Analysts: Keystone will RAISE my gasoline prices

[Ziggurat]

Oh, I'd argue that ethanol mandates is the poster child for that. Far more expensive than Solyndra was.

That should be the poster child, but politically speaking it's paid off so far. I don't think most people understand how bad an investment that's been for everyone except the ethanol producers and corn farmers.

 

[Ziggurat]

Four billion plus dollars per year in subsidies say otherwise

You mean "subsidies", because they aren't actual, you know, subsidies. Most of it is tax deductions that are used to bring the realities of oil exploration "capital" expenditures in line with the reality that these expenditures are largely unrecoverable expenses.

Furthermore, these "subsidies" are actually dwarfed by tax revenue from oil companies. The government isn't losing money on oil.

-- but my question was really directed more toward your second sentence: "And marginal returns tend to decrease, not increase, with increased investment." Why does this not apply to oil?

It does. I never suggested otherwise.

Do you disagree that the American taxpayer is investing more in oil every year and receiving less in return?

I've got no idea how much American taxpayers are investing in oil over time. I suspect you don't either, but feel free to present evidence.

The track record so far is virtually nonexistant by comparison with investment in oil.

$6 billion per year is virtually nonexistant compared to $4 billion per year?

You might want to check the math.

I disagree, as does the author of this:
I recommend reading the whole thing.
http://www.energyandcapital.com/arti...gy-policy/1079

You need to fix your link. The '...' abreviation which shows up in the visible text isn't part of a valid web address, copy the actual link location from wherever you got it. But what you've copied and pasted doesn't inspire a lot of confidence, since you seem to be doing exactly what he describes: kicking furiously without any real plan.

Bald assertion.

Please, tell me all about those successful electric cars. Tell me about the batteries under development with five times the current capacities. I'm really dying to know.

How could it not?

Because people might not choose to live near their work, even if their work is near housing. Especially if they change jobs and don't want to move. Or can't afford to move into the housing near their work. Or can afford much better housing than the housing near their work. If you can't even envision what could go wrong with your plan, well, that's pretty much a guarantee that you haven't thought about it enough to be trusted anywhere near implementation.

Sure. Americans drive for FUN.

They also drive to do shopping. And to visit friends. And to pick up their kids from school. Etc, etc. Scattering businesses throughout residential areas won't necessarily make that any better.

Like I said, it was a joke.

Yet what you want to do will, in fact, require such changes.

But we are already under the thumb of the most ruthless dictator the planet has ever seen: OIL

You're not going to win this argument by anthropomorphizing inanimate objects.

-- and since government policy had a lot to do with creating that situation, government policy can help alleviate it.

Yet your proposed policies won't actually alleviate much of anything. Well, except for the Vegas thing, that would actually save a lot of energy, but you were kidding about that.

 

[AlBell]

Oh, I'd argue that ethanol mandates is the poster child for that. Far more expensive than Solyndra was.

Not really.

http://finance.townhall.com/columni...licy_obama_spent_24_billion_on_energy_in_2011

The Congressional Budget Office says that the government provided $24 billion of tax credits and direct subsidies to the energy industry in 2011. Here’s how it was divided up:

$2.5 billion in various tax credits to the fossil fuel industry
$6 billion to the ethanol industry
$16 billion to renewable energy and energy efficiency programs

The hydrocarbon industry takes advantage of tax credits designed to incentivize more investment in exploration and production. Most of it is identical to the kind of depreciation and expensing credits available to every other business in America. However, much of the support to ethanol and green technology is direct subsidies and grants; the government literally sends them a check.

 

[Dymanic]

You mean "subsidies", because they aren't actual, you know, subsidies. Most of it is tax deductions that are used to bring the realities of oil exploration "capital" expenditures in line with the reality that these expenditures are largely unrecoverable expenses.

Privatize profits, socialize losses. I understand the premise. And I love how you guys always try to redefine the word "subsidies" so as to eliminate tax subsidies. You must not have noticed that the link YOU posted a few inches below that explicitly referred to tax credits as "subsidies". Because tax expenditures represent foregone government revenues, this is consistent with the conventional approach of counting them as a cost to government, hence; subsidies. Try to at least keep it internally consistent, willya?

$6 billion per year is virtually nonexistant compared to $4 billion per year?

If you somehow got the idea that I consider corn ethanol to be any part of a realistic plan for our energy future, allow me to straighten you out on that: "Catastrophically idiotic" is the phrase that describes it best for me.

I've got no idea how much American taxpayers are investing in oil over time. I suspect you don't either, but feel free to present evidence.

From 2002-2008, $53.9 billion in tax breaks and $16.3 billion in direct spending.
http://www.elistore.org/Data/products/d19_07.pdf

But you seem to have lost your place in the discussion. We were talking about why there is "no reason to think [my] proposal will succeed, and every reason to think it will fail." I mentioned increasing public transportation and electrical transmission infrastructure, reducing commute distances, etc. Did you find any mention of corn ethanol? No? Then how the hell did we suddenly end up talking about that?

You need to fix your link.

Sorry about that.
http://www.energyandcapital.com/articles/soccer-and-energy-policy/1079
It's not a long or difficult read. I'd just plop the whole thing on the board but for copyright considerations.

Please, tell me all about those successful electric cars. Tell me about the batteries under development with five times the current capacities. I'm really dying to know.

No, I don't believe I will. YOU were the claimant: "Electric vehicles are currently a failure, and not because of a lack of infrastructure or government investment. There is no clear solution to their shortcomings either." But I'm not actually in all that much disagreement anyway. I have always argued here that we're not going to simply switch to electric vehicles and continue on our merry way, as if we had found another limitless supply of energy to replace the one that just became so limited in supply. We're going to have to change a lot more than that.

They also drive to do shopping. And to visit friends. And to pick up their kids from school. Etc, etc. Scattering businesses throughout residential areas won't necessarily make that any better.

I find your logic flawed. People once did these things without traveling tens of miles to accomplish them. I see no fundamental reasons why they can't do so again, except that now a lot of the buildings are in the wrong places. That's a tough problem to fix, but more flexible zoning would help.

Yet what you want to do will, in fact, require such changes.

Changes are coming, one way or the other, ready or not. Artificial communities like Las Vegas will be the least resiliant.

 

[Ziggurat]

Privatize profits, socialize losses. I understand the premise.

The premise of what? You seem to be curiously mute on that. And given that tax revenues on oil have exceeded oil company profits, I'd hardly say that the profits are all that privatized. Or that there's much in the way of losses either.

And I love how you guys always try to redefine the word "subsidies" so as to eliminate tax subsidies.

You're the one who has redefined subsidies to include taking less money. And as I pointed out, given that most of these tax deductions (which aren't the same as tax credits) are really equivalent to the ordinary deductions pretty much all businesses can take (ie, deduct costs), that's not exactly much in the way of special treatment.

You must not have noticed that the link YOU posted a few inches below that explicitly referred to tax credits as "subsidies".

Yeah, tax credits. Because many tax credits actually take the form of direct payments by the government. Tax deductions? not so much. And that's what the oil industry gets: deductions, not tax credits. Have you ever filed your own taxes?

If you somehow got the idea that I consider corn ethanol to be any part of a realistic plan for our energy future, allow me to straighten you out on that: "Catastrophically idiotic" is the phrase that describes it best for me.

And yet, that's the sort of thing our government does when it decides to invest heavily in alternative energy. Yet you want it to invest even more. And you think that it somehow magically won't do catastrophically idiotic things with all that money you want it to spend?

That's dangerously naive.

From 2002-2008, $53.9 billion in tax breaks and $16.3 billion in direct spending.
http://www.elistore.org/Data/products/d19_07.pdf

Let's look at the top three components of that $54 billion breakdown in more detail, shall we?

Foreign Tax Credit ($15.3 billion) - a general tax credit available to basically all businesses that do business overseas. Not exactly oil-specific.

Credit for Production of Nonconventional Fuels ($14.1 billion) - in the words of your source, "This credit has historically primarily benefited coal producers." Not oil producers, coal producers. Your argument is about oil.

Oil and Gas Exploration & Development Expensing ($7.1 billion) - As I already mentioned, this deduction brings the reality of oil exploration into line with the standard accounting practices of other businesses: their "capital" expenses are essentially non-recoverable, and so they should be treated by the tax code as expenses and not capital investments.

We don't get to a real oil "subsidy" (but even then it's a deduction, not a credit) until number four. And beyond that, a lot of the items are still for coal or natural gas. So only a fraction of that $54 billion is truly oil-specific "subsidies". And of course, that's a 6-year total, comparing that to a yearly total without conversion will also give the wrong impression.

But you seem to have lost your place in the discussion. We were talking about why there is "no reason to think [my] proposal will succeed, and every reason to think it will fail." I mentioned increasing public transportation and electrical transmission infrastructure, reducing commute distances, etc. Did you find any mention of corn ethanol? No? Then how the hell did we suddenly end up talking about that?

Because that's the sort of thing government actually ends up doing when it decides to try to manage our energy.

Sorry about that.
http://www.energyandcapital.com/articles/soccer-and-energy-policy/1079
It's not a long or difficult read. I'd just plop the whole thing on the board but for copyright considerations.

That article is a fail.
"To compensate for the decline of oil with renewables, the world would need to build the equivalent of all the world's existing renewable energy capacity, every year.
Since that is impossible, efficiency and energy transition must make up the shortfall.
We will also see the peaks of natural gas and coal in the next 20 years. Hydropower and nuclear will do little more than hold their current market share."

They think nuclear cannot be dramatically expanded, but that renewables can be? Sorry, but anyone who makes that claim is smoking crack. We have a far better chance to scale up out use of nuclear than of renewables. Nuclear has a proven track record. Renewables... don't. Hell, they don't even have very good prospects. The only thing right in that quote is that hydro won't expand much, because we're already pretty tapped out.

I have always argued here that we're not going to simply switch to electric vehicles and continue on our merry way, as if we had found another limitless supply of energy to replace the one that just became so limited in supply. We're going to have to change a lot more than that.

But you're being incredibly evasive about what else needs to change. If you think we need to reduce our standard of living, just come out and say it. At least that position would have some internal consistency. But if that's not what you're arguing for, then I really don't see how your position even makes any sense.

I find your logic flawed. People once did these things without traveling tens of miles to accomplish them. I see no fundamental reasons why they can't do so again

Actually, people simply did without a lot of them. And their standard of living was considerably lower. Yes, we literally can go back to a lower standard of living. But if that's what you're arguing for, then argue for it.

Changes are coming, one way or the other, ready or not. Artificial communities like Las Vegas will be the least resiliant.

That really depends. The increased energy usage that Las Vegas requires compared to many other cities doesn't come from fossil fuels for transportation as much as from electricity. But that's not really such a problem if we go heavy into nuclear. Hell, even at the moment it gets a lot of its power from hydroelectricity.

 

[BenBurch]

I've argued for standarized, swapable batteries. Your batteries are running low? Simply pull into a service station and swap them (or it) for fresh ones.

http://en.wikipedia.org/wiki/Flow_battery

 

[Ziggurat]

http://en.wikipedia.org/wiki/Flow_battery

"On the negative side, flow batteries are rather complicated in comparison with standard batteries as they may require pumps, sensors, control units and secondary containment vessels. The energy densities vary considerably but are, in general, rather low compared to portable batteries, such as the Li-ion."

Doesn't sound like a good fit for electric cars.

 

[BenBurch]

"On the negative side, flow batteries are rather complicated in comparison with standard batteries as they may require pumps, sensors, control units and secondary containment vessels. The energy densities vary considerably but are, in general, rather low compared to portable batteries, such as the Li-ion."

Doesn't sound like a good fit for electric cars.

Depends on how often it is acceptable to fill up. My thought is that a rapid fill-up such as this would allow is such an advantage that you won't mind doing it every couple days. The recharge times on most batteries is terrible, and the infrastructure to hoist batteries in and out of cars safely as a daily activity is expensive. Liquid flow applications and positive seal nozzles are well known technologies and fairly cheap to implement.

 

[mhaze]

I've argued for standarized, swapable batteries. Your batteries are running low? Simply pull into a service station and swap them (or it) for fresh ones.

There are a number of reasons why that doesn't work. Basically, this proposes a static system of batteries, where in fact they are rapidly evolving. Batteries from ten years ago are junk, batteries from ten years in the future will be far better. Charging systems can be microprocessor regulated such that they can charge various types, but then, you don't have standardized, swapable batteries.

So that's exactly what you DON'T want.

 

[Ziggurat]

Depends on how often it is acceptable to fill up. My thought is that a rapid fill-up such as this would allow is such an advantage that you won't mind doing it every couple days.

And if it needs a refill every day? That won't fly. As it is, I don't think Li-ion cars can go more than a few days without a recharge, so a lot of consumers would need to refill at least once a day.

And that's not the only problem. Building the infrastructure to do all that would basically lock us into whatever that particular battery technology was. Which means we couldn't upgrade to anything better without massive costs, even if it's another flow battery. At least with Li-ion batteries, we aren't being locked in to a specific variant.

 

[WildCat]

There are a number of reasons why that doesn't work. Basically, this proposes a static system of batteries, where in fact they are rapidly evolving. Batteries from ten years ago are junk, batteries from ten years in the future will be far better. Charging systems can be microprocessor regulated such that they can charge various types, but then, you don't have standardized, swapable batteries.

So that's exactly what you DON'T want.

You can have any type of battery you'd like, it just has to have the same form factor. Just like you can buy alkaline or lithium or NiCd batteries for your camera.

 

[Dymanic]

The premise of what? You seem to be curiously mute on that.

The premise behind government subsidies. You seem curiously obtuse on a lot of these simple points.

And given that tax revenues on oil have exceeded oil company profits, I'd hardly say that the profits are all that privatized. Or that there's much in the way of losses either.

Now you're just babbling off-the-cuff gibberish.

You're the one who has redefined subsidies to include taking less money.

No. I'll grant you this: it's rather complicated, and not everyone defines "subsidy" exactly the same way. But limiting the definition to direct payments is a very non-standard approach. You know, when I'm interested in learning more about something I don't know much about, I usually begin with Wikipedia. I suggest you give that a try:

"Energy subsidies are measures that keep prices for consumers below market levels or for producers above market levels, or reduce costs for consumers and producers. Energy subsidies may be direct cash transfers to producers, consumers or related bodies, as well as indirect support mechanisms, as tax exemptions and rebates, price controls, trade restrictions, planning consent and limits on market access."
http://en.wikipedia.org/wiki/Energy_subsidies

Yeah, tax credits. Because many tax credits actually take the form of direct payments by the government. Tax deductions? not so much. And that's what the oil industry gets: deductions, not tax credits. Have you ever filed your own taxes?

I really think you need to slow down and think some of this through a little more thoroughly before posting.

And yet, that's the sort of thing our government does when it decides to invest heavily in alternative energy.

Oh, I don't know. That Boulder Dam thing worked out ok.

And of course, that's a 6-year total, comparing that to a yearly total without conversion will also give the wrong impression.

Of course. I think there is a reasonable assumption that the sort of person for whom these facts would be of interest would be capable of performing that simple math. The researchers stated their reasons for not limiting their scope to a single year:

"Researchers chose to use a recent seven-year timeframe (FY 2002-2008), in order to show general subsidy trends over a period of time. This timeframe includes all policies in effect at any time during the seven-year period. These data are not intended to illustrate a present-date “snapshot” of expenditure levels, but to demonstrate historic spending levels over a representative time period that includes economic downturns, upswings, and shifts in policy over time (e.g., changes brought about by the Energy Policy Act of 2005)."

Because that's the sort of thing government actually ends up doing when it decides to try to manage our energy.

You're repeating yourself over and over in a redundant fashion.

Actually, people simply did without a lot of them.

They did without shopping and children and schools?

And their standard of living was considerably lower.

Is "miles driven per year" one of the metrics used to measure that?

The increased energy usage that Las Vegas requires compared to many other cities doesn't come from fossil fuels for transportation as much as from electricity.

But the visitors who provide its economic base arrive via fossil-fueled transportation. Crank the price of gas up high enough and they won't need to run all those lights anyway.

 

[Dymanic]

The hydrocarbon industry takes advantage of tax credits designed to incentivize more investment in exploration and production. Most of it is identical to the kind of depreciation and expensing credits available to every other business in America.

Not really.

We've done this before.

"According to the most recent study (http://www.cbo.gov/ftpdocs/67xx/doc6792/10-18-Tax.pdf) by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry."
http://www.nytimes.com/2010/07/04/business/04bptax.html

 

[Ziggurat]

The premise behind government subsidies. You seem curiously obtuse on a lot of these simple points.

Uh, no. The purpose of subsidies is not to socialize losses and privatize gains. That's what bailouts and government loan guarantees do: they transfer risk. Subsidies simply provide a direct transfer of wealth to a special interest, regardless of profits or losses.

Now you're just babbling off-the-cuff gibberish.

There's nothing off the cuff or gibberish about it. I already gave a source for that information. Over the past 30 years, the government has earned more in tax revenues from oil than oil companies have earned in profits. That's a fact. A fact you haven't come to grips with.

Oh, I don't know. That Boulder Dam thing worked out ok.

Hydroelectricity is hardly "alternative". We've been using water power since before we had electricity. Hydro is great, but we're pretty much tapped out because it's so great. We won't get anything else as good.

Is "miles driven per year" one of the metrics used to measure that?

Pick a standard measure of your choice. Go back thirty years, and it was lower. Go back sixty years, it was lower still. Etc, etc. Transportation fuel is used for a hell of a lot more than just driving the kids to school.

But the visitors who provide its economic base arrive via fossil-fueled transportation.

That's true of any vacation destination. Nothing is special about Las Vegas in that respect. In fact, it's far better than many vacation spots because it's not as far away as a lot of other places from much of their tourists.

 

[Dymanic]

Uh, no. The purpose of subsidies is not to socialize losses and privatize gains. That's what bailouts and government loan guarantees do: they transfer risk. Subsidies simply provide a direct transfer of wealth to a special interest, regardless of profits or losses.

I guess it must have been this that confused me:

Most of it is tax deductions that are used to bring the realities of oil exploration "capital" expenditures in line with the reality that these expenditures are largely unrecoverable expenses.

You're making some distinction there that I'm not quite getting, though I don't have any big problem with your restating of the premise -- as long as it is noted that the reason for making this "transfer of wealth" is that it is assumed that the recipient's activities are of benefit to society as a whole.

There's nothing off the cuff or gibberish about it. I already gave a source for that information.

It was not your facts but your conclusions that I found incoherent.

Hydroelectricity is hardly "alternative".

The Zigster hath spoken.

Pick a standard measure of your choice. Go back thirty years, and it was lower.

I'll play. How about fresh air?

Transportation fuel is used for a hell of a lot more than just driving the kids to school.

No kidding.

 

[Ziggurat]

I'll play. How about fresh air?

I said, "Pick a standard measure of your choice." Nobody uses fresh air as the metric for standard of living, even if some metrics incorporate it. But as it happens, the air quality today in the US is a lot better than it was fifty years ago. And nothing in the US compares to London's Victorian air quality. In fact, plenty of rural primitive people live with much worse air quality than Americans do, because of smoke from cooking fires.

 

[Dymanic]

I said, "Pick a standard measure of your choice."

I know. I did.

Nobody uses fresh air as the metric for standard of living, even if some metrics incorporate it.

Does anybody use anything as THE metric for standard of living?

I asked a question above which you ignored. I consider it important, so I'll ask it again: Is "miles driven per year" one of the metrics used to measure standard of living?

But as it happens, the air quality today in the US is a lot better than it was fifty years ago.

I guess that depends on where you look. When the Beatles were starting their first Hamburg stint, I was living in Riverside, California. Most days, you could still see the mountains that ring the city on three sides. About the time they were recording Sgt. Pepper, I returned there after a sojourn of some years in Texas, and was there until about the time they released their post-breakup solo albums. The only time you saw those mountains in those days was right after a storm, or when the Santa Anas were blowing. Sometimes we'd drive up to the top of Mount Rubidoux in the afternoon to get high and watch the smog roll in. It was the loveliest shade of pink, mostly, though I often saw many other colors in there, too. Like I said, "quality of life" tends to be rather subjective.

And nothing in the US compares to London's Victorian air quality.

The word "smog" was in fact coined to describe the mixture of smoke and fog which often plagued London back when (soft) coal was the primary source of energy. I hardly need convincing that coal is among the dirtiest possible sources. We're currently consuming sixteen times as much of it as the UK, and producing nearly four times as much as the entire EU combined -- so the history of London's experience with the air quality issues associated with coal might be a good thing for us to keep in mind.

It's one of those good news/bad news things. The good news is that we've got plenty of it. The bad news is there's just no way we're going to avoid increased reliance on coal if we are to maintain any semblance of a functioning modern society -- and more bad news is that we are not presently poised to make very efficient use of coal as a replacement for oil in the one sector of our economy which relies most heavily on oil: transportation.

In response to your question: "So what exactly would you have us do?" I (quite non-evasively, I thought) mentioned some specific measures:

"Massively upgrade public transportation. Massively expand electrical transmission infrastructure in anticipation of converting the bulk of our transportation sector to electric vehicles. Reduce commute distances through changes in zoning ordinances that separate residential areas from commercial areas."

It was not intended as a complete list, but a general overview of the direction I see us as inevitably being forced to take. Your waving of the red herring of corn ethanol indicated that you failed to notice that I was advocating preparation for a transition from liquid fuels to electricity in our transportation sector, and you probably also didn't notice that I made no mention of specifics with regard to where all that electicity might come from.

What I predict that we ARE going to do (leaving aside questions about what we should do) is to burn more coal to generate electricity, and build more nukes, and make some solar panels and windmills and maybe some tidal and geothermal plants or whatever. We're also going to be powering a lot more of our vehicles with natural gas in one form or another.

I also predict that with all of these put together, we are still going to be faced with a very significant shortfall in the amount of energy we currently use for transportation -- so, one way or another, we're going to make some kind of a transition. If we had gotten serious about preparing for that transition three decades ago we might have had a better chance of making it a smooth transition.

As it is, the global energy situation is becoming increasingly unstable, the political system in the US is in a state of near-paralysis, and American roadways are dominated by enormous gas-sucking SUVs sporting "Drill baby drill" bumper stickers, their drivers apparently oblivious to the fact that this country has experienced sudden and dramatic oil price shocks before. Those who feel that the situation may be improved by a shift toward more aggressive US foreign policy can obtain (here, for example) "Nuke Iran" bumper stickers to place alongside their "Drill baby drill" bumper stickers. Sales are brisk, I hear. I think the transition is going to be especially tough on some of these folks.

 

[Ziggurat]

I guess that depends on where you look. When the Beatles were starting their first Hamburg stint, I was living in Riverside, California. Most days, you could still see the mountains that ring the city on three sides. About the time they were recording Sgt. Pepper, I returned there after a sojourn of some years in Texas, and was there until about the time they released their post-breakup solo albums. The only time you saw those mountains in those days was right after a storm, or when the Santa Anas were blowing.

The Beatles broke up over forty years ago. Like I said, air quality has gotten better since then. A lot better.

The word "smog" was in fact coined to describe the mixture of smoke and fog which often plagued London back when (soft) coal was the primary source of energy. I hardly need convincing that coal is among the dirtiest possible sources.

Yet it's an alternative we're going to turn to if we can't use oil or nuclear.

It's one of those good news/bad news things. The good news is that we've got plenty of it. The bad news is there's just no way we're going to avoid increased reliance on coal if we are to maintain any semblance of a functioning modern society

Not true. Coal is replaceable by nuclear. We have the technology to do that. France already produces far more energy from nuclear than from coal.

 

[mhaze]

MORE oil from the pipeline will cause oil to cost MORE?

Logically that kind of talk will help MORE angry independent and conservative votes against the Bamster's upside down world.

 

[Dymanic]

Like I said, air quality has gotten better since then.

Overly generalized statements are always wrong.

Coal is replaceable by nuclear.

In principle, at least. We've had some interesting discussions which included looking at what it would take to achieve that in practice: The number of plants it would take, what they would cost (and who would pay), and how soon they could be brought on line.

But since coal does not provide very much of the energy used in transporation anyway, and since that remains the more difficult problem to solve, the more pertinent issue is how to either replace the oil we use in that sector (whether it's from coal or nukes or whatever) or rearrange things enough so that we use less energy for moving people and things from one place to another. A lot less.