Since Peak Oil Day (May 21, 2008), when the genie's (= Peak Oil) presence outside of the lamp was officially acknowledged by The Wall Street Journal, among other very establishment business media entities, the U.S. public has shown that it is also increasingly "getting it". Vehicle miles traveled is down, SUV sales are down, small car (which get better mileage than big cars) sales are up, to name just a few examples. The frown on people's faces as they gas up their vehicles is becoming quite noticeable. This weekend I watched a 4WD big Ford pickup's owner pump in $88 worth of gas - about 22 gallons - and not look happy about it at all. It was a new looking truck - the paint still shiney - and it's presence in a mid sized city looked a bit out out of place. Unless that truck does construction or some other business, that truck looks to be more and more like an albatross, and less and less of a babe magnet. But it is big....compared to a compact car, just like the amount of money that Exxon-Mobil (it was an E-M station, and probably their gas) made with that sale.

Also since Peak Oil Day, there has been this infuriating drum beat of half-truth, innuendo, "weaseling", ignorance in print, etc aimed at the new "Usual Suspect" for higher food prices, ethanol. Most of this is the result of shoddy journalism, laziness and ignorance of where food comes from/how it is made, and the money flow around food (growing it to delivering it). For a more balanced view, see http://www.ethanolrfa.org/resource/facts/food/. And it's a great way to avoid dealing with the real culprit - our country's pathetically bad liquid fuels policy (if we even have one) and the efficiency with which we use the stuff. Especially car mileage, and more importantly, passenger miles per gallon.

This statement from our Secretary of Energy, also does not bode well for those who wish for lower fuel prices (from http://europe.theoildrum.com/node/4202#more):

"In the absence of any additional crude supply, for every one percent of crude demand, we will expect a 20 percent increase in price in order to balance the market."

The relationship of price to demand is often called price elasticity. In this case, raising the price 20% will lower demand by 1%. Translated, if gas goes from about $4.20/gallon to $5.30/gallon, our national gasoline consumption will drop from around 9.5 million barrels/day to 9.4 million barrels/day. Since about 40% of crude oil can get converted into gasoline, raising our gasoline by $1.10/gallon will lower our crude oil imports by about 250,000 barrels/day.

That trend is not very good - raising gasoline prices by $10/gallon might lower demand by 2.5 mbd, and gasoline needs by 1 mbd. Hopefully this is not a linear trend, and at some point in the very near future common sense kicks in for the vast majority of us. Efficiency rules, and those who revel in wastefulness, are fools.

Another interesting point was made by the Renewable Fuels Association - the approximately 520,000 barrels/day (or 0.52 mbd, or 8 billion gal/yr) of EtOH has kept the prices 15% below what they would be otherwise. It works out to be about 75 cents per gallon right now, but even that may be conservative. Some would say that all this has done has been to suppress prices and thus allow the demand to be accommodated. However, given the time required to bring new supplies on, and the fact that we are going to need to drop our consumption of imported hydrocarbons really significantly, really fast, there may be better ways to view this. After all, it is petroleum prices that set the prices for EtOH and biodiesel, not the other way around. And many of the very same shills for the oil industry who are moaning about food prices are also babbling loudly about gasoline and occasionally about diesel prices.

Unfortunately, it is choice time - wasteful food and wasteful fuel policies won't be allowed to continue - just the money cost alone will break us. We are going to have to wise up with both. And we are going to have to decide what kinds of food are needed - we need figure out what amounts of oils, sugar, starches and/or proteins are needed, and by whom. Does it make sense to feed huge quantities of starches to cows, pigs and chickens, who have very little chance to move around and burn off those calories, and instead, who ferment those into CO2 and methane, which end up emanating out each end? Do we want to feed a nation with an obesity epidemic even more sugar and starch to fulfill our wildest couch potato dreams? Wouldn't it be better to put those sugars (and starch is basically a time release form of sugar) into gas tanks and not little children, who might have a better chance at growing up NOT diabetic.

Or maybe it would be better to not grow starch laden crops (wheat, rice, corn, oats, barley, etc) at all? Just be a nation living on beans for protein? Actually, both are needed in order to come up with the right amino acid mix, but who cares...just get some more hydrocarbons, fast, get 'em cheap and pass the fritos...

Oh well, more and more of us realize that it is not more production only that will relive this nation of its current "oil problem", but it is also efficient fuel usage that is required. And also the manufacture of appropriate fuels in ways that are more and more renewable. That renewable aspect is going to get a powerful motivation boost as global warming consequences (what are the odds of TWO 500 year floods happening within 15 years of each other...really low, unless those are NO LONGER 500 year floods?) and "inelastic prices" of gasoline interact with Peak Oil and Peak Export Oil.

Those who get renewable AND efficient are apt to do better than those who don't. This applies to countries, states, counties and people, and there are lots of clever ways to get around the current problem oil rapidly escalating prices. Maybe steadily increasing sales taxes on non-renewable liquid fuels might finally be considered?

One last point here. The part of the oil industry which is making the big bucks is not the refinery or delivery part. It is those who already have existing oil and gas wells, ones which have been producing for some time, and which have production costs between $5 to $20/bbl, but who get to sell it at $130 plus/bbl. This is where Exxon-Mobil in effect, prints money, and really large quantities of it. They won the Oil Sweepstakes Lotto. If you want to take a bite out of THEIR profits, put a sales tax on their product, which will lower the demand for their product. After all, gasoline is now priced at what it will fetch, not what it costs plus a reasonable profit. A sales tax on non-renewable liquid fuels will just decrease the profit of the big oil extractors, almost all of who know they cannot invest much of that profit to find and extract significant new quantities of oil....profitably. The taxes then go to various governments (those who install the tax), which can be used to at least partly alleviate the economic damages wrought by high prices, and which can be used to lessen dependence on liquid fuels. Like more mass transit, more rail lines for freight, more insulation for buildings, and more transmission lines to get our grid to a state that allows better access to renewable energy, especially wind.

Any comments on the morning rant?