofuels_impact.pdf

      • Carney

        And otto, even if you do choose to get bamboozled by oil cartel funded anti ethanol FUD, you should still support a flex fuel mandate, because ethanol is not the only alcohol fuel.

        There are other alcohols as well, such as propanol and butanol, and especially methanol, the latter of which can be made from almost anything, cheap. Quibble about this or that alcohol fuel if you must, but let’s move beyond theory and at least give drivers the choice of trying them out, make the ability to use it a standard option in all new cars from now on, rather than get hung up playing whack a mole to every anti ethanol myth as millions of new cars, year after year, roll out of factories “locked in” to only being able to use oil-derived fuel.

        • ottovbvs

          Perhaps the fact I worked in the oil business for a long time accounts for my scepticism about ethanol. It’s going to fade because ultimately it’s creating more problems than it’s solving. Steam cars were once seen to have a future. The major, but not the only, solution to our problem is lower consumption of a fuel that works more efficiently than most, not expending vast amounts of energy and doing all kinds of harm creating substitutes so we can carry on behaving like drunken sailors.

        • Carney

          lower consumption of a fuel that works more efficiently than most

          What fuel are you talking about here? Oil?

          Reduced oil consumption will not help us economically or geostrategically. OPEC, which controls the supply and thus the price, can just cut production to match, spike the per-unit price, and make just as much money as before despite the reduced sales volume. We’ll have the same amount of money being drained from our national economy and family budgets despite using less oil. And the extremists and terrorists’ budgets will be utterly unimpeded.

          Furthermore, it’s hard to see any realistic prospect of our using less oil. Our national average MPG went from 13 in 1976 to 20 in 1990, a huge increase, but despite being able to move the same distance on much less fuel, our gasoline consumption did not go down but instead went UP, from 89 to 103 billion gallons.

          Engineers have done all the easy stuff already; the low-hanging fruit on efficiency has already been picked. If we want to squeeze even more blood from this stone, our choices consist of using complex hybrid technology adding thousands to per vehicle cost, or making vehicles more slow, weak, cramped, and flimsy. All for no benefit anyway, as I’ve explained.

          Fuel efficiency was only ever a means to an end, not an end in itself. The real end was to lower pollution, help the economy, and reduce the wealth of pro-terrorist extremism. In an oil-only world, the only imaginable way of doing so was to try to use less oil. But we don’t have to be in an oil only world. If some other means than efficiency can accomplish some or all those goals more effectively than efficiency, we should break out of the oil only mental box and embrace those means.

  • Carney

    By the way, a “carbon tax” would punish the use of coal and natural gas, two resources which, unlike oil, we have in abundance, and which, if used to make methanol fuel for flex fuel cars, can play a major role in breaking our dependence on oil.

  • tommybones

    Our oil dependency is a Conservative energy issue. They have spent decades spurning any move toward alternative energies. Instead, we spend trillions on military spending in order to protect our oil addictions. Literally, Conservatism is a cancer which has spread throughout our entire society. It’s nothing more than ignorance based, pro-corporate, anti-everyone else nonsense and has always been that way.

    • Carney

      tommybones, the left is just as responsible for our continued oil dependence.

      The reason so many Americans are so leery of the issue of alternatives to oil is that they are repelled by the left’s transparent eagerness to hijack and divert anti-oil sentiment into irrelevant crusades against other energy sources (such as coal) and to impose a draconian austerity regime forcing ordinary people to revert to a standard of living from generations ago with sharply limited freedom of movement and action. The left often openly expresses a desire to humiliate and punish Western nations, and especially America, that goes beyond policy preferences and reveals outright contempt and hatred (“you truck-revving rednecks are gonna get yours!”) You talk about “anti everyone” but the Green left has a strong strain of Malthusian anti-humanism that basically sees people as vermin to be culled.

      Even calmer, less extreme leftists are often “soft” on the nutcases. Furthermore, the “nice” ones embrace and push policies that in the end don’t work to get us off oil (fuel efficiency, etc.)

  • sinz54

    Carney:

    There’s an even simpler solution:

    Require that flex-fuel cars be able to run on ethanol too. (That’s easy and the technology exists now.)

    And then repeal the Federal and state laws against making your own moonshine in your own distillery in your own home or place of business.

    And presto! Suburban and rural homeowners would distill their own ethanol to fuel their vehicles with. Small businesses and perhaps even giant corporations would distill their own ethanol for their fleets of company vehicles. Condominium associations would operate their own stills to produce fuel for the homeowners’ vehicles. Etc.

    In warm climates, modern “stills” can even be powered by solar power.

    Like so:

    http://running_on_alcohol.tripod.com/

    or

    http://www.rebelwolf.com/essn/ESSN-Oct2005.pdf

    The laws banning the private manufacture of moonshine are an anachronism, a holdover from the days of Prohibition. Once those laws are repealed, a whole new free market in private distillery technology will emerge, competing on price, user-friendliness, and efficiency. (Maybe Apple will invent the “iStill”.)

    • Carney

      Interesting suggestion. I know that ethanol advocate David Blaine has similar ideas.

      http://permaculture.com/

      But the political and economic importance of liquor goes back long before Prohibition, to the Whiskey Rebellion at least and likely well before. The damage caused by alcoholism (and bad batches containing methanol), as well as the revenue importance of the taxes, have combined to create a strong public policy consensus in favor of strong liquor laws and stiff taxes.

      In any case, even setting aside one man “brew your own” operations, it’s a lot easier for a group of small town entrepreneurs to set up an alcohol fuel processing plant, and/or a filling station, than it is to start an auto company. The problem is the cars. Make them alcohol compatible and then it’s a lot easier for the fuel situation to take care of itself.

  • ottovbvs

    Carney:
    Furthermore, it’s hard to see any realistic prospect of our using less oil. Our national average MPG went from 13 in 1976 to 20 in 1990, a huge increase, but despite being able to move the same distance on much less fuel, our gasoline consumption did not go down but instead went UP, from 89 to 103 billion gallons.

    Er…This was due to an increase in the number of vehicles on the road

    1976…139 million
    1990…189 million
    Now….250 million

    That is the number of vehicles went up by 36% but gas consumption went up by only 16% and without the appearance of SUV’s it would probably have been less. Had we been on ’76 MPG consumption would have gone to at least 121 billion gallons. The only way out of this is reduced consumption, all you’re proposing is a switch from Heroin to Cocaine. Let me assure you that if the price of gas in this country went to the same level it is in Britain (roughly $10 a gallon) within five years US consumption would go over a cliff and create a transport revolution. And it wouldn’t be replaced by ethanol.

    • Carney

      Of COURSE there were more vehicles on the road, otto. Of course some vehicles got bigger. Over time, there’s going to be economic growth, population growth, combining to create more and bigger vehicles, more drivers, and more miles driven per vehicle. That’s normal, that’s healthy. Growing is what healthy people, families, nations, and economies DO. That’s exactly what makes attempts to reduce fuel consumption hopeless and futile.

      It’s depressing to see you smack your lips in eagerness to impose draconian, brutal increases in the price of oil to try force Americans into regressing in our standard of living, into adopting humiliating flimsy poverty-mobiles, or out of their cars entirely (which uniquely give the individual freedom of movement, and are among the top aspirations of all peoples as they advance economically and join modernity). You know, a significant part of that time between 1976 and 1990 was spent in stagflation or recession. If it had been an uninterrupted growth run, even more growth in fuel consumption would have taken place (oh no!) I guess the “solution” to that terrible prospect is forced immiseration – a Great Depression to end all Great Depressions.

      Treating improvements in the standard of living as the problem, treating human growth, movement, activity, and aspirations as problems to be sharply limited, is the thinking of a enemy of humanity. And it’s unnecessary.

      • ottovbvs

        Of COURSE there were more vehicles on the road, otto.

        Except that you completely ignored it in making the claim that gas consumption had jumped substantially despite improvements in fuel efficiency aimed at reducing consumption which you dismissed as unrealistic. Then follows the usual waffling bs and non sequiturs about families, flimsy euromobiles (like BMW’s you mean?), freedom, enemies of humanity and all the other crap you guys use as a substitute for intelligent thought. You can’t even do elementary math for godsake. And btw the Swiss, Germans and French enjoy an equal or superior standard of living to us while paying three times as much for gas.

        • Carney

          Your post is ridiculous. You’re missing the point. You’re acting like it’s an “aha!” moment or that you caught me in something or that you somehow refuted me.

          When my whole point was that there will be rising fuel demand. More cars and bigger cars are two among several factors that cause this. Pointing to one of the various REASONS for rising fuel demand (which I was perfectly well aware of, and have referred to before in prior posts in this blog and elsewhere) does not refute, and in fact reinforces, the reality that fuel demand is going to rise too fast for even the most dramatic efficiency gains to keep up, let alone make headway against.

          You use modern BMWs as a refutation that Europeans drive smaller cars. Yes, many European automakers now make US-sized cars, but (and I don’t have the data in front of me) I think it’s safe to say that the mean car driven in Europe is still far smaller. Little Fiats and such. In fact, it’s precisely this reality that many austerity advocates consider praiseworthy and want to impose on America, a land they despise because we have “wasteful” big powerful roomy fast vehicles.

          Change your thinking. It’s not consuming energy or fuel that’s the problem. It’s the specific fuel (oil) that’s the problem. People are not the problem. OPEC and what it does with the wealth it extracts from us is the problem.

        • ottovbvs

          Your post is ridiculous. You’re missing the point. You’re acting like it’s an “aha!” moment or that you caught me in something or that you somehow refuted me.

          I did…hence the rather desperate floundering….but flounder on…The numbers are simple we have 4.5% of the world’s pop and we’re consuming 25% of the oil (look at European per capita consumption). The only way we get off this hook is by consuming less not looking for substitutes lke ethanol that are ultimately likely to prove just as costly. I realize dopes on the right aren’t going to come to their senses until we have gas at 10 bucks a gallon so the sooner the better as far as Ii’m concerned.

        • Carney

          Otto, I’m trying to decide whether you’re a troll, and veering strongly on the side of yes.

          What did you “catch” me in, specifically? How does your pointing to one of the reasons that fuel demand is ever growing refute my point that fuel demand is ever growing?

          Are you actually asserting that I was ignorant of the reasons driving the growth in fuel demand? Do you really want me to dig around and post prior posts of mine here and/or elsewhere in which I demonstrated this knowledge?

          As for our globally disproportionate consumption of fuel, that’s completely irrelevant. I’m sure we also consume more than our share of Cheetos. What matters is that the one fuel we’re stuck with being able to use is controlled by our enemies who charge us monopoly prices.

          We’re enormously successful in producing biomass. We have the world’s biggest coal deposits and lots of natural gas as well. Breaking the oil monopoly is what matters, not trying to dumb down our standard of living to some kind of world mean.

          I also note that you completely ignore the existence of methanol. Inconvenient facts.

  • cdorsen

    The reason the right has largely been against the solutions offered is that answer usually seems to come straight from leftist doctrine which even if true, conservatives rightly so, are going to be skeptical at best. Taxing top earners or corporations for their carbon consumption, then redistributing that money to “green energy” subsidies or subsidies for the poor to pay for the now more expensive fuel. Not to mention that, like it or not, right or wrong, the GOP does have a large corporate constituency (not like the Dems don’t have their pet constituencies too). The answers on the left all seem to punish corporations by adding taxes and restrictions. This goes against a vital GOP position. So, you can hardly blame them when all the answers harm their causes and constituencies. That is not to say playing politics is a noble goal, but it is a reality.

    Carney is probably getting closer to a solution that would have more support on the right. Making all vehicles flex fuel is minimally invasive to the auto industry who already does this on many vehicles. It has little to no effect on most other industries.

    When we start talking about ethanol, we need to make clear that our energy problem is two-fold, environmental and domestic/foreign production. Ethanol and other alternatives have not been shown to be great environmental alternatives though they may help us increase domestic production of energy and reduce our alliance on foreign. When having this debate, the distinction needs to be made.

    • ottovbvs

      , conservatives rightly so, are going to be skeptical at best

      Er…that’s the criteria is it? The proposed policy doesn’t necessarily have to work, or be desirable, or in the national interest…it just has to satisfy conservatives….Sounds like the perfect formula for national success.

  • forgetn

    Correct me if I’m wrong, but hasn’t every American President, for 30 years made the same promise/target?

  • greg_barton

    Here’s a great post about thorium based energy:

    http://market-ticker.org/post=183373

    It contains the phrase “I’m not an adherent of the global warming religion…” so should pass muster with the conservative crowd here. :)

  • greg_barton

    The Wall Street Journal is also picking up on thorium:

    http://online.wsj.com/article/SB10001424052748704893604576200492192158916.html

  • sweatyb

    @Carney

    Even better, in a fully flex fueled car, methanol can be used interchangeably with gasoline

    interchangeably except for the fact that a gallon of gas will get you MUCH further than a gallon of E85.

    from Wikipedia, energy density (MJ/L):
    gasoline – 34.2
    gasohol E10 – 33.18
    gasohol E85 – 25.65
    ethanol – 24
    methanol – 15.6

    Unless we’re paying significantly less per gallon for E85 (which we are not), we are getting ripped off every time we fill a tank with anything other than straight gasoline.

    • Carney

      Ethanol is not the fuel for people whose sole criterion is wringing the most miles per penny out of their fuel in the short term. However, breaking oil’s monopoly over transportation motive power will have a salutary effect on the economy. Giving drivers fuel choice will prevent OPEC from charging monopoly prices and causing recessions, or simply appropriating wealth to itself that could contribute to economic growth and prosperity here. OPEC price manipulation causes oil to be priced far above its natural market level. If you want a real rip-off, keep allowing cars to be made that are unnecessarily locked in to oil as their only fuel source, so you’re forced to pay whatever OPEC demands if you want to move about.

      Furthermore, ethanol is a higher octane fuel than even premium gasoline, and most people accept that charging more for high octane than low octane gasoline is reasonable. Finally, most flex fuel vehicles are merely ethanol tolerant rather than ethanol optimized. The new Buick Regal has done a lot to close the E10 vs. E85 mileage gap – I’m not sure what wizardry was involved.

      I realize all this is so much eye-glazing blah blah for short term, “what’s in it for me now?” types. To them I’d say support a flex fuel mandate anyway. During the 2007-2008 oil price spike, when gasoline was pushing $4 a gallon, methanol was selling unsubsidized for 90 cents. Even accounting for mileage that’s around $1.80 for enough methanol to take you the same distance as a gallon of gasoline. A lot of people would be happy to fill up every weekend on methanol instead of every other weekend on gasoline if their monthly fuel expenses would drop by that much. And because it is made from abundant natural gas, coal, or any biomass, none of which are or can be controlled by an OPEC-style price-fixing cartel, methanol’s low price is scalable amid rising demand.

  • greg_barton

    Carney: “It’s depressing to see you smack your lips in eagerness to impose draconian, brutal increases in the price of oil…”

    No one needs to be eager about this. It will happen no matter what. It’s happening now, and it’s the almighty market that is doing so.

  • greg_barton

    Using Brazil as an exemplar for ethanol is not wise. 1) Their ethanol is sugar based, a far more efficient source than corn, which we use. 2) Their economy is far smaller than ours, and transportation needs less intense, so they can rely on a less energy dense fuel than we can.

    What we should be aiming for is a transportation fuel that is as energy dense as our existing fuels. A synthetic fuel created from coal will do the trick nicely. See the post I linked to above on thorium power for a method to kill two birds with one stone, the other bird being electricity production:

    http://market-ticker.org/post=183373

    • Carney

      Yes, sugarcane has the highest ethanol yield per acre, but corn’s isn’t too shabby either. In fact ethanol can be made in worthwhile quantity from over 17 crops grown worldwide, using only conventional sugar/starch based methods.

      And if methanol compatibility becomes a standard feature in cars, then ethanol corn farmers will be able to use crop residues (such as cobs, stems, leaves) to make methanol fuel, increasing per acre fuel yields still further.

  • greg_barton

    So what do you think of nuclear?

    • Carney

      I’ve got no beef with nuclear, but it’s not really a way to break free of oil, because oil is no longer much used for electricity generation.

      Only about 3% of our electricity comes from oil, down sharply from nearly 20% in the 1970s. 50% comes from coal, 20% each from natural gas and nuclear, 5% from hydro-electric dams, and 2% from all “green” sources combined (solar, wind, etc.) Unless you live in Hawaii, or a handful of other places, turning on the lights does not burn oil. So politicians and pundits who talk about oil addiction and then tout solar, wind, nuclear, or other methods of generating electricity are misled or misleading.

      The real oil problem is in transportation motive power, where nearly every vehicle around uses oil-derived fuel. Even trains and ships, which once ran on coal, use oil now. That’s what we need to change.

  • ottovbvs

    Carney // Apr 1, 2011 at 5:30 pm
    [i]Otto, I’m trying to decide whether you’re a troll, and veering strongly on the side of yes…
    As for our globally disproportionate consumption of fuel, that’s completely irrelevant. I’m sure we also consume more than our share of Cheetos.[/i]

    Flounder on…in the Carney analysis our globally disproportionate consumption of oil is completely irrelevant to the fact that (according to him) we are being being held hostage by oil states. (Apparently it’s no different than our consumption of Cheetos although I didn’t think we were being held hostage by Frito Lay). Using the same logic we could say the alcoholic’s disproportionate consumption of Jack Daniels does not hold him hostage to the makers of Bourbon.

    Breaking the oil monopoly is what matters, not trying to dumb down our standard of living to some kind of world mean.

    Dumbing down to the standard of Germany, France, Switzerland, Sweden and similar countries you mean? I think the UN ranks us as 13th in quality of life. Cue accusations that the UN is a communist front

    • Carney

      otto, if, as in the 1940s, we had the majority of the world’s known oil reserves and two thirds of its oil production, our globally disproportionate consumption of oil would not be a national security problem.

      Similarly, we consume a globally disproportionate share of the world’s electricity, but because 97% of our electricity supply comes from non-oil (ie domestic) sources, that is also not a national security problem.

      The source of the problem is thus not our globally disproportionate consumption of oil. It’s that oil is permanently and unfixably controlled by unfriendly or hostile foreign powers. Since we can’t fix that issue, our best remaining choice is to switch the source of our transportation motive power to alternatives which are abundantly available either domestically, or with friendly powers, and which cannot be “cornered” by a cartel able to impose monopoly prices.

  • Kurlis

    Jim Dipeso, you are so stupid it’s nearly unbelievable. How can you be so dumb? The United States has a dependency on oil? As opposed to what, you ignorant buffoon? I really lose my patience reading your crap articles. You don’t think. You are captive to the farce that is global warming and climate change. You think, stupidly and without any evidence whatsoever, that CO2 drives climate change. This is then nexus of your stupid assertion that the use of crude oil as an energy source is a bad thing. Good grief.

    • ottovbvs

      The United States has a dependency on oil? As opposed to what, you ignorant buffoon?

      (Sigh) As opposed to what? When you have 4.5% of the world’s population and are consuming 25% of it’s oil even the most brain dead might wonder why the mismatch?

      • Kurlis

        The United States is the largest, wealthiest, most advanced industrial society in world. That the United States uses more oil than any other country shouldn’t be surprising to anyone who thought about it for even a few minutes. To claim that the United States is “addicted” to oil is similar to stating that the human race is “addicted” to oxygen.

        The claim is farcical and stupid. Crude oil is absolutely necessary for the maintenance of modern civilization. Alternatives to crude oil are neither as efficient nor as cost effective nor as useful.

        Jim Dipeso should have his head examined. It would be helpful if someone removed the poleaxe embedded in his forehead.

        • gmat

          It might be possible to use fewer barrels of oil per billion of GDP without putting western civilization at risk. I wonder how many fewer?

  • gmat

    As it is a security issue, maybe it would be better for the government to simply ration the use of certain oil products, eg, gasoline, progressively driving down overall oil consumption (which I think would drive up development of alternatives). Feldstein had a good idea a few years ago about using tradeable Oil Conservation Vouchers to ration gasoline.

    http://www.nber.org/feldstein/oil.html

  • nuser

    I live on an island ,population about 780,000.00 on a 12,000.oo sq. land. The soot on my windows is unbelievable. We need alternative energy and less population.

  • Blaming the White House for Gas Prices Is As Silly As … | LesBnB.com

    [...] Say it with me now: The White House does not set gas prices. The White House does not set gas prices. The White House does not set gas prices. [...]