The price of oil struck an ominous chord for the U.S. economy with yesterday's record trade of $147 per barrel. At these prices we are sending more than $1 million every minute of every day to oil rich countries. As oil hits a new high the dollar has hit a record low against the euro. Our equity is draining away and flowing to foreign hands.
How can we get ourselves out of this mess? This crisis will take nothing short of a restructuring of our core industrial and transport sectors. Just as a turnaround CEO comes in to fix a troubled company, we need a retooling to rid ourselves of oil dependency. We do not need politicians looking for fake fixes such as a summer gas tax holiday.
We do not need the President of the United States of America to beg sheiks for a bit more of the black gold. Keep your dignity, Mr. President.
The problem is clear -- 55 percent of all the oil we use in the U.S. is guzzled by cars and SUVs. Not planes, not trains, not big trucks. To find the problem look no further than your driveway. Yes, the fleet of 245 million cars and SUVs that we drive in the US -- that is the main problem.
To address this crisis we should partner with automakers, utilities, and public transport and create millions of jobs in the process. We need to move immediately to high-mpg cars and the electrification of transportation. We must upgrade to a smarter electric grid and build out public transport to handle the increased ridership from high gas prices.
To deal with the oil crisis, T. Boone Pickens envisions an increase in wind power to offset the use of natural gas and direct that to the transportation sector. While more renewables are absolutely desirable this plan would take years to stabilize the economy and make a dent in oil use.
To decrease the use of oil in our cars we need the kind of retooling we did for World War II. In 1941 we asked Detroit to refit all their factories from pumping out cars to manufacturing planes and tanks.
Now we are in another war. A war against this debilitating addiction. We must ask Detroit and all automakers in America, foreign and domestic, to retool immediately to make cars of more than 30 mpg, hybrids of 40+ mpg and the mass scaling of plug-in hybrids that connect to our electric grid.
We must give the automakers the means to do this. Automakers are in trouble and cannot retool on their own. We should offer them loan guarantees and give incentives to private capital to invest in an immediate restructuring of all car plants.
If there is any tax reduction we should consider it is a capital gains discount for investment funds that pour significant dollars right now into reorganizing automakers around the new order of high oil prices. This could unleash tens of billions of dollars immediately at no cost to the U.S. Treasury.
We can put Detroit back to work and get off oil at the same time. In fact, we can only get off oil by getting auto workers back to work and replacing our addictive fleet of guzzlers.
We must also pull cars off the road at much faster rates. We currently have tens of millions of cars getting less than 18 mpg and stay on the road for more than 14 years. The average mpg of the fleet has stayed at 21 mpg for more than a decade.
We can use the same incentive structures that we successfully deployed to accelerate the retirement of old refrigerators and air conditioners in favor of energy star appliances. Now with the price of scrap auto steel through the roof at $560 per ton, we can afford to junk the worst offenders in low mileage. These tend to be heavier cars that can be worth thousands of dollars in scrap metal and reusable parts.
Second, let's partner with our utilities and create new jobs in this sector. Most utilities are looking for more demand for electricity at night and to cut demand during peak daytime hours. Plug-in hybrids offer utilities that very opportunity to gain new demand at night while we charge up and to shave off the peak by taking back electrons during the day from those same vehicles.
Our national energy labs have concluded that we could replace more than half of all cars in the U.S. with plug-in hybrids and not have to add even one power plant. There is plenty of spare capacity at night.
We should give the utilities the ability to make the same profit off of efficiency gains as generating electrons and give them the capital to upgrade our to a smart network. This will create millions of high and low-tech jobs as we move to a 21st century bit-enabled electricity grid.
Third, let's leverage private capital to build out public transport. While replacing cars is critical, we must move more Americans around using shared systems. High gas prices have already pushed public ridership to new highs. Let us meet this demand by putting at least $100 billion of public and private money into this infrastructure.
This stimulus will create millions of additional jobs at all levels of skill. In particular, the construction workers so hurt right now in the housing crisis will get right back to work on a sustainable asset for this country.
Back in 2005, the Congress passed the Energy Policy Act. Title X of that law calls for the Freedom Prizes -- a set of prizes that raise awareness of our enslavement to oil and promote alternative solutions. The White House and Congress should focus more on tools that we have to address this problem than trying to convince OPEC countries to play nice.
We need to get U.S. workers back on the job and retool our economy now for this new reality. We are up to this challenge, but we must act now.
Jack D. Hidary is chairman of SmartTransportation.org and the Freedom Prize Foundation. The Freedom Prizes were co-founded by Hidary and Josh Becker.
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Comments View as Flat
Bart Anderson Posted 12:48 pm
14 Jul 2008
Electric cars not the answer
Good post generally. I disagree with the point about autos.
America has only so much capital, and a wrong decision on autos means that money may not be available for real solutions. We are slightly insane at the moment on the subject of automobiles and we cannot conceive of a society that would not be able to afford them. Politicians will not go near the subject. So -- is this the right mindset with which to approach a long-term investment -- an investment that our grandchildren will have to live with?How certain are you that the U.S. will continue to have the wealth and natural resources to sustain a transportation system that is intrinsically hoggish on resources? Isn't it true that we are near peak oil production now, and that oil will essentially run out during the next few decades?
Even electric cars are great users of metals and energy. Where will the electricity come from? All known methods of generating electricity have side-effects and require resource inputs. (Even the more benign wind and solar technologies need inputs.)
And let us say that the U.S. is able to finance and supply a fleet of efficient cars. What about the hundreds of millions new car owners in India and China? What we do here sets the pattern for the world.
Are you willing to bet that the earth can support hundreds of millions of autos indefinitely.
Bart
Energy Bulletin
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Jon Rynn Posted 1:19 pm
14 Jul 2008
Europe average mpg: 44
compared to US, 24. So somebody knows how to build efficient cars. And at this point, instead of bailing out yet one more set of incompetent management team (see Bear Stearns, Fannie Mae, Freddie Mac, more to come), why not let the government take over the companies and give them to their employees? That would put the fear of the market into management. But more importantly, it would improve management, and insure that any gains made in production would stay in the US, because you can be sure that if the bailed-out car companies eventually became profitable, they'd abandon the country that saved them in two seconds.
Also -- definitely, some big bucks into public transit, although I'm not sure how that can be made private as well -- except that private firms make the transit equipment. Certainly, we should be investing as much in transit as Europe.
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Charles Komanoff Posted 1:24 pm
14 Jul 2008
Numeracy?
Can't these newbies get the numbers straight?
The percent of U.S. oil consumption accounted for by U.S. "passenger vehicles" (cars + light trucks) is 45%, not 55%.
(See EIA, Monthly Energy Review, Table 3.5, Petroleum Products Supplied by Type, divide 2007 daily average total barrels by daily average gasoline; some gas is used by non-passenger veh's and some passenger veh's use non-gas, the two roughly offset each other.)
Charles www.komanoff.net
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amazingdrx Posted 1:36 pm
14 Jul 2008
Great plan!
Add conversion of long haul trucks, trains, tractors, and construction equipment to natural gas. If only 5% of that gas was biogas from waste, the carbon footprint would be offset. Farm biogas for tractors for instance.
"...big bucks into public transit, although I'm not sure how that can be made private as well -- except that private firms make the transit equipment."
Yes Jon, the government could own the tracks (tubes are my favorite design, hehey), the auto industry building dual use, cars, vans, and buses that run on both road and rail. the vehicles privately owned by individuals and transit companies. Maybe even coop owned buses could bring private non-governmental socialism into the picture.
Non-profits could be helped with government funding to provide transport on low profit routes like rural areas where fixed income citizens need access.
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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MAD MAC Posted 4:46 pm
14 Jul 2008
We could invade Iran..........
........ destroy Tehran with thermonuclear devices, and depopulate the countryside with a mass campaign of ethnic cleansing and then steal their oil. We would then get that oil for free. This would accomplish two things:
Solve our short-term energy problems
and
Remind those countries that are getting on our nerves that we can still kill every one of them if we feel like it.
Victory in Pattani
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Ron Steenblik Posted 4:48 pm
14 Jul 2008
Among the "we shoulds"
We should stop bailing out the automakers.
First, they decided to manufacture gas guzzlers, even though in other countries where they make cars (Brazil, Japan, Europe), they are already making models that get far better fuel economy. The problem is decidedly NOT that the automakers don't know how to make more fuel-efficient cars. If there are barriers to trade between those countries and the United States, remove them.
Second, as documented in Keith Bradsher's excellent book, High and Mighty: SUVs: The World's Most Dangerous Vehicles and How They Got That Way (which should be required reading for anybody working on transport policy), Detroit (including the labor unions) obtained, and fought to retain, all manner of regulatory favors -- and, for many years, import protection -- that made the production of SUVs and light trucks the most profitable parts of their business.
One of those regulatory favors was the "dual-fuel loophole", which gave them a way to churn out 5.3-litre flex-fuel (i.e., able to run on high ethanol blends) behemoths and have them counted against CAFE standards as if they were abstemious, gas-sipping eco-cars. Why do you think GM was so keen on E85 and came up with its "Live Green, Go Yellow" campaign? (Note the types of vehicles depicted on GM's web page.)
Should we reward the automakers now for having based their whole business plan on sales of gas guzzlers? IMHO, no. That was their gamble: we should let them live with the consequences.
These are only my personal opinions.
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Wolverine Posted 5:20 pm
14 Jul 2008
Eh
This is just more of the same "technology will save us" crap. There wasn't one word about what's needed more than anything re transportation, which is to greatly reduce it. How about designing communities that are walkable and bikeable?
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Ron Steenblik Posted 8:56 pm
14 Jul 2008
Update on GM and E85
According to DTN Ethanol Center:
*My question is, how does increasing the number of E85 pumps increase the demand for cellulosic ethanol in particular, and not ethanol generally, including ethanol derived from other sources, such as corn?
These are only my personal opinions.
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Biodiversivist Posted 1:27 am
15 Jul 2008
Answer:
It doesn't. It's a shell game.
"The future promise of environmentally sound fuels is being used as an excuse to continue investing in current, ecologically harmful biofuel production"--Duff Badgley, dirty hippy
And from Odograph:
Odo's epiphany was expanded upon by Robert Rapier
In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
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racc Posted 1:41 am
15 Jul 2008
High-Speed Rail and Rapid Transit
Another silly plan to desperately try and cling on to the automobile. Instead, there should be massive investment in public transit and high-speed rail. This is what the rest of the world is doing. We are so far behind and we don't even know it. The age of the automobile is over. Why try and protect companies in sunset industries? It does not make economic sense. Let Ford and GM adapt or fade away without giving them a bunch of public money.
The way forward is to create a better transportation system based on rail. People are tired of driving and flying anyway. Why prolong the agony.
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MAD MAC Posted 1:58 am
15 Jul 2008
Wolverine, you want to..........
rebuild every community in the world so it's more walkable and more bikeable? Any idea what that might cost (in dollars and Carbon emissions?)
Victory in Pattani
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amazingdrx Posted 2:12 am
15 Jul 2008
GM determined to use E85
To make this the biggest banklruptcy in history? We're number 1! We're number 1!
In your face Indymac!
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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Ken Johnson Posted 2:58 am
15 Jul 2008
Regulatory incentives
With gas prices currently in the vicinity of $500 per ton-CO2, there should be more than enough market incentive for efficient vehicle technologies and alternative fuels, if only life-cycle fuel costs and savings were adequately reflected in vehicle prices. Maybe what we need more than a massive infusion of government investment is effective regulation to overcome market failures.
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John former Marine Posted 3:40 am
15 Jul 2008
I think MadMac's comment to invade Iran...
Is actually the most sensible "solution" to the oil problem if your goal is to keep everyone driving their own cars. Otherwise, rail, bus, biking, and walking will have to take the place of cars. And goddammit!, I've got a RIGHT to drive a car...I think it's in the constitution somewhere.
So, who's kids to we send to kill the brown people this time?
Il faut cultiver notre jardin.
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justlou Posted 5:32 am
15 Jul 2008
The Maddening World of Corn Fuels First Hand
I was petroling up at a local gas station in a small central IL town a few days ago. The station has an E-85 pump that has been dispensing it for $2.95/gallon for several weeks.
I struck up a conversation with a Monsanto seed co. employee who was driving a new Chevy Silverado 4 X 4 pickup and was filling it with E-85. He told me the truck was averaging 14.5 mpg. No comments from me, but my thought was -- that sucks. No wonder GM is going broke. And the ethanol plants that are buying corn at $6.00 to $7.00 per bushel and selling it below cost are certainly not making any profits either. Double suck.
Yesterday I was driving back through the same town and a spray plane was applying fungicides on a corn field right on the edge of town. He was making his turn around directly over the heart of the town. And he was low! When we got downwind of the field a very strong chemical odor permeated the air. I could not freaking believe it! When I got home, I called the town police dept. to ask if any of the town residents had complained. My call was routed auotmatically to the county sheriff's office. I talked with a detective and asked if they had received any complaints. No. Not one. In fact he had not received a single complaint in the six years he had been a detective.
Curiosity got the better of me and I called the local FAA office and talked with a flight standards official. I told him about the incident and asked him if there was any regulation about crop sprayers flying low over towns. Surprisingly, there does not seem to be. They have to fly a minimum of 500 ft. elevation when they are traveling from field to field or from base to field. But when they are actually making their spray runs, the minimum does not apply. I asked him about the safety of flying low over populated areas like I saw. He just said it was not prudent. He also told me that if I saw something like that again I needed to get the N number off the side of the plane and try to get photographs. He said that in IL right now there are 320 pilots from out of state, besides our own resident pilots, applying fungicides to the corn crop. This practice has really escalated in the past couple of years after agronomists documented the yield increases resulting from these chemical applications.
The thought occurred to me later about the kind of measure anyone would use to justify getting a few more bushels per acre of corn by risking the safety of local town residents? The crop was not at risk of a major yield loss from some serious pest problem. But this kind of symbolizes the entire system in the way that we lopsidedly weigh the short term economic benefits of an industrially based system of agriculture against the long term perspective of environmental quality, biological diversity, sustainability, and longevity of rural communities.
I am sure that the vast majority of the farm community is very happy with these scenes of progress around here. But sometimes, it all looks like a war to me. And one that we may not survive for even 50 years.
Why am I such a cynic?
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Colin Wright Posted 2:50 pm
15 Jul 2008
Heck, let's just go post-carbon...
For a broader perspective, see this speech by British PM Gordon Brown:
Are you listening, Barach?
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Colin Wright Posted 3:04 pm
15 Jul 2008
Don't forget freight!
Also at the Oil Drum, ALan Drake has a good piece about electrifying rail (in 6 years!):
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MAD MAC Posted 7:07 pm
15 Jul 2008
Pay me enough and I'll go
I'm still in shape, just got off active duty last year, and really am not fond of Islamic anythings, but particularly Islamic states. Of course, for me, the question is always how much first and foremost. I didn't fight for ideology, I did it for money, it was a job.
Victory in Pattani
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John former Marine Posted 10:41 pm
15 Jul 2008
justlou....call EPA
Justlou,
If you've got a plane spraying pesticides over residential areas, you should immediately call the regional EPA enforcement office in your area or contact EPA's Office of Pesticide Programs. EPA regulates most of the pesticides on the market and there are very strict rules regarding spray drift, aerial spraying, etc. Local police can't do anything about it...you need to call EPA. If you have information about the time/place (and photos would be even better) of the incident, they'll investigate. It could quite possibly be a totally benign chemical that was being sprayed....and then again it could have been a nerve agent...
Il faut cultiver notre jardin.
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John former Marine Posted 10:44 pm
15 Jul 2008
MadMac, what will we pay you with?
With the way our J.O.-in-chief is running the economy into the ground and the bailouts I expect he'll push through to keep his criminal friends rich, I'm guessing the dollar is going to be devalued very quickly. Maybe we can pay you in pesos to take over the Iranian oilfields for us?
Il faut cultiver notre jardin.
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amazingdrx Posted 12:28 am
16 Jul 2008
Black water
Will pay him. Finally after US troops are gone from Iraq, the oil money will flow.
The mercenary army will fight on. In the employ of the oil monopolies.
Plenty of ex-service members have joined the contractor forces. If he had the courage of his convictions he would be blogging from Iraq right now.
To all the bush faithfilled oil war mongers, join up or STFU. I have said this for years, not one of these specimens has taken up the challenge.
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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Wolverine Posted 1:40 am
16 Jul 2008
JustLou
You might also have a lawsuit if you were sickened or injured by the spray, or even for an injunction to force the pilots to remain within the legal limits.
John,
There's no such thing as a "benign" chemical. Pesticides, which is almost certainly what this was, are chemicals meant to kill something. Aerial spraying is the most ecologically damaging way to apply pesticides, because it's very difficult to impossible to control where the spray goes and doesn't go. Aerial spraying should be banned without exception as the first step toward eliminating pesticides.
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MAD MAC Posted 2:20 am
16 Jul 2008
I had an offer from Blackwater
And the money was good. But not good enough to make me leave my FAT life in Thailand.
Victory in Pattani
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socialscientist Posted 3:37 am
16 Jul 2008
better cars -> more sprawl
Make public transit free and we will gradually evolve back to walkable, bicycle-friendly communities.
.
http://freepublictransit.org
.
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justlou Posted 4:48 am
16 Jul 2008
John and Wolverine -- Drift
I did call the IL Dept of Ag that does regulate spray drift. The standards state that no drift is allowed by any means of application including aerial, ground or even hand. I smelled it but that could have been the odor from the petrochemical carrier of the active ingredient. Unless I could document some actual deposition or damage with samples or photographs it would be just about impossible to pursue a complaint. Plus, the aerial pilot was not spraying over residences, but was circling his plane over the town to maneuver for his next spray swath on the field next to town. That in itself was bad enough from the safety point of view and not "prudent" according to the FAA official I talked with.
Rather amazingly, I asked the state official at the IL Dept. of Agriculture how many reports or complaints of spray drift had been filed last year in the entire state of IL. How does 60, yest sixty, sound to you? I am sure the actual number would have been in the thousands. The size and scope of agriculture just cows most folks into a state of submission. Most people just conform and don't complain even when it affects them or they don't recognize chemical damage when they see it on their plants or whatever. Of course some people do have the balls to discuss such issues directly with the applicator or neighboring farmer and are satisfied with "we'll try to be more careful in the future". Been there myself a couple times. But, living the middle of this corn/soybean factory, I usually get several adrenaline rushes each spring when the applicators are out spraying on very windy days which has happened quite frequently this year.
You are right about the part of the reach of local police but only as it affects the spray drift portion. But local police do have some jurisdiction over civil aviation. If they see some pilot doing something dangerous they do have the authority to hunt the pilot back to his base of operation and pursue the issue with him.
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Bart Anderson Posted 10:06 pm
16 Jul 2008
Magic of the markets
MAD MAC:
MM, do you know it would cost if we don't make our communities walkable/bikeable?Communities are being re-built now, because of high gas prices. We just don't see it clearly.
It's the magic of the markets at work. Far-away suburbs are losing their value and being abandoned, whereas walkable close-in housing is keeping its value. Guess where real-estate money will be invested?
The process will accelerate as gas prices continue to increase.
Bart
Energy Bulletin
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