The preventable crisis

We've been a one-car family for years, and you'd think we oozed boogers from our skin and had three eyes each. And were un-American, to boot.

When you're juggling a car, you end up being penalized at work in some cases and end up feeling pretty much looked-down upon.

What we have in America is a massive cultural problem, and our addiction to the automobile is just one of the more visible aspects of it at present. The root problem is we are greedy, materialistic and unwilling to sacrifice ANYTHING for "the common good."

The answer to our oil problem lies to a large extent in cheap (and that means tax-subsidized), ubiquitous mass transit, walking- and bicycle-friendly streets and a true national rail system. Of course, by the time we come around to that realization, our economy will be in ruins, and there'll be no capital to build any of it.

What goes around. . . .

Kit Stolz,

For instance, right now a high tariff on Brazilian sugar cane ethanol makes it uneconomical to sell this fuel in the US, even though it's about eight times as energy efficient as corn ethanol.

Excellent point.

Often times people wonder why the US shouldn't just pursue a protectionist trade policy and impose high import tariffs on all kinds of products in order to "protect American jobs."

You just explained why protectionism is a bad idea and low import tariffs are the right policy. We simply can not expect all of the best products to be made within our borders and we must allow the American consumer to purchase products from overseas.

I hope Barack Obama means it when he hints that he will not be a protectionist if he become president.

________________________________________
Posted last week on the Dallas Morning News Blog but it bears mention here.

I heard a radio news debate today about whether or not Detroit should 'have seen this gas crisis coming'. Gee..... They only had 35 years warning.

I guess Nissan and Toyota had better access to the internet.

Folks, I am hardly a mean-gone-wild ‘free market’ guy nor a insular antique hippie type. I've had a lucrative corporate Neiman Marcus past, fine clothes, fine cars, house twice in natl. magazines. No eco-Unabomber here. But. I also once lived on communes in the Nixon era. Whether anyone wants to see the wisdom from the counter-culture where I cut my late 60s / early 70s teeth, here it is:

I began recycling in 1969. It made zero sense to bury in a land fill a glass bottle or a newspaper or coke can then any less than now. Gas guzzlers? Avoided them like the plague after the wait-in-line-to-find-empty-pumps gas crisis 35 years ago that showed us all how hostage we were to OPEC Middle Eastern oil. (Why in this century even when gas was 'cheap' at $2 would I want to pay then $45 to gas up some hog getting 8-18 MPG when there have all along been 40 MPG alternatives costing under $20 grand that were under $20 to fill? Tossing dollars out my sunroof never made me feel like I’d ‘arrived’..) And oh yes, I also made note a few years back that we were in some war being waged in the center of oil patch Iraq. Silly pre-green me but this looked foreboding to me….like a reason to buy a high MPG car several years then as now.

In 2000, I aired a satire of the SUV on NPR's All Things Considered (SUVs in Texas …..in fact Rod linked to it once on this blog…the delivery was pathetic as I was new. But 8 years later the message was spot on. ) How Dallas had the highest consumer profile for 4-wheel drive vehicles despite being the flattest city in America. I had hell placing that piece anywhere despite it being a good piece I was proud of; no newspaper, magazine, wherever…bought it because everyone who was in a position to buy it drove an SUV. Finally when Ford Explorer and Firestone tires began suing one another over rollover deaths in those ‘safe’ SUVs, I got a call and those who had earlier lampooned me and my lampoon …recorded me and aired it two hours later nationally.

I know, I know….Americans needed the room and space...like a station wagon God forbid was a non-starter. (Or later my dumb Scion XB which has more room than an Explorer despite being very little longer than a Mini-Cooper.) Had to be a high-heels lower emission standard w/tax allowance benefit ' government reward (at a time of war) for buying a highest gas consumption ‘safe’ high risk rollover consumer subsidized ‘work vehicle' SUV.

Say what you will about the pluses and minuses of the so-called alternative counter-culture of the so-called baby boom era. All I ever hear about (especially from those who were neither born then nor if they were, involved in the anti-war ear) is drugs sex and rock and roll. That was a big deal, make no mistake. But so was nutrition, whole foods vs. processed crap like I grew up eating…TV dinners and instant mashed potatoes? I learned what constituted a whole protein. How to make and like yogurt. Organic meant something. Vegetarianism was something you explored for reasons of conscience. As was how to eat cheaply and healthily. I learned how to not waste and to re-cycle and care about polluting. Much of this is now, 35-40 years later becoming part of mainstream America’s lexicon.

I do believe in my heart that something good is coming from all this but it saddens me deeply that it took a disastrous forecast and an economic roller coaster and 4$ gallon gas my life for mainstream America to accept what the so-called (and understandably much maligned) ‘counter-culture’ made a common creed 40 years ago. Respect the earth. Resources are God given and should be honored accordingly. Be resourceful; Waste not / Want not.

Earlier this year I had dinner with Rod and this came up and he said then I should write a column about this. Perhaps I just did.

a high tariff on Brazilian sugar cane ethanol makes it uneconomical to sell this fuel in the US, even though it's about eight times as energy efficient as corn ethanol. Lifting this tariff would relieve some of the upward pressure on both food and fuel prices

I'm not sure Brazilian ethanol is the solution to our problems. Consider the acreage required to replace American...

Gasoline consumption: 351,817,804
Transportation fuel: 528,411,132
Oil imports: 484,850,358
Oil consumption: 782,199,992
Oil & NG imports: 556,820,333
Oil & NG consumption: 1,244,322,989
Fossil fuel electricity: 532,199,026
Fossil fuels: 1,698,870,200 (*)

...using sugarcane ethanol from Brazil.

By comparison:

Amazon rainforest: 1,375,000,000 acres
Remaining cerrado (**): 108,453,175

It's also worth wondering whether our relations with Brazil shall remain tranquil indefinitely. Once upon a time, the Mideast was probably considered a stable source of energy imports.

(*) US oil stats: eia.doe.gov/neic/quickfacts/quickoil.html

Other US energy stats: eed.llnl.gov/flow/02flow.php

Conversion factors: bioenergy.ornl.gov/papers/misc/energy_conv.html

Per-acre sugarcane yield: earth-policy.org/Books/PB2/PB2ch2_ss5.htm

(**) biodiversityhotspots.org/xp/Hotspots/cerrado/Pages/default.aspx

'Rock'. I see no evidence that you actually read my post.

I can guarantee you, as Rod would be quick to point out, I am hardly some aging remnant from some leftist era. You think when I was National Sales Director for Neiman Marcus...where at morning meetings I would show a handbag that retailed for over $50,000...that I don't know a thing or two about 'free market' economies?

But I also know something on a personal level for decades that others are being forced to learn. And no, at a time of war (in the Middle East, no less) to have my sister and her husband reward with thousands of dollars in tax rebates for buying 'luxury’ SUVs like their Escalade...(that they can't give away now...while people who drove gas conserving cars asked for nor got tax incentives).... is certifiably a Bush era disgrace.

I know many people who have billions of dollars. Some treat resources like they are theirs to squander because they can...the man who built a golf course in the desert?....and others, like my late friend Lou, who was estimated to have billion$$$s...and lived a grand life... but was a role model of respect for finite natural resources and conservation re: the future thereof. (It is through Lou that I first met John McCain whom he like I supported in 1999.) Being 'successful' and 'rich' I learned from him and others...need hardly be synonymous with greed and profligate conspicuous waste abuse of shared resources like water and land.

I remember after Katrina when President Bush asked Americans to conserve gas as the refineries were hit hard. Remember? And I heard Tucker Carlson say angrily what you just said...that free markets meant if someone has the money to buy all the gas he wants then he should be able to do so without the President saying 'no'. So the President was being realistic at a time of crisis but in the name of 'free market economy' was treated like a pariah by his own party when he dared ask us to make even temporary contributing efforts post Katrina.

Rawlins Gilliland,

'Rock'. I see no evidence that you actually read my post.

I can guarantee you, as Rod would be quick to point out, I am hardly some aging remnant from some leftist era. You think when I was National Sales Director for Neiman Marcus...where at morning meetings I would show a handbag that retailed for over $50,000...that I don't know a thing or two about 'free market' economies?

I don't remember accusing you of not knowing anything about 'free market' economies.

I was simply advocating for the free society and for free consumer choice. I told you how I have made my choices. Toyota Corolla and less than 3 miles from work.

To be honest, I moved from Southern California to Denver, Colorado and I decided to live less than 3 miles from work because, never having driven in the snow before (except for living in Alaska one winter), I wanted to limit the amount of driving I had to do during the snowy season.

As for greed and profligate conspicuous waste, would someone, like me, who drives less than 8,000 miles per year be accused of being profligate and wasteful? How about someone like me who occasionally goes to Outback Steakhouse and orders a Filet Mignon?

It just seems like your more recent post was a little huffy and I'm not sure who is the target of your hostility.

Above post----Did not realize that only now we must enter our name each new time we post. Otherwise, no name appears at all. Who know. Conserving?

Rawlins,

I loathe the far left no less than I recoil from the 'it's ours to squander' right. Either extreme is repugnant. But there has been a 'gone wild' mentality from the 80s onward that has confounded me.

Rather it was the misrepresentation of the good elements of the long ago counter-culture and the overall loss of logic when it came in the post 1980 years to being responsible custodians of our country and its resources.

I think the post 1980 years have been, for the most part, great years for the United States of America, in both economic and environmental terms. Back in the 1970s, we were still burning leaded gasoline.

As someone said earlier, SOMEtimes those of that era most easily dismissed as lefties are the true conservatives. Complicated but true. Which is in part what Rod says one way or another in Crunchy Cons.

The more I read about Crunchy Conservatism, the more it seems a lot like Ralph Nader-ism. But, then again, if you ask 5 people for a definition of conservatism, you will probably get 5 different answers. So, the "I'm a true conservative" line doesn't impress me much.

The key question is are you a strong supporter of the free society, of free consumer choice, the free enterprise system and are you an opponent of trade protectionism and forced unionization?

Instead of calling it conservatism, I'll call it free market-ism. Or maybe some other label.

Look, I completely agree that we use too much oil. But the US military's oil consumption of 300-400k bbl/day over the past decade is chump change compared with overall US oil consumption of ~20e6 bbl/day

That attitude is exactly what we need to change. If that kind of consumption is flippantly dismissed as chump change then you know we have an enormous problem.

The long supply lines are killing us - oil, water, electricity - all piped in from great distances at high costs. Local production and consumption is the answer.

If those fools spent a little time comparing the fuel efficiency of a Honda Civic with their Ford F-150, maybe they wouldn't have to strain their brain cells inventing all kinds of hokey corporate conspiracy theories.

Yes, and if a frog had wings he could fly. And which hokey conspiracy theories are you talking about - the one blaming speculators, or the ones blaming the enviros for blocking drilling and more refining capacity?

Let's rely on the free market to correctly allocate our energy resources, not top-down command and control policies.

The "free market economy" gave us what we have now - Enron, $145 oil and your fools in their F-150s with the "Bush/Cheney '04" stickers still peeling on the bumper. Are you saying that you want to tinker with our 'free market?'

Shame on those people from India. How dare they decide to start buying cars and appliances and bidding up the price of oil?

Yeah, that's free markets for you.

Bob,

Free enterprise is the worst economic system, except for every other economic system.

Gasoline consumption in the United States has gone down over the past year. This is due to the workings of the free market.

The Soviet Union, Cuba, North Korea, even the union state of Michigan has proven that alternatives to the free enterprise system are very good alternatives.

Rock,

The problem is that energy conservation is critical to the health of our economy. You seem to think of oil as some sort of luxury good that people should be able to buy at will as long as they can afford it when in reality it's a finite resource that's very difficult to replace once there's not enough of it, with dire consequences for the nation as a whole. The point is that we could have saved ourselves a lot of economic distress if we had realized this sooner when acting involved inconveniencing people who like to drive big cars, versus not acting which has left us facing recession and the threat of massive inflation.

The free market may be the best way for allocating limited resources but only when the market recognizes that they are limited.

As you noted above, GM couldn't predict when the price of oil would go up to $145 a barrel (and acted like it never would) but the government could safely assume that it was going to happen sooner or later--especially given the volatility of our major suppliers--and take steps to make sure we were better prepared to react to it.

Plus, the government not only ignored opportunities to ease the transition into a future of limited oil supply, it perversely made things worse. Even if you don't believe that it was the government's role to discourage people from using gas, it's still responsible for encouraging people to consume more through tax incentives, corporate subsidies, land use planning, etc.

Let's rely on the free market to correctly allocate our energy resources, not top-down command and control policies.

Yes, let's, by all means. We can start with internalizing the security costs of imported oil, by figuring what proportion of the US military budget goes towards operations in the Mideast, Africa, & Latin America, and impose a per-barrel tariff on imported oil (and natural gas, and ethanol) roughly equivalent to that cost. In the event that we (say) withdraw from the Mideast, we can keep that tariff in place, to compensate for the risk associated with politically-motivated supply cutoffs (because, Lord knows, the free market's risk-management skills leave something to be desired - see the housing bubble for details).

Then, with oil's true costs properly internalized to US consumers, we can let the free market have a go at it.

MI,

The United States actually imports a more oil from Canada than it does from Saudi Arabia.

And the combined tax take of the state and federal governments is larger than the profit rate on a gallon of gasoline. This means that the government actually profits more from the sale of gasoline than do the big, bad oil corporations.

And did you know that a majority of oil deposits are owned by government owned oil companies, not the ones you hear demonized so often?

In other words, an oil company owned by the government of Saudi Arabia owns more oil deposits than Shell oil. Yet, when people whine and whimper about gas prices, they usually single out Shell oil rather than realize the old statements of economics:

Scarce resources

Alternative uses

C'mon. Open up that old dusty economics textbook.

"I enjoy defending free markets over socialism all the time."

Who said those were the only two choices? Maybe the other choice is to recognize that the 'free market' is a MARKET, and not a 'solution'. It isn't the free market's JOB to find solutions to social problems, to create new resources, etc. It is the job of human beings to do that. Free markets? They make money. If it isn't something that makes money, the 'free markets' won't do it.

And oil makes a boatload of money. Why would they work to create a cheaper, more plentiful alternative?

"It is certainly better than any alternative. As the world market price of oil has gone up, Americans have been driving less and sales of SUVs have declined, so much so that there are some stories on the business sites about how General Motors might go belly up."

So, apparently our 'free market' car companies aren't automatically doing the right thing, and might, out of greed, apathy, or misreading the situation, go bankrupt instead?

"Back in the late 1970s, before I was old enough to drive a car, I remember how Honda and Toyota and Nissan (at that time called 'Datsun') were taking market share away from General Motors and Ford in part because they offered better gasoline mileage."

You do know that Japan (who you are admitting is beating us, at least in this area) is not exactly a pure 'free market' system, right? There's heavy Government protectionism, etc.

"We all saw how the Soviet Union collapsed, right? We know that free enterprise works better than socialism, right?"

Again, you are making a big assumption. That socialism and communism (and that they are the same thing) are the only alternatives, and that a country's economic system is the only thing that gets things done.

If you allow the free market to work, a sense of increased scarcity combined steady demand results in price increase, which continues until the price increases cause over all quantity demanded to drop.

We all learned this in Economics 101, right? Or did some Nader-ite professor teach that course too?

Oh, and that was me. Darn code. I have to remember to type in those fields now.

Rock,

You and I have been butting heads rather vigorously lately, so I thought I should post my reaction to your first post on this thread: bull's-eye, sir.

The devil, as they say, is in the details. I think the objections to your arguments are more for the general level of your remarks than for any detailed flaw or omission. I suggest that you consider how the larger details impact your general free-market vs. socialism stance.

The fact is that as a society we simply are not proactive. We are reactive. There has been only one instance where the future was the primary motivation for a federal policy, and that was T. Roosevelt's creation of the national park system. I submit that such a policy shift would be politically (and practically) impossible in this day and age.

So, the question I like to ask is this: can our free market leaning be justified for the long list of catastrophes to which it has contributed, from the '29 crash to the spate of "scandals" of the last 15 years, not to mention the ones in the 19th century. Is there truly an overall benefit to society in an unregulated (or worse, regulated but unenforced) economy that permits predators' making a killing at the expense of the rest of us? When does rich become too rich? How do we measure it?

"Ask not what your country can do for you. Ask what you can do for your country."

John Fitzgerald Kennedy

I submit that corporations are in most need of this attitude shift, and most likely to see it as a marketing boost when their customers turn a blind eye to the disservice corporations have done and are capable of doing to our country in exchange for all of the things the country is doing for them.

Doing the right thing is bad for profits, q.e.d.

Well Rock, there are some problems with looking at oil and gas from a free society and free market perspective. It just isn't that free. OPEC is a cartel that does price fixing. There are externalities (pollution and their associated health costs, etc) that aren't priced into oil. Plus, there is political manipulation which interferes with the action of a free market. Some examples are tariffs, tax breaks given to SUV purchases for 'business' purposes, etc. The worst part about is that some of the legislators who trumpet free-market practices are the first to slap together legislation to manipulate the markets in favor of corporate contributors.