Fossil Fuels

What the oil bloom bought us

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Greens are portrayed in the media as profits of doom, as though a fascination with the negative impacts of our lifestyle might be some sort of psychological flaw. My own view is that we are closer to reality than the vast majority of the population, who are trapped in denial about the ecological crisis, but none the less I think it is worth re-evaluating the extraordinary achivements of the 200-year oil bloom.

Getting even with ExxonMobil

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I believe the very simplistic view is that by going after the oil companies, they are going to relent and lower gas prices. Thus, their profits will return to “normal” levels along with our gas prices. We want a return to the good old days of sub-$2/gallon gasoline. But most of the proposals that are being floated won’t do anything to relieve high gas prices, although they may have an impact on oil company profits. If that’s the case, then what is the point? I would say that it is simply feeling like justice was served. We want to get even with Big Oil.

Top 5 myths about subsidies to oil companies

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Can the president who killed Osama bin Laden now stand up to Big Oil? Encouraged by comments made by House Speaker John Boehner that subsidies for oil and gas companies should be on the table, Democrats have revived their stalled effort to cut billions per year in taxpayer handouts to the largest oil and gas companies. But the oil lobby is not going gently into that good night.

Introduction of the Open Fuel Standard Act

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The OFS would require that 50 percent of new automobiles in 2014, 80 percent in 2016, and 95 percent in 2017, would be warranted to operate on non-petroleum fuels in addition to or instead of petroleum based fuels. Compliance possibilities include the full array of existing technologies – including flex fuel, natural gas, hydrogen, biodiesel, plug-in electric drive, and fuel cell – and a catch-all for new technologies. This requirement will then provide certainty to investors to produce alternative fuels and fueling stations to have a variety of pumps supplying those alternative fuels.

Energy prices and US recessions

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For all the recessions from 1973 on, energy prices were rising either before or immediately at the onset of the recession, and in every case they “broke” in some sense before the recession was over – either declining, or at least sharply slowing in growth. The paradigm case is 1973 where energy prices were rising steadily and then a huge oil shock coincides with the start of the recession, which only ends after prices have stabilized.

The peak oil crisis: peak oil elasticity

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Most of us can recall from Economics 101 the concept of elasticity of price demand which says that in most cases as the price of something goes up, the demand for the product or service goes down. Studying the elasticity of gasoline prices has been very popular recently and that in the last 20 years there have been well over 100 papers written on the elasticity of gasoline prices.

The general conclusion of these efforts is that gasoline demand in motorized societies such as the U.S. falls slowly. In the very short run, motorists have no choice but to spend whatever it costs to keep their automobiles and trucks running for their livelihoods depend on it.

The context of Hubbert’s Peak in world oil forecast

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Hubbert’s Curve still remains important because it provides something close to an upper limit to the amount of oil that can be produced. The reason I say “close to” an upper limit because there is still the possibility of technological advances, making new types of production economic. Experience to date shows that the role of these advances is likely to be fairly small, though.

Complaining about mosquito bites while a crocodile bites our leg

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I am not an oil industry apologist, but recognize that I live in an oil-centric world, own a car, enjoy air travel and partake in the daily smorgasbord of food, services, and novelty made possible in the cheap energy age. To me, given the problems our country and government face, blaming Exxon for high gasoline prices and excessive tax subsidies is akin to complaining about a mosquito bite on your arm when a crocodile has your leg in its mouth.