The crack is out of whack
May 19, 2011 11:41 AM Subscribe

Unusually for a spring season, gasoline prices have been steadily climbing in the US since the beginning of 2011, and have surpassed $4/gallon in many US states, largely due to political instability in many oil-producing African and Middle-Eastern nations. "Not so fast," says the Department of Energy. Although the price of crude oil has climbed steadily throughout the year, the price of gasoline has climbed much faster -- a disparity known as the crack spread, which has remained at its highest level in 32 months, even in light of a sharp decline in the price of crude oil at the beginning of the month. The DoE speculates that although crude oil is cheap and plentiful enough, the 2011 Misssissippi River Floods are currently more to blame for $4 gas than the uprisings in the Middle East.
posted by schmod (125 comments total) 7 users marked this as a favorite

a disparity known as the crack spread

An activity familiar to anyone who's had to fill up their gas tank recently.
posted by Horace Rumpole at 11:47 AM on May 19, 2011 [49 favorites]

Gas prices jumped considerably right after Katrina, and have not remotely returned to those levels.
posted by Melismata at 11:47 AM on May 19, 2011

I blame the inelasticity of demand for gasoline.

People seem to love goddamned free markets until they do something like actually price to demand.
posted by GuyZero at 11:47 AM on May 19, 2011 [13 favorites]

So what the DoE is really saying here is, "Hey, I know you all see crude getting cheaper but there's always an excuse for people to make exorbitant amounts of money off of gas."
posted by Slackermagee at 11:49 AM on May 19, 2011 [4 favorites]

So global warming is causing high gas prices. Cute.
posted by delmoi at 11:49 AM on May 19, 2011 [1 favorite]

Sorry, by cheaper I meant not-as-crazy-expensive. Funny how that works in your brain. Slow rate=cheaper. Its like a part of me now...
posted by Slackermagee at 11:50 AM on May 19, 2011

there's always an excuse for people to make exorbitant amounts of money off of gas.

There's no appropriate level for profits from gasoline.
posted by GuyZero at 11:50 AM on May 19, 2011 [1 favorite]

I thought this was phenomenon was called blatant collusion.
posted by CaptApollo at 11:51 AM on May 19, 2011 [7 favorites]

the 2011 Misssissippi River Floods are currently more to blame for $4 gas than the uprisings in the Middle East

I suspect oil company profit margins are even more to blame than the flooding.
posted by Faint of Butt at 11:52 AM on May 19, 2011 [7 favorites]

Gas costs as much as it does because you're willing to pay that much.
posted by MrMoonPie at 11:53 AM on May 19, 2011 [17 favorites]

I thought it was oil speculators...
posted by spiderskull at 11:53 AM on May 19, 2011

a disparity known as the crack spread

Also known as BOHICA*.
posted by chugg at 11:55 AM on May 19, 2011

*Bend over, here it comes again.
posted by chugg at 11:55 AM on May 19, 2011 [1 favorite]

I learned the US is dirt cheap compared to Europe.

Doing the math right now it costs about $9/gallon in Europe and the UK.
posted by vacapinta at 11:55 AM on May 19, 2011 [1 favorite]

Here's Exxon's recent effort to defend itself , making various arguments including that their profit per gallon of gasoline sold is just $0.02.
posted by Perplexity at 11:57 AM on May 19, 2011

So what the DoE is really saying here is, "Hey, I know you all see crude getting cheaper but there's always an excuse for people to make exorbitant amounts of money off of gas."

Maybe, maybe not. Crude oil doesn't magically turn into gasoline, and if the US's refinery capacity was severely limited, it would indeed drive up prices even in light of cheap crude.

I'm not defending the oil companies here -- far from it. Gasoline is currently a necessary evil in American society, and if their refining/distribution infrastructure is vulnerable and localized enough that an (admittedly severe) seasonal flood is enough to send huge shocks through the market, we've got a huge issue on our hands.

Oil profits and their absurd tax subsidies are another issue entirely (er...potentially, I'm really not sure; are there ways to statistically prove market collusion?).
posted by schmod at 11:59 AM on May 19, 2011

Gas costs as much as it does because you're willing to pay that much.

Gas costs as much as it does because you (and by "you," I mean the vast majority of consumers as a collective whole) are not willing to reconfigure their lives dramatically so as to almost entirely remove daily automotive trips from their personal, vocational and recreational lives, and therefore grumble at slowly rising prices but are not otherwise stirred to immediate action, whatever an action would be that would cause oil companies, Washington or both to take notice.

But that's easy to do, right?
posted by delfin at 12:00 PM on May 19, 2011 [6 favorites]

an action would be that would cause oil companies, Washington or both to take notice.

What exactly should Washington do? Mandate fixed gas prices? Nationalize oil refineries?

This is the USA we're talking about here, not Venezuela.

Gas costs as much as it does because you (and by "you," I mean the vast majority of consumers as a collective whole) are not willing to reconfigure their lives dramatically so as to almost entirely remove daily automotive trips from their personal, vocational and recreational lives

Yep. Which is why I bike to work every day.
posted by GuyZero at 12:03 PM on May 19, 2011 [3 favorites]

If there was ever an industry that just cried out for government takeover, it's the fossil fuels industry. National security? Check. Economic dependency? Check. Private ownership fatally conflicted with public property rights? Check. Public interest in a long-term strategy, vs. quarterly earnings targets? Check.

Obama should take it over, double the price, and plow the profits into developing a market for renewable resources.
posted by stupidsexyFlanders at 12:07 PM on May 19, 2011 [14 favorites]

If there was ever an industry that just cried out for government takeover, it's the fossil fuels industry.

Most countries have national oil companies.

Obama should take it over, double the price, and plow the profits into developing a market for renewable resources.

Yeah he would get re-elected FOR SURE.

Frankly, I think we should go back to rations. Just give out cards good for X gallons of gas per day to everyone, and allow people to transfer them. It would be free money to people who invest in an efficient car, and people who bitch about high gas prices would stop whining.
posted by delmoi at 12:09 PM on May 19, 2011 [1 favorite]

Yeah he would get re-elected FOR SURE.

you spell out your fantasy, i'll spell out mine.
posted by stupidsexyFlanders at 12:14 PM on May 19, 2011 [4 favorites]

What exactly should Washington do?

Offer 50 billion tax free to the American company which can launch 50,000 pounds to GEO 14 times in a year using the same airframe.

Once we have that, it's a no-brainer to start launching Union Labor and building materials to GEO to start building the solar power satellites.

Continue that for 20 - 30 years, and the US has no energy shortage anymore.
posted by mikelieman at 12:16 PM on May 19, 2011 [2 favorites]

Frankly, I think we should go back to rations

Having a hard time seeing that. Last time there was rationing, the population of the US wasn't 300 million, and most people, such as myself, did not have to commute 40 miles to work (and I wouldn't, if I had the choice).
posted by Melismata at 12:16 PM on May 19, 2011

But that's easy to do, right?

In my lifetime people have gone from commonly driving 1.3 - 1.6 litre cars with the odd 3 - 4 litre around the place to seeing "small" cars like the Corolla go to a base 1.8 engine, and 3 - 5 litres being common. Farmers used to run 2 litre utes, now anything less than a 3 is reviewed as "not powerful enough". A modern Corolla is the size of the Coronas and Camrys of my teens.

It would hardly be a radical change to just, I don't know, buy the same size cars our parents did. Mileage may vary in your country.
posted by rodgerd at 12:17 PM on May 19, 2011 [6 favorites]

Obama should take it over, double the price, and plow the profits into developing a market for renewable resources.

Yeah he would get re-elected FOR SURE.

Actually, he's probably be impeached because the executive branch does not even remotely have that kind of power. Can we please collectively stop making "Obama should do/should have done X" statements?

The President can barely brush his teeth without the consent of the legislature (which coincidentally just voted this week to continue giving $21 billion in subsidies to large oil companies).

We have a President. Not a king. Feel free to collectively blame the federal government, but don't single out one guy -- there are (by design) many more people calling the shots.
posted by schmod at 12:17 PM on May 19, 2011 [7 favorites]

What exactly should Washington do? Mandate fixed gas prices? Nationalize oil refineries?

The price of milk is fixed (albeit at the state level). So, why can't the Fed fix gas prices?
posted by spicynuts at 12:21 PM on May 19, 2011

which coincidentally just voted this week to continue giving $21 billion in subsidies to large oil companies

That's a Democratic Senate, by the way, giving out $21 billion to oil companies. Not a Republican Senate.

We badly need a third-party option in this country.
posted by Blazecock Pileon at 12:22 PM on May 19, 2011 [7 favorites]

...not willing to reconfigure their lives dramatically so as to almost entirely remove daily automotive trips from their personal, vocational and recreational lives...

But that's easy to do, right?

Omigosh, people might have to make decisions and run their own lives like free and intelligent adults?!

- Obama should take it over, double the price, and plow the profits into developing a market for renewable resources.

- Frankly, I think we should go back to rations.

I don't think the "more tyranny and poverty for everyone" socialist solutions will fly. Well as long as we have the burden of elections...
posted by codswallop at 12:23 PM on May 19, 2011

Maybe its just because I make my commute burning wvo but I for one am happy to see gas prices going up.
posted by Gregamell at 12:23 PM on May 19, 2011

It would hardly be a radical change to just, I don't know, buy the same size cars our parents did. Mileage may vary in your country.

Well, I bought a Fiesta this week myself, but that makes about as much difference to the overall problem as GuyZero's biking to work. Two down on the "doing something vaguely constructive" side of the ledger, a couple of hundred million to go.

The "everybody drives a lot" problem simply cannot go away because that's how America's infrastructure has been created. If you live in a place where you can work, shop, eat, date and learn all within walking/biking distance, you're in the extreme minority.

Omigosh, people might have to make decisions and run their own lives like free and intelligent adults?!

This is not a nation of free and intelligent adults who are willing to make those kinds of sacrifices, let alone get enough people elected who feel the same way. It simply isn't. The only thing that will change Americans' dependence on driving will be raw, naked necessity.
posted by delfin at 12:26 PM on May 19, 2011 [3 favorites]

It's not just gasoline - it's distillates across the board that are out of whack with the price of crude. You could map bunker (principally MDO 180 and 380) against crude and come up with a similar if not worse spread over the last couple of months.
posted by digitalprimate at 12:28 PM on May 19, 2011

That's a Democratic Senate, by the way, giving out $21 billion to oil companies

Whooooa there. The Democratic Senate didn't pass a subsidy bill; the Republicans in the Senate filibustered a bill to repeal the already existing subsidy. The Democrats would have repealed it if it had come to a vote.
posted by Justinian at 12:28 PM on May 19, 2011 [9 favorites]

We badly need a third-party option in this country.

Exact numbers: Democrats in the Senate voted 50-3 in favor of repeal. (Ok, in favor of cloture on the repeal bill but it amounts to the same thing). Republicans in the Senate voted 45-2 to maintain the subsidies. The 50 Democratic votes were by themselves (without Snowe and Collins) enough for repeal of the subsidies if the vote had been allowed, but the Republicans stopped it.

So this isn't evidence we need a third party, it is evidence you misunderstood what happened.
posted by Justinian at 12:33 PM on May 19, 2011 [8 favorites]

I don't believe for a second, that demand in the U.S. drives the price of oil. Once upon the time that may have been true, when the U.S. represented over 50% of the whole world's economic activity. Today, you could ask all drivers in the U.S. to drive only half as much, and the prices wouldn't budge, simply because any excess available oil would be soaked up by the rest of the world, with China in the lead.

On another note. Last night I was putting my garbage cans out for the next day pickup, and in front of my neighbors house, there was a parked chevy suburban. Engine running, the guy on the phone. Half an hour later, I come out to add something to the garbage, and the suburban engine is still running, stenching up the whole neighborhood, guy still yakking on his cell. I wished the price of gas was $20 a gallon.
posted by VikingSword at 12:34 PM on May 19, 2011 [4 favorites]

Blazecock Pileon: "That's a Democratic Senate, by the way, giving out $21 billion to oil companies. Not a Republican Senate.

We badly need a third-party option in this country."

Not arguing with your second premise, but the Dems put forth to get rid of the subsidy, but three Dems and all but two Republicans voted the measure down. You know better than that.
posted by notsnot at 12:35 PM on May 19, 2011

Norway is a huge producer of oil and gas, yet gasoline prices here are about twice as high as in the US. My country could easily afford to subsidize gas and essentially just give it away like Iran. Instead it's taxed at a very high (but fixed, as in you pay a certain amount of money per liter) level.

Why?

Number one: It's a very convenient way of collecting taxes.

Number two: It tends to discourage wasteful use of a limited and highly polluting resource.

Number three: Psychologically, it's a lot easier to deal with prices increasing from $8 to $10 per gallon than dealing with a doubling of prices from $2 to $4.

(And Norway has a much lower population density than the US, so the whole "but we're such a big country with a scattered population" doesn't really hold water.)
posted by Dumsnill at 12:37 PM on May 19, 2011 [10 favorites]

I found this interesting:

If you think paying $4 for a gallon of gas is ridiculous and long for the days when gas cost a quarter, consider this: 93 years ago you could pay just 25 cents and drive away in your Oldsmobile or Studebaker with a gallon of gas. However, adjusted for inflation Americans were paying the equivalent of $3.70 in 2011 dollars, and their income levels were hardly on par with today's average salaries.
posted by Splunge at 12:41 PM on May 19, 2011 [2 favorites]

If there's a huge decline in the spot price wouldn't the crack spread be guaranteed to skyrocket seeing as how oil refineries have bought their oil months in advance at much higher price on the futures market?

It's not like Exxon rocks up to the crude oil tap and says "I'll take 50,000 gallons at the lower spot price please". Oil refineries work to keep a constant supply and you pay the premium when the spot price of oil is $100/barrel and futures two months ago were trading at $110/barrel.

This is the premium you pay to live in a first world country with gasoline available consistently at the pump.
posted by Talez at 12:43 PM on May 19, 2011 [1 favorite]

That's a Democratic Senate, by the way, giving out $21 billion to oil companies. Not a Republican Senate.

Simply not true. Under Senate rules, a sufficiently large minority can prevent that legislation from going forward for a vote. Consider also that even if the Senate had passed the bill, the House of Representatives would have also had a vote on it, and the House is held by the Republicans. And even if it had somehow voted in favor of ending those subsidies and the bill had become law, there would have been an immediate legal challenge to its implementation because revenue-raising bills must to originate in the House in order to be constitutional.

Being from Europe myself, gas still looks very cheap to me even at these prices. I generally use public transport so it doesn't take a direct bite out of my wallet; if I had to drive to work that would be a much bigger issue for me. But then I'd use either a motorcycle or one of those gas-sippin' smart cars.
posted by anigbrowl at 12:45 PM on May 19, 2011 [1 favorite]

Once we have that, it's a no-brainer to start launching Union Labor and building materials to GEO to start building the solar power satellites.

Actual Plans for what is being called a solution which shows no brain:
http://www.ursi.org/WP/WP-SPS%20final.htm
The peak microwave power-flux density at the rectenna site would then be 300 W/m2,

Yet:
Solar on land - solar electric generation power density (global mean of 170 W/m²)

See the black dots here:
http://upload.wikimedia.org/wikipedia/commons/thumb/d/db/Solar_land_area.png/200px-Solar_land_area.png
The small black dots show the area of solar panels needed to generate all of the worlds energy using 8% eff. PVs.
posted by rough ashlar at 12:47 PM on May 19, 2011 [1 favorite]

Instead it's taxed at a very high (but fixed, as in you pay a certain amount of money per liter) level.

Why?

Number one: It's a very convenient way of collecting taxes.

Number two: It tends to discourage wasteful use of a limited and highly polluting resource.

Which is a very sound method of dealing with the issue. Unfortunately, it's a very European method of dealing with the issue.

In the US, anyone even vaguely interested in enacting that has spent decades being shouted down by politicians, pundits and voters bent on slashing tax rates across the board, declaring attempts to allow tax cut legislation to expire as "tax increases," claiming that cutting taxes always increases tax revenues substantially, and demanding that any politician who dares to suggest anything other than "slash spending, cut taxes" be voted out of office. The notion of raising gas / oil taxes by a nickel per gallon, let alone several dollars, would get any Congressman who raised it run out of town on a rail.
posted by delfin at 12:48 PM on May 19, 2011

This made me think of The Water Engine - David Mamet's short story about a man who invented a cheap energy source, and how the energy companies dealt with it. Considering Mamet's political leanings, it makes me wonder, "Does he think that's how it should be done?"

As far as the price of oil goes, the energy companies are being fairly straightforward about the economics of it all. Oil is a commodity, and the prices fluctuate. The disingenuousness however, is that Big Oil is completely vertically integrated.

Exploration and development cost money, but they are paid through the open market, at a net profit.

Crude oil distribution through the open market costs money, but the distribution networks operate at a net profit.

Refining crude oil costs money, but the refiners operate at a net profit, paid for by manufacturers and redistributors.

Plastics, fertilizer, oil, volatile gases, all cost the manufacturers money, but they operate at a net profit, reselling the products they make.

Gasoline (and diesel) costs distributors, but they operate at a net profit - as quoted above, Exxon claims only two cents per gallon of profit, per gallon of gasoline.

You can be certain they aren't including the entire production process in their assessment. It's turtles all the way down. Exxon at every step in the process. They could actually retail gasoline at a loss, and still be one of the most profitable companies on the planet.

The people who really don't make money selling gasoline? Independent retailers. They make one to two cents a gallon, which really isn't worth it, even though they are covering their costs - they aren't operating at a loss. This is why you don't see so many "service stations" any more, gasoline stations/car mechanics. It is why you see so many car washes and convenience stores associated with gasoline sales. Gasoline sales drive consumers to the stores. No need to drive consumers to the front door of a car mechanic, people go to the mechanic only when they need to.

And yes, our infrastructure is to blame.
posted by Xoebe at 12:52 PM on May 19, 2011 [4 favorites]

I don't believe for a second, that demand in the U.S. drives the price of oil.

Other than the mild, seasonal fluctuations that we've seen in the past, i.e. a little more expensive in the summer, a little cheaper in the winter, I'd have to agree. Most of the action seems to be happening on the supply side of things, and I think that the flooding is actually a pretty plausible explanation.

Logistics are complicated. UPS by itself is a massive human accomplishment, and they're only a small part of what gets moved around the country every day. Earthquake and tsunami in Japan? Factories in Indiana see work stoppages. Flood on the Mississippi? Gas prices spike. It isn't a conspiracy, and it isn't evidence of mismanagement or bad policy choices as much as it's evidence of the huge, interconnected world we live in. Maybe too interconnected.

Norway is a huge producer of oil and gas, yet gasoline prices here are about twice as high as in the US.

That's because they tax the absolute bejeezus out of it. Like all European countries. More to the point, Norway may be a pretty big exporter of crude oil, but it actually imports about 50% of its daily consumption needs because its refinery capacity is pretty low. The ExxonMobil refinery in Baton Rouge has more than twice the capacity of both of Norway's refineries. So what's going on here is Norway is exporting a metric assload of crude oil and some refined products but is actually importing half of its gasoline. Which is expensive. The US may import a whole ton of its crude, but we refine most of it here.

I say again, logistics are complicated.
posted by valkyryn at 12:53 PM on May 19, 2011 [1 favorite]

My parents moved to a place an hour outside of the center of Tucson, AZ, several years ago. It's a place that simply shouldn't be. It's not served by rail or by any reasonable bus system. Everyone uses AC year-round. A huge number of the residents are retired -- the only reason they're there is because the weather seems amenable (see above, "AC year-round") and land and gas are cheap.

In my daydreams, that place is a deserted shell of its current self in 20 years. High gas prices alone would do it. I'm not sure what it would take. $6? Probably not. $8? $10? But make no mistake, great swaths of the US would suddenly make no sense whatsoever if gas went up significantly for a long period of time. People would move, suddenly and en masse.

Some people would call that a dystopia. I see it as a wonderful revolution, but I do acknowledge that it will take a huge amount of effort and societal change. Maybe violence.
posted by gurple at 12:54 PM on May 19, 2011

If you think paying $4 for a gallon of gas is ridiculous and long for the days when gas cost a quarter, consider this: 93 years ago you could pay just 25 cents and drive away in your Oldsmobile or Studebaker with a gallon of gas. However, adjusted for inflation Americans were paying the equivalent of $3.70 in 2011 dollars, and their income levels were hardly on par with today's average salaries.

The problem is that people aren't nostalgic for $0.25/gal gas from 93 years ago, they're nostalgic for $0.99/gal gas only 12 years ago. Gas was stupidly, insanely cheap, and it lead to development of vehicles with horrendous gas mileage because it was so cheap. Public transportation also fell by the wayside for the same reason.
posted by explosion at 12:55 PM on May 19, 2011 [2 favorites]

The Democratic Senate didn't pass a subsidy bill; the Republicans in the Senate filibustered a bill to repeal the already existing subsidy.

In light of facts I did not understand, I retract my first statement, which was wrong.
posted by Blazecock Pileon at 12:57 PM on May 19, 2011 [6 favorites]

Gas was stupidly, insanely cheap.... Public transportation also fell by the wayside for the same reason.

Oh, that wasn't the only reason.
posted by gurple at 12:59 PM on May 19, 2011 [1 favorite]

We badly need a third-party option in this country.
posted by Blazecock Pileon at 2:22 PM on May 19 [3 favorites +] [!]

Yeah! Like Canada!!
posted by goethean at 12:59 PM on May 19, 2011

our infrastructure is to blame.

Public transportation also fell by the wayside for the same reason.

Yup. Funny. The railroads worked to put horses out of business; the auto industry worked to put the railroads out of business; now everyone's wishing for horses again, if not a better public transportation system.
posted by Melismata at 12:59 PM on May 19, 2011

If you live in a place where you can work, shop, eat, date and learn all within walking/biking distance, you're in the extreme minority.

And you must be able-bodied, or the walking/biking is a moot point.
posted by desjardins at 1:01 PM on May 19, 2011 [5 favorites]

We were playing a game today: Name 5 things you wish were never invented. #2 on my list (right after chain restaurants) was the personal automobile. If it had never occurred to anyone to invent this or market it, if Americans had always relied on public transport, our lives would be so much better. No suburban sprawl, no smog, no long commutes, no traffic jams, no car maintenance, no car insurance, no digging deep into our wallets to buy gasoline.

We have a train station one block from our house. One. Friggen. Block. The trains haven't stopped there in ? years (30? 40?) instead they wiz past on their way to Raleigh and to DC several times a day. And every day my husband drives himself 35 minutes to the Raleigh airport where he works. Even if he could physically bike that far, he works nights so it would be too dangerous.
posted by Secret Life of Gravy at 1:10 PM on May 19, 2011 [1 favorite]

Here's a larger version of that solar insolation graphic. Now I'm a big fan of solar power, but simplifying the issue down to a few 'small black dots', as if we could just do it tomorrow but for those greedy obstructionists, is really quite misleading.

I'm from Ireland; those 'small black dots' are about the same size as my country. Ireland's a small country, but having grown up there and crisscrossed it extensively, I can assure you that it's quite a large slab of land in absolute terms. Like, it takes a few hours to drive across it, even on a freeway. In geographic terms that's fairly small, in engineering terms that's vast. At a price of $100 per square meter for solar panels - which is well below current prices, as far as I know - covering an area the size of Ireland would require 7 quadrillion dollars, which is 500 times more than the entire GDP of the US, or about 100 times more than the entire GDP of the world. And that's just one of those small black dots.
posted by anigbrowl at 1:12 PM on May 19, 2011 [4 favorites]

Yup. Funny. The railroads worked to put horses out of business; the auto industry worked to put the railroads out of business; now everyone's wishing for horses again, if not a better public transportation system.

Are you suggesting the yuppies signing their kids up for riding lessons are actually planning for the future of public transportation?
posted by Nanukthedog at 1:14 PM on May 19, 2011

We badly need a third-party option in this country.

Yeah! Like Canada!!

Hey now, the Liberals are a fine third party.
posted by TheWhiteSkull at 1:18 PM on May 19, 2011 [3 favorites]

Also on the topic of living where you work, play, shop...When my husband bought this house 20 years ago, the train station was already closed but Main street still had a post office (He works for USPS) a library, and an ice cream store that also sold bread, milk, and cigarettes. All of these things are gone. Main street is now beauty shops, barber shops, and churches.
posted by Secret Life of Gravy at 1:19 PM on May 19, 2011 [1 favorite]

If you live in a place where you can work, shop, eat, date and learn all within walking/biking distance, you're in the extreme minority.

Seoul, Tokyo, New York, London, Paris, etc, etc. Many of our biggest population centres around the world are quite amenable to foot, cycle, or decent mass transit. In the industrialised world most people live high-density.
posted by rodgerd at 1:20 PM on May 19, 2011

Still better than Main Street is now Wal-Mart and its parking lot.
posted by delfin at 1:20 PM on May 19, 2011

As much as I hate defending oil companies (I'm going to wash my mouth out with Listerine as soon as I post this), Exxon Mobile's quarterly profit is almost always 10% of revenue. Last quarter they made about 10B on revenues of 100B. Go back to the 2008, same thing, 10% of revenue. That 10% doesn't really change much unless the price of oil really goes south. Their profits are up year over year, but so is the cost of producing that much oil (e.g. they turn more spigots on, the more equipment, personnel, etc they need).

The crack-spread is indicative of other things - futures markets, refinery issues, etc.

That said the price of gas has gone down 4c lately at my local gas station. Thank goodness for small miracles, right?
posted by SirOmega at 1:20 PM on May 19, 2011

If you live in a place where you can work, shop, eat, date and learn all within walking/biking distance, you're in the extreme minority.

Seoul, Tokyo, New York, London, Paris, etc, etc. Many of our biggest population centres around the world are quite amenable to foot, cycle, or decent mass transit. In the industrialised world most people live high-density.

should have added, and be able to pay an affordable rent.
posted by Melismata at 1:21 PM on May 19, 2011 [3 favorites]

#2 on my list (right after chain restaurants) was the personal automobile. If it had never occurred to anyone to invent this or market it, if Americans had always relied on public transport, our lives would be so much better. No suburban sprawl, no smog, no long commutes, no traffic jams, no car maintenance, no car insurance, no digging deep into our wallets to buy gasoline.

And no rock n roll, no youth culture, none of any of the great things we got by being able to get away from our parents in the back seat of a car.
posted by spicynuts at 1:24 PM on May 19, 2011 [1 favorite]

But there's some price at which each current daily driver would no longer be a daily driver.

Yep. Every green energy fanatic in the US should be praying for $8 gas.
posted by GuyZero at 1:25 PM on May 19, 2011

It's getting close for me at 4.25/gallon. It cost me 50 bucks to fill up on Saturday. If it gets to 65 to 70 to fill up....that'll be the end of that.
posted by spicynuts at 1:27 PM on May 19, 2011

But there's some price at which each current daily driver would no longer be a daily driver.

It's probably really high though, because there's a large investment involved in moving or changing jobs, and people are bad at making a large sacrifice now in return for long-term prosperity.

Also, public transportation probably won't catch on until someone figures out how to make it not smell like pee.
posted by mrgoat at 1:28 PM on May 19, 2011 [1 favorite]

It would hardly be a radical change to just, I don't know, buy the same size cars our parents did. Mileage may vary in your country.

Indeed. My dad drove around a little Chevette that was awesome. I learned how to drive a stick shift in that car.

But the SUV marketers have seized on the safety fears of Americans. I don't know how we can get past that issue.

The states rejecting rail funds are going to be regretting it in a decade. I hope the voters remember those choices.
posted by formless at 1:28 PM on May 19, 2011

I hope the voters remember those choices.

BA HA HA HA HA HA HAH HA HAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA!!
posted by spicynuts at 1:30 PM on May 19, 2011 [6 favorites]

What would the price of gas have to be for you to give up daily use of your car? $6? $8? $12? If you literally couldn't live where you are and work where you do without daily use of a car, then presumably that magic gas price is higher, because you'd have to move or change jobs.

But there's some price at which each current daily driver would no longer be a daily driver.

That would be the raw, naked necessity of which I spoke earlier. People will stop driving habitually only when there is no economic possibility of them continuing to do so.

However, consider some of the additional fallout of this. We're having enough of a problem keeping unemployment down in the current climate -- what happens when "I can't afford to drive to one of the few jobs I can find" becomes an increasingly loud refrain? If you can't work in your profession where you live, you can't afford to drive to a place where jobs in your profession are, and subsequent heavy demand for housing in job-rich areas sends house prices and rent in those areas skyrocketing... then what?

How quickly do affluent suburbs become ghost towns because employment possibilities aren't local?
posted by delfin at 1:30 PM on May 19, 2011 [5 favorites]

How quickly do affluent suburbs become ghost towns because employment possibilities aren't local?

Our only hope is that some well-timed, brief, but substantial price shocks wake people up to the fact that we need to invest in public transit like mad before we run out of enough cheap oil to actually make those investments

But there are several factors that will slow the suburban exodus, such as telecommuting, car-pooling, and company-run buses.

I also foresee a lot of towns conscripting their school buses into makeshift public transit.
posted by jedicus at 1:37 PM on May 19, 2011 [1 favorite]

Interestingly enough from the Chevette page:

The Chevette effectively became the last domestic made subcompact from GM until 2011, when GM will introduce the Sonic to the United States and Canada.

It looks like GM is either betting on gas prices staying high, or an America with lower spending potential.
posted by formless at 1:37 PM on May 19, 2011 [1 favorite]

How quickly do affluent suburbs become ghost towns because employment possibilities aren't local?

I think a lot of that is inevitable. But it isn't the only possibility. Dreyer's moved their headquarters to suburban Oakland in the late 90's. The HQ is within walking distance to BART, but it's by no means an urban area. There was a lot of local opposition, but eventually they won out.

This story could be repeated if property values start to fall significantly in well-connected suburbs, which could then slowly change to follow a more reasonable hub-and-spoke transportation model.
posted by gurple at 1:37 PM on May 19, 2011 [1 favorite]

You can see a chart of inflation-adjusted gas prices here. (N.B. it only goes through 2009 so it doesn't show the current spike.)

The first time I saw a chart like that, the old stories I used to hear about my great-grandfather running his Model T down to absolute fumes -- getting the tank so low that he'd have to drive it in reverse to get it up a particular hill, after which he could coast all the way to a station, and of stretching his gas by cutting it with moonshine tailings -- make a certain amount of sense. Gas was fairly expensive in the teens and 20s, and people were pretty crafty about conserving it.

But they didn't have a time in their recent history where the stuff had been literally cheaper than water (admittedly not tap water, but grocery-store bulk bottled stuff). Older people in 1918 probably remembered whale oil and lamp kerosene, bought and meted out in small quantities; there are very few people alive today, with the exception of the very young and very old, for whom gasoline hasn't always been cheap.

What would the price of gas have to be for you to give up daily use of your car? $6? $8? $12?

This is something I've thought about, as gas prices have periodically gone up. I live close enough to my office that I could probably swing bicycling a lot more often than I do. (Currently I do it as a recreational activity which has the side effect of getting me to work, but that's not really the point.) I can imagine at $8 or $10 switching over to bicycling-as-transportation and only using the car when it was really crummy outside, or in the winter when there's enough snow or ice that I'd be really afraid of having somebody run me over. (But then again, with $8 or $10/gal gas, maybe the traffic would be a bit more sedate.)

What I'd imagine you'd start to see is a lot more people driving more efficient but still gasoline-driven vehicles: mopeds, scooters, and motorcycles. I know several people who bought Vespas back in 2007/08 when the prices were going up day after day. On a purely financial basis I think they got burned, because prices went down in 2009/10 so that the payoff on a scooter got a lot longer. (But none of them seem to regret the purchase.) If you look at countries where gasoline is a lot more expensive relative to income, you see a lot of <150cc motorcycles and scooters.

One risk of higher gas prices is that there are a lot of old two-cycle mopeds and scooters sitting around in sheds and garages, which could get pulled out if demand for that sort of transportation suddenly spiked. I would bet at any given time, only a small fraction of the two-cycle scooter fleet is on the road, because so many of them are used only recreationally ... if they were suddenly used brought into service as regular transportation, we might have an ugly air- and noise-pollution problem overnight.
posted by Kadin2048 at 1:37 PM on May 19, 2011 [1 favorite]

If you literally couldn't live where you are and work where you do without daily use of a car, then presumably that magic gas price is higher, because you'd have to move or change jobs.

Oh, I just love it when that libertarian meme of "just move or change jobs" gets played. It's so precious in its utter disregard for actual reality.
posted by Thorzdad at 1:39 PM on May 19, 2011 [9 favorites]

It was actually mostly canals, not horses, that the railroads put out of business. (And anybody who thinks a horse will replace their car doesn't realize how much money, space, and work are involved in keeping a horse.)
posted by enf at 1:41 PM on May 19, 2011

What would the price of gas have to be for you to give up daily use of your car? $6? $8? $12?

Another way to think about it is to do the math a little differently. Don't think about how much each gallon costs, figure out how many gallons you _use_ each year.

Like, if I divide (let's say) 12,000 miles by the 33-ish MPG I'm hoping to average from my Fiesta (and that's being generous), I get ~360 gallons a year. If my wife does the same, that's 720 gallons a year for our household.

If gas goes up by a dollar, can I afford another $720 a year in gas costs? How about $1440? $2160?

Buying a car these days involves some additional calculus balancing cost up front against how nice it is to get that MPG denominator higher.
posted by delfin at 1:45 PM on May 19, 2011 [1 favorite]

Oh, I just love it when that libertarian meme of "just move or change jobs" gets played. It's so precious in its utter disregard for actual reality.

I think you should expand this statement a little, Thorzdad. I'm pointing out that, in the absence of major transportation infrastructure development, many people will move or change jobs (or, likely, both) so that those two important locations are closer, if gas prices rise dramatically over the next few decades. In what way is this a libertarian position? In what way do you disagree?
posted by gurple at 1:45 PM on May 19, 2011

When I used to play SimCity, I used to make the map all rails, no roads. It solved the issues of traffic and of pollution. I have no idea how the fire department got around, though.
posted by jabberjaw at 1:46 PM on May 19, 2011

When I used to play SimCity, I used to make the map all rails, no roads. It solved the issues of traffic and of pollution.

Me, too. Then I would decide I wanted an amusement park (which was available based on how much road had been built), so I would move off to the edge of the map and make a giant asphalt wasteland.
posted by Vibrissa at 1:50 PM on May 19, 2011 [1 favorite]

"Gas costs as much as it does because you're willing to pay that much."

Well, sort of. The price is set by the "marginal you" consuming the "marginal gas", and also the "marginal cost" of that "marginal you" matters too.

Which is totally the title of my next poem.
posted by scunning at 1:50 PM on May 19, 2011

"Move" implies that you can find something affordable in your new location and sell your old one for enough money to make it worthwhile.

"Change jobs" implies that you can find, obtain and keep a sufficiently-salaried job in your new location.

Do you want to wager on your own abilities to do both, in an economic climate in which many others are bailing out for the same high-density population center that you are, unless there's absolutely no way to avoid it?
posted by delfin at 1:51 PM on May 19, 2011 [4 favorites]

Do you want to wager on your own abilities to do both, in an economic climate in which many others are bailing out for the same high-density population center that you are, unless there's absolutely no way to avoid it?

QED.

(you're trying to tell me that no one will move or change jobs because so many people are moving and changing jobs)
posted by gurple at 1:54 PM on May 19, 2011

Guyzero blames the inelasticity of demand. But note, demand for gas is highly inelastic *in the shortrun*. the longrun, people take gas prices into consideration when making a variety of choices that they cannot make day to day, like the kind of car they'll purchase, and the kind of house to buy (as in relation to where they work). The LR elasticity of demand is far less inelastic (in abs value), which definitely get here pretty fast.

Also, keep in mind, supply is also relatively inelastic in the SR. Prices double but supply won't - can't easily build up more gas retailers or pumps in short time. But you an over time.

Ultimately, gas prices are in the longrun going to be heavily influenced by if not determine by the marginal cost of producing the last unit of gas. Of course, that's IF it's competitive. With collusive forces, like OPEC, we get deviations from that but with the LR elasticity of demand being less than the SR, squeezes over time can cause collusion to break down and encourage cheating between firms (cheating on their promises to cooperate).
posted by scunning at 1:58 PM on May 19, 2011

But note, demand for gas is highly inelastic *in the shortrun*

Draw a line between the short run and the long run and enjoy your Nobel prize in Economics.
posted by GuyZero at 2:02 PM on May 19, 2011

Gurple...it ignores the very real fact that moving a family elsewhere to an area where jobs might be is very expensive. In such an economy, that move would likely be across a few states. Also, in such an economy, the ability to sell the home you're currently in could well be functionally impossible, as it is right now in many areas. And banks have a funny habit of expecting you to keep-up those mortgage payments, even if you've moved three states away.

Plus, there's the very real probability that, while there might be areas that have jobs, the number of jobs available will be relatively small, especially in comparison to the numbers of people looking for jobs. And, because of that, there will be further downward pressure on wages for those jobs, turning the financial calculus for moving even more sour.

In the end, the "just move and change jobs" mantra simply dances around an enormous mountain of economic reality, and becomes simply cruel as any sort of actual plan. Will some people change jobs and move. Sure. Will they be the exception or the rule? That's the rub. I suspect people successfully moving and landing adequate employment without also suffering severe economic hardship will prove to be the exception.
posted by Thorzdad at 2:06 PM on May 19, 2011 [9 favorites]

In the end, the "just move and change jobs" mantra simply dances around an enormous mountain of economic reality, and becomes simply cruel as any sort of actual plan.

I think I see our disconnect, Thorzdad. You thought I was suggesting "just move and change jobs" as a "plan". Probably you thought I was saying that we should simply allow gas prices to rise, and people would redistribute themselves accordingly due to market forces, and the US would be better, and it would be that simple.

To be clear, that's not what I'm suggesting. What I'm saying is that, if gas prices rise and nothing else changes, a large number of people will move and/or change jobs (and a lot of other nasty things will happen). I think we agree on that, modulo the definition of "large".

If I were to suggest a plan, it would involve interim taxation of gas up to, say, the $5.50 over the course of the next couple years, with scheduled annual increases, and the use of that money (and lots of other money) to fund long-term national and local infrastructure projects. Early taxation would allow a transition to an expensive-gas world ($15? $20?) to take place over decades rather than suddenly over years, and, in my mind, would thereby help prevent a huge amount of economic anguish and literal, real-world, armies-and-bombs bloodshed.
posted by gurple at 2:20 PM on May 19, 2011 [4 favorites]

In the end, the "just move and change jobs" mantra simply dances around an enormous mountain of economic reality

That's why they call it "sacrifice" and not "vacation".

The "enormous mountain of economic reality" is increasingly going to become the hill next to the enormous mountain of economic reality of gasoline. Ain't much can be done about that. (Actually, there is lots that could be done, but no-one will do it until the hardship has already hit)

You can point out that it's extreme hardship, but that's obvious. It's also going to be necessity. (That's obvious too)
posted by -harlequin- at 3:31 PM on May 19, 2011

At a price of $100 per square meter for solar panels - which is well below current prices, as far as I know

No, I can walk into a brick and mortar retail store down the road, today and get just a single square metre of solar panels for less than that.

(You're thinking of more common mid-range efficiency cells, which are more costly, but require less surface area to generate the same energy. The USA has little need of efficiency because there is no shortage of area. You're also not taking into account economy of scale, and cutting out the wholesale and retail markups)

Even knocking off an order of magnitude, your estimate is still a big number, but it's actually the accumulated cost over many decades. I think we already spend that much on oil infrastructure (if you include the costs not kept on the same books) over comparable time periods. Shifting to self-reliance is feasible.

And that word sure does sound good; Self-reliance.
I'd happily put a nice chunk of my income into that word.
posted by -harlequin- at 3:44 PM on May 19, 2011

Actually, he's probably be impeached because the executive branch does not even remotely have that kind of power. Can we please collectively stop making "Obama should do/should have done X" statements?

Yeah, I was going to mention that: republican congress = no takeover of oil refineries. But also the political fallout from that would be pretty problematic. 51% of the public already blame Obama for high gas prices, so actually taking control and jacking them up would be electorally devastating. Plus it would be a regressive tax, etc, etc, etc

The President can barely brush his teeth without the consent of the legislature (which coincidentally just voted this week to continue giving $21 billion in subsidies to large oil companies).

On the other hand let's not get carried away. There is a lot the president can do, especially when it comes to global warming (The EPA had the authority to restrict CO₂ emissions, for example).

The price of milk is fixed (albeit at the state level). So, why can't the Fed fix gas prices?

No one has to drink milk, and also milk is produced by farmers: the government can put in subsidies to create more milk if there's not enough. The same can't be said for oil.
posted by delmoi at 4:08 PM on May 19, 2011

What would the price of gas have to be for you to give up daily use of your car?

Easy, if you're rational:

1. A calculation that shows I'd be financially better off spending the money to move (or switch jobs to) to an area that allowed me to eliminate or significantly reduce the car usage;

2. The knowledge that gas prices would not fluctuate sufficiently in the next few years to turn my sound financial decision into a sucker's bet.

THat's the thing about gas prices; they fluctuate. As long as they do, people shouldn't make long term financial decisions based on short term fluctuations. So don't ditch the SUV for a small car because gas is pricey this month, and don't sell your house or take a lower-paying job as soon as prices spike -- instead, in the short term accept the loss, but as your SUV wears out, as you look for a new job or a new house for other reasons, take the increased prices into account.

Case in point: I switched from a 30-mile-daily commute over the 405 to an 8-mile commute that could, in a pinch, be done via bus and walking, or on a bike. I did it to save money and make my life better, but I also did it when it made sense to change my job anyway. Now my kids are in school and I have a 50-mile commute, because it's an amazing school and worth it -- but in a year or so, once I'm sure its as good a school as it seems to be, then I'll start looking at a place to live near the school, so that my commute goes back down to 15 miles or so a day.

Ultimately, thats a much more rational approach than "what would it take to get you to ditch your car" -- it should be "what would it take to get you to put more weight on ditching your car the next time you make a major long-term life decision."

I ordered my LEAF when I had the 8-mile commute, before I knew my kids would have the option of going to this fantastic school. If I had taken delivery of my LEAF already -- it's still delayed -- I'd likely have to have a second car. Sometimes the right decisions get trumped by other, "righter" decisions.
posted by davejay at 4:09 PM on May 19, 2011

Living in Kansas City, MO in 1972, on Baltimore Street, I was 2 blocks away from a discount Hudson gas station on Main, which pretty consistently was having "gas wars" with the Skelly and Sinclair brand stations on adjacent blocks. (Since then, some states, such as North Carolina, have enacted laws that prevent retailers from selling gasoline below the price at which they purchased it, stopping "gas wars" in an effort to keep independent gas retailers from being forced out of business by larger chain retailers.) I bought a lot of gas at 27 cents a gallon, and occasionally, during a real "gas war," usually in the summer, as low as 21 cents a gallon. By 1973, the first of the big OPEC embargoes was underway, and you couldn't buy gas, some days, at any price. When you could buy gas, it quickly went above $1 a gallon, to as high as $1.41 a gallon, in late September of 1973. I was driving a '68 Plymouth station wagon, with a 318 cubic inch V8, that got about 17 miles a gallon, and was making a little more than minimum wage, something like $2.25 an hour. That price increase really hurt, as I was driving about 14 miles to work, so basically, every day, I was suddenly burning about an hour and a quarter of work for fuel to commute.

I've never owned more than a 6 cylinder car since, and mostly, 4 cylinder stick shift models, like the truck I currently drive, which gets around 30 mpg. And I drive a lot less, today, than I did then, and use public transport for some trips, every month, and have a far greater income. Relatively speaking, the current price increases aren't nearly as problematic for me as those of 1973, and more important, there is no shortage of fuel, if I want to buy, as there was in 1973.

But I suspect that gas prices could be lower, if U.S. refineries were currently running at something more than 81 - 83% capacity. The oil industry has said that this rate of production is due to seasonal factors like scheduled spring maintenance and seasonal gasoline mix changeover, as well as navigation issues on the Mississippi, but examining the data from previous years, you can see that April and May utilization has historically been somewhat higher, going back to the go-go economic days of spring 2007, when it was around 90% for most of April and May.
posted by paulsc at 4:15 PM on May 19, 2011

Also, the price of milk is fixed to have a minimum floor, not a maximum price ceiling. It's to ensure farmers don't compete with one another to the point of going out of business. But milk prices are free to exceed gas prices if there's some sort of localized milk shortage.
posted by GuyZero at 4:17 PM on May 19, 2011

We were playing a game today: Name 5 things you wish were never invented. #2 on my list (right after chain restaurants) was the personal automobile. If it had never occurred to anyone to invent this or market it, if Americans had always relied on public transport, our lives would be so much better. No suburban sprawl, no smog, no long commutes, no traffic jams, no car maintenance, no car insurance, no digging deep into our wallets to buy gasoline.
posted by Secret Life of Gravy at 1:10 PM on May 19 [1 favorite +] [!]

It might be intructive to go back to the reasons why automobiles were invented: as people gravitated to cities (built around ports), population density and affluence increased. Horses were pretty much the only method of transport (not just of people, but of goods etc... you can't get everywhere by ship or rail). Imagine the amount of manure generated by a quarter million horses travelling in a major city like NYC in 1900 (population 3mil). For all the problems the automobile brought us, it's probably preferable to living and walking among a thousand tonnes of horse shit and urine left in the streets every day...
posted by xdvesper at 4:20 PM on May 19, 2011 [2 favorites]

Also, interesting point re: electrification in Australia - an electric car (like the Leaf) generates more CO2 emissions than the current generation petrol and diesel vehicles. This is because Australia generates most of its electricity from brown coal which has an absolutely awful emissions profile.
posted by xdvesper at 4:24 PM on May 19, 2011

And that word sure does sound good; Self-reliance.
I'd happily put a nice chunk of my income into that word.
posted by -harlequin-

See this red square?... this is the area this organisation is trying to suggest is *all* that would be needed to power the planet using conventional solar arrays.

Looks insignificant, right?

I recently drove across an area of the North African Sahara roughly the same distance across.

Driving at a comfortable 60-80 miles an hour, it took us two days. And it's the desert... it's inhospitable. That is an ENORMOUS surface area.

I'm sorry, but we simply will never work out the logisitics for such a project. Not going to happen.
posted by panaceanot at 4:28 PM on May 19, 2011

IT DOESN'T ALL NEED TO BE IN ONE SPOT.

If you took all the surface area covered by roads today, it would probably be larger then the surface area covered by solar panels.
posted by delmoi at 4:34 PM on May 19, 2011 [1 favorite]

I'm sorry, but we simply will never work out the logisitics for such a project. Not going to happen.

We've already worked out the logistics, many times over, in other areas of our civilisation. It might not happen because we're short-sighted idiots, but it's certainly not any lack of ability preventing us.
posted by -harlequin- at 4:39 PM on May 19, 2011

Oh man would I be happy to be proven wrong.

It's just that I can quite easily comprehend just how many of, say, these (Google's new project) would need to be built to cover that red square, no matter how spaced out, having driven for two days across the projected area required.
posted by panaceanot at 4:48 PM on May 19, 2011

I still can't get over the term "Crack Spread". Really, when I fill up, I feel that term very much indeed.

I object, fairly strongly, to the idea that market forces are all that should be considered in oil. As a citizen of an oil producing country (Canada), that is *MY* f-ing oil in the ground, and the companies take it out with my f-ing permission and I offer them some profit in return for their hard work. It is not *their* oil. It is the citizens of Canada oil. If they want to bend us over and spread the crack, then it is not a violation of "free market principles" to regulate them. The market is not free, nor is the resource. The oil companies serve at the pleasure of the citizenry (who own the oil) and I think they need to be reminded of that here and there.
posted by Bovine Love at 4:49 PM on May 19, 2011

an electric car (like the Leaf) generates more CO2 emissions than the current generation petrol and diesel vehicles.

Do you have a cite for those calculation? I've heard this contrarian myth take countless forms over the years, and every one of them so far has turned out to be bunk.
Sometimes, the advantage margin is slim, but I'd guess it's more likely that someone is doing some sleight of hand with the numbers.

As an example of how easy it is to massage the numbers; when a leaf is stopped at red lights, or in gridlock, the engine is not idling and using energy, while almost all other cars are burning infinite gallons per mile. So... depending on which way you want to bias your results, you just assume lighter or heavier traffic.

(But truth be told, most instances of the myth don't even bother with numbers. They just make it up out of whole cloth. And because it's contrarian, it sounds truthy.)
posted by -harlequin- at 4:50 PM on May 19, 2011

please delmoi. I'm not a shill for oil and gas, and recognise we need to transition somehow to renewable energy, but to compare road surface area with the logistics for laying out solar arrays is bonkers.

Our ability to lay down vast swathes of bitumen is just another ability we got with the advent of cheap oil. We're not going to be able to pave a similar area with solar cells easily.
posted by panaceanot at 4:54 PM on May 19, 2011

For all the problems the automobile brought us, it's probably preferable to living and walking among a thousand tonnes of horse shit and urine left in the streets every day...

The Victorians dealt with the manure very quickly and easily-- it was highly prized by gardeners and there were plenty of people ready to scavange it for a living much as people today pick up aluminum cans on the street. On the other hand, dead horses were a real smelly problem. My point was not that we should still be using horses to get around (it is very expensive to feed and house horses in the city) but that transportation evolved to the 1 person 1 machine solution and it didn't have to. The car is not intuitive. It is almost ludicrous to consider the idea that in order to get around people buy and maintain these amazingly expensive metal boxes. For many people their car is the most expensive item they own and cars are so much more fragile and impermanent than the price tag would indicate.

And no rock n roll, no youth culture, none of any of the great things we got by being able to get away from our parents in the back seat of a car.

Eh. You can get away from the parents by bus.

And that's the good news. There are systems in place that can be kicked into high gear if the demand arises. My teenage years I used the bus exclusively to get around Long Beach, California: to get to school and to work and to meet friends and to go shopping. It was a very good bus system. I'm sure these days it is crap because most cities let their bus systems go to hell, but if the demand was there...
posted by Secret Life of Gravy at 5:02 PM on May 19, 2011

panaceanot: It might also be that it's difficult to comprehend that that huge red square is also a single silver bullet that provides the ENTIRE power demands of the ENTIRE world.

In other words
- it's vast and complete overkill. We don't need a single silver bullet.
- the similarly vast resources put into obtaining energy by other means can be increasingly diverted to the project as it grows, because we wouldn't be needing those sources.

Now consider that solar is price competitive with regular energy. (Exact figures depend how you measure it, but for the purposes of this thought experiment, it'll be close enough regardless)

That means that the amount of resources needed to create this thing are already being spent on mining energy, moving mountains (literally), etc.

That suggests that a project of this scale is not only not something we can do, it's something we are already doing - just with uglier sources of energy.

It's a big square mostly because you're not seeing the size of the square we're already maintaining.
posted by -harlequin- at 5:08 PM on May 19, 2011

Faint of Butt wrote: "I suspect oil company profit margins are even more to blame than the flooding."

Given that the spread between oil and gas was abnormally high prior to the flooding, I'm inclined to agree.

explosion wrote: "The problem is that people aren't nostalgic for $0.25/gal gas from 93 years ago, they're nostalgic for $0.99/gal gas only 12 years ago."

Or maybe the $2.50/gal gas from a year ago. Or perhaps we're just a bit suspicious (as was mentioned earlier) that the price of gasoline skyrocketed after Katrina and Rita and hasn't ever really come down from those highs, even after the damaged refineries restarted a few months later.

I completely agree that burning oil is one of the dumber things we do, but that doesn't mean that we as a society deserve to get bent over by the refiners or whoever the hell.
posted by wierdo at 7:17 PM on May 19, 2011 [1 favorite]

WHO RUN BARTERTOWN?
posted by telstar at 7:28 PM on May 19, 2011

Do you have a cite for those calculation?
posted by -harlequin- at 4:50 PM on May 19 [+] [!]

It was a paper by the SERG (Sustainable Energy Group) which I don't have the link for anymore, that prompted me to do a back-of-envelope calculation to confirm their numbers. I'll just run by my logic here.

Nissan's own specs say a Leaf takes 24kWh to fully charge, for a range of 160km. This provides a figure of 15kWh per 100km

Just to note, the US EPA's own test results show that the Leaf energy consumption is 34kWh per 100km. We'll leave this aside for later, and use the 15kWh for now.

Coal in general produces 1kg of CO2 per kWh of electricity generated.

I live in Victoria, where 85% of electricity is produced from Brown Coal. The last 15% is produced by less polluting sources: however, this gain is offset by the fact that of all types of Coal, brown coal is the most polluting (higher than the average of 1kg per kWh - in fact, the biggest plant in Victoria produces 1.5kg per kWh). Also, there are transmission losses of the order of roughly 6% to consider. Lets just keep the original figure of 1kg of CO2 per kWh, as it seems conservative enough.

That means that the Leaf produces 15kg of CO2 per 100km (using 15kWH per 100)
If we take the EPA's estimate, that's 34kg of CO2 per 100km.

Ford Fiesta Econetic produces 9.8kg of CO2 per 100km, as per vehicle spec, used for UK tax band purposes.
The 2010 Toyota Corolla produces (depending on engine type) somewhere around 13kg of CO2 per 100km, as per vehicle spec.

Even strictly according to manufacturer spec, the Leaf loses to both petrol and diesel, both "fuel economy" spec and standard consumer spec. That is, if you believe that the Leaf somehow gets more than twice the range that the EPA tested.

I admit that the fuel efficiency of regular petrol cars can be overstated, but usually not to the order of twice as much. As a data point, I am getting 12% better fuel economy on my Fiesta than the manufacturer spec.

As you said, there's room to play with the assumptions. But I think it makes a strong case, at least, that until you fix the electricity grid, moving to electric cars is not going to make much of a difference to CO2 emissions. In fact you could remove all cars from the road tomorrow and that would only take off roughly 10% of human caused CO2 emissions.
posted by xdvesper at 8:17 PM on May 19, 2011 [1 favorite]

The car is not intuitive. It is almost ludicrous to consider the idea that in order to get around people buy and maintain these amazingly expensive metal boxes. For many people their car is the most expensive item they own and cars are so much more fragile and impermanent than the price tag would indicate.
posted by Secret Life of Gravy at 5:02 PM on May 19 [+] [!]

I agree with you completely on this point. The economics of our society is pretty fucked up.

For years and year I used take public transport everywhere. My commute to work could be something like Tram->Bus->Train->Bus. Then I got a fuel efficient company car. It costs me $110 every month to fill up, and it saves me 1 hour of commute per day. My train ticket was costing me $170 every month.

The part that really upsets me was that I was taking the off-peak train line, which usually runs empty anyway. My marginal cost to the system was zero, since the trains have to run to schedule anyway. So this year, I'm driving to work, and that train is still running empty.

Either tax gasoline more, or make public transport cheaper. I don't mind spending more time travelling, but it really shits me to pay more for public transport than I do on petrol, especially when my marginal cost to the rail system is effectively zero as that train is still running empty...

And yes, I have almost never had a passenger in my car. 99% of my trips it's just me and the road.
posted by xdvesper at 8:29 PM on May 19, 2011

Gas prices jumped considerably right after Katrina, and have not remotely returned to those levels.

No. Gas was $2 a gallon during that time.
posted by gjc at 10:11 PM on May 19, 2011

Just did some back of the envelope math. US Petroleum consumption divided by purported Big Oil profits. 31 cents a gallon. I wouldn't mind gas being a little cheaper, but it isn't the bloodbath people are making it out to be. If they made zero profits, my last fillup would still have been about $3.89 a gallon.

Why is Chicago one of the places where gasoline prices seem to peak? Because we are the biggest consumer who is also furthest from all the ports. The gasoline infrastructure costs a lot of money.

Why is crude oil so high? A significant percentage of that is because of the high Euro and the low dollar, and the bubble in gold.

Why is crude so high when it wasn't a year ago? Because we were in the midst of a global recession! Remember in mid 2008, gas was very expensive. It only got cheaper because global demand went down. Global demand is picking back up, prices are going back up.

It isn't speculators, because futures contracts must either end with someone buying oil, or paying the other guy. For every contract that doesn't end in an actual sale of oil, at roughly the market price determined by supply and demand, there is a winner and a loser speculator, and they cancel each other out.

Speculators might run the price up in the interim, but when it comes time to actually pay for and deliver the oil, it is pure supply and demand.
posted by gjc at 10:31 PM on May 19, 2011 [1 favorite]

xdvesper wrote: "As you said, there's room to play with the assumptions. But I think it makes a strong case, at least, that until you fix the electricity grid, moving to electric cars is not going to make much of a difference to CO2 emissions. In fact you could remove all cars from the road tomorrow and that would only take off roughly 10% of human caused CO2 emissions."

That largely depends on the mix of generation in your particular area.

It is true that the new EPA numbers are overly pessimistic for the gas cars, at least for me. The only way I can not beat them in my SO's V6 RAV4 is to drive like a 17 year old. The flip side of that is, of course, that their numbers for the LEAF are probably also pessimistic.
posted by wierdo at 10:56 PM on May 19, 2011 [1 favorite]

It's Peak Oil. I'm still predicting total economic collapse of the First World in < 25 years, with big shocks clearly visible in the next 10. Factors such as internal Exxon practices, flooding in the Midwest, refinery capacity and political instability are all valid, but not the primary drivers here. China, India, and Brazil are rapidly industrializing. The supply of oil has effectively plateaued. More demand, constant and soon to be decreasing supply. Prices will continue to rise until the next major recession brought on by rising oil/gas prices. With each contraction the effect of the US recession will have less and less effect on gas prices, as the developing world becomes less and less dependent on the US and their demand for gasoline remains closer to constant. At some point the US economy will go into recession, gas prices will continue to climb, and United States economy will collapse. Debate all you want about solar panels, wind turbines, geothermal, nuclear reactors, hydrogen cars and cold fusion, it's all a pipe dream. We don't have the capital, the credit, the motivation or the time to transform our infrastructure on the scale necessary to avert this.
posted by sophist at 11:00 PM on May 19, 2011

I can afford about $20 per gallon before I would have to radically change my lifestyle, and I have a 120 mile round trip commute. But then, I catch an electric train, because I bought a house 5 mins walk from the train station (and 10mins walk to school/shops/pub).
My house was about the same price as one further away from this infrastructure, because a lot of people like living over there on the other side of the golf course too.
I don't buy the idea that there is no affordable housing anywhere near public transport. I think there just aren't any places you want to live in now. You might feel differently when gas is $10 a gallon.
I also know there are lots of towns with no public transport at all, but there are plenty of affordable places with buses or commuter trains all over the country.
posted by bystander at 2:03 AM on May 20, 2011

anigbrowl: At a price of $100 per square meter for solar panels - which is well below current prices, as far as I know - covering an area the size of Ireland would require 7 quadrillion dollars, which is 500 times more than the entire GDP of the US, or about 100 times more than the entire GDP of the world. And that's just one of those small black dots.

Your seem to be off by a factor of 1000.
$100 per m² = $100 million (10^8) per km².
Republic of Ireland ~70,000 (7 × 10^4) km² : $7 trillion (7 × 10^12).
Which is 12% of the annual world GDP (~$60 trillion).

For the sake of argument, let's assume that the assumptions of that map, detailed here, are reasonable. Then, using your method of calculation, covering the required area of 900,000 km² with solar panels would cost $90 trillion, i.e., 1.5 × annual world GDP. And the cost would be spread out over decades, would be offset against the money saved, create jobs, etc. But this is a very rough ballpark estimate for an unrealistic scenario. The recent IPCC report (pdf) assumes investments in the range of 1% annual GDP for up to 75% renewables in 2050.
posted by ltl at 2:50 AM on May 20, 2011 [1 favorite]

The people who are arguing that when gas prices hit a certain point there will be a large-scale abandonment of personal autos as a means of transportation are forgetting something really basic:

Gas prices are really just energy prices, and energy prices are factored into other prices.

When the price of gas goes up, the price of everything, including wages, goes up. Why? Because, for example, the food you eat has traveled quite a distance from the place where it was produced to the place where it was packaged to the place where you eat it. All of that costs money, and that gets factored into the retail price. Same goes for consumer goods, even cars themselves. The same is even true of services, because service providers of every stripe not only have to get to work but have to buy supplies, all of which are affected by energy prices.

This would not be true if we were talking about, say, iPods, or kiwi fruit. The prices of those things aren't really figured into the prices of other things, because they aren't part of the production cost for anything. But energy prices essentially drive the whole economy, so raising those just makes everything more expensive.

In short, a rise in gas prices is far more likely to cause across-the-board inflation than it is to cause any change in transportation behavior, or, at least, there will be a long stretch of general inflation before that happens.

No, the only way for rising gas prices to cause a change in behavior is if the rise in prices is driven by actual scarcity. If there isn't actually enough gas to go around, people will find some other way to get around. But as long as there is enough gas to meet demand, our economy is so dependent upon it that an increase in energy costs seems likely to manifest as all-around inflation than anything else.
posted by valkyryn at 5:04 AM on May 20, 2011 [2 favorites]

Guyzero, sure thing! Longrun is when there arent any fixed costs. Shortrun there are. Now gimme my Nobel!
posted by scunning at 6:27 AM on May 20, 2011

Guyzerocan you post a link to more info on milk price floors?
posted by scunning at 6:32 AM on May 20, 2011

When the price of gas goes up, the price of everything, including wages, goes up.

The significant lag between increases in costs to consumers and increases in wages will cause a lot of hardship, resulting in behavior change on at least a limited and temporary scale. People have more ability to control how much they spend directly on fuel than how much they spend on many of the other things which do have energy costs factored in (food being the easiest example there).
posted by asperity at 7:32 AM on May 20, 2011

Guh, milk prices aren't set uniformly. But here's the PA Milk marketing board's pricing sheets. They set the price producers are paid (I guess by dairies) and they set the wholesale price of milk. Retailers are free to charge whatever they want. In this cases it's straight price fixing but I call it a ceiling since dairies are presumably free to pay more if they want. Whether that happens in practice I dunno.
posted by GuyZero at 7:40 AM on May 20, 2011

er, that is, I call it a floor.
posted by GuyZero at 7:40 AM on May 20, 2011

please delmoi. I'm not a shill for oil and gas, and recognise we need to transition somehow to renewable energy, but to compare road surface area with the logistics for laying out solar arrays is bonkers.

Our ability to lay down vast swathes of bitumen is just another ability we got with the advent of cheap oil. We're not going to be able to pave a similar area with solar cells easily.

I'm not saying it would be as easy, but you seemed to imply that that you would need to have all the solar panels in ONE PLACE, which would indeed be a huge undertaking. But that's not how it needs to work at all. You have solar panels spread out all over the place. You put them on roofs and so on. It is not that hard.

There are billions of people on the planet right now and as a society overall have built tons and tons of small things that, if you add them up, cover enormous areas.

Silicon is one of the most abundant elements in the earth's crust. There is plenty out there, it just needs to be purified, then cut into thin sheets.

The Victorians dealt with the manure very quickly and easily-- it was highly prized by gardeners and there were plenty of people ready to scavange it for a living much as people today pick up aluminum cans on the street. On the other hand, dead horses were a real smelly problem.

That worked in low-density areas but in NY you actually had so much horse manure that it basically stayed on the road indefinitely.

Also, horses need to be fed all the time, whether you're riding them or not. You would have the same competition for food human as you do with ethanol and biodeisel.

I live in Victoria, where 85% of electricity is produced from Brown Coal.

Not everywhere in the world is Victoria. Lots of places use less carbon intensive electricity. You didn't say "If powered by 85% coal, the leaf produces more CO₂ then other cars" you just said it produced more.
posted by delmoi at 8:08 AM on May 20, 2011 [1 favorite]

I can afford about $20 per gallon before I would have to radically change my lifestyle

Again, you are assuming that oil could reach these prices and the only effect to you would be the increased cost to put fuel in your tank. Gas prices effect everything we buy, particularly food and consumer goods. Not only for transportation, but also for the plastics to wrap them. Cheap hydrocarbons are the foundation upon which our economy is built, and if you think that live in the US and are somehow divorced from that, you are in for a surprise.
posted by sophist at 8:30 AM on May 20, 2011

I'm sorry, but we simply will never work out the logisitics for such a project. Not going to happen.

We managed to fly a glorified calculator-with-wings to the moon just so that Armstrong could piss on it. We put thousands of satellites into space. We built the internet. We built the car and the railroad. We built every piece of power-generating infrastructure that currently powers the planet. Why couldn't we do that again, but do it right this time?

In the short run, we might be greedy, myopic sonsabitches. In the long run I really, really don't think it's wise to bet against humanity. This shit will get done one way or another.
posted by thsmchnekllsfascists at 9:16 AM on May 20, 2011

How quickly do affluent suburbs become ghost towns because employment possibilities aren't local?

I like to try to imagine how automobile-centric towns like the one I grew up in could ever possibly adapt. The only thing I've been able to thing of is that if you look at strip malls and big box stores with their huge parking lots, you often could develop ontop of the parking, leave some space for connecting roads, and maybe have somewhat decent, walkable, urban commercial areas.

The really hard part is just the housing stock sprawling out in all directions for miles and miles and miles. It costs a lot of money to keep services going over these large, low denity areas. If the suburb dies, it seems they'd turn in to terrible ghettos. I think you'd need some kind of system that incentivizes turning subdivisions back into farmland. Luckily, the way we build our houses here in North America, with the materials we use and our light frame construction methods, you'd almost think these things were designed to be temporary structures from the start.
posted by floam at 12:14 PM on May 20, 2011

Modern subdivisions aren't inherently bad from an efficiency standpoint, except insofar as any single family home is necessarily less energy efficient than an apartment. The problem is subdivisions designed such that you have to drive a mile down several roads winding about and random dead ends along with no efficient walking routes.

I've been mapping a lot of new subdivisions in my area for OSM and have found that many aren't all that different than my 1920s-era suburb which was designed around the trolley that ran through the middle of it. Many of them could be made walkable with nothing more than a bit of land dedicated for walking paths.

That's not even considering the developments modeled after old-style small towns.
posted by wierdo at 8:56 PM on May 20, 2011

What would you consider the typical number of units/acre for a "modern" subdivision? Compared to what I think of when I imagine a 1920s streetcar neighborhood, the modern subdivisions tend to have larger yards, driveways, wider roads, and higher square-footage per home, with density being quite a lot worse than the nice old neighborhoods.

I do agree though, the cul-de-sac road layouts compared to grids might alone be more stifling than the actual density difference.
posted by floam at 10:05 AM on May 21, 2011

There is some difference inherent in modern subdivisions here in that they are required to dedicate a fairly significant portion of the development area to flood control and other common uses. Older developments didn't require that and thus maintain a higher average density. (at the cost of causing greater stormwater flows downstream)
posted by wierdo at 12:46 AM on May 22, 2011

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