Capitalist Reform to Reduce International Oil Demand: Getting World Refiners to Price at Market

A market-driven revitalization of the world oil refining sector is the best and fastest way to reduce both oil demand and related air emissions, including CO₂. A combination of market-based pricing–absent from foreign refineries (most politically owned and/or managed)– and new investment brought forth by the improved profitability of such pricing, could reduce the demand for crude oil by between eight and twelve million barrels per day, or about 10–15 percent.

A Bold Hypothesis

This rather astounding assertion can be educed as follows:

• Most countries subsidize refined oil product consumption, usually middle distillates (diesel and kerosene) at the expense of gasoline and other products;
• Owing to the price controls on heavily used middle distillate products, most oil refiners outside the U.S. and a few other countries lose money;
• The subsidies to middle distillate users, at the expense of gasoline and LPG consumers, creates an “unbalanced” demand barrel – one that defies both economics and chemistry;

Costa Rica’s Energy Paradise: Comment on Tom Friedman (Not everywhere can be a playground for the rich)

In his recent New York Times op-ed, Thomas Friedman veritably gushes about the long-term commitment of Costa Rica to a clean environment and renewable energy. He is proud of the fact that renewables power 95 percent of the country’s economy. Such energy air-conditions resort hotels, charges golf carts, powers cable pulleys through the rain forest canopy, and bakes chips at the local Intel assembly plant.

Costa Rica’s energy mix is led by 75–80% hydropower, 12% geothermal, and 3%–5% oil (more specific statistics are here). The workhorse hydro is a mix of storage and run of river, with storage at about 50% of the 2,000 MW installed capacity.  In a dry year, the run-of-the-river plants will not produce much, or very reliably, which brings up the risk of such reliance.  In 2007 Costa Rica suffered power cuts as a result of drought and its lack of diversity in electricity generation.…

Green Jobs: Making Society Poorer (Basic math can show interesting things)

A key element of the current administration’s approach to recovery from our current economic and financial crises is a fundamental reorientation of the kinds of work performed in our economy. But a proposed shift to “green” jobs in the name of well-paying, high-impact employment that cannot be outsourced overlooks the essential nature of how human labor fosters economic well-being.

Simply put, the key to prosperity is high productivity per worker. There is simply no other way to be rich unless you sit on top of a gold mine (or oil well) and have few mouths that need to feed off that source of wealth.

Discarding the vain hope that a nation of 300 million can live well off a raw materials-based economy, we are left with productivity as the wellspring of affluence.…

The 70s: Bad Music, Bad Hair, and Bad Energy Policy (What Obama can learn from Carter)

Pickens Plan II’s Natural Gas Trucks: Mel Brooks Meets Energy Policy

Mr. President, How About These Shovel-Ready Projects?