While I appreciate that your figures are just examples, you might want to look at Europe. We have huge duties on fuel, and petrol here is approx US$7.50/gallon. People simply have to have petrol. Increased duty goes straight into inflation. There is currently no viable alternative to petrol or diesel. A car lets you go where you want when you want the route you want in the manner you want. If you need to rush your child to the doctor, you can’t do it by public transport, and you can’t always wait for an ambulance or a taxi. Further, cheap personal transport means a flexible labour force. And a labour force which is more competitive with those countries which don’t have high fuel duties.
Yes, but people factor that cost into the cost of a vehicle. And the vehicle fleet in Europe is much more fuel efficient than the US vehicle fleet. People ride mopeds. People drive mini cars. People drive tiny little putt-putt trucks. People take the train to go between cities. And people don’t have 3 cars per household.
Thing is, $7.50 per gallon gas doesn’t mean the end of the car. You can still have a car. You’re just not going to use it nearly as much, and you’re not going to have a gas guzzler unless you’re rich. So $7.50 gasoline isn’t the end of civilization, it doesn’t mean economic collapse, and it doesn’t mean Mad Max style gasoline wars, and it doesn’t mean the survivors fighting the rats for a chance to gnaw the carcasses of the dead.
You know…you’re taking all the fun out of this. 
Personal anecdote time…
Those with a death wish or the young, anyway.
There’s plenty of big vehicles.
Can’t say I’ve noticed this. Apart from going into central London.
One car per adult seems rather common.
As far as I can tell, the price of petrol has made no difference to people’s mileage. They need to drive and that’s that. The roads are getting busier and busier.
Perhaps you haven’t been to the U.S. lately. I have recently been to France and the Netherland and I can tell you that there is a world of difference between the make-up of the vehicle fleet in those countries as compared to the U.S.
Personally, I wouldn’t call you a market fundamentalist on the basis of what you are saying here. I’d reserve that term for those who seem to believe religiously that the market is always right to the point where they refuse to correct clear externalities, like WillMagic, rather than those who think that preserving the market as a mechanism but giving it signals through taxation, for example, is the best way to deal with externalities.
Lame. You know, you could actually try refuting my arguments, instead of trying to dismiss me with a wave of your hand and a mention of the word “externalities.” It’s garbage argumentation and you should know better.
But anyway, on externalities…obviously “correcting” positive externalities is a stupid thing to do. Positive externalities abound in capitalist systems, and it’s what makes the system so awesome. An entrepreneur buys a new machine that lets him make his product at half-cost, and the consumer benefits from the cheaper merchandise without having been a party to the initial transaction. Bang.
But negative externalities, as you mention, are bad. However, I don’t see how the oil “crisis” is an example of a negative externality that needs internalizing. Perhaps, if you aren’t tooooooo busy, you could enlighten me.
Well, the main externalities that I see are the environmental costs associated with the use of oil. However, there is also the fact that our foreign policy seems to be dictated in large part by oil interests…and the costs of this are not internalized.
Finally, there is the issue of whether the market is good enough at anticipating the future. I.e., it is not clear that the motivations are such that companies invest enough in the future versus their short term gain. As a result, just letting the market deal with the issue of the scarcity of oil may cause sharp disruptions.
Sam, I’ve believe I’ve addressed nearly all these issues in my last two posts already, so I’ll just add some clarifying remarks where I feel they’re warranted. Clearly you disagree with me, and that’s fine.
Regardless of the system under consideration, cost is a concern of course. But it’s cost vs benefit that is decisive, and that’s the point I’m attempting to make here. Sure a hydrogen economy would be cheaper. I think that your number is a bit low BTW, but you’ve accused me of that as well, so we’re even there, but even the real figure would be far cheaper than rebuilding cities - no argument on that point.
But don’t forget that the benefits a hydrogen ecomomy provides would be similarly diminuitive - after it’s done we’d be using another form of energy equally voraciously with those associated wastes and costs after conversion (actually more, but that’s another discussion as well).
The economic calculations posted here (mine and yours) are back of the envelope of course. Including more elements connected with the costs is fine, but should also invoke more elements connected with the benefits. We can start another thread to discuss this if anyone is interested; I’m confident that an overwhelming case for a restructured city can be made on economic grounds if a reasonably robust analysis is made.
Or put in other words, if the time value of money and costs associated with having an entire city under construction (workers, space for current residents, local distortion of commodity prices like steel and glass) are included, then so should the time value of man-hours saved in not sitting in traffic later, the costs of the pollution itself, the real estate for all the pavement that could be prime office building space instead. People die often in cars, or are injured/maimed as well, and that has costs too. There’s a quality of life bonus involved in a life with less stress and more socializing, hard to hang a number on but it’s there.
Your last sentence “Oh, and of course you have to convince everyone that they really want to live in a big arcology packed in line sardines - or put a gun to their heads.” seems to stem from a simple misunderstanding, so let me explain what I’m proposing.
An arcology as it seems to be defined would involve putting everyone and everything, including agriculture and heavy industry, under one dome. I think this is prima facie ridiculous, even if many “microdomes” are assumed. At least I can’t think of a way to make that work, it’s not practical. There’s a reason cities develop as they do, with a dense central population and progressively less further out, and it’s because cows corn and timber need land to grow, the coal mine is usually where the coal is, and the people involved in those occupations would rather live closer to their jobs too. Folks need to be outdoors for recreation (that’s why I live where I do) as well. Perhaps this is the kind of idea you are reacting so strongly against?
I’m envisioning just a major city and its suburbs/surrounding area rolled up into a mega-structure, not necessarily one building, but inter-connected enough that within its borders autos/buses/etc are largely unnecessary having been replaced with a system better designed for the population density. Some would still have cars, some would not just as it is in cities today. Staying in the city is voluntary, and if if scope is limited to the US then 20 or 30 such cities are all that is practical or necessary. Plenty of parks and common space, spacious and comfortable but reasonably so. The power plant has to be in the city for co-generation purposes, but generally heavy industry is out.
I rebut that your “packed in line sardines” metaphor better describes* current living conditions *for many of us, commuting especially, and that’s the sort of thing I’d hope to eliminate as it’s ridiculously inhumane.
Almost. The question is whether the market will do a better job than the government at anticipating the future, and that answer IMO is an unqualified yes. There are hundreds of oil companies with hundreds of thousands of employees who stand to profit greatly if they correctly assess the future energy supplies of this country. On the other side you have a few thousand government officials who have no such incentives to be correct and plenty of incentives to just dish out money wherever they can.
And the beauty of the market is, as the cost of oil increases, these businesses will be looking at the biggest business opportunity in the history of the world if they can supply alternative energy, and more and more capital will be shifted to alternative energy and efficiency r+d. Without any government intervention. Why? There’s too much money to be made for this not to happen. If the problem is serious enough eventually ALL the world’s capital will be shifted into energy resources. And if that can’t solve the energy crisis, then how could government possibly do it?
But the odds of this are all really low. As the price of oil increases, demand for hydrogen/solar et. al will increase, and demand for efficiency will increase. So as time goes on we’ll use less and less oil and more and more of other energies…again, without government intervention.
Well, I am not as wedded to the notion that markets will do a bad job at anticipating far enough in advance as I am to the notion that markets are not considering the clear environmental implications…and the other externalized costs such as much of what our government spends on military advantages.
Still, I don’t think that the market necessarily does a better job anticipating the future. I see a lot of short-term thinking in corporate America. The incentives for the corporate CEOs mainly cause them to focus on short-term gain and neglect (or at least under-value) long-term issues. Maybe that is what spending the last 10 years working in corporate America has shown me. [Some of the guys I eat lunch with are real hard-core conservatives…virilently anti-government, anti-tax, think Chuck Schumer and Hillary Clinton are the anti-Christs, and even hate evolution but when the talk turns to corporate America, they almost start sounding like Marxists (okay, slight exaggeration, but you get the point)…Go figure!]
That said, I do agree that government’s role should not be to micromanage things. I.e., I think it is generally better for government to create the correct incentives than to actually dictate exactly what technologies should be pushed, etc. I do think the market is a great mechanism for finding the least-cost ways of getting something done…But I don’t think the market is infallible and, at any rate, it doesn’t do any good at solving problems that don’t exist for it (e.g., limiting greenhouse gas emissions when the current direct cost that companies bear for such emissions is $0).
First of all, I’m sorry if my remark about market fundamentalists was taken as an offence, it wasn’t meant that way. It’s just that as a European (Norwegian), a lot of typical views in USA are pretty damn radical free market. After all, I live in a country in which market intervention by the government is very very common. Our typical tax range is between 25 and 40%, with the marginal tax rate for high incomes at 50%. But then we get a lot of free services from the state in return.
Well, at least in Norway it doesn’t work that way. We pay high taxes, yes, but the state guarantees for a certain standard of living for ALL Norwegians. So what we are really doing is subsidising the poor.
Wow. How did you guess that? 
I guess you also see the fact that driving alone 50 kilometers every day to and fro work, in a vehicle that weighs two tons isn’t the most clever way of transport? If you got the chance to build a city from scratch, would you really include no public transportation systems?
People don’t demand public transportation because it’s still cheap enough to drive. But I believe that as we approach the oil production peak, oil prices will go up several hundred percent, and then it will be so much more expensive to build those public systems. So we should act in advance, and change society now, while energy is still cheap. That’s really a problem with trusting only in the free market. It’s not good at planning in advance. There’s always a lag in market response.
Agreed. But regions that plan and act now will be able to provide these public services at a much lower cost.
Remember that it’s not only petroleum derived products that will increase. All energy costs will increase.
I don’t have the exact numbers (it’s not really that available data, if you have them, please post), but research in petroleum technology outweighs those of renewables by huge factors.
Not really. The ONLY incentive of the energy companies is as high a price for their product as possible. So if they keep shut about the emerging (possible) energy crisis, then people will not prepare for it, and prices will go up unnecessary much (from the customer’s viewpoint, not business) when it hits.
But what if the increase comes really, really fast? And you no longer can afford to buy that hybrid car. Remember that everything becomes much more expensive when the price of oil multiples. Not only gas.
Again, Norway was deemed to be the number one country in the world to live in, in terms of standards of living and security and other things, and we have a mixed economy, not a free market one.
Well, to start with, except for the more expensive SUVs, few cars weigh a full two tons anymore. Mine is 2800 pounds, that’s less than a ton and a half, and it’s a station wagon.
To continue with, ‘50 kilometers’? My god, I wish I only commuted 50 kilometers. My daily commute is 140K. That’s not even that far, I know people who come another 40K beyond me.
America is… a big country. Not that it helps all that much, but public transportation where I live is as good as possible… equally as good as anywhere in the UK, for example… and it’d still add an hour and a half to my daily commute to take it.
I’m sure Norway’s great, but what works for Norway won’t always work for America. I wish it did.
Don’t forget that there are a lot of other forces pushing Europeans into smaller cars. For one thing, they don’t generally have to travel as far as North Americans. For another, their road systems are often more difficult for larger vehicles to navigate. So even if gas were free, I would expect Europeans to be more interested in smaller cars than are North Americans.
When we go on vacation, our trip is usually more than 1000 km. How often do people in Europe drive 1000 km in their vehicles? My family is spread out in a 400 km radius from where I live. My round trip commute is about 50 km, and I live inside the city. And my drive is on wide roads, usually 2 or 3 lanes wide, and I have a covered parking space where I work. My garage at home is 26 ft wide. Two large vehicles fit in it comfortably.
We also tend to have larger homes in North America, bigger yards, wider sidewalks and boulevards, etc. We have the luxury of plenty of living space, and we use it.
Under these kinds of conditions, a large vehicle makes a lot of sense. So it takes a lot of financial pressure to push people into smaller vehicles. Now, if I lived in a city that was built hundreds of years ago and had narrow streets, little parking, and congested roads, and 90% of my driving was distances of 20km or less, and my car had to sit in my postage-stamp sized external living space, I’d be more likely to have a tiny little car I could manoever around.
To get back to the OP a bit, imho the single most important thing that can and should be done with regards to increasing relative scarcity of petroleum is for governments to resist the pressure to engage in measures that will decrease the price of gasoline at the pumps in the short term. Every summer I see this. Please can’t the government provide relief at the pumps, usually in the form of some sort of rollback on gas taxes. That is the single stupidest response to the issue possible. In order for the market to respond properly to a diminishing availability of petroleum, the price has to reflect that diminishing availability. Subsidizing the use of gas (and I’d say that putting no tax on gas when most roads are paid for with public funds would constitute a subsidy) will ultimately exacebate the problem.
So when you get sticker-shock when you fill your tank, resist the urge to whine to your elected representatives about the tax. Higher prices in the short term will, in the long term, result in a smoother transition to alternative energy sources, because those higher prices provide market incentive for alternatives to be developed. If you don’t like the high price of gas, figure out ways to use less of it. Most of us could significantly reduce our gas consumption if we were motivated to do so.