America! Let’s get our hatred straight. We may very well hate foreign oil but…
#1 Unless you are from Hawaii, electricity is not made from foreign oil in any significant amount! Wind turbines, solar panels, nuclear power, nor coal will reduce foreign oil. We don’t use oil to make electricity! Period. It’s too expensive. “But what about plug in hybrids or electric cars?!” Try holding your breath until that matters and get back to me. “But what about peaking diesel generators?!” You keep focusing on the 0.1% and I’ll look at 99.9% and we’ll see who has a better chance of success. “But doesn’t that link say that 3% of our electricity is from oil?!” Yes but that is beans compared to the amount used in transportation, plus 40% of that 3% is domestic.
#2 As much as we hate foreign oil, we should hate Canada the most since they are the top crude oil import supplier. About 60% of the U.S. oil supply is imported and about half of it comes from OPEC. So, for every gallon we reduce, we are screwing 20% U.S. sources and 30% OPEC sources – that’s a 10% screw differential, which is far exceeds the ballyhooed cries from all the foreign oil yahoos.
#3 If you really cared about maximizing your foreign oil vanquishing efforts at the minimal cost, you’d focus on national vehicle efficiency standards (aka higher miles-per-gallon) and driving less (aka walk, bike, get your ass on a bus or train), not all the new exotica alternatives. Your car is 85% inefficient. Doing one without the other is pouring water into a bucket with a big hole in the bottom. Never underestimated the U.S.’s ability to suck oil at an astonishing rate, much faster than new sources can substitute for oil.
#4 If we use less oil, it will lower the world market price for oil, and others will consume more of it, which is fine for domestic security, but means nothing for global warming. Barring a global ban on oil, we will probably use it all up, which really means make it too expensive for carting our lazy asses around. Oil is used for fertilizer, plastics, pharmaceuticals, and a myriad of other things – burning it at 15% efficiency is a pretty poor use.
Which brings me to the idiot list of groups using foreign oil to push solutions that don’t save oil. These may very well be worthy endeavors, but A doesn’t necessarily mean B:
1. Partners for Affordable Energy, i.e. coal
2. Americans for Independent Energy, i.e. everything but oil
3. Americans for American Energy, i.e. everything but oil
4. American Energy Now, i.e. renewable energy
November 7, 2006 at 10:05 pm |
Also your point in #4 is only true in a competitive market. I’m not sure how effective OPEC is at setting prices, but I’d be willing to say that it’s not a perfectly competitive market either, and there’s a good chance they could just keep prices almost at the same level.
Or it could even drive prices higher, if OPEC doesn’t use it’s market power to the full extent possible due to concerns of straining foreign relations between OPEC members and oil-consuming nations like the US. I’ve heard that Saudi Arabia, for example, produces more than it the profit-maximizing level because its government is friendly to the US. So if the US were less dependent on foreign oil, it would be less concerned about keeping oil prices low, and OPEC would feel freer to raise prices.
It all comes down to how competitive the oil markets really are, which (as far as I know) is a tough call. But my hunch is that even if it does not have real enforcement power over the world’s oil producers, it is still useful for setting production targets. And while it might be in any one producer’s short-term interests to disobey OPEC and overproduce, it’s a bad long-term strategy to start the sort of price wars that would drive prices down to the competitive equilibrium. It’s a long-term Nash equilibrium, or something.
Finally, chances are very slim that we will use up all the world’s oil. At some point finding new oil becomes so expensive that other energy sources are cheaper. So there will always be a few undiscovered oil sources. (Theoretically, anyway.)
November 14, 2006 at 5:15 pm |
Regarding who gets screwed when we reduce oil consumption, I would be shocked if a reduction in our oil consumption results in a reduction in domestic production. Arguably, when we reduce consumption by x amount, we are lowering imports by x also. Granted, that barely will affect OPEC, and even less Saudi Arabia.
That being said, kudos for working to clear up these massive misconceptions on energy issues.
November 15, 2006 at 9:10 am |
Theoretically, a reduction in consumption will result in a reduction in the marginally most expensive oil, which would likely be domestic. I once heard that OPEC tried to peg the price of oil to $25/barrel so that domestic producers wouldn’t be profitable – anything higher and domestic producers would start pumping, anything lower and they shut off. That’s obviously out the window now…
But most oil has regional characteristics that don’t reduce its consumption equally by national import/export percentages. Minnesota gets most of its oil from Canada. California from Alaska (I think).
November 25, 2006 at 12:12 pm |
While it may be true that only Hawaii is foreign oil buring state, California (which has only been building natural gas generating for years) imports a significant amount of foreign energy. This foreign natural gas is also shipped into larger ports in the Northeast. These foreign energies come from places like Venezuela (with prick leader Hugo Chavez).
I completely agree that Americans need to focus less on exotic alternatives and get off their collective fat asses and walk, run or ride a bike to work. Moving back toward where we work (urban areas) will facilitate this while drastically reducing commute times. And if any developers are listening, lets build some condominiums with more than two bedrooms downtown!