The Oil Drum

Animal rights group PETA recently announced a $1 million reward for the first person to make in-vitro meat (leading Bruce Sterling to dub them "People for the Ethical Treatment of Alien Lumps of Flesh").

While PETA's aim here seems to be to be to publicise their opposition to the consumption of animals (as shown in the quote below), there is another angle to this story which is perhaps more interesting for those interested in energy issues - which comes back to "the oil we eat."

"Why is PETA supporting this new technology? More than 40 billion chickens, fish, pigs, and cows are killed every year for food in the United States in horrific ways. Chickens are drugged to grow so large they often become crippled, mother pigs are confined to metal cages so small they can't move, and fish are hacked apart while still conscious — all to feed America's meat addiction. In vitro meat would spare animals from this suffering. In addition, in vitro meat would dramatically reduce the devastating effects the meat industry has on the environment.

"Of course, humans don't need to eat meat at all—vegetarians are less likely to get heart disease, diabetes, or various types of cancer or become obese than meat-eaters are—and a terrific array of vegetarian mock meats already exist. But as many people continue to refuse to kick their meat addictions, PETA is willing to help them gain access to flesh that doesn't cause suffering and death...."

This story is part of my new Countdown to $200 oil series, which is the successor of my earlier, and now terminated by reality, Countdown to $100 Oil series.

As in previous years, I got my ass whipped in my latest attempt to suggest on Daily Kos that gas taxes should be increased, despite the fact that the place is completly dominated by Obama fans and Obama's solid stance against the gas-tax holiday.. Some commenters kindly called me a "rich elitist f*ck from Europe" (guilty on all counts, of course) for wanting to bankrupt poor Americans who cannot do without gasoline, preferably cheap, and are already struggling mightily.....

This is a guest post by Phoenix, an engineer working in the energy sector, and a friend of mine for well over 3 decades.

In January 2006 Phoenix emailed me a spreadsheet that predicted an oil price of $100/barrel by 2008, followed by an ongoing geometric rise in oil prices. I remember immediately phoning him to point out that the scenario was impossible because it is unsustainable - $100/barrel would cause economic havoc comparable to the oil shock of the 1970s and if a geometric price progression followed, then no economic recovery would be possible and... well, I recall using the phrase “rioting in the streets inside of 18 months”.

As we know, oil hit $100 in January 2008 and kept climbing, surpassing even Phoenix’s predictions. So when Phoenix offered to explain the model that generated those numbers, I leapt at the opportunity. Here is the story of how Phoenix became Peak Oil aware and generated his Price Calculator.

Click to Enlarge

First off, here is JHK on Colbert (Flash required, methinks). It's smart, it's funny, and it's worth your time (6 min).

For those of you in Canada, the video can also be seen on youtube here.

And, Jim has sent us a reply to the critics of World Made By Hand (link to Amazon)...it is posted here in its entirety.

I don't intend to mount a "defense" against all your complaints, but would like to make a few brief points:

The facts support the position that the Y2K computer situation was a serious problem. Billions of dollars and untold man-hours were spent correcting it. It was, however, a very limited problem, and it is fatuous to assert that just because it was successfully corrected means that we shouldn't have taken it seriously.

Complaints have come from many quarters that in my novel the feminist revolution appears to have been discontinued, or that my female characters are not sufficiently valorized. To me, these complaints show an impressive incapacity to imagine that social arrangements might be different under very different practical circumstances. In "World Made By Hand," the corporate milieu no longer exists. Issues of "glass ceilings" and "equal pay" tend to be irrelevant. All the people in the novel are essentially working within their competence. But the divisions of labor are not what they used to be in the age of WalMart and Time Warner. The major female characters are treated sympathetically as real people with pretty complicated lives.

The supernatural elements in the novel were introduced for a purpose: to suggest that the consensus about reality defined by Enlightenment ideas is yielding to a different consensus about reality -- one less grounded in empiricism and logical positivism. I went this way because it seemed probable that socio-economic changes so profound would have to produce changes in fundamental views of reality.

Robert Rapier's recent review of World Made By Hand can be found here.

In recent days a series of media articles surfaced pointing to a concerning situation in China. The New Scientist reported:

At the end of a cold and stormy winter, the country has just 12 days of coal reserves at most power stations. Some provinces, including Hebei, bordering Beijing, have less than a week's coal left. This is a record low, the state electricity regulatory commission revealed on Tuesday.

Where's the Demand Destruction?

Oil is close to $120/barrel, "peak oil" is everywhere you look, so where’s the demand destruction? The latest EIA figures actually show a 0.57% increase in US gasoline demand year on year over the last week. The week prior also showed an increase in gasoline demand, but the 4-week average still shows a 0.5% decrease because of lower demand in 2008 for the weeks ending 4/4/08 and 3/21/08. Regardless of which statistic one chooses, this is hardly a convincing case for demand destruction. Admittedly, historical demand growth has been near 1.5%, and the per capita gasoline use is slightly lower since the US grew roughly 0.883% last year. At best, this is not significant "demand destruction." Take a look for yourselves: here are the EIA’s full historical tables for gasoline demand, both week ending and 4-week average. With statistics available to show both minor increases or decreases, recent reports in the press and blogosphere consistently publish reports of declining demand. Other articles, also consistent in claiming that we're driving less, rely on entirely different sources: Businessweek recently claimed that "traffic" as measured by the Federal Highway Administration is down 1.4% last year, and MasterCard claims that purchases at the pump are down 6.8% since last year. If EIA statistics are even vaguely accurate, then MasterCard's figure seems untenable--what is happening to all the additional gasoline being purchased? Gasoline stocks are up from a year ago, but nowhere near enough to make up for these discrepancies. And, of course, it is possible that EIA data is off--there are even internal discrepancies in the EIA's reporting, with this week's Weekly Petroleum Status Report highlights (.pdf) claiming that the 4 week average for gasoline demand rose by 0.9% over last year, directly contradicting the EIA's data tables (referenced above) that show a 0.5% decline in the exact same statistic. Amidst this confusion, the consistency of reporting about a decline in gasoline demand seems like cherrypicking.

With this uncertainty surrounding the concept of “demand destruction,” it’s time to take a deeper look at the mechanics behind how demand destruction occurs. Specifically, this essay will limit its focus to two components of demand destruction in gasoline: the time-lag between high prices and reduced demand, and the need to price alternatives to each gallon of gasoline we consume. Does a lack of demand destruction when oil is well over $110/barrel mean that prices must go even higher to destroy demand? How much higher? Or is it enough that prices hold at this level for long enough to cause people to gradually make long-term purchases with this price in mind, and thereby destroy demand? How long? Finally, how much of current US demand destruction (to whatever degree it exists—even if only as a decrease in growth of demand) is due to current economic conditions, and how much can be attributed directly to the price of oil?

It's hard for oil not to be in the news at the moment, but we haven't seen coverage like this very often. This article by Jad Mouawad is from the New York Times, but today it was published as a full page feature in the The Age Business section in Melbourne:

If you think the oil situation is bad, worse is to come

To many experts, the steadily rising price underscored longer-term fears about a system that has supplied cheap oil for more than a century.

Given the latest trend in Asian Unleaded prices, on the back of the TAPIS oil price, it looks all but certain that we will see new petrol price records tomorrow:

Vincent V. in NYC writes: Garbage trucks are a major source of urban air pollution. One truck pollutes about as much as 350 cars. NYC has been moving to switch utility vehicles to hybrid tech (w/city buses & taxis), but not with garbage trucks.

There was a PR event yesterday at Union Sq for natural gas powered trucks: http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080410006271&newsLang=en

But Volvo just introduced the first hybrid garbage truck in Sweden, which seems even better suited than CNG to congested environments like NYC. Garbage trucks idle for 60-70% of the time they're in use. But Volvo's hybrid shuts off completely, eliminating pollution and noise. (sorry for the autochannel.com spam...)

It would be great to push the NYC Dept of Sanitation to look into purchasing hybrid garbage trucks in their next round of ordering.

And under the fold, if you are needing a little inspiration/thinking, you'll find a brief speech by RFK on GDP and measuring success in America. :)

This isn’t an argument about whether or not taxes—particularly energy taxes—are “good” or “bad.” Rather, this essay has a narrow focus: IF we’re going to attempt to reduce gasoline demand through taxation, what is the best way to do it?

Here’s my somewhat counter-intuitive theory: to most effectively reduce long-term gasoline demand, gasoline taxes should increase, not decrease, long-term price volatility.

First, let’s look at European gasoline taxes. In the UK, gasoline tax is .50 GBP per liter plus 17% VAT ($3.75/gallon before VAT, $4.42/gallon with VAT). In Germany it’s .65 Euro per liter plus 19% VAT ($3.80 per gallon before VAT, $4.53/gallon with VAT). Compare that with US taxes, which range from a low of $0.26/gallon (Alaska) to a high of $0.63/gallon (California). The much higher European taxes operate to reduce price volatility because they remain static in the face of changes in the underlying price of gasoline. For example, if taxes effectively double the price of gasoline, then a 10% increase in the pre-tax gasoline price results in only a 5% increase in the after-tax price of gasoline paid by the consumer.