Category: energy

More Drilling?

I  think any additional drilling for oil should be done only on the precondition that the additional supply would be offset by a decrease in demand (i.e conservation).  That way, it won’t just get pissed away on increasing domestic demand, like what happened in the mid-1980’s when a huge amount of new supply pushed prices way down and ushered in the SUV era. Continue reading “More Drilling?”

Gas Guzzler Tax

Decades ago, harkening back to the oil shocks of the 1970’s, the US Congress instituted what would seem to be a reasonable idea of discouraging gas guzzlers. Vehicles below 22mpg are slapped with a special tax, usually referred to as the gas guzzler tax ( the legislation was called: The Energy Tax Act of 1978). The tax is collected by the manufacturer or importer, and is paid by the first buyer.

An economist would refer to such a tax as a disincentive to guzzling gas (actually a disincentive to producing/buying gas guzzling vehicles).

As is usual, what would seem to be a good idea is destroyed by spineless politicians and weaselly lobbyists.

Therefore, SUVs (light truck), of course, are exempt 🙂

In 2005, about 170M was collected. There are untold hundreds of millions of dollars of foregone revenue due to the SUV loophole.

Source: TRANSPORTATION ENERGY DATA BOOK: EDITION 26–2007, Tables 4.20 and 4.21
(a treasure trove of energy data. Also interesting is the studies on speed vs. mpg — generally vehicles peak around 50mph).

Better late than never?

Here is some pretty stark statements coming directly from the Bush Administration. Why now, in the seventh year of his administration? Why spoil the streak? Wouldn’t a continuation of current policy — delay and denial — have worked for just these last few months of his lame duck administration? Where is Dick Cheney on this? Continue reading “Better late than never?”

The Real Cost of Tackling Climate Change

The full paper that was excerpted to become a WSJ op-ed piece can be downloaded from the Pacific Research website. (a good deal, as the cover price is $24.95!).

I should point out that the paper is not a scientific endeavor, and the author is not a scientist by training: “Hayward holds a Ph.D. in American Studies and an M.A. in Government from Claremont Graduate University”. It is more of an outlook and commentary. He tends to think the mass-media (MSM?) has a tendency to sensationalize environmental stories and make everything seem both excessively gloomy and unfairly blame anthropogenic causes — this is probably true. He lists some citations that refute that trend: Continue reading “The Real Cost of Tackling Climate Change”

Gas Tax Pandering

It’s hard to know where to start with this one. John McCain at least openly acknowledges that economics isn’t his strong suit. Senator Kyl, I would have thought, would know better. Pure pandering.

Here we are in the midst of a big brown-cloud and ozone non-attainment season, and our two senators are endorsing a plan to increase the amount to gasoline and diesel consumed. Vehicle emissions in Maricopa county (the Phoenix metropolitan area) are the primary contributor to smog.

As if that’s not bad enough, the shortfall — the amount that would have been collected during the “holiday” — will be made up from general revenue. Which is to say, car use will be (further) subsidized by taxes unrelated to driving, like the income tax, or will simply make the federal deficit larger. This sets up exactly the wrong incentives– you will get more driving and less useful economic activity.

From a economic policy perspective, a much better stimulus would be to have some sort of “holiday” on payroll taxes. These taxes are a direct tax on labor, and hit lower-wage earners particularly hard.

“…John McCain proposed a ‘gas tax holiday’ that would suspend federal levies between Memorial Day and Labor Day… His Arizona colleague, Jon Kyl, promptly introduced it as Senate legislation”

“The 18.4 cent tax per gallon of gas (24.4 cents for diesel) funds interstate highway repairs and other transit needs, though general revenue would offset losses from the moratorium.”

— Global Warming Holiday, WSJ April 25, 2008. (emphasis added)

…

Ozone and CAFE

Coincidentally, two related-but-unrelated items came out today.

A new National Academy of Sciences report confirms (reconfirms?) the link between elevated ozone air pollution and increased risk of premature death was released. See, e.g. Panel Confirms That Ozone Kills, US News & World Report April 23, 2008. Ozone is an unavoidable byproduct any combustion, e.g. automobile use.

On the fuel-economy front, presumably to coincide with earth day, Bush Administration released accelerated CAFE standards. See e.g. Government to release proposed fuel economy rules, Associated Press April 22, 2008.

Holman Jenkins’ WSJ Business World column, A Volt out of the Red, gave his usual analysis of CAFE, which I believe is right, and I tend to agree with. My complain is his sin of omission — does he not know about toxic pollution? He continues to berate the Prius, as in this dig “…GM intends to beat Toyota at its own game of selling bogus green symbolism to Washington and Hollywood”.

Does toxic pollution not count? Since apparently Jenkins doesn’t “believe in” global warming, does that also mean he doesn’t believe in air pollution either?.

The Toyota Prius (note 1) puts out only about one-half the ozone-forming pollutants per mile of the average new car (average is defined as being bin 5). An absurd vehicle like the Hummer H2, bin 8, emits between two and ten TIMES as much ozone-forming pollutants (note 2). How much more are H2 drivers paying to pollute the air, say, compared to Prius driver? Nothing. Drivers pay nothing. And if you can believe it, the H2 situation now is much better than it was a few years ago, in 2004 model year the H2 emitted between five and 30 times the pollution of a Prius.

And it’s not like Toyota is “green” and Hummer (owned by GM) is dirty — Toyota produces their own dirty cars, e.g. in 2008 the Scion XD bin 8, just like the H2. Though it looks like Toyota never produces a bin 11 car.

What’s the point? I don’t own a Prius. The point isn’t for everyone to run out and buy a low-emissions vehicle — that actually wouldn’t work because the regulations work on a fleet average. A constructive start would be to price pollution appropriately. This simple market-based solution would reduce the total amounts of smog and result in better health for all. The polluter, that is to say the driver, should pay.

Notes:

1) See EPA GreenVehicle Guide, About Ratings. Pdfs for vehicle emissions standards, and summary/history (the glossary is particularly useful). This explains the Tier 1, and Tier 2 “bins”. This is all terribly confusing because the bin number (1 through 11) goes up as pollution goes up — whereas the EPA’s “Air Pollution Score” (10 downto 0) goes down.

2) Retrieved from the 2008 model year EPA Green Vehicle Guide.

-) Another explanation of Tiers and Bins at hybridcars.com

-) Excellent article at Edmunds: Untangling U.S. Vehicle Emissions Regulations

Who pays for ozone pollution?

If the WSJ (editors, of course. Red Tape Rising, March 21, 2008) is to be believed, the Bush administration has unleashed a last-minute flood of not only expensive but mis-guided regulations on America. Singled out for scrutiny is the modest reduction in allowable levels of man-made ozone pollution. Continue reading “Who pays for ozone pollution?”