This board seems to be attract a decent portion of environmentally concerned types. The strong consensus of global warming threads seems to support the need to reduce fossil fuel consumption, etc.
It seems to me that demand for oil in most of the world, the United States in particular, has proven surprisingly elastic in the face of recent increases in oil prices.
That said, there has still been a ready supply of protest and consternation regarding the pain of increasing oil costs among the posters on this board.
So, by balancing your desire to see a reduction in fossil fuel use against the personal economic damage which arises from high oil costs, where would you price oil if you could do so by fiat?
For me, around $100 a barrel sounds about right. I believe the economy can adapt to that level through conservation and increasing efficiency without being overly disruptive or threatening long-term economic growth. It ought to permit a grual evolution towards efficiency. Fewer Canyonero’s and more bikes on the road, but it’s still possible to fly across the country or oceans from time to time provided it isn’t in a Boeing 727.
Not that I am specifically doubting you, and I am not sure it has a place in this thread, but do you have a cite for this? I would be very interested to see how much US oil consumption levels have dropped since the advent of the higher process. All I see in the article is this:
Which does not seem to be quite the same thing as saying that demand is elastic as a response to the higher prices…
Sorry, that wasn’t the best article from the Times on the subject, I used the search function and here’s a better one:
"The Cambridge Energy report said gasoline demand growth slowed significantly from 2005 to 2007 and peaked last year. Demand in the first quarter of 2008 declined by 1.3 percent from the first quarter in 2007.
Even if consumers start driving more, the report predicts that the efficiency of the American vehicle fleet will continue to improve…
“If these trends hold, then 2007 could stand as the peak year for U.S. gasoline demand.”
Hmm, 1.8 percent. Not the biggest decline, but nothing to sneeze at.
As far as the question, I agree it needs to be expensive enough to discourage poor city design and needless trips, but still enable things like air travel and inexpensive food.
Maybe instead of relying on the free market (the horror!), we could use a sliding scale that taxes oil for personal automotive use more than oil for commercial aviation or farming uses?
The price of fuel is irrelevant. It’s the stability of the price. We could easily pay %5 a gallon for fuel if it would stay at that price long enough for wages to stabalize around it. This is why I have advanced the idea that bio-diesel is the short term answer for our energy needs. We have the ability to grow all the diesel necessary for domestic needs without interupting other food crops. This can be delivered through standard fuel nodes. All that is needed is an accelerated introduction of diesel cars which is simple given that the big 3 automakers have European diesel versions in production.
I’m not convinced that the downsides of burning fossil fuels outweigh the downsides of expensive oil. That is, I think that the cheaper oil is, the better (assuming that we’re talking about an arbitrary supply that won’t be depleted faster at cheaper prices).
Yes, global warming is a real problem. However, I tend to believe that if we had effectively free petro-energy, we’d find a cost-effective way to contain the problem. So, my price, under the assumptions I made above, is Free, or as close to that as you’ll accept.
If, on the other hand, you mean that we wouldn’t have any more oil than we do now, but somehow people would be able to pay less for it and magically deplete it faster, then I wouldn’t change the price one bit. I have seen no evidence that a price set by fiat would work any better than the market price at conserving a finite resource.
I think a long term average of $100 a barrel would do wonders for fuel economy, exploration and exploitation of domestic stocks, and in driving technology.
For all the screaming about expensive gas this summer, I think the shock ended up being a blessing in disguise.
I would like to see a slow, steady, predictable long-term increase to at least $200 per barrel. Emphasis on slow, steady, and predictable. This would give people and society time to adapt to replace oil entirely, by rearranging their habits, replacing vehicles, rebuilding buildings and cities. It’s the sort of adaptation that would take generations to fully implement.
A sudden price increase leads to problems because people can’t adapt fast enough. Price spikes send contradictory signals which cause problems because people don’t know what to do.
I’m another one that would hope that oil drops a small bit and then does a slow climb in price that stays slightly ahead of inflation. It will do more to encourage fuel efficiency and alternate fuels than any government action I could foresee happening if fuel went back to being cheap.
This is not just about AGW and air pollution, but also getting America off our foreign oil addiction.
The problem is an unstable currency… $5 today is not the same as $5 a few months from now. With all the turmoil in the markets, housing etc, the USD, gold and oil are bouncing all over the place driven largely by the money supply and the dollar.
If the dollar could just hold a more steady value at any level things would be more predictable and thus better for the economy as a whole. Sadly, I don’t see that happening anytime soon.
