The problem would still lie with refining capacity. Our current refineries cannot produce enough fuel that we use in a day. The NIMBYs won't let us build any more refineries, so therefore we have to import 5 million barrels of fuel from foreign countries to meet our demand. They want to make us equal in a world economy and drag us into the quagmire that is the rest of the world. This theory falls in line with why teachers aren't teaching anymore and why kids today can't think for themselves nor can they problem-solve like we can. American ingenuity, innovation and initiative are dying out because of the Liberals. And don't even get me started on the Unions - they've become exactly what they were formed to fight against.
Mr. Bigley demonstrably isn't stupid, so how else to interpret this?
That said, we face a much different situation today. The biggest differences are that we're now well past "peak oil" both for the world and the U.S., and the industrialization of China and India (among others) has produced an exponential growth in their demand for energy.
Yet in the same paragraph he also says:
The excess capacity of world oil production that existed in the 1980's is long gone - except for the United States. We reached peak oil production way back in 1985, and we've seen production decline every year since then, largely because of the environmental lobby and the environmentally oriented lawmakers in Washington. (my bold)
He seems to be acknowledging that so-called "peak oil" is a political artifact (or, more charitably, an unintended consequence) yet seems determinedly oblivious of the well established mechanism for altering a political condition - a suitable change of legislation or of the politicians who won't.
I won't argue the figures he presents, but the response he proposes seems effectively little different in process to that proposed by Mad Maxine herself. Mind you, I have no objection to developing domestic US oil resources, but the mechanism we utilise to influence the domestic market needs to be given a much more rational examination then what I read proposed in this link.
No offense Kevin, but I suspect that a similar proposal to restrict sale of the production of copper mines to the domestic US market only, without a much more detailled explanation of the mechanism used to achieve that result, would elicit a substantially more critical response from you.
Returning to Mr. Bigley, he has gathered an impressive amount of data together, but he still manages to drive right off the rails with it all. Does anyone here (especially here) seriously think that the correct response to a sociological myth is rampant socialism?
The lack of a consistent energy policy in this country is a serious problem and we are all paying for it too. Destroying what presently serves as our economy while tearing up our Constitution (which forbids the federal government from direct involvement in commercial enterprise) doesn't strike me as the best thought out response possible.
Will, if you think I was serious about "socializing" CITGO's refineries, you haven't read TSM enough.
I was merely pointing out (another) of the unintended consequences of Federal legislation. And the Leftist idiocy (but I repeat myself) of Reps. Waters and Hinchey.
"The NIMBYs won't let us build any more refineries, ..."
Really? Oklahoma has plenty of sparsely-populated sites with fabulous pipeline access, and people who think that God created oil and gas so folks could hit the royalty jackpot. Texas and Louisiana are not much different.
The truth is probably that we outsource refinery capacity for the same reasons we outsource DVD player factories.
A data point to add: Diesel costs as only a couple €-cents less than gasoline here in Italy; the gap tightened with time and now it's almost non-existent. The price of gas is around 1.55 €/liter...
Pretty bad news for the 40% of cars that use diesel, so much that some people who drive only short distances are switching back to gasoline.
The popularity of LPG or methane-powered vehicles is skyrocketing and many manufacturers offer models with built-in multifuel capability (while LNG and methane rigs used to be aftermarket mods).
Oklahoma has plenty of sparsely-populated sites with fabulous pipeline access, and people who think that God created oil and gas so folks could hit the royalty jackpot. Texas and Louisiana are not much different.
Actually, Daniel's right, but for the wrong reason.
It's not NIMBY in lots of these cases.
IT's NIABY. Not In Anybody's Back Yard.
The locals in many areas would go nuts to have a local refinery.
The amazingly-well-funded opposition will show up from out of town, file lawsuits, and leave whenever there's not the local court battle.
It's about the meme and dominant paradigm, Daniel, and that mandates that not only will you not want that, but you're going to make damn sure I don't get it no matter how much I want it.
Additionally, there's the EPA requirements. Built before '73, and the requirements aren't so onerous. (And very obviously well about what's required, since that's the last time we built a refinery).
After 73, and new restrictions come into place. Such tough emission restrictions, that apparently Exxon/Mobile with record profits and oil above $100/barrel for the likely future, just now thinks they can built it with the higher bar and make money.
The big change came in the 70's, when people started using the legal system not to derail things locally, but nationally they were unhappy with. Or, more simply, when the watermelons figured out they could be far more effective with lawyers than sit-ins.
Dead on, Unix. Remember, for decades Oklahoma had producing oil wells on the lawn of the State Capital Building. Overall, oil production is a highly regarded industry here.
Apologies. I read your comment as being more supportive of the Bigley position then you obviously intended. That caused a bit of cognative dissonance because Kevin Baker couldn't really have meant that, could he?. :)
I think FabioC's comment above is worth noting also. It seems price saturation is occuring to a broader degree then I was previously aware. A basic tenet of classical strategy teaches that once opportunity for advancement becomes flat (think typical x-y coordinate graph) between the major competitors is when the upstart or alternative competition has it's greatest chance to redefine the field of competition. If this general rule should hold true in the present example, expect to see several "breakout" technologies assume a much greater position of market share in the relatively near future (tens of months rather than decades) then is the case at present. Shell or Exxon/Mobil losing significant market share to this guy for a somewhat extreme example.
Kevin,
Great piece, but you are not completely correct. While there is some truth to our exporting refined products the ULSD standards have significantly reduced the availability of raw feed stock to turn in to diesel. This is b/c diesel used to be the dregs, anything that was cracked and considered a waste stream by the initial unit was sent to the diesel product stream, and I mean any thing. This usually meant high sulfur stuff, but not always. With the ULSD regs now you can't send most of that stuff there any more and thus the companies have had to find other things to do with the waste streams. Enter polymers. Most of the high sulfur waste streams now go to either in house or outside specialty chemical companies making polymers (see your tires) and other specialty chems. Turns out that between the new regs and demand for polymers there is more money to be made not making diesel.
Same problem - hydrogen is not a fuel. It's a way to store energy. It has to come from some energy-intensive process such as electrolysis wherein the energy we get out of hydrogen is less than the energy that goes into splitting it out of water and compressing it for storage.
Now, perhaps that hydrogen generator produces H2 at a price below that of gasoline, calorie for calorie, but I doubt it. "Solar electric or wind generator" powered? How long does it take to make an equivalent of 20 gallons of gasoline? What kind of maintenance of the converter is required?
I wish the guy luck, I really do, but this deal smells funny to me.
The big change came in the 70's, when people started using the legal system not to derail things locally, but nationally they were unhappy with.
Not just environmentalists U-J. Consider the porn prosecution by the US Atty in Western PA, and the US Atty in SoCal abusing the computer fraud act in going after the MO woman in the teenage suicide case.
The 'right' has surrendered principle in favor of using the courts the same way the left has.
Sorry, but I can't agree with your examples or conclusions.
Aside from the merits or lack thereof of those cases (the Western PA I'm totally ignorant of), criminal prosecutions have been a hallmark of government harassment for hundreds of years.
Thus the absolute prohibition against double jeopardy delineated in the Constitution. (Let's not get started on the feds filing charges if the state misses convictions...)
But until the 70's, there was almost nothing that a civil suit could do. No standing, no cause for action.
But in the 60s and 70s, legislatures started rewarding people who filed "for the public" lawsuits, allowing anybody, no matter their location to file suit. "For the people".
That's the big difference and change. Before, you could sue *if* they were literally going to build in your backyard, or close to it. The 60s and 70s set up professional litigators and activists who could make (quite a nice) living literally stopping progress everywhere.
The EPA mandated cleaner diesel. The result was diesel that could then pass European regulations. Therefore, a market was opened up for diesel to be exported to Europe, where there is more of a demand for it.
(I'm sure there are refining capacity problems adding to the price, as well.)
Oddly, what we seem to have here is a situation where government regulations (EPA and European regulations) managed to open a market (good), but which also drove up prices (bad). I'm not really sure what to think of that. I suspect that it is less optimal than the results of a free market, but I can't prove that.
Or is it also that the high-sulfur waste stream simply cannot be made into low-sulfur diesel at a competitive price?
That is certainly part of it. Precipitating sulfur out of the waste streams is neither easy or cheap. It makes more sense to use it as is wherever possible. That and there is a very small margin on all fuel and in particular diesel as it is.
The 60s and 70s set up professional litigators and activists who could make (quite a nice) living literally stopping progress everywhere.
I wasn't disputing that, just noting that the 'right' has in recent times, adopted a similar mindset/approach.
Note:
All avatars and any images or other media embedded in comments were hosted on the JS-Kit website and have been lost;
references to haloscan comments have been partially automatically remapped, but accuracy is not guaranteed and corrections are solicited.
If you notice any problems with this page or wish to have your home page link updated, please contact John Hardin <jhardin@impsec.org>
JS-Kit/Echo comments for article at http://smallestminority.blogspot.com/2008/06/more-unintended-consequences.html (17 comments)
Tentative mapping of comments to original article, corrections solicited.
The problem would still lie with refining capacity. Our current refineries cannot produce enough fuel that we use in a day. The NIMBYs won't let us build any more refineries, so therefore we have to import 5 million barrels of fuel from foreign countries to meet our demand. They want to make us equal in a world economy and drag us into the quagmire that is the rest of the world. This theory falls in line with why teachers aren't teaching anymore and why kids today can't think for themselves nor can they problem-solve like we can. American ingenuity, innovation and initiative are dying out because of the Liberals. And don't even get me started on the Unions - they've become exactly what they were formed to fight against.
Mr. Bigley demonstrably isn't stupid, so how else to interpret this?
That said, we face a much different situation today. The biggest differences are that we're now well past "peak oil" both for the world and the U.S., and the industrialization of China and India (among others) has produced an exponential growth in their demand for energy.
Yet in the same paragraph he also says:
The excess capacity of world oil production that existed in the 1980's is long gone - except for the United States. We reached peak oil production way back in 1985, and we've seen production decline every year since then, largely because of the environmental lobby and the environmentally oriented lawmakers in Washington. (my bold)
He seems to be acknowledging that so-called "peak oil" is a political artifact (or, more charitably, an unintended consequence) yet seems determinedly oblivious of the well established mechanism for altering a political condition - a suitable change of legislation or of the politicians who won't.
I won't argue the figures he presents, but the response he proposes seems effectively little different in process to that proposed by Mad Maxine herself. Mind you, I have no objection to developing domestic US oil resources, but the mechanism we utilise to influence the domestic market needs to be given a much more rational examination then what I read proposed in this link.
No offense Kevin, but I suspect that a similar proposal to restrict sale of the production of copper mines to the domestic US market only, without a much more detailled explanation of the mechanism used to achieve that result, would elicit a substantially more critical response from you.
Returning to Mr. Bigley, he has gathered an impressive amount of data together, but he still manages to drive right off the rails with it all. Does anyone here (especially here) seriously think that the correct response to a sociological myth is rampant socialism?
The lack of a consistent energy policy in this country is a serious problem and we are all paying for it too. Destroying what presently serves as our economy while tearing up our Constitution (which forbids the federal government from direct involvement in commercial enterprise) doesn't strike me as the best thought out response possible.
Will, if you think I was serious about "socializing" CITGO's refineries, you haven't read TSM enough.
I was merely pointing out (another) of the unintended consequences of Federal legislation. And the Leftist idiocy (but I repeat myself) of Reps. Waters and Hinchey.
"The NIMBYs won't let us build any more refineries, ..."
Really? Oklahoma has plenty of sparsely-populated sites with fabulous pipeline access, and people who think that God created oil and gas so folks could hit the royalty jackpot. Texas and Louisiana are not much different.
The truth is probably that we outsource refinery capacity for the same reasons we outsource DVD player factories.
Daniel, they've been trying to build a new refinery near Yuma, AZ for over ten years.
They still haven't broken ground.
Lawsuit after lawsuit after lawsuit for "environmental" reasons.
A data point to add: Diesel costs as only a couple €-cents less than gasoline here in Italy; the gap tightened with time and now it's almost non-existent. The price of gas is around 1.55 €/liter...
Pretty bad news for the 40% of cars that use diesel, so much that some people who drive only short distances are switching back to gasoline.
The popularity of LPG or methane-powered vehicles is skyrocketing and many manufacturers offer models with built-in multifuel capability (while LNG and methane rigs used to be aftermarket mods).
Daniel:
Oklahoma has plenty of sparsely-populated sites with fabulous pipeline access, and people who think that God created oil and gas so folks could hit the royalty jackpot. Texas and Louisiana are not much different.
Actually, Daniel's right, but for the wrong reason.
It's not NIMBY in lots of these cases.
IT's NIABY. Not In Anybody's Back Yard.
The locals in many areas would go nuts to have a local refinery.
The amazingly-well-funded opposition will show up from out of town, file lawsuits, and leave whenever there's not the local court battle.
It's about the meme and dominant paradigm, Daniel, and that mandates that not only will you not want that, but you're going to make damn sure I don't get it no matter how much I want it.
Additionally, there's the EPA requirements. Built before '73, and the requirements aren't so onerous. (And very obviously well about what's required, since that's the last time we built a refinery).
After 73, and new restrictions come into place. Such tough emission restrictions, that apparently Exxon/Mobile with record profits and oil above $100/barrel for the likely future, just now thinks they can built it with the higher bar and make money.
The big change came in the 70's, when people started using the legal system not to derail things locally, but nationally they were unhappy with. Or, more simply, when the watermelons figured out they could be far more effective with lawyers than sit-ins.
Dead on, Unix. Remember, for decades Oklahoma had producing oil wells on the lawn of the State Capital Building. Overall, oil production is a highly regarded industry here.
Kevin,
Apologies. I read your comment as being more supportive of the Bigley position then you obviously intended. That caused a bit of cognative dissonance because Kevin Baker couldn't really have meant that, could he?. :)
I think FabioC's comment above is worth noting also. It seems price saturation is occuring to a broader degree then I was previously aware. A basic tenet of classical strategy teaches that once opportunity for advancement becomes flat (think typical x-y coordinate graph) between the major competitors is when the upstart or alternative competition has it's greatest chance to redefine the field of competition. If this general rule should hold true in the present example, expect to see several "breakout" technologies assume a much greater position of market share in the relatively near future (tens of months rather than decades) then is the case at present. Shell or Exxon/Mobil losing significant market share to this guy for a somewhat extreme example.
Kevin,
Great piece, but you are not completely correct. While there is some truth to our exporting refined products the ULSD standards have significantly reduced the availability of raw feed stock to turn in to diesel. This is b/c diesel used to be the dregs, anything that was cracked and considered a waste stream by the initial unit was sent to the diesel product stream, and I mean any thing. This usually meant high sulfur stuff, but not always. With the ULSD regs now you can't send most of that stuff there any more and thus the companies have had to find other things to do with the waste streams. Enter polymers. Most of the high sulfur waste streams now go to either in house or outside specialty chemical companies making polymers (see your tires) and other specialty chems. Turns out that between the new regs and demand for polymers there is more money to be made not making diesel.
Turns out that between the new regs and demand for polymers there is more money to be made not making diesel.
Now that's interesting! Or is it also that the high-sulfur waste stream simply cannot be made into low-sulfur diesel at a competitive price?
Will:
Same problem - hydrogen is not a fuel. It's a way to store energy. It has to come from some energy-intensive process such as electrolysis wherein the energy we get out of hydrogen is less than the energy that goes into splitting it out of water and compressing it for storage.
Now, perhaps that hydrogen generator produces H2 at a price below that of gasoline, calorie for calorie, but I doubt it. "Solar electric or wind generator" powered? How long does it take to make an equivalent of 20 gallons of gasoline? What kind of maintenance of the converter is required?
I wish the guy luck, I really do, but this deal smells funny to me.
The big change came in the 70's, when people started using the legal system not to derail things locally, but nationally they were unhappy with.
Not just environmentalists U-J. Consider the porn prosecution by the US Atty in Western PA, and the US Atty in SoCal abusing the computer fraud act in going after the MO woman in the teenage suicide case.
The 'right' has surrendered principle in favor of using the courts the same way the left has.
Juris:
Sorry, but I can't agree with your examples or conclusions.
Aside from the merits or lack thereof of those cases (the Western PA I'm totally ignorant of), criminal prosecutions have been a hallmark of government harassment for hundreds of years.
Thus the absolute prohibition against double jeopardy delineated in the Constitution. (Let's not get started on the feds filing charges if the state misses convictions...)
But until the 70's, there was almost nothing that a civil suit could do. No standing, no cause for action.
But in the 60s and 70s, legislatures started rewarding people who filed "for the public" lawsuits, allowing anybody, no matter their location to file suit. "For the people".
That's the big difference and change. Before, you could sue *if* they were literally going to build in your backyard, or close to it. The 60s and 70s set up professional litigators and activists who could make (quite a nice) living literally stopping progress everywhere.
The EPA mandated cleaner diesel. The result was diesel that could then pass European regulations. Therefore, a market was opened up for diesel to be exported to Europe, where there is more of a demand for it.
(I'm sure there are refining capacity problems adding to the price, as well.)
Oddly, what we seem to have here is a situation where government regulations (EPA and European regulations) managed to open a market (good), but which also drove up prices (bad). I'm not really sure what to think of that. I suspect that it is less optimal than the results of a free market, but I can't prove that.
Or is it also that the high-sulfur waste stream simply cannot be made into low-sulfur diesel at a competitive price?
That is certainly part of it. Precipitating sulfur out of the waste streams is neither easy or cheap. It makes more sense to use it as is wherever possible. That and there is a very small margin on all fuel and in particular diesel as it is.
The 60s and 70s set up professional litigators and activists who could make (quite a nice) living literally stopping progress everywhere.
I wasn't disputing that, just noting that the 'right' has in recent times, adopted a similar mindset/approach.
Note: All avatars and any images or other media embedded in comments were hosted on the JS-Kit website and have been lost; references to haloscan comments have been partially automatically remapped, but accuracy is not guaranteed and corrections are solicited.
If you notice any problems with this page or wish to have your home page link updated, please contact John Hardin <jhardin@impsec.org>