When young men reach the age of 17, (in Australia)
they obtain their driving licenses. Then they buy a cool car (death trap) that
isn’t worth the money that they or their parents paid for it.
The next three years of their lives are spent “tricking” out
the car with the best mag wheels, the loudest stereo , the largest LCD screens
for video music clip playback and they do this to ostensibly show desirable
potential mates that they have a chariot worthy of the damsels time to ride in.
Later in life, vehicle selection is based on,
Speed: “But it’s a V8
and really flies” or “I installed a Turbo charger”.
Safety: “I got a
truck (F350 ute) so the missus feels safe when she takes the kids to school”
Prestige: “I only buy German made cars” or “Nothing says it like a Lambourghini”
Therefore for many, the motor vehicle would appear to be the
very essence of our public persona.
For Brisbanites, I refer to Rock and roll George, for Syneysiders,
Rene’s Burgundy Convertible and for everyone else, the hoon living at the end of your
It takes us to work, it takes us to the footy and for many,
it was our first bedroom.
So one has to ask, what would happen if suddenly, the world
ran out of oil, or, because of the falling US Dollar value, the price of
petroleum became so expensive that no-one could afford to use their car every
day of the week.
In part 1
(if we watched the videos) we learnt that the US Dollar over the last decade
has lost approximately 28% of its value.
In 1980, the price of a gallon of petrol in the US
In 1999, the price of a gallon of petrol in the USA
Yet according to the CPI, the price (in 1999) should have
Was the US Government artificially lowering the price of
petrol to it’s consumers and if so, who was paying for their saving of $1.25
Is Gasoline just a political tool?
If so, we must revisit some of the other decisions our
governments have been making in relation to Gasoline.
Slap Koltai – “We’re talking about Gas prices not Politics……”
OK. How much of that saving was due to the overvaluation of
In CPI terms, the cost of a gallon of gasoline in the USA
today should be $4.14.
Yet today the prices are:
To understand the problem we have to analyse production
To make up for the faling reserves and to allow Americans to
continue consuming 25 BBS per year each, the US
had to import oil.
The next chart shows Oil prices in the US
going through the roof just in time for the GFC. Coincidence or design? (We’ll
leave you mulling that one over for a little bit….)
Yet the price at the pump is still only $2.70.
(Here I was going to analyse the Oil per person ratios of
the USA, Canada,
Australia Japan, China
However, due to a case of bad data….. see my previous blog article….. I will
have to include that analysis in a future part.)
So now, we should talk about the unmentionable, Peak Oil.
The opening paragraphs of the (2005) Hirsh Report were:
The peaking of world oil production presents the U.S.
and the world with an
unprecedented risk management problem. As peaking is approached, liquid fuel
prices and price volatility will increase dramatically, and, without timely
mitigation, the economic, social, and political costs will be unprecedented.
Viable mitigation options exist on both the supply and demand sides, but to
have substantial impact, they must be initiated more than a decade in advance
Pretty heady stuff. You would think that Governments of the
world are rushing to find a solution to prevent societal melt-down.
Yet, I am unable to see evidence of that.
There is no Government Department that has been formed to
specifically target the lead up to the oil crash that we will have.
Industry appears to be carrying the can.
General Motors announced that their Hummer division (about
15 gallons to the mile 😉 is to be closed down.
Chinese and Indian Auto makers are building specifically
small engined cars (1 litre and smaller engines).
Renault have announced that they will be capable of
producing 500,000 hybrid electric vehicles a year.
Governments are showing an interest in alternative fuels,
however, not too much interest as evidenced by the GMH withdrawal of its EV1
Why was the EV-1 withdrawn from sale? Did the Oil companies
get together and have a quiet word with GMH?
Did the Government back down on its promised subsidies to
the vehicle companies for alternative energy vehicles?
Possibly the fuel industry lobbyists have far too much sway
with our politicians.
In the next part we will discuss the gasoline peak oil
problem based on an average global consumption of 4.7 barrels per person per
annum which equals 940 liters per person or at 12 kilometers to the liter,
about 11,280 kilometers per annum.
(Compared to the current US
utilisation of approximately [non-DOE dataset] 28.3 barrels per person per
And dear reader, it will get better, I assure you, we are in the pre event warming up period…….. still wearing our track suits and working out behind the stadium…..
Fuel Economy Calculator
PEAKING OF WORLD OIL PRODUCTION:
IMPACTS, MITIGATION, & RISK MANAGEMENT
Robert L. Hirsch, Roger Bezdek, Robert Wendling
US Energy Information Administration (EIA) Annual Energy
Although after the blooper
that I found, I don’t actually consider this to be a high value source of
accurate data anymore.
Revenge of the EV-1
US Census Bureau.