Some mornings under the window in my bedroom, nightmares of nuclear holocaust would awaken me to staring blinded at the new sun in the window. I would know that I was awake, but the dreams were so fresh that the contrast in light from closed eyes to morning sun would convince me that the bombing had begun and I was just a microsecond from being crisply well-done.
Those heartbeats of fear before realization are nothing like the doom that lingers over me these days of war over oil.We are a nation of 300 million people in a world of 6 billion and we use 25% of the oil produced on the planet. Our cars consume it like we consume oxygen, and our way of life revolves around being free - not just to speak our minds, but to travel wherever we like. Imagine the changes in our social structure in the case of a major change in price of crude oil, and what small catalysts are already in play that could cause this change.
The oil-rich lands of Saudi Arabia feed our country with highly-sought crude. The country is nearly in a state of rebellion, as assassins attempt to murder the Saudi royal family. The abuses of the Saudi nation of its people are well-known and ignored by our government, as long as the oil continues to flow.
Oil workers in Saudi Arabia have been reasonably content for years with the political situation in Saudi Arabia, because the Saudi police - effectively in the hands of the royal family - were keeping control of the people. Now, they are becoming more skiddish in manning their wells because the police are becoming complicit in these assassination attempts. Assuming that a full-scale rebellion takes place, we could lose our oil wells in Saudi Arabia entirely.
A smart indicator of our government's foresight of the potential for this disaster would be an increased presence of US troops in the Arabian peninsula. There is not an increased military presence in Saudi Arabia currently. However, there is a huge US military presence very close by -- In Iraq.
Even if Saudi Arabia doesn't explode in civil war, today's crude oil barrel prices are the highest they've been since the first Gulf war, $44. Economists estimate that barrel prices that exceed $50 are no longer the stuff of conspiratorial hyperbole. Assuming that oil prices continue to climb and the situation never improves enough for them to stop, we could end up with gasoline prices that rival Europe, $5 per gallon. A 20-gallon tank would cost $100 to fill. You will be able to measure the cost of a trip to the grocery store in dollars.
As gas prices get more expensive, fewer people will be able to afford to drive. The poor may have no way to get to work if they can't afford to fuel their cars. Public transportation costs could double. Every delivered consumer good would cost more. The implications of increased delivered consumer goods prices are astounding.
Imagine - You can't afford or don't want to waste the money to drive to a store. Other people feel similarly and stay home. The cost to the store of their merchandise increases because of increased delivery charges from higher fuel prices. Demand at the store decreases because people don't want their goods. The store has no business and closes.
This isn't just the mall. This is any store. Grocery stores may have difficulty obtaining the grand supply of goods that they currently enjoy, at least at the prices that common folk can currently afford. Because people don't go out any more the social climate will change.
People won't take casual drives to visit distant relatives. Flights will become infrequent and quite expensive, not just due to the fuel costs (the price increase as a result of which would instigate the initial loss in customers) but due to the increased prices the airlines would need to remain operational with fewer clientelle. Major manufacturing (airlines, construction, etc.) all slow down or stop because nobody is going anywhere.
Imagine the streets vacant.
What have we done to prevent this? What can the government yet do to protect us? Well, nothing.
Government subsidies are not feasible. It is not feasible to allow the government to subsidize oil purchases because either way, we'll be paying for the gas. We currently don't pay an inordinate tax on gasoline, so any money applied to keep gas prices low would be new. Sure, the tax would apply to even non-drivers, so you won't pay as much for gas as you might have in total, but you're still going to complain. And the guy who still can't afford gas is going to complain that he has to pay this new gas tax, whether he sees the benefit in being able to buy milk at the supermarket is an issue on which he would have to be educated.
There are so many different models of car on the road today. How many of them are fuel efficient or don't just operate off of pure gas power? Three models provide fuel efficiency of 45-50 miles per gallon. Three.
Soon enough we'll all be plugging in our cars, right? Not really. It actually costs more to charge a car to the same performance level as it gets with gas than the gas costs. If more people place more demand on electricity because gas prices are bad, we'll have an increase in price in electricity, too. This will be similar to the increase in natural gas, when everyone switched to natural gas because oil was too high, and now natural gas is expensive because the demand is high.
"This isn't going to happen in my lifetime," you say. Think again. All it takes is one well-placed bomb. All it takes is one crazed fundamentalist. All it takes is one rumor on the stock exchange floor. All it takes is another Bush term on rampage across the Arabian Peninsula. All it takes is another fuel-slurping Hummer on the road.
Start growing hemp. I hear you can make car fuel from that.
I'm not really sure what you mean by "It actually costs more to charge a car to the same performance level as it gets with gas than the gas costs". Check out http://www.electroauto.com/info/pollmyth.shtml or http://www.gmev.com/faq/faq.htm. I'm not sure what performance you're talking about, but the EV1 has a < 10 second 0-60 time. What it doesn't have is a good range.
Also, electricity is rather cheap, and can come from sources other than gas/fossil fuels. Probably the biggest advantage (in my opinion) to charging cars is that electrical plugs are standardized across the country, regardless of the source of the power. You can replace any generation system with another and it'll continue to work. Another advantage is that electrical cars could actually store energy from low-cost times of day and distribute at high-cost times, balancing out the power system.
Also, it's not as if electric cars are the only solution. Most cars are headed towards fuel cells, anyway, as a more efficient energy storage system.
Oh, dark days are coming, to be sure, but not because of any sudden loss of Saudi oil in the near future (a preposterous notion by any stretch of the imagination anyway).
How worried were you about the unrest in Venezuela aimed at Hugo Chavez in 2003? Chavez survived assassination attempts and attempted coups by parts of his military. How worried about Venezuela are you now in 2004? The unrest in Venezuela continues.
Why do I ask? Answer: The United States imports just as much oil from Venezuela as it does from Saudi Arabia. Guess who have been the number one and two exporters of crude oil to the United States over the last few years? I'll give you a hint amigo; you could actually drive your car to both of these countries. That's right, Canada and Mexico! Surprising, eh? Thank goodness our Canuck friends are exporting more than just Celine Dion.
Over the last few years Saudi Arabia has supplied roughly 13.5% of our imported oil. For the month of May, 2004 they supplied about 14.5%. That's a lot of oil, no doubt. But stop to consider, that's 13.5% - 14.5% of our *imported* oil. The United States currently produces about 47% of it's own oil. Ballpark figure: we're talking about 7% of our oil coming from Saudi Arabia and about 12.5% from the Persian Gulf in general. Now that Iraq unofficially joins The Union as the 53rd state (Puerto Rico and Israel are the ones you are probably forgetting) I suppose the line between domestic and foreign oil will be blurred somewhat.
The United States could lose every drop of oil imported from Saudi Arabia and it would severely disrupt the economy for a time, but it would not throw it into the chaos you describe. Are we, the citizens of the greatest nation the world has ever known, so prideful of our resourcefulness, gumption, and bravery going to collectively throw our hands up and exclaim that we can not just figure out how to conserve 7% of our oil consumption? Err, well, nevermind. I guess that I know the answer to that question but I will pretend to be optimistic anyway.
I guarantee that if there were actually a perceived economic benefit to doing so we easily could conserve more than 7% of our oil consumption. Currently, we, as a nation, don't conserve because we don't feel that we have to. In fact, our society is so ass-backward that conserving is actually seen as economically disadvantageous. Forced conservation as a nation would do us great good economically, environmentally and in other ways even less tangible.
I disagree with the theory you posit whereby public transportation could double in cost. Suppose the cost of gas increased twofold and ridership for a particular imaginary route, normally 10 passengers, increased twofold as a result. I dunno what a commuter bus gets for gas mileage but let's say 5 miles a gallon and consider a 5 mile bus ride costs 5 dollars in fuel as opposed to 2.50 it used to cost. Instead of 10 riders on the bus there are now 20 riders and let's say they are all paying $1.00. There is now an extra $10 of revenue for that trip to offset the $2.50 loss in extra fuel costs. Sure, I know the cost of everything goes up. The bus company has to pay more for the paper schedules to be trucked in and bus parts cost more to be trucked in, etc. I am quite sure that increased ridership would more than make up for these costs. Managed correctly, in the long run the public transportation sector is one business that stands to *gain* money as a result of increased gas prices. I will concede that there would likely be an initial spike in fares to cover costs dealing with the logistics, staffing and machinery needed to support a sudden influx in ridership numbers.
Oh, yeah, I forgot, just in case one might think I am pulling facts out of my hindquarters the oil import numbers come from www.eia.doe.gov for instance, May's numbers: http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/petroleum_supply_monthly/current/pdf/table35.pdf
The site came in handy when I started composing my as of yet unfinished and unposted article on why drilling in ANWR is a bad idea.
The pricing information on the EV1 is interesting. It prices the "fueling" of the car at 10 cents per kilowatt hour. Current prices in Pennsylvania are between 6.17 cents and 10.67 cents (100% renewable, like wind, is more expensive), and so they're much cheaper than the statistics mentioned. So it is pretty cheap.
Although I would love to see all electric cars there are a couple of problems not taken into account by this report. The EV1 seems to have no back seat - it's not a family vehicle, nor is it designed to haul cargo. Also, these cheap electricity prices are available because there aren't 100 million cars plugged into the grid at night. You can't demolish the gas industry and expect that cost to vanish just because the current price of electricity is cheaper than gas.
Maybe it's cleaner to use electricity, too, but we have a power problem there also. If we needed to generate more electricity to supply the demand for 100 million plugged-in cars, we could only really increase coal, natural gas, and oil consumption. All of the green sources of electrical energy can't really be caused to produce more output. I suppose we could put up a few more windmills, but can we make the wind blow harder?
These days, oil price fluctuations are often more a result of perception of value than actual value. Drop a couple bombs in the middle east to watch the price of oil shoot up. I doubt that you'd see such an immediate result from bombs in Venezuela (ignorant investors), but I have no doubt that the eventual fallout of the loss of their supply of oil would gradually increase prices much higher and much more permanantly.
Regarding public trasit economy: When was the last time that a government agency reduced it's prices after a "temporary" increase to cover immediate temporary costs? Do you really think that public transit will reduce its prices if more people travel, even if it is able to do so? That increased demand would equate to lower transit prices seems to defy economic theory, wouldn't you say?
If I had a job in Philly, it would currently be cheaper to take the train to the city than my car, but if I wanted to go to Valley Forge Park, I would have no choice but to drive. Price changes to public transit due to reduced car drivers also need to take into account the additional routes that would need to be added to the transit systems for increased accessibility and capacity. I'd be curious to see a model of this.
Badnarik on High Gas PricesA Libertarian Party press release.