Energy crisis ’solution’
Posted by WARREN MOSLER on May 22nd, 2008
Interesting no one even mentions anything close to my proposal:
Lower the national speed limit to 30 mph for private ground transportation.
That would:
- Directly cut gasoline consumption as vehicles are far more fuel efficient at 30 mph than 60 mph.
- Directly cut air and other pollutions.
- Reduce long distance driving due to time constraints
- Increase the demand for public transportation due to time savings issues
- Reduce the needed safety features as you can’t hurt yourself all that much at 30 mph
- Lead to much smaller cars and therefore better ‘packaging’ in the cities, reducing traffic and parking demands
- Change relative real estate values currently distorted by relatively cheap fuel
The reduction in consumption could be up to 5 million bpd in the US alone, which would:
- Provide the net supply shock capable of reducing crude and refined product prices
- Improve our real terms of trade and restore our quality of life
- Increase national security by reducing dependence on foreign oil
- Slow environmental degradation
It’s a political choice- ration by price as we are currently doing, or use other methods, some of which we already do, such as fuel economy standards.
This proposal simply adds the price of ‘time’ to burning gasoline for all private transportation, thereby making fuel efficient, cleaner, less resource intensive, alternative transportation more attractive.
Feel free to try to make it happen if you agree!
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May 22nd, 2008 at 4:44 pm
I’d hypothesize, and I’m sure you’d agree this would never fly politically. Is their an equivalent fuel efficiency mandate number?
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May 22nd, 2008 at 4:48 pm
BTW, I heard Ed Shultz who is one of those left-leaning talk radio guys,
mention we should go back to 55 mph.
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May 22nd, 2008 at 5:49 pm
won’t make a dent or cause anyone to switch to public transportation
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May 22nd, 2008 at 5:50 pm
no equiv fuel efficiency number as that wouldn’t move people to public transportation, reduce safety equipment, save 25,000 lives a year, etc.
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May 22nd, 2008 at 10:38 pm
Michael Masters quote from todays testimony.
“If wall street concocted a scheme whereby investors bought large amounts of pharmaceutical drugs and medical devices in order to profit from the resulting increase in prices making these essential items unaffordable to sick and dying people, society would justly
be outraged”
Nice touch! You have a hand that one?
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May 23rd, 2008 at 8:27 am
that was mikes example. he sent his drafts to me for suggestions. a made a few that got in. i’d been discussing this with him for several years and my ‘enter the dragon’ write up was used some for reference, but he did the real work and added the swaps loophole.
however, i thought the effect had crested in the summer of 06, and that from then on the driving force for prices was saudi oil pricing, and that crude would overperform the other commodities, particularly the industrial metals. Yes, the fund buying is helping support prices some, and is supporting forward prices, but the supply responses are there in the industrial metals though not food/crude where the saudis rule.
also, a while back i wrote how paulson/bush/bernanke had deliberately started a stampede out of the $ with generally inflationary consequences and falling real terms of trade/standard of living as the US shifts to an export economy.
by the way, several years ago i also started writing about how biofuels would link food to fuel, and trigger the largest humanitarian disaster of all time.
last summer i also thought a 70’s style inflation would most likely keep the fed from cutting rates regardless of weakness. i was wrong on that call, as i overestimated the fed’s grasp of monetary operations. now it seems they are back ‘on track’ as ‘normal’ central bankers, but too early to tell.
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May 23rd, 2008 at 11:22 am
I am in general agreement that we need to mandate higher fuel efficiency for transportation. I also think agressive investments into new energy technologies should be made, such as EEStor’s ultra-capacitors, whoch could power a purely electric vehicle for about 500 miles at a cost per mile of under $1 (http://en.wikipedia.org/wiki/EEstor).
Regarding the 30 MPH speed limit, though, are you referring to within municipalities, or for long-haul driving? If we did that for long-haul driving, wouldn’t this create infrastructure problems? For example, given that for any major metro in the US, most food is trucked in, and also given a specific consumption need of food per day (x number of people eating x amount of food), then reducing the speed of delivery increases time to delivery and, given the same number of shipping units (trucks), reduces the amount of product deliverable per day. So, it would seem to me that in order to compensate, shippers would need to actually put more trucks on the road, which would end up erasing any value you got out of the reduction in speed by adding more fuel consumption across the shipping ‘units’ needed to deliver the required products.
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May 23rd, 2008 at 1:00 pm
I was including long haul.
better mpg means even with more trucks there is less fuel burned as the same number of miles will be driven. A lot safer, too.
this would also increase use of rail for freight if time is an issue.
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May 23rd, 2008 at 6:19 pm
I think we’ve painted ourselves into a corner in the US. First, we’ve allowed our national transportation infrastructure to fall into serious disrepair. While once rail lines crisscrossed this country, now only major freight lines remain, and access into remote regions by rail is all but impossible, thus making trucking required. Second, we have neglected public transportation in our cities, which in many cases forces people to drive.
In Japan, every city of any size has a comprehensive rail system, and a city bus system, that makes getting around the city reasonably easy. These systems are in turn coupled to between city systems. So, you have an arrangement that goes like this: origination > city bus > city rail > inter-city rail < city rail < city bus < destination. In contrast, major US cities have a patchwork of marginally interconnected services that are not comprehensive and which therefore prevent serious use. Some major US cities have no rail system at all. Example: there is a regional rail transport station about 1 mile from the office where I work, and several of my colleagues use it to commute from perhaps 30 or 40 miles away. You would think that would be great for them, but no. Why? Because the city bus service does not offer service to and from the rail station, so they have to walk the 1 mile distance from the station to work. Cab service is almost non-existent, so in fact a group of them teamed up and bought a used car which they simply leave parked to drive back and forth to the rail station. Even so, the whole adventure takes hours out of their day, which brings me to my next point.
Urban sprawl is a huge problem in the US. In Europe and Japan, city centers are denser, and travel between home and work is easier across shorter distances. In contrast, the LA metro area is more than 140 miles from top to bottom. I once lived about 18 miles from my workplace, and I calculated the time it would take me to get from home to work using city bus service or the train. Transit time came out to an astounding 1.46 hours per direction. Is it any wonder why most Americans opt to drive?
My point in all this is to acknowledge the extreme infrastructure deficits we have in the United States that would work against any significant change to national speed limits in the US. I don’t doubt that it would save fuel… but my guess is that things would have to become very ugly before our government would ever enact such austere measures… if for no other reason than the fact that our cities and transportation systems would simply be unable to deal with the ramifications.
My suspicion is that we will simply blunder on as we have been until such time that things get really bad, or until somebody gets extremely rich with an alternative technology that is rapidly adoptable. In either scenario the whole thing becomes moot, really. In the first case, we will be in such poor shape that speed will be the last thing on anybody’s mind; who cares about speed limit when 20% of the population is unemployed and nobody can afford to buy basic foodstuffs? In the second case, the technology will have ’saved us’.
Based on my observation of congressional behavior, and this is admittedly conjecture… but it seems to me that there is an assumption that we will find technological solutions to these problems.
What do you think?
Oh, hey - one bright spot: in the LA metro area, we have already enacted the maximum speed limit of 30MPH on many of our major roads for much of the day, and we did it completely by accident. :-)
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May 24th, 2008 at 10:17 am
a 30mph limit will save fuel, and a lot of it
it will also result in more ‘time efficient’ public transportation
i agree the chances are slim to none, unless/until things get a lot worse
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June 3rd, 2008 at 10:36 am
Soros testified today and said institutional investment in oil is the
new elephant in the room.
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June 3rd, 2008 at 12:05 pm
he’s maybe three years late.
that was the case when crude was in contango and saudi output was maxed out at near 11 million bpd
saudis are setting price now, with output at about 9.5 million bpd
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October 27th, 2008 at 3:25 am
Simply solution. Adopt the Boone Pickens plan. As someone who is in the energy business, natural gas and coal, I am certain the Pickens plan will work! It’s time to get Washington moving on it. Peak oil is just around the corner. Don’t let the fall in petro prices this fall fool you, the world is running out of oil fast. RE: Matthew Simmons wonderful book. Read it.
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October 27th, 2008 at 6:55 am
Yes, nat gas got us out of the similar bind in the late 70’s as deregulation allowed conversion to nat gas from petro at our utilities.
this time around converting cars to something else might do the trick, at least for a while. Seems to pluggable hybrids are a lot closer than nat gas conversion, and people will like hardly going to the filling station at all (plugins) vs going more often for nat gas.
But even with both it will take a long time and the total reduction in gasoline (not total energy) consumption can easily be accomodated by an opec production cut, which means they remain price setter.
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