Sunday, April 24, 2011

Running on empty

Some days, I can't help but wonder how many millions of people there are in America, in the same position I'm in. Picture driving somewhere - maybe way out in west Texas where towns are a long way apart - and you've been watching for a gas station for a hundred miles, as the needle drifted down past 1/4. First, you eased up on the throttle. Now you're cruising really slowly, and coasting down hills.

You're way past looking for a good price, you're looking for any gas station. Is that one?.. No, it's closed.

Now, the needle's below the E. There's got to be a town somewhere over the horizon, or there wouldn't be a road here. Somewhere up there, there's a gas station; there has to be. But with every passing mile it seems more and more likely that you'll run out of gas before you get to it.

What can you do? You've come way too far to turn back, and there's no point in beating yourself up now, because you passed that last gas station without stopping; who stops to re-fill when they've still got almost half a tank? I guess the people who live in this desolate area do.

In the rear view mirror, you see a big dually extended-cab cowboy Cadillac looming and for a moment you consider trying to get his attention to say, Hey buddy, I'm running on fumes here. Do you have jerry can by any chance, or could you hang with me and, if I run out, give me a ride to the next town? But he passes at 85 and disappears in the empty distance.

You wonder, If I drop it to 45 mph from 55 would I get significantly further, or would it just delay the time at which I run out? Either way, once I'm walking there's no way I'll get to the next town before nightfall.

What's the furthest past E I've ever seen the needle?

I suppose that mood is bound to figure in the next election (not for me, I can't vote, but for anyone else that's feelin' it.) Of course, the price shock those people will get at the gas pump, when they find one, will become a political football.

"Drill, baby drill"

"Open up the strategic reserve."

"Approve offshore projects, and open up the Arctic National Wildlife Refuge."

Politicians will pander to an electorate with the attention span of fruit flies. The truth is, there's no way that untapped offshore or arctic oil could get to refineries in a time frame of less than several years. But even if it did, there's simply no mechanism for that production to result in lower gasoline prices.

The reason that's true is, the drill-baby-drill morons are the same ones who don't want the government to regulate anything. If a country has its own oil, and wants to force the companies that extract it to sell it for less than the world price (or export some at full price and use those profits - ie, tax oil production - to subsidize consumers) then domestic gasoline prices can drop. That's what that commie Hugo Chavez does in Venezuela. Gas is about ten cents a gallon down there. And the Saudis who bankrolled 9-11 also benefit from subsidized fuel prices.

But we hate them. So as it is, American oil producers sell to American refiners at the world price. Domestic oil producers would face immediate shareholder suits if they sold it for less. Refiners buying domestic production pay same price they pay to Hugo Chavez, and that they pay to the people who write Al Qaeda's checks, and to the Koch brothers. Oil is a fungible global commodity.

That means that whoever drills our wells and builds the pipeline systems necessary to get our oil to the nearest refiner will sell it at the world price. And that, in turn, means that the only way incremental oil production from offshore wells or the arctic could influence the price Americans pay at the pump is if there was so much oil available from those sources that it flooded the global market.

There isn't that much. Even what we could produce would take five to ten years to reach the market, but the wildest bullshit artists from Washington to Wichita won't claim there's anywhere near enough to meaningfully affect the global price for crude. In fact, all the incremental oil we could possibly get to refiners in five years, drilling willy-nilly without any environmental reviews or anything, would amount to a rate of production that some Saudi could counteract by turning the wheel on a big valve over there about a sixteenth of a turn. OPEC makes those little production adjustments all the time.

So you see, you can drill everywhere, and pump everything. You can kill the last polar bear and soak the last pelican in oil, and you'll be foiled by that guy in Saudi Arabia, who'll drive his gold-plated Hummer out to that great big valve in the desert turn that valve one tiny squeak, and the world price will go right back to where it was.

Desperate times call for desperate measures. But they don't call for stupid measures.

You want to pay less at the pump? Use less. Ride to work instead of drive; even gas-guzzling motorcycles get twice the average fuel mileage of cars in similar use.

1 comment:

  1. Weird thing is that here in the UK (where plenty of cars get over 50mpg) gas is now over $9 a gallon (yes, nine dollars a gallon...) but fuel sales by volume are up nearly 6% on a year ago. If you've ever studied economics that means we'll pay plenty more yet