Comments on: My oral testimony on dealing with oil — short term and long http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/ The Latest on Climate Science, Solutions, and Politics Sat, 20 Mar 2010 14:26:36 -0400 http://wordpress.org/?v=2.8.5 hourly 1 By: Roger Chittum http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16588 Roger Chittum Wed, 23 Jul 2008 17:48:01 +0000 http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16588 Well said, Joe. This retired oil company executive agrees with you that we should use SPR releases to manage prices downward. The economy will take at least 5 years to adjust and recover if oil prices stay where they have been. If I controlled the votes in Congress, I would make a substantial increase in CAFE standards the quid pro quo for opening the SPR. There is, of course, the contrary view--expressed by John McCormack above and by many, many others elsewhere--that high prices are a good way, or the best way, or only the way to ration consumption. I disagree with that view. I would impose efficiency standards, mandate markets for clean energy, set emission limits, mandate use of BACT and BARCT, etc. And if we do a good job of that and also allow trading of credits, I don't object, so long as we don't allow phantom credits as the EU does or allow credits for cleaning up super-dirty plants in places like China where we should insist they use BACT. Attempting to do all this by manipulating market prices, which will unavoidably be volatile, will not work and will cost more than regulation, IMHO. So long as we are staggering along under the burden of high energy prices, which includes the transfer to oil producing nations of about 1% of aggregate US household wealth each year, it will be more difficult to find the economic resilience and the political will to shut down existing power plants and refineries and do the other things that need doing. One more point, if we succeed in bringing about dramatically reduced per-capita use of petroleum in the US and also get India and China to impose efficiency standards on transportation, oil will once again get very cheap--if not permanently, at least from time to time. Joe, you've been saying high prices are here forever, but today you argued to make them lower. You should declare yourself clearly on the question whether high prices are the problem or the solution. Well said, Joe.

This retired oil company executive agrees with you that we should use SPR releases to manage prices downward. The economy will take at least 5 years to adjust and recover if oil prices stay where they have been. If I controlled the votes in Congress, I would make a substantial increase in CAFE standards the quid pro quo for opening the SPR.

There is, of course, the contrary view–expressed by John McCormack above and by many, many others elsewhere–that high prices are a good way, or the best way, or only the way to ration consumption. I disagree with that view. I would impose efficiency standards, mandate markets for clean energy, set emission limits, mandate use of BACT and BARCT, etc. And if we do a good job of that and also allow trading of credits, I don’t object, so long as we don’t allow phantom credits as the EU does or allow credits for cleaning up super-dirty plants in places like China where we should insist they use BACT.

Attempting to do all this by manipulating market prices, which will unavoidably be volatile, will not work and will cost more than regulation, IMHO. So long as we are staggering along under the burden of high energy prices, which includes the transfer to oil producing nations of about 1% of aggregate US household wealth each year, it will be more difficult to find the economic resilience and the political will to shut down existing power plants and refineries and do the other things that need doing.

One more point, if we succeed in bringing about dramatically reduced per-capita use of petroleum in the US and also get India and China to impose efficiency standards on transportation, oil will once again get very cheap–if not permanently, at least from time to time.

Joe, you’ve been saying high prices are here forever, but today you argued to make them lower. You should declare yourself clearly on the question whether high prices are the problem or the solution.

]]> By: Rick http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16587 Rick Wed, 23 Jul 2008 17:23:37 +0000 http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16587 Joe, what do you think of switching over to electric cars and reregulating aviation? This would allow the surplus fuel can be polymerized for jet fuel, or at lease a greater proportion of crude oil is reformulated to jet fuel. Then regulation would protect long haul roots over water to be preserved. Finally we build long haul high speed bullet trains for transcontinental transportation. This allows us to drive when we must. We can still travel across country in far greater comfort than we could if we flew and we still save a critical part of the aviation industry until some time when even flying is replaced by something that doesn't require carbon-based fuels. Joe, what do you think of switching over to electric cars and reregulating aviation? This would allow the surplus fuel can be polymerized for jet fuel, or at lease a greater proportion of crude oil is reformulated to jet fuel. Then regulation would protect long haul roots over water to be preserved. Finally we build long haul high speed bullet trains for transcontinental transportation. This allows us to drive when we must. We can still travel across country in far greater comfort than we could if we flew and we still save a critical part of the aviation industry until some time when even flying is replaced by something that doesn’t require carbon-based fuels.

]]> By: Joe http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16586 Joe Wed, 23 Jul 2008 17:12:13 +0000 http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16586 Thanks, Nick. Some of the members really got what I was saying. I was also very happy most of the Dems understand the critical need to end our addiction to oil. And I learned a lot too. Hopefully, I will be able to interview James May, CEO of the Air Transport Association, about what $200 a barrel oil would do to the airline industry. Thanks, Nick. Some of the members really got what I was saying. I was also very happy most of the Dems understand the critical need to end our addiction to oil. And I learned a lot too. Hopefully, I will be able to interview James May, CEO of the Air Transport Association, about what $200 a barrel oil would do to the airline industry.

]]> By: Nick Kong http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16584 Nick Kong Wed, 23 Jul 2008 16:44:26 +0000 http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16584 Great work today, Joe. I thought your arguments came through resoundingly. Great work today, Joe. I thought your arguments came through resoundingly.

]]> By: Trinifar http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16583 Trinifar Wed, 23 Jul 2008 16:32:29 +0000 http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16583 You may want to fix the typo: "I think we cut use the price relief now." You may want to fix the typo: “I think we cut use the price relief now.”

]]> By: Joe http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16579 Joe Wed, 23 Jul 2008 16:12:14 +0000 http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16579 John -- I personally would be very interested to see how much oil prices would drop if we opened up some of the SPRO. If it were a lot, then frankly the people arguing that this was a speculative bubble were correct. If not, then that will send a strong signal that the situation is dire, that oil has peaked. John — I personally would be very interested to see how much oil prices would drop if we opened up some of the SPRO. If it were a lot, then frankly the people arguing that this was a speculative bubble were correct. If not, then that will send a strong signal that the situation is dire, that oil has peaked.

]]> By: Joe http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16577 Joe Wed, 23 Jul 2008 16:10:53 +0000 http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16577 Jon -- Thanks. That was a good hearing. Jon — Thanks. That was a good hearing.

]]> By: Jon http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16576 Jon Wed, 23 Jul 2008 16:05:22 +0000 http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16576 Great job. Thank you. Great job. Thank you.

]]> By: John McCormick http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16574 John McCormick Wed, 23 Jul 2008 15:57:35 +0000 http://climateprogress.org/2008/07/23/my-oral-testimony-on-dealing-with-oil-short-term-and-long/#comment-16574 The energy conservation demand and consumer pain are bashing heads and your written testimony amplifies that. Higher oil prices are slowly causing public attitudes to shift to driving less and buying more efficient vehicles. The former reduces AGW gases and the latter, one can assume, will allow reestablishing old patterns and lifestyles that include driving wherever anyone chooses. This gasoline price transition needs a floor price to assure consumers oil will never again be cheap...but that is what they wish for and what your SPRO suggestion, for the short term, will inadvertently aid. I do not mean you are calling for cheap oil and I see the argument in the hearing as being drilling versus what? I only raise the obvious tension that will continue in the AGW debate as the world limps blindly toward the oil peak. John McCormick The energy conservation demand and consumer pain are bashing heads and your written testimony amplifies that.

Higher oil prices are slowly causing public attitudes to shift to driving less and buying more efficient vehicles. The former reduces AGW gases and the latter, one can assume, will allow reestablishing old patterns and lifestyles that include driving wherever anyone chooses.

This gasoline price transition needs a floor price to assure consumers oil will never again be cheap…but that is what they wish for and what your SPRO suggestion, for the short term, will inadvertently aid. I do not mean you are calling for cheap oil and I see the argument in the hearing as being drilling versus what?

I only raise the obvious tension that will continue in the AGW debate as the world limps blindly toward the oil peak.

John McCormick

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