Gas and oil prices

Today here in Alaska, we became the first state to average over $4/gallon for gas. Diesel prices are even higher. We had to buy heating oil for one of our apartment buildings yesterday at $4.05/gallon. As such, you’d expect me to be complaining and whining. Yes, it is hard. However, I look at it differently. I don’t think the price is high enough.

Let me explain before you give me grief. 😉 First, while prices are at an all time high, demand is still going up. Second, world supplies as shown in crude pumping capacity are down. Two of the world’s largest oil fields, Ghawar in Saudi Arabia and Cantrell in Mexico, are past peak (article to read more about what that means here). Simple economics says as demand rises and supplies fall the price must rise.

Eliminating the US federal gas tax will only benefit oil companies and overseas oil producing countries. It won’t stop or slow the rise in prices. It would hurt the programs funded by this tax. There would be temptation to make the cut permanent. Then when and if it were phased back in this fall, it would be a big hit on consumers just as fall heating season begins.

I suggest that instead of waiving the federal gas tax we dramatically increase it and use the money to invest in mandated conservation measures and alternative energy sources such as wind, clean coal, hydro, and solar. This would serve a few different purposes. First it would change our habits thus curbing consumption which would help keep the price lower. When oil prices triple, as I’m sure they will, we will be in a position to dramatically eliminate our dependence upon oil. It would create some jobs to put the new infrastructure in place.

I realize this would be a hard sell to most lower and fixed incomes. I would have a exemption for all or part depending upon income, the amount of conservation you have done and your driving habits. I would also have an exemption for essential services such as hospitals and emergency response vehicles. I don’t want them not to be able to respond because they can’t afford fuel. However, the rest of us would just have to get used to it. Sorry.

While I applaud the new fuel efficiency mandates on new vehicles, I think it doesn’t go far enough. The technology exists to get over 40 mpg right now. I have a Honda Civic hybrid that gets around 50 mpg in summer and around 30 in the middle of an Alaskan winter at -30F assuming I drive 55 or less. That’s another thing, we need to re-implement the federal highway 55 MPH speed limits. Driving slower saves a lot of gas. We have a scooter which gets over 105 MPG but only goes about 45. So it takes and extra 5 to 15 minutes to get where we’re going. Its definitely worth the savings. Besides, it’s fun!

Two things about fuel efficiency of the vehicle itself seem obvious to me: smaller engines and two wheel drive make a big difference. Most drivers don’t need huge engines. The larger the engine, the lower the fuel economy. Nor do most drivers need all-wheel-drive (full time 4-wheel drive). Our Civic is two wheel drive and actually did better with studded tires than some AWD and 4-wheel drive vehicles last winter for traction. If you want 4-wheel drive, it should be a push button activated when needed then able to shut off. It takes more energy to use all four wheels. It is completely unnecessary on dry pavement.

Here in Alaska we use a lot of heating oil. This would be hardest to cut back, but some conservation can be done. Replacing old doors or windows helps but is expensive. If you can’t afford that then hardware stores sell plastic kits to cover the windows. Heavy curtains also help a lot. Lowering your thermostat to 68 degrees instead of 72 is not unreasonable. I just read in the paper that in summer 50% of heat produced by home furnaces goes to domestic hot water. Insulate your water pipes (and water heater if it’s separate). Or install a solar hot water heater.

We need to subsidize our rail system like we do the highways. It is much cheaper to transport goods by rail than individual trucks. We need to improve the passenger rail system as well. It may not be as convenient as private vehicles, but it is much more efficient.

Don’t whine to the government for a quick fix if you yourself aren’t willing to be part of the solution. Some sacrifices need to be made by the public to see us through this. Slow down. Get a smaller, more efficient vehicle. Walk or ride a bicycle if you’re only going a short distance. Consider moving closer to your job or vice versa.

As far as housing goes, consider downsizing. It takes less energy to heat/cool smaller spaces. According to a report I heard on the radio, per capita living space has more than doubled in the last 75 years as our standard of living has increased. As energy prices continue to rise, those in larger homes are going to have a much harder time compared to those in smaller homes. Is the extra space really worth the extra expense?

Even at the high level of gas prices today, the amount spent on fuel is still a smaller portion of disposable income than was spent on fuel during the gas crisis in the 1970’s. People have the money, they just prefer to spend it on other things. So would I but the problem won’t be going away. Its only going to get worse. Considering fuel prices in Europe or even Canada for that matter, are so much higher than the US, we shouldn’t complain.

I do not like the idea of a windfall profit tax on oil companies either. This would have the opposite effect you would expect. Companies would stop exploring for oil. They would have little incentive to do so if they didn’t expect to make a profit. Oil exploration is an expensive, risky business. Yes, they are getting rich but they have a product that just about all the world needs which is running out. They are also the ones taking all the risk when a field begins to dry up or there are large spills like the one in Alaska a few years ago and in 1988. I don’t blame them for cashing in. Wouldn’t you? They are not a social program. Plus, they pay out dividends to shareholders based upon profits. A tax would take money away from the shareholders. Granted some of the shareholders are large companies and rich investors, but there are also many smaller shareholders like my husband.

There’s no doubt that we’re only at the beginning of high oil prices. We need to act now for the future. I realize what I propose goes against our modern instant gratification society but if we don’t do something drastic soon, it will be even worse later. We need long term solutions not quick fixes.

4 Responses

  1. Do you guys have B5 oil in Alaska? Maybe you should ask your oil dealer if you do. Just in case. Ever since working for NORA, I have seen many oil users like yourself either struggling with prices or just wanting to go green. Well, B5 costs about the same, but it produces NO greenhouse gases, reduces emissions, and most important of all, it can help conserve 400 MILLION gallons of oil. Imagine that. 400 MILLION!!!! I bet prices would go down after all that oil being withheld. Here’s the link so you can check it out for yourself:

  2. There are no large scale biodiesel plants in Alaska for heating oil. There are a few plants but what they make is for their own use. Feedstock and cold flow issues are cost prohibitive up here. However, I make my own biodiesel from used fryer oils. We just finished making a 200 gallon processor which we need to use 3 times a week. We are currently using anywhere between B60 (60% biodiesel mixed with 40% regular heating oil) to B90 in our buildings with no trouble or modifications. While the B5 (Bioheat) blend is a start, it’s just a small drop in the bucket and won’t make any noticeable difference in national oil prices or consumption if you figure the world uses over 82 million barrels (42 gallons of oil equals 1 barrel) of oil daily and the US uses close to 21 million barrels every day. So you’re talking about saving only half a day’s worth of oil. As for emissions, it is only the 5% biodiesel part of the blend which is carbon neutral. The other 95% is still petroleum with all the drawbacks that you mentioned to go along with it. But even a 5% reduction is better than nothing.

  3. Water is the source of life – treasure it! R4.
    Water is the source of all life on earth. It touches every area of our lives. Without it, we could not thrive — we could not even survive.

    Sustainability – “We strive to meet the needs of the present generation without compromising the ability of future generations to meet their own needs”.
    We should discourage wastefulness and misuse, and promote efficiency and conservation.
    “Conservation is really the cheapest source of supply,”
    For the benefit of mankind, maintain the quality of life and preserve the peace and tranquility of world population. Water resources must be preserved – to sustain humanity. We must eliminate wasteful utilization of water, conserve our water sources and implement rigid conservation methods. We should utilize solar and or other source of renewable energy to operate desalinization projects from the oceans. Utilize renewable energy sources to purify and transport the water to its final destination. As world population increases the scarcity of water will become a cause for conflict, unless we take steps now to develop other sources of water for drinking, rainwater harvesting – storm-water and gray-water utilization. Designing of landscaping that uses minimal amount of water.
    “With power shortages and a water scarcity a constant threat across the West, it’s time to look at water and energy in a new way,”
    To preserve the future generations sustainability, we should look into urban farming – vertical farming. The term “urban farming” may conjure up a community garden where locals grow a few heads of lettuce. But some academics envision something quite different for the increasingly hungry world of the 21st century: a vertical farm that will do for agriculture what the skyscraper did for office space. Greenhouse giant: By stacking floors full of produce, a vertical farm could rake in $18 million a year.
    Jay Draiman, Energy and water conservation consultant
    May. 2, 2008

    Hydro dynamics: forget oil. Sharing freshwater equitably poses political conundrums as explosive and far-reaching as global climate change.
    Quoted from other sources
    Anyone who has ever stood on a beach and looked out into the vast expanse of an ocean knows that there is a lot of water on this planet. In fact, 70 percent of the Earth’s surface is covered by water. It may seem like water is all around us, but safe, clean, reliable drinking water is not a cease¬less resource. The problems facing drinking water range from failing infrastructure, to climate change, to insufficient supplies.

    Personal Conservation
    Preserving our water resources is not a job for water industry professionals alone. We all have a vested interest in ensuring that water remains safe, af¬fordable and available. Therefore, each individual American has a responsibility to monitor and control their water use, There are many simple ways for people to reduce excess water use, lower water bills and protect the environment, espe¬cially in die spring and summer months, Beyond the standard constraints of watering the lawn only when neces¬sary and washing car wisely by using soap and a bucket of water, some steps include: draining water lines to outside faucets, disconnecting hoses, shutting off outdoor water sources during cold weather and running a small trickle of water on whiter nights to prevent pipe from freezing.
    Water supply management is an issue that affects us all. It may not be apparent to every citizen today, but with climate change and population shifts transforming the United States, it soon will be. Effective solutions need to be put into place today before we are faced with a water crisis. A focus on careful planning, treatments, innova¬tions and conservation measures will help to create stability for long-term water management. Commitment to keeping water at the top of the list for communities and citizens will better prepare us for whatever the future of water holds.

    The indispensable source of life-without water there would be no industry, no agriculture and, most importantly of all, no life. In dry parts of the world this essential commodity is even more precious. Almost all human actions involve water from taking a shower to reading a newspaper to driving a car or simply eating a sandwich – almost everything we do or touch is somehow related to this precious treasure. We ask that you stop and think how you use water and what you can do to conserve this essential natural resource.
    *Water, beliefs and customs,
    *Water as a vehicle of the economy,
    *Water, source of art and life, irrigation and cultivation.
    The people have decided to act to try and develop a real awareness program on the theme of water preservation and distribution in an attempt to help maintain the original purity of rivers and streams.
    In many parts of the world water sources and wells are not equally distributed. Water as a source of life can also be at the source of conflict.
    Whether we live in India, Iceland or the Atlas… we have always tried to trap and tame water. Dams, pumps, canals, water treatment centers; there are so many different ways to exploit this resource that we often forget how fragile this unique and essential treasure actually is.
    Unfortunately, many of the things we do every day can harm our water. That’s why all people and government should be working with municipalities, farmers, business leaders and developers just like you to take action to protect our water and clean it up.
    Small changes can make a big difference. This guide outlines practical things we can all do to preserve and protect our water. We all need to be part of the solution.
    Concentrated Solar Power, which requires no solar panels at all. It works by concentrating sunlight onto a small pipe using cheap parabolic reflectors. The pipe contains a liquid that’s heated to very high temperatures by the sun and drives a steam boiler that rotates a turbine to generate electricity (much like nuclear power plants, but without the nuclear waste). It’s cheap, low-tech, and far more affordable than solar power. Plus, it can be built in practically any desert, so it doesn’t take up valuable land. As another bonus, when CSP operations are built near the ocean, they can desalinate ocean water as a side effect, providing fresh water for irrigation to grow food. This is the only renewable energy technology I know of that can produce cheap energy, fresh water and crop irrigation all at the same time. Plus, it has no emissions, no toxic chemicals, no nuclear waste and very little environmental impact..
    “You can’t escape the responsibility of tomorrow by evading it today” – Abraham Lincoln said it.
    “That man is richest whose pleasures are the cheapest” – Henry David Thoreau.
    “To waste, to destroy, our natural resources, to skin and exhaust the land instead of using it so as to increase its usefulness, will result in undermining in the days of our children the very prosperity which we ought by right to hand down to them amplified and developed” – Theodore Roosevelt.
    “When the ‘study of the household’ (ecology) and the ‘management of the household’ (economics) can be merged, and when ethics can be extended to include ‘environmental’ as well as human values, then we can be optimistic about the future of mankind. Accordingly, bringing together these three E’s is the ultimate holism and the great challenge for our future” – Eugene Odum.

  4. Jay,

    Yes,water is important for both life and as a potential energy source. The new forms of hydro electric and hydro-photaic (SP?) generators are promising. They are much more eco friendly than the traditional hydroelectric dams. Being in Alaska, I’m rather intrigued with tidal force generators.

    As far as conservation goes, it’s amazing how polluted our oceans are with trash. I’m not talking industrial pollution or chemicals, but basic trash. I saw a computer monitor that had washed ashore on the beach at Midway Atoll in the middle of the Pacific Ocean! The albatross are dieing from feeding their young plastic bits instead of squid.

    Thanks for the comment. Good details though. I think your comment may be longer than my article 🙂

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