Artificial costs

Mark Perry has some interesting graphs comparing average gas price with taxation levels:

It’s important to recognize what this is not.  It’s not to say that gas taxes should be lower, nor does is it an argument in favor of McCain’s asinine gas tax holiday proposal. 

But it is an important reminder that there are regulatory components.

Hat tip: Coyote Blog.

An energy earthquake

Great piece in the LA Times about the changes that may be in store as energy prices continue to rise:

Besides the obvious effect $7-a-gallon gasoline would have on commuters, automakers, airlines, truckers and shipping firms, $200 oil would drive up the price of a broad spectrum of products: Insecticides and hand lotions, cosmetics and food preservatives, shaving cream and rubber cement, plastic bottles and crayons — all have ingredients derived from oil.

The pain would probably be particularly intense in Southern California, which is known for its long commutes and high cost of living.

“Throughout our history, we have grown on the assumption that energy costs would be low,” said Michael Woo, a former Los Angeles city councilman and a current member of the city Planning Commission. “Now that those assumptions are shifting, it changes assumptions about housing, cars and how cities grow.”

Push prices up fast enough, he said, and “it would be the urban-planning equivalent of an earthquake.”

The thing is, painful and overdue as it is, life will probably be better when it’s all done.

The reality of eating local

A new study at Carnagie Mellon raises questions about the “energy” impact of eating locally: Ezra Klein summarizes:

The line, then, is that the prudent environmentalist will eat local in order to cut down on greenhouse gas emissions. Intuitively, that makes a lot of sense. Bananas shipped from Brazil can’t be good for the environment. But two Carnegie Mellon researchers recently broke down the carbon footprint of foods, and their findings were a bit surprising. 83 percent of emissions came from the growth and production of the food itself. Only 11 percent came from transportation, and even then, only 4 percent came from the transportation between grower and seller (which is the part that eating local helps cut). Additionally, food shipped from far off may be better for the environment than food shipped within the country — ocean travel is much more efficient than trucking.

As Brad Plumer writes, the striking takeaway is that “on average, replacing just 21 percent of the red meat in the ‘typical’ diet with fish or chicken does as much, emissions-wise, as buying everything in that same diet locally.” That’s not, of course, an argument against eating locally. Taste, farming practices, sustainability, and much else point towards local consumption. But buying locally raised meats doesn’t get you off the environmental hook. If you’re worried about global warming, changing what you eat is far more important than monitoring where it’s produced.

Telling it all in auto sales

Via Autoblog:

The two brands who lost and gained the most sales last month (MINI and HUMMER) sum up nicely what happened to auto sales during May in the U.S. Brands armed with small cars weathered the storm and big trucks and SUVs continued to nose dive. In fact, after 17 years worth of being this country’s best-selling vehicle, the Ford F-150 full-size pickup (42,973) has fallen for the first time to fourth place behind the Toyota Camry (51,291), Corolla (52,826) and your new best-selling vehicle in the U.S., the Honda Civic (53,299). Note to automakers: that would be the sound of the canary in your coal mine hitting the floor.

Bad policy costs us all

Here’s an example of how a messed up Bush policy has more than doubled the cost of wild Salmon.  Yeah, it’s all related, but you know Shrubya “gets” the common man.

The collapse of these fisheries is mostly the product of the decisions by the Bush administration back in 2001-2003 to ignore federal law and shut off Klamath River Basin water downstream so that Oregon farmers — who were being backed by a witches’ brew of militia/Patriot movement paranoiacs and Republican property-rights types — could have the water for themselves. The result was the largest salmon kill in American history.

And it all happened because of machinations in which Dick Cheney himself was intimately involved. Cheney is a “fisherman” the same way he’s a hunter (I for one would not stand near the guy with a fly rod in his hand because I know I’d catch one of his flies in my face): he depends on privately supplied stocks. For the rest of us, well, go catch what you can after he’s done shooting the salmon in the face.

Consequences? What consequences?

Great bit at TMV:

SUV for Sale

By Tom Purcell

“Ah, the summer season has arrived and the wife and I hope to hit the road. That means one thing. I must dump my SUV.”

“Dump your SUV?”

“With gas prices soaring, who can afford to drive such a gas guzzler anymore? What’s worse: My giant hunk of steel is worth several thousand less than I owe on it.”

“Those are the breaks. But isn’t that the risk you took when you bought it?”

“Risk?”

“Surely you know that a third of the world’s crude oil comes from the Middle East, one of the most volatile regions in the world. That volatility has led to erratic gasoline prices before.”

“It has?”

The problem with GOP “economics”

Great piece at FDL.  Read it in full.

Twelve dollars a gallon?

Not yet, but certainly possible.

“The world’s premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand.” Previously the International Energy Agency had forecast an ever increasing supply to match ever increasing demand, but times they are a changing. Not one to be outdone by an international agency, “the U.S. Energy Department’s own forecasting shop, the Energy Information Administration, has long stuck to the same demand-driven methodology as the IEA, assuming that supply will keep up with the world’s growing hunger for oil.” After all, for decades that’s how things worked, so why do the hard job of analyzing both supply and demand when only doing half your homework is so much easier? But, since 2004 demand has continued to rise while supply has plateaued. Now, both agencies have been caught with their analytical pants down and are scrambling to cover themselves. While some blame oil speculators for rapidly rising fuel costs, most economists and oil analysts point to increasing world-wide demand combined with the difficulties of finding new oil and the lack of willingness of oil suppliers to spend the money needed to find more of the stuff.

Missing the point for the middle class

Chris at Americablog calls it right:

Wow, go figure. Another Wall Street writer dismissing record high gas prices and food prices. It’s about time people get a grasp on the real world where such costs are in fact a problem. Not everyone in the world gambles trillions of dollars - paying outrageously high bonuses without any link to the ultimate end result - loses and then gets bailed out by the middle class who can hardly keep up with their own costs.

The only thing worse is that not only is there a steady stream of this nonsense, not a damned person in Congress is saying much about the bailout and it’s long term consequences. I get the whole “we need to prevent a major collapse” thing but sheesh, do we really need to fund lifestyle choices for Wall Street? If they can afford to pay the likes of Tony Blair $1 million per year and keep shoveling over handsome bonuses, they don’t get it. Either that or we’re all just idiots for tolerating and condoning this behavior.

Consequences of inefficiency

A little dose of painful reality from The Truth about Cars:

Who do you think is doing the greatest damage to the US dollar? The Chinese? The European Union? OPEC? Brace yourself - it’s you, every time you press the gas pedal on your gas-guzzler. With today’s oil prices, US oil imports represent $1.5b per day leaving the country — make that $548bn per year. “This represents the single largest contribution to America’s balance-of-payments deficit, and is a leading cause for the dollar’s ongoing drop in value,” writes Michael T Klare, author of “Rising Powers, Shrinking Planet,” over at Tomdispatch.com.

Cause and effect

Great piece at Coyote Blog on the relationship of climate and industry to per capita energy consumption by state.

Economic policy does matter

And this, regarding the relationship to the dollar and oil prices, is an example of why.

The blind leading the stupid

Praying for cheap gas, because you KNOW God’s number one priority is protecting us from the consequences of our own policies:

Rocky Twyman has a radical solution for surging gasoline prices: prayer.

Twyman - a community organizer, church choir director and public relations consultant from the Washington, D.C., suburbs - staged a pray-in at a San Francisco Chevron station on Friday, asking God for cheaper gas. He did the same thing in the nation’s Capitol on Wednesday, with volunteers from a soup kitchen joining in. Today he will lead members of an Oakland church in prayer.

Yes, it’s come to that.

“God is the only one we can turn to at this point,” said Twyman, 59. “Our leaders don’t seem to be able to do anything about it. The prices keep soaring and soaring.”

…”God, deliver us from these high gas prices,” Twyman said. “That’s all they have to say.”

Words fail me.

At the risk of introducing some intelligence into the equation, conserve more, drive less.

Unintentional honesty

Saw this piece in the Star Tribune a couple days ago, talking about growing frustration and impatience for United Health among the Wall Street crowd, which is expecting better performance and profitability.

This line is symptomatic of so much:

The company expects its medical-care ratio, the portion of premiums that goes toward paying medical bills, to inch up to 81.3 percent this year, from 80.6 percent in 2007. A higher medical-care ratio is bad for insurers because it means narrower profit margins.

Yeah, health care as a business, but what would you think of a charity that lost 20% of its overhead to administrative expense and profit?

Single payer.  Now!

Only getting half of it

Michael at Balloon Juice talks about ANWR and why it won’t help reduce gas prices.

He’s right, it won’t make a large dent in the worldwide oil prices, but the larger issue is domestic production and reduced reliance on Middle Eastern sources, particularly in a strategic sense.