Comments on: Reducing Oil Consumption

Comment on Reducing Oil Consumption by: Ian Lance Taylor

Wed, 09 Jul 2008 07:05:39 +0000

Thanks for the notes.

ncm: Interesting point about gas stations, we’ll see what happens.

Michael: I’m not sure I agree that raising fuel standards would hurt car companies. For example, if fuel standards had been raised twenty years ago, car companies would not be in the painful position they are in today. Of course, other things would be different, so who knows, but the point is, car companies complain about fuel standards but they aren’t necessarily hurt by them.

Comment on Reducing Oil Consumption by: Michael Hubbard

Wed, 09 Jul 2008 06:56:56 +0000

I guess my thoughts are pretty similar to ncm’s.

Comment on Reducing Oil Consumption by: Michael Hubbard

Wed, 09 Jul 2008 06:29:14 +0000

To say that Japanese companies are doing well despite Japan’s good emissions standards is a little bit wrong, I think. Those companies are doing well, but I think it has a lot to do with other countries’ (like our) low standards. They sell us a ton of SUVs. I agree that the standards should be higher, but this would hurt car companies. I think there are a bunch of people who, if forced out of their Hummers, would take the bus rather than buy a Prius.
Similarly the current trend of excessive consumption and thus soaring prices, though unsustainable, seems to be quite beneficial for some people ( http://www.washingtonpost.com/wp-dyn/content/article/2008/07/06/AR2008070601833.html ). I don’t see any quick fixes when investing in environmentally irresponsible things is so beneficial to some, even if it’s a few people that are benefitting at the expense of everyone else.

Comment on Reducing Oil Consumption by: ncm

Tue, 08 Jul 2008 21:59:11 +0000

The oil companies have a problem. They have lots of capital to invest in alternatives to oil. However, all the most promising alternatives are free of the choke points they need to maintain the cash flow they are used to. Their first priority must be to sabotage all the alternatives until they can secure their next chokehold. Geothermal and nuclear power have the sort of scale they like, but the electric utility industry is already dug in there.

In the short term, I think we’ll see a sharply increasing proportion of corporate-owned gas stations as they (re-) secure control over the distribution network, the better to choke compressed-air, battery, and hydrogen delivery channels.

Comment on Reducing Oil Consumption by: Ian Lance Taylor

Tue, 08 Jul 2008 14:11:53 +0000

Oil companies which only focus on oil are being just as short-sighted as car companies which fight to keep fuel standards low. Their time hasn’t come yet, but it will. BP is trying to get out of the oil-only mode, with limited success. Exxon seems on paper to be following a different and quite rational plan: they are using their windfall profits to buy their own stock rather than to invest in new exploration. If they keep following this path, they should eventually be in a position to take themselves private and shut down at a tidy profit to executive management.

In any case, it’s worth reflecting that the oil companies actually control a minority of the market. Most of the market is controlled by national producers, like Saudi Arabia, Russia, and Venezuela. Those countries are raking in the money. However, except for Saudi Arabia, they have only limited influence over the U.S. government. The present administration, which is by no means the only one responsible for our oil problem, is clearly heavily influenced by both the oil companies and Saudi Arabia.

Comment on Reducing Oil Consumption by: ncm

Tue, 08 Jul 2008 07:12:01 +0000

Reducing dependence on oil would have reduced profits for oil companies. They’re doing just fine, today, thank you very much. When it looks like their profits are about to start down, then it will seem like time for the federal government to step in. Last time that happened we invaded Iraq. Next time, where? Iran? Venezuela?