July 5, 2008
What's needed, nationally and personally?
On the national level:
We can create policies that mandate or promote carpooling, telecommuting and videoconferencing. Telecommuting in particular could save 10B gallons of gasoline per year (7% of total consumption, or much more than ethanol) or more, with no pain at all. Sadly, business culture isn't quite ready for it - a rapid expansion of telecommuting will take a real push. Paradoxically, everyone would be better off. Similarly, telecommuting can be better than solo driving.
One painless and important change: we can immediately end policies that favor free parking, which effectively subsidize driving. One study estimates that up to 25% of commuters who receive free parking would stop driving alone to work, if their employers allowed them to receive the value of their free-parking in cash. Cities should charge more for parking (while reducing other business and citizen costs, such as sales or other taxes or fees, to avoid becoming un-competitive) and switch from requiring businesses to provide free parking to requiring businesses to charge for parking. This would encourage mass-transit and ride-sharing, and immediately save fuel (as much as 50% of city driving can be looking for parking!). This won't harm consumers: customers will find shopping much more convenient, and businesses will have more money to encourage shopping in other ways.
More transparency for futures trading would be helpful, and slightly reduced leverage (greater capital requirements) would help reduce any bubbles. Most of the speculation-related proposals would do more harm than good. For instance, elimination of the ability of institutional investors to trade futures would drive some to less transparent foreign markets. Elimination of trading by investors (those not taking delivery) would do a great deal of harm - at minimum it would make hedging much more difficult for many energy consumers.
Obviously, we need to dramatically raise fuel taxes - the best way would be a gradual increase over 5 years, with revenues rebated per capita to individual and industrial/commercial consumers. This will be very difficult to do before a true emergency, but the rebate would help sell it - like social security, it would spread the benefit in a reasonably progressive way.
Fuel taxes are much better than emissions-trading. Emissions-trading requires complex legislation and bureaucracies, and endless expenses in brokering. Sadly, carbon and fuel-taxes are much harder to sell, precisely because they're simpler, more transparent and more effective, which makes them seem more painful.
We need to raise the CAFE dramatically and provide rebates for plug-ins and electric cars (assistance to Detroit for retooling, and socialization of Detroit's pensions and healthcare costs wouldn't be a bad idea - the alternative for Detroit is bankruptcy, which will achieve the same ends in a much more painful way), and expand non-fossil fuel electrical generation ASAP. Obviously, the wind and solar federal programs need to be extended, with a 7 year gradual phaseout. Expanded mass transit is a good idea, though it's far from a silver bullet. National model building codes should be revised for much greater efficiency, and pushed into local government.
We need greatly expanded research into bio-fuels from cellulose and algae. Algae in particular has a great deal of technical potential. Cellulosic fuels will always be limited in scale, but improved processes could reduce their cost and environmental impact. Coal To Liquids with CO2 sequestration should be offered loan guarantees, to allow greatly expanded private investment without the fear of another Synfuel-type disaster (caused by the 80's oil price crash ).
I suspect that reliance on diesel is a blind alley - it's more efficient than gasoline, but only a little (a gallon of diesel has more energy, and carbon, than a gallon of gasoline), and it's success in Europe is dependent on subsidies. The US hybrid->plugin->ErEV->EV path seems much better in the longrun.
Here's a good article on these questions by Andy Grove, the ex-CEO of Intel: http://www.american.com/archive/2008/july-august-magazine-contents/our-electric-future
What can we do personally?
Better driving can save 20%. Try to take the train, carpool, or ask about telecommuting. The next time your work requires travel, ask if this can be done by teleconferencing. If not, ask if there are any plans to make it possible. All of these can make life easier, and at the same time cut costs dramatically.
Reduce home energy consumption: we all know the simple and effective things, like CFLs, plugging air leaks (windows, doors, attics, electrical outlets, roof, joints, chimney and walls), and programmable thermostats. Spot/room heating with electric space heaters is very cost-effective. Space heater infrared radiated at people (say, at one's desk or kitchen counter) is even more efficient, since it allows one to feel warm even if the air is cool. Comforters allow lower winter temperatures, and fans (ceiling and desk) allow higher summer temps. Simple, cheap, kits allow you to add a layer of insulation to windows with a sheet of transparent plastic.
How does saving electricity and natural gas help with oil/gasoline prices (for those of us not heating with fuel oil)? In the US, natural gas is used for both transportation and electrical generation, so NG connects the electricity and oil markets. Outside the continental US, oil is used for electrical generation.
High-mileage drivers can buy used high-MPG cars easily and quickly, such as a Corolla (40MPG highway, but as little as $3K for a reliable 10 year old model), or a Honda Insight (gets 60-70 MPG, but still only $10k). Get rid of an SUV, and rent it back when needed for heavy cargo. Look into carsharing.
-install better windows (we added two more layers to our thermopane windows, and now don't need the furnace until outside temperatures are below freezing),
-replace appliances, including refrigerator, furnace and A/C, with higher efficiency models.
-Consider a heat-pump - new air-based heat pumps work very well, and are very cost effective, compared to any other form of heat.
-If you heat with fuel oil, simple resistance electricity may be cheaper for whole-house heating, and is relatively inexpensive to install. For instance, $4.50 #1 fuel oil is more expensive than 13 cent electricity (the national average is about 10 cents). There are about 35 KWHs per gallon (at 90% combustion efficiency): divide your cost per gallon by the $/KWH - if it's higher than 35, you'll save.
-Natural gas is almost always cheaper than simple resistance electricity (the necessary price ratio is 264, and we're only at about 130, on average).
Don't forget that these things help reduce household costs, CO2 and oil/gasoline prices (a threefer!).
When looking for a new job, give preference to closer jobs - this will pay many dividends beyond reducing fuel costs. Look for homes close to rail, or to work, if possible.