President Obama addressed the nation about gasoline prices yesterday, but it’s been almost six years since Americans officially panicked about high prices. It was near the end of September 2005 — a month when average gasoline prices had moved into the high $2 range — that President Bush called for the nation to avoid nonessential driving, and to conserve fuel by carpooling and using transit.
Bush, like many people, blamed the prices on temporary refining losses from Hurricanes Rita and Katrina. So nearly six years on, as summer driving season appears through the windshield, here’s an updated look at what’s happened to gas prices.
With a single brief exception—the immediate aftermath of the 2008 financial meltdown—gas prices have never dipped below average 2005 levels, and they have regularly spiked much higher. As 2011 advances, the trend line is climbing ominously fast, almost as if we’re heading for a repeat of the summer of 2008.
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Obama’s speech earned mixed reviews, but he got at least one thing right when he described what we can do to bring prices down: not much. Here’s how he described the 2008 presidential campaign season:
…because we were at the height of political season, you had all kinds of slogans and gimmicks and outraged politicians—they were waving their three-point plans for $2 a gallon gas… And none of it was really going to do anything to solve the problem.
That’s right. Obama’s speech marked a step toward telling Americans the truth that oil companies don’t want us to hear: there’s exceedingly little we can do to change the price of gasoline. It is set, in large measure, by global commodity prices that are mostly out of our control.
That means the only sensible strategy is to insulate ourselves—our families, our businesses, and our governments—from the effects of high prices. We can’t necessarily reduce gas prices, but we can make them irrelevant. Our energy policy should aim to make gas price spikes no more scary than price hikes for typewriter ink or whale oil or draft horses.
Does the sightline institute have a editorial position on the phrase “peak oil” and it’s connotations for oil prices going forward? What is that position?Hopefully we can all agree that oil is finite, will peak, and according to all evidence we see out there (the history of discoveries, where we’re getting our oil, the past history of depletion) is very close to peaking in supply. It’s nice to suggest that we will look back on the incredible energy delivered by oil as something quaint like the typewriter or whale oil, but that fact is that we use 87 million barrels a day, or a olympic sized pool each second of the stuff global. A gallon of gas has 33 kilowatt hours of energy in it. That means my 3kw solar powered roof system would need to collect 10 hours of full sun to produce the power in a gallon of gas.What I mean to say here is that in the span of my child life this stuff will be gone, but its dubious to me at least that the “replacements” we come up for it will come close to producing the amount of power in oil. I think thats something we had better be realistic about in our planning and not just assume we will be flying around in solar powered planes. I’m sure sightline is aware of these issues and I applaud you for pointing out that the only measure of control we have over oil is not thinking we will produce more, but learning to leave without the stuff… but the scale of the problem is much much greater than most are willing to admit.
Let’s start getting a little more realistic about our future. The future is dense and local, not sprawly and global. We need some community buy-in on what life means when we burn fewer hydrocarbons. Life can be rich, complex, and community-connected. Outside, not virtual.A couple of countries have started Peak Oil planning, most notably Ireland. There are also some great models of Peak Oil Plans or Energy Downscaling Action Reports (from the Transition perspective) at the city level: Portland (2007), Oakland (2008), San Francisco (2009),Berkeley (2009), and my personal favorite, Bloomington, Indiana (2008). Looking at Peak Oil is something Sightline’s home city, Seattle, has yet to do. Sightline, can you flex your sizable political muscle and get Seattle’s politicos to finally embrace the idea of getting real about peak oil in Comp Plan and OSE plans? In department work plans and neighborhood plan revisions?
For an interesting set of essays on possible cutlural responses to an energy constrained future visithttp://www.futurescenarios.org/created by David Holgren co-originator of the permaculture concept with Bill Mollison.CheersMOC
It would be interesting to overlay a graph of various currency exchange rates on this graph. A significant amount of the decline in oil prices in 2008, relative to the dollar, was the worldwide movement of money into the traditional safe haven of US treasuries.In theory, at least, we do have some control over the stability of the dollar. That said, we seem intent on spending beyond our means for the foreseeable future. This will likely continue to drive the dollar lower and amplify any rise in oil prices.
Eric de Place
Bill,Sightline doesn’t have an editorial position on the phrase “peak oil,” so I’ll just speak for myself here. I try to avoid using it because for many people it’s freighted with enough political and rhetorical baggage to be unhelpful. Plus, the phrase isn’t necessary to get across many of the core elements: that oil supplies are finite, and that in world where demand is growing and supply isn’t we might expect high and volatile prices. That said, peak oil’s big “bite” is supposed to come from the fact that conventional oil doesn’t have many good substitutes. That’s true, but it only goes so far. It’s turning out to be the case that there are some dirty substitutes for conventional oil (tar sands, shale oil, coal gasification, etc.), some possibly cleaner substitutes (various forms of biofuels, compressed natural gas, electricity), and ample opportunities for efficiency improvements in virtually every arena where oil is used. So I think it’s far from clear exactly how severe will be the consequences from reaching the halfway point of global reserves of conventional oil.
“Peak oil” folks should be lauded for persisting in getting the reality of the “end of cheap oil” into our brains long before the status quo media, government and big oil would admit to it. Kudos for that.But as Eric points out, what most “peak oil” folks talk about is just the peak in conventional oil. It should be called “peak cheap oil”. There sadly is a huge amount of “dirty new oil” out there at $100 per barrel. As oil prices rise the amount of dirty oil resources seem to be expanding incredibly quickly. Venezuela, for example, just passed up Saudis as the nation with the greatest proven oil reserves—all heavy dirty “oil”. Number three on the planet is Canada with its dirty tar/oil sands. Note that two of the top three oil reserves on earth are now “dirty oil”. Then there is coal to liquid, natural gas to liquid, shale to liquid, corn to liquid…and on and on. From a climate standpoint this is a disaster because it ups the CO2 per gallon. And oil—not coal—is already USA main source of GHG.From a consumer standpoint this is a disaster because it ups the dollars per gallon.The only hope is to transition away from oil dependent INFRASTRUCTURE. As long as our expensive machines demand oil to do their jobs we are stuck with expensive, dirty, “post-peak” fuel choices.
One more gigantic dirty “oil” source on the horizon that I don’t hear “peak oil” folks talk about is “methane hydrates to liquids”. Let “oil” flirt with $200 a barrel and wait a few years. The amount of hydrocarbons available to turn into liquid form at high prices is sadly (for our climate future) just off the charts.
Barry and Eric;I think if you look into the writings of those with a sophistocated approach to “peak oil” there is the recognition that beyond conventional oil there is a great deal of available pre-oil,dirty oil, etc. in the ground.But that’s just it. It’s in the ground and in many cases it will stay there. It’s the arguement of “The Economist” magazine and those with similar viewpoints that much of this oil/hydrocarbons which will not be available to us at 50$ per barrel, will be economically available at 100-200$ per barrel. Oilsands, Tarsands, Methane Hydrates, Shale Gas converted to Oil, etc.A more sophisticated anlaysis in my opinion is to realize that money is just paper or electronic figures of agreed value and thats it… it is the confidence of investors in the future ability of thier investment to pay dividends in the future that matters most. Its the ability of oil companies to engineer, manage, and use energy to get energy in increasingly complicated ways that present major blowback risks that will fail more and more frequently as we move into the more “difficult” oil. I don’t argue that peak oil when it happens the next few years will not push our governments and oil companies into a bargain with the devil to push for more utilization of deep offshore or oil shale etc. They are already doing that… see our “green” presidents recent speech for example. I’m just saying that the energy system is more fragile than we think, and the more it leans on “difficult oil” the greater the blowback from the system in environmental disasters, failed deadlines, missed production levels. This all results because these fossil fuels have a very low EROEI, they return little resource for the energy investment. As for Sightlines refusal to engage with the term “Peak Oil” that’s a major mistake in my opinion. Just because certain segments of the population increasingly think climate change is a liberal fraud does not mean that we abandon speaking truth to the issue. Peak oil refers specifically to that moment when despite our investment or effort, we have reached a point where we cannot produce more and production levels drop. It may carry some political baggage, but its not a political concept and we should not treat it as such.Peak Oil and the Limits to Growth are essential ideas to building a sustainable and resilient culture that most environmentalists do not bring up because they clash with certain mythologies that our Capitalist consumer technology driven culture take as givens. Our economic system that demands growth in order to employ our population and to repay debt will not last in the face of decreasing available energy and raw materials. Peak Oil is an important concept in communicating about what type of future is both possible and realistic. For too long the green debate has just been about replacing the type of machines we run this system on with green and clean machines and that will make everything OK. Greens need to be able to talk about resource limits, population control, and the diminishing returns of economic growth and overly-complicated technology without fear that they clash with the ideological mythologies of the American people. Respectfully, Bill
The Clean Energy Revolution Won’t Be About Clean Energyhttp://www.commondreams.org/view/2011/03/28-5