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The Moral Equivalent of War
With all this talk about gas taxes and energy prices, it's important to have a little history lesson.
In 1977, then President Jimmy Carter set up the first comprehensive energy policy the US ever had.
Some quotes from that speech:
Our decision about energy will test the character of the American people and the ability of the President and the Congress to govern. This difficult effort will be the "moral equivalent of war" -- except that we will be uniting our efforts to build and not destroy...
I know that many of you have suspected that some supplies of oil and gas are being withheld. You may be right, but suspicions about oil companies cannot change the fact that we are running out of petroleum...
But we do have a choice about how we will spend the next few years. Each American uses the energy equivalent of 60 barrels of oil per person each year. Ours is the most wasteful nation on earth. We waste more energy than we import. With about the same standard of living, we use twice as much energy per person as do other countries like Germany, Japan and Sweden...Now we have a choice. But if we wait, we will live in fear of embargoes. We could endanger our freedom as a sovereign nation to act in foreign affairs. Within ten years we would not be able to import enough oil -- from any country, at any acceptable price.
If we wait, and do not act, then our factories will not be able to keep our people on the job with reduced supplies of fuel. Too few of our utilities will have switched to coal, our most abundant energy source.
We will not be ready to keep our transportation system running with smaller, more efficient cars and a better network of buses, trains and public transportation.
We will feel mounting pressure to plunder the environment. We will have a crash program to build more nuclear plants, strip-mine and burn more coal, and drill more offshore wells than we will need if we begin to conserve now. Inflation will soar, production will go down, people will lose their jobs. Intense competition will build up among nations and among the different regions within our own country.
If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions...
I am sure each of you will find something you don't like about the specifics of our proposal. It will demand that we make sacrifices and changes in our lives. To some degree, the sacrifices will be painful -- but so is any meaningful sacrifice. It will lead to some higher costs, and to some greater inconveniences for everyone.
But the sacrifices will be gradual, realistic and necessary. Above all, they will be fair. No one will gain an unfair advantage through this plan. No one will be asked to bear an unfair burden. We will monitor the accuracy of data from the oil and natural gas companies, so that we will know their true production, supplies, reserves, and profits.
The citizens who insist on driving large, unnecessarily powerful cars must expect to pay more for that luxury.
So, what happened? Well, the general populace didn't much like the idea of that sacrifice. Many of the people in the rust-belt, now upset about gas prices were exactly the same ones that elected Ronald Reagan in droves.
In the meantime, Reagan dismantled Carter's policies -- and the Alaska Pipeline and the British North Sea oil kept prices low enough for about 15 years that people just kept buying those SUV, pick-ups, etc. -- all that used even more gas than the luxury cars Carter referred to!
And in the process we lost 30 years.
That bears repeating: 30 years lost.
Hillary Clinton is pretending that the problem is we need to get the price of gas below $4. That time has passed. We lost it in the 30 years we were greedy.
Mourn that fact. Now let's move on.
If Hillary were really concerned about oil prices, she'd be proposing how people will be heating their homes this winter. Of course, winter comes after the election occurs.
If you live in IN and NC, don't fall for her fake solutions. We have a real energy crisis coming on, and Hillary's solution just helps the denial along even further.
We finally have to face our moral equivalent of war.
Comments (41)
It is absolutely NOT true that this so-called "gas tax" issue is Sen. Clinton's sole "answer" to the Energy Crisis. For just ONE example, I've heard her husband talk (in considerably more informed detail than I've heard Sen. Obama communicate) about government assistance to improve the hybrid car battery.
Fair enough to dismisss the gas tax issue as a "gimmick". I know economists don't like it, but I think the average economist is better-equipped than most of us to tolerate $4/gal. gas, assuming he even drives to work in the first place. The point is not that it's an ideal answer, the point is that attempts to do NOW, what can be done, NOW. We all agree (including Sen. Clinton) that much more needs to be done over the longer term.
May 6, 2008 7:28 AM | Reply | Permalink
First, I never said this was her sole answer.
I did say that she has not addressed the problem honestly.
Summer months are not about driving to work, they are about vacations. So let's be honest about what people are really upset about. And let's be honest Hillary's "solution" is anything but.
And let's agree that the "meme" of the working class is bogus. Everyone I know goes to work at least 5 days a week. So trying to separate out "elitists" is totally bogus. In fact, the main message of my post was that the general public most likely to fall for the pandering now, were the very same ones that didn't want to deal with the problem before.
Because all those people you are counting on to invent the magic technology to save the US from a fate that is surely going to happen anyway, are the same "elitists" you don't want to know from now. You can't have it both ways.
May 6, 2008 7:43 AM | Reply | Permalink
Have you completely lost it? Summer driving to you may mean vacation, but there are people in this country that are working while you're vacationing - who in the hell is making your bed in the hotel, or washing the towels you use, or serving you your breakfast or selling you the t-shirts you buy, or putting you on the damned amusement park rides?
May 6, 2008 4:33 PM | Reply | Permalink
But the question remains, why do gas prices go up in the summer? What leads to increased demand?
May 6, 2008 4:57 PM | Reply | Permalink
I'll take "Increased Consumption" for $200, Ben.
May 7, 2008 4:13 AM | Reply | Permalink
DF! I've been waiting for you!
Every time I have a thread that's right up your alley, you come late the party!
Fortunately, I still have some libations left in the kitchen...
May 7, 2008 4:33 AM | Reply | Permalink
I wish that I had more to add here.
Well, it looks like we screwed the pooch on that one.
It's good to see that many people are at least of a mind to understand that this is actually happening. It's unfortunate to see that some think that this may be mere "conspiracy theory" (though, oddly enough, many modern oil company geologists deny that the notion of peak oil is legitimate) or that we can somehow force multi-national corporations to nationalize a resource that they do not own or that we can somehow tax these companies to some undescribed benefit (Where will this money go? Why won't this cost be passed to the US consumer? Why won't oil companies gladly sell elsewhere?).
It makes me wonder what would happen if I was doing a tandem skydive with someone and told them that we only had 5 seconds to deploy the parachute based on the altimeter reading. Would they call me a pessimist or accuse me of proffering a doomsday scenario?
I reminds me very much of Ishmael by Daniel Quinn.
May 7, 2008 5:01 AM | Reply | Permalink
Bev... it's been years since I've been on a vacation.
Would you like to know why?
Couldn't afford it.
May 6, 2008 6:46 PM | Reply | Permalink
That's irrelevant to Bev's point. The point is that these people are hurting now and need a break. Everyone agrees it is not a long term solution. But people are facing crisis now and they need relief now.
Is that too hard to understand??
May 8, 2008 6:13 PM | Reply | Permalink
P.S. Everyone YOU know isn't the rest of the country - it reminds me of the morons who claim there isn't such a thing as global warming because there is snow in their backyard. Guess what? There are people I know who are working two and three jobs a week to keep their heads above water, they're not planning the next trip to Disney World, they're wondering how they're going to feed their kids or pay the rent or buy school supplies and God help them if one of them gets sick.
May 6, 2008 4:37 PM | Reply | Permalink
So exactly what city do your people commute too?
Let's put some meat on your arguments. Because everyone you see in a soup kitchen, doesn't represent the country.
And, instead of a meaningless metric like counting jobs, let's talk about something more meaningful like hours worked/week.
As I said, most people in this country work very hard.
May 6, 2008 6:44 PM | Reply | Permalink
you truly are a moron.
Don't you get it? People are facing crisis. Maybe not you. Does it matter if you and your buddies are not facing crisis? Those that are facing crisis are Americans.
May 8, 2008 6:16 PM | Reply | Permalink
Yes, according to Hubbert we ran out of oil in 2006.
For a refreshing counterpoint, I heartily recommend Greg Palast.
May 6, 2008 7:30 AM | Reply | Permalink
No, totally wrong on two accounts.
First, Hubbert talked about peak oil -- that point when the easiest amount of oil, the 1st 1/2 -- has been taken from the ground.
Hubbert never talks about "running out", it's about peak.
Second, Hubbert made his prediction -- with extraordinary accuracy -- about the lower 48 US states. Not the world. The only reason why the year of peak for the world is in some doubt was that some countries didn't have transparent data.
However, now that we are already 2 years past 2005, we can see empirically, that production did peak in 2005. At this point, the peak oil theory will help us estimate how much time is left before the oil gets too difficult to get (energy returned on energy input).
I suggest you go and read some published books on the topic as the must elementary fundamentals have escaped your thoughts.
May 6, 2008 7:36 AM | Reply | Permalink
While in essence I agree with what you've posted and I've been talking up Carter for 30 years, I've seen no evidence that we have hit the peak. Peak oil in no way accounts for the present rise in prices. There is no supply problem at the moment even with Iraq's oil production nearly off line.
As you've posted there is a decided lack of transparency in data about oil fields outside this country. No one really knows if we have hit peak or if its 20, 30, or 50 years into the future. That also depends on what action we take now to conserve, what technologies we bring on line of discover to increase efficiency, and what technologies we come up with to obtain oil from oil shales and sand as well as better, cleaner uses of coal. But it does appear unlikely that there will be another major find since the oil companies have been looking for many years without any but small successes.
While I do agree that this is a real problem, one we should have continued working on as Carter began to, you are choosing the most pessimistic scenario possible.
I guess there's a value in that as its so hard to get people moving unless the crisis is imminent and if we wait that long there's likely not going to be enough time to or energy reserves to find solutions. We as a nation cannot continue to constantly increase our oil use and other nations cannot develope to the point that they equal our usage. There is a finite supply and a replacement must be found in our lifetime.
Both democratic candidates have decent plans to start us on that path if they are able to push them through congress. The attempt to demonize Hillary over her gas tax holiday is as much a form of pandering over a small issue as the gas tax holiday is. As usual Krugman is a voice of reason amidst the hyperbole.
May 6, 2008 3:06 PM | Reply | Permalink
The rising prices are because the Saudis can no longer play the swing role by producing more oil to keep up with demand. This in spite of their promising for nearly 2 years to do so.
As a result, speculators have now set the price of oil...and hence the rise. So it's very definitely linked.
According to EIA International Petroleum, in 78 months of global oil production (97-07), only 4 months saw crude output exceed 74 million bbl/day:
April 2005
May 2005
Dec 2005
July 2006
With the exception of OPEC and Russia, all oil producing countries are past peak (via data). You only need transparency to make predictions, not to look in the rear view mirror.
OPEC and Russia aren't transparent, it's true.
However: They are not particularly friendly to the US and even if they could maintain current levels, there are other countries (notably Russia, itself, China, and India) that are developing a huge appetite for oil to increase their standard of living:
http://tonto.eia.doe.gov/country/index.cfm
Note especially the table on the upper right.
May 6, 2008 7:34 PM | Reply | Permalink
Here's a graph of similar data:
http://www.eia.doe.gov/emeu/aer/pdf/pages/sec11_20.pdf
May 6, 2008 8:05 PM | Reply | Permalink
Other indications of past peak oil:
The Energy Returned on Energy Invested:
http://en.wikipedia.org/wiki/EROEI
100 years ago, we got about 100 barrels for every barrel invested. Today in 2008, it's about 10x.
In other words, we already have the easy stuff out of the ground. That, too, is a sign of being in peak.
Also, Hubbert based his theory that discovery of oil follows a "bell-like" curve and leads the extraction (production) of oil curve by about 40 years. That doesn't mean that there can be no discoveries, but it means there are less and less.
The peak discovery in the lower 48 states occurred about 1935... and we peaked in 1973. The peak discovery for the world occurred around 1965.
You do the math.
May 6, 2008 7:42 PM | Reply | Permalink
Lastly, the US has a growing appetite for oil...and so does the rest of the world. This will deplete the finite resource even faster:
http://www.gatsby.ucl.ac.uk/~pel/environment/population_pt04.html#ref
Between these 3 posts, I think you will see, oceankat, that there is evidence aplenty.
May 6, 2008 7:44 PM | Reply | Permalink
This is a little off topic, but since you recommend Greg Palast, and this does have to do with energy, this article by Greg is most interesting.
http://www.gregpalast.com/mrs-clintons-forgotten-fling-with-the-killer-of-karachi/
May 6, 2008 2:39 PM | Reply | Permalink
What about Hubbert's predictions of oil production?
How accurate were those?
Not very.
There's more than one school of thought on this, and I think it's valid that people have been arguing about "peak" production for 50 years. As I said before, the truth is likely somewhere in between, what is clear to me is that the time of record 11 billion dollar quarterly profits on a public resource is over.
Senator Clinton is doing something about that, so good on her. The whole point isn't to limit people's knowledge about something and only present facts and figures that benefit your own argument, it should be a discussion.
Who has benefitted the most from the fear-mongering cry of "PEAK OIL!!!?"
Funny, but it's those private oil companies that have, and incredibly since Bush became president. OPEC ain't hurting either.
Something to think about, at any rate.
May 6, 2008 9:37 AM | Reply | Permalink
"a public resource..."
DON'T WE WISH!
May 6, 2008 2:34 PM | Reply | Permalink
If she feels so strongly about it, she's a Senator, and can get to work writing up a bill.
How can she credibly support a policy position that must be implemented immediately ("summer holiday") if she's not actually utilizing her legislative powers for its speedy realization?
Even if she's too busy with the campaign to do it, many of her supers are congresspersons, and they could be collaborating on it for her. If she ends up squawking about the gas tax holiday through another news cycle without some legislative action from her camp, then even more people will start calling her out to put her money where her mouth is. Summer holiday people, move. Make it happen or don't, but if you're not going to write up and present that bill, you DON'T get to talk about how you strongly support it for the benefit of all Americans.
May 7, 2008 11:00 AM | Reply | Permalink
I'd say forcing the oil companies to open their books and submit to government regulation of their profit margins is good first shot in the war. What is Obama proposing to do?
This is classic governance. She's found a popular issue to put pressure on the oil companies. The best they have been able to do to sidetrack her is trot out Obama, trot out Economists who conveniently forget to mention the excess profits tax as they denounce the holiday, and hunker down, hoping she'll go away.
In my view, how we handle the end of oil is the most critical national security issue facing America. It's only a matter of time before Americans come to their senses and take their fate out of the hands of the international oil and gas companies.
And here's a half-baked idea for you to maul. Would nationalizing our refining capacity give us countervailing power to engage OPEC with?
May 6, 2008 9:42 AM | Reply | Permalink
Uh, no.
There's China and Russia for starters. Besides, our refining capacity is woefully out of date.
The only effect would be to isolate the US even further in a game that's becoming more and more decided by countries in the east.
It's comments like yours, Billy, that make me realize that those who support many of Hillary's notions have as much of an up-to-date and clearminded view of things as those who support GWB.
May 6, 2008 12:16 PM | Reply | Permalink
Well, Billy, you go right in their offices and demand it!
You've got about as much chance of accomplishing that fantasy as Hilary does of getting the Bush administraton to pony up a windfall profits tax.
It will take a sea-cahnge in our electorate (my guess is it will be the 112th before we ccan even discuss your lofty requirements, hope I am wrong and you areright, though) to make any headway, let alone getting the most pernicious, powerful and pervasive conspiracy (trust) in the history of our nation to cough up its secrets.
Makes us all feel good, though, huh?
This is classic pandering.
May 6, 2008 2:20 PM | Reply | Permalink
Workerbee:
1) When you say; "what is clear to me is that the time of record 11 billion dollar quarterly profits on a public resource is over. Senator Clinton is doing something about that, so good on her."
I presume that you referring to the proposed 'windfall' profits tax, am I correct?
2) How is the reality of peak oil "fear mongering"? Oil is a non-renewable resource so, obviously, that means a finite supply is a reality for which we are overdue in preparing.
May 6, 2008 10:04 AM | Reply | Permalink
Hello, yes, but not just that. Clinton has indicated a willingness to take on these poor stewards of that finite resource.
It is fear mongering, because what CT and some others are saying is there are no solutions short of harsh drastic measures while at the same time insisting that there is nothing to see behind the curtain.
I think there are likely better, more practical ways to deal with this mess, and we won't get to even discussing them if every time someone picks up a club and a magnifying glass they're shouted down.
FDR was shouted down, by elitist economists no less.
Thankfully, he did'nt listen to them. He listened to the regular folks. He helped them.
Oh, I know that libetarians in particular have rewritten history, but you won't find many folks that were alive then that have bad things to say about FDR.
:)
What is needed is more regulation, profit caps, and investment. 11 billion a quarter is a good start.
May 6, 2008 7:12 PM | Reply | Permalink
Profit caps will only hurt Americans. About 40% of the total amount of money in pension funds is invested in oil companies, and that's retirement money for a huge share of Americans of all constituencies.
If, for instance, the oil companies devise a pricing regime that increases efficiency and conservation of oil use, while at the same time these same companies are investing in and fielding better alternative fuels, then they might very well be entitled to profits above $11 billion/quarter.
What if their investment to profit margin is 20:1? 50:1? An $11 billion/quarter profit cap doesn't care. But stock indexes do.
May 7, 2008 11:15 AM | Reply | Permalink
I agree that we've lost a lot of time, but Carter is also one of the reasons that I'm reluctant to advocate that the current candidates get too involved in the issue. Right now, there's not a lot of evidence that any of the big three have a full grasp of the topic and whenever "peak oil" first comes up, a lot of the doomsday scenarios bring up images of Mad Max, A Boy and His Dog or that thing with Peter Cook and Dudley Moore flying around in a hot air balloon. Personally, I'd rather that we stay "hopeful" until at least the election.
Afterwards, if the speechmaker or the fighter wanted to invoke the imagery to get us more focused on alternatives, I'm sure Al Gore and his environmentalists would gladly join in the conversation, but Carter told us all to put on a sweater and though there were other factors at play, he lost the next election.
May 6, 2008 2:43 PM | Reply | Permalink
Again, you and I agree on the realities:
and this was one of the things that Reagan attacked... and all the Reagan democrats in the rustbelt bought into it.
And this was being told to put on a sweater!
http://www.eia.doe.gov/emeu/aer/pdf/pages/sec11_20.pdf
What a lovely story this picture tells...
May 6, 2008 8:02 PM | Reply | Permalink
Of course we won't hit a solid wall of oil wells stopping cold. It will be a soft transition, which we are now seeing, from easy to difficult oil. The higher prices will cause renewed use of coal, delaying the tapering off of oil production.
The best strategy is to aggressively push non-fossil sources. The competition from those will keep prices lower, and reduce the pressure to shift to coal. And the sector that first achieves complete freedom from fossil energy will be the long-term winner.
Clinton and McCain are talking about squeezing the oil companies, which is a loser strategy. In the meantime, important tax incentives for alternatives will expire without action. I am not impressed with the current silliness over gasoline. Smart countries will be looking for the earlies possible escape from the trap. Looks like we will be among the last to get the message.
May 6, 2008 4:54 PM | Reply | Permalink
Exactly. For all practical purposes, we are never going to run out of oil. There will never be a newspaper headline announcing that the last drop of oil had been pumped. Because long before that would happen, oil will become so expensive that it will become useless as a source of energy.
May 6, 2008 5:20 PM | Reply | Permalink
Indeed. It will be tantamount to burning Scotch in your car.
Except for the taste...
May 6, 2008 6:14 PM | Reply | Permalink
To quote Tena, foookin tags... and the edit button is broken again.
May 6, 2008 7:07 PM | Reply | Permalink
Wasn't Carters energy policy also the last one the US ever had?
May 6, 2008 5:21 PM | Reply | Permalink
Yes. Everyone likes to blame the Bushes (father and son) for not being interested in energy policy because they were oilmen...
...but the Clintons didn't do anything in the White House for 8 years about it either. In a sense, GWB had nothing to dismantle from the Clintons in this regard.
Indeed, one of the reasons Hillary can go out now and pander on this issue is because the Clintons did nothing about it 16 years ago. And that was when we had record lows in oil prices and budget surpluses. What a great time to rebuild our passenger and light rail systems.
But no... energy wasn't an issue with the Clintons, that is clear.
May 6, 2008 7:47 PM | Reply | Permalink
HEY KOOLAID!
May 6, 2008 6:34 PM | Reply | Permalink
Recommend. Clearthinker, no matter what happens with the nomination we all need to start waving this issue in people's faces. Natural resource stuggles--air and water, habitat (lost to climate change), and, yes, oil--are going to become flashpoints both here and internationally over the next few decades. The US still has enough wealth to prepare for hard times by investing in technology and industry to support converting our miserably designed economic structure and lift other regions of the globe with us. In another 10 years we may have lost our chance and sink along with everyone else.
Thanks for posting this.
May 6, 2008 10:38 PM | Reply | Permalink
You're very welcome! Thanks for reading it!
May 7, 2008 3:59 AM | Reply | Permalink
ARGH!
SWASHBUCKLE AWAY! FIRE YE CANNONBALLS!
BURN! BABY! BURN!
NOW GUZZLE THE GAS!
ME ENERGY'S NOT IN CRISIS!
ACQUIRE! MERGE! MARAUD! DILUTE! DILUTE!
ARGH!
May 6, 2008 11:46 PM | Reply | Permalink
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