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ShayBanerjeeSecondEssay 3 - 15 Jun 2015 - Main.ShayBanerjee
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< | Ending Personal Ownership of Vehicles: A Necessary Step | >
> | Oil Dependence: Why it must end, and why the Federal Government Must end it | | | -- ShayBanerjee - 24 May 2015
Introduction | |
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< | The federal government must build the infrastructure capable of supporting an economy in which suppliers own road-based vehicles and consumers share them (“rideshare”). Failure to do so will permanently entrench the existing regime of personal vehicle ownership and the dependence on oil that accompanies it. | >
> | Oil accounts for more than 95 percent of energy used in the U.S. transportation sector. That is a problem, and the federal government must solve it. | | | | |
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< | A Problem | >
> | The Long Term Problem: Oil prices are killing us | | | | |
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< | Oil accounts for more than 95 percent of energy used in the U.S. transportation sector. That is a problem. Personal vehicle ownership ensures that it never gets solved. | >
> | The long-term price of oil is rising, and that fact detracts from America’s economic strength. Between March 1974 and March 1979, the average first purchase price of oil on the global market was $8.17. Between March 2010 and March 2015, that number was $88.01, reflecting an increase almost triple what would be reflected by the corresponding rate of inflation. Since gasoline prices closely track oil prices, the secular trend is driving up the cost of transporting consumer goods, raw materials, and labor. Since every $20 increase in the price of oil reduces annual GDP growth by over half a percentage point, America’s continued dependence on oil has likely cost us trillions over the last several decades. | | | | |
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< | By imposing insurmountable hurdles to the construction of a national electric charging network, personal ownership prevents the total replacement of gas-powered vehicles with electric vehicles. First, since personal owners are not adept at planning long-term refueling strategy, accounting for their unpredictable needs requires that refueling operations exist at thousands of strategic locations across the country. This works for oil, which can be carried to refueling stations in trucks, but serious electricity generation – the kind needed to power 250 million vehicles – requires expensive transmission lines that the private sector will not build. Second, personal owners demand that refueling is convenient and fast. This prevents electric vehicle penetration because liquid petroleum can be loaded faster than a battery can charge. | >
> | The price will continue rising in the long term because the world is running out of reasonably extractable oil. There are fewer than 1.3 trillion barrels of proven and probable oil left in the world’s major fields, which at present rates of consumption will last 40 years. World discovery of new oil has been declining for decades and—contrary to reports of politically motivated institutions (e.g. OPEC)—new discovery is no longer replacing existing reserve depletion. The majority of oil-producing countries have seen production declines since 2005, and the handful that did not are now struggling to maintain existing quotas. Simply put, inflation-adjusted prices do not rise in the long term where resources are abundant. This is why computers, for example, have experienced a real price decline over the last several decades, even while global demand has skyrocketed. The world is not running out of silicon, but the world is running out of oil. | | | | |
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< | Because no other technological development will reduce oil use, only electric vehicles can end America’s oil dependence. The fuel economy of domestically purchased automobiles will improve, but not as rapidly as America’s transportation needs will increase. Meanwhile, renewed efforts to develop a commercially viable synthetic fuel alternative are arriving too little, too late. | >
> | The Short Term Problem: Shale has made things worse | | | | |
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< | So long as cars are dependent on oil, economic growth is capped. Oil production has peaked, and the diminishing returns upstream are savaging the American economy. The retail price of gasoline has more than tripled in the last two decades, and the cost of transporting consumer goods, raw materials, and labor are rising with it. Since wage and productivity increases are lagging, the secular trend is dragging down livelihoods and profit margins. Because the so-called “Shale Revolution” was a commercial failure and the resulting crash will further exacerbate long-term cost pressures, the problem is only going to get worse. | >
> | In recent months, oil prices have crashed, but this phenomenon is temporary and will only exacerbate long-term cost pressures. The undeserved hype surrounding shale led industry actors to over-invest in the product, creating a speculative bubble that has now burst. The fact is that shale cannot be produced sustainably except at inflated three-figure prices because tight production depletes wells far too rapidly, offers few returns, and requires extreme levels of capital investment. Shale plays are therefore seeing dramatic cutbacks in the midst of the supply glut, as drillers are instead reaching deep into their most productive regions or relying on inventory draws. Even though such tactics are not sound business strategy, companies are pursuing them to pay off the over $200 billion in accumulated debt from the shale bubble. When the drillers run out of low-hanging fruits to pick, prices will boomerang in the other direction, and economies reliant on oil will be caught bill-in-hand. | | | | |
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< | The drag placed on the American economy by personal vehicle ownership is not limited to entrenching oil dependence. First, personal owners are more likely to ride alone and tend to require parking in densely populated communities. These qualities increase congestion and traffic, reducing productivity, air quality, and the value of property located near major roads. Second, personal owners demand vehicles customized to support their individualized needs. This characteristic increases production costs by preventing standardization of processes and machinery. Third, preventing electric vehicle penetration deprives consumers of the accompanying energy efficiency gains. While internal combustion converts only 20% of stored energy into work, electric engines convert 80%. | >
> | Make no mistake: the “American Shale Revolution” was a blundering commercial failure that has humiliated the U.S. in the eyes of the world. American energy companies have lost hundreds of billions of dollars in the last several months, and many are operating in the red. U.S. rig counts have plummeted for 27 straight weeks, and even the EIA is predicting domestic production declines for the foreseeable future. Exxon has slashed 2015 capital expenditures by 12%, while BP, Shell, and Chevron are pursuing deeper cuts. The same investors who once predicted “100 years of American shale” are now crawling back into their holes, to the tune of a $672 million aggregate divestment from oil ETFs as of April 29. Meanwhile our international competitors swarm like vultures, eager to prey on American consumers when prices recover. OPEC predicts oil prices will rise to $200 per barrel after the dust settles, and they are right. | | | | |
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< | No benefit of personal vehicle ownership justifies its preservation. First, while personal owners may gain some utility through vehicular customization, that gain does not outweigh the benefit of getting consumers home faster by reducing traffic. Second, while personal ownership saves consumers the costs of a driver, the long-term costs of customized production, customized maintenance, and oil dependence are larger. Furthermore, the labor costs of rideshare will be eliminated with the inevitable emergence of autonomous capabilities. | >
> | A National Solution | | | | |
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< | Instead of transitioning to a more robust economy, governments at every level are propping up the economic drag of personal vehicle ownership. Major cities require new parking with every office building. State and local governments prohibit the pre-arrangement of rides through electronic devices. The federal government spends $7.3 billion on tax subsidies for incurred parking expenses. The weight of government policy must be shifted in the opposite direction, and the federal government must lead the change.
A Solution
The emergence of autonomous vehicles on American roads is inevitable. Optimistic projections anticipate complete vehicular autonomy by 2026. As the disruption occurs, the federal government must construct or heavily subsidize massive rideshare facilities capable of supporting fully autonomous, fully electric vehicles.
If autonomous vehicles were predominantly controlled by rideshare suppliers, the obstacles facing electric vehicle penetration would be eliminated. First, combining autonomous vehicles with rideshare eliminates the need to construct tens of thousands of charging locations across the country. Rideshare services could integrate refueling processes into their high level planning and logistics, thereby allowing for refueling locations that are larger, less frequently distributed, and located closer to centers of power generation. Second, autonomous vehicles allow rideshare to be fully operationalized. Extended trips could be completed through tightly coordinated vehicle “handoffs” mid-trip, thereby reducing the speed and convenience advantages of gasoline. With these obstacles eliminated, electric vehicles will leverage their higher energy efficiency to drive out gas powered vehicles.
Since electric vehicles rely on grid-based power generation, their total penetration of the transportation sector would virtually eliminate America’s dependence on petroleum and make a substantial dent in overall fossil fuel dependence. Oil is responsible for only 1% of grid-based power generation, and that number is falling. Alternative energy sources comprise 32% of grid-based power generation, and that number is rising.
In addition to ending America’s dependence on oil, rideshare unlocks incidental benefits that could not otherwise be achieved. First, because rideshare centralizes logistics and planning, suppliers could coordinate autonomous driving programming that optimally reduces traffic. Second, firms operating rideshare facilities could leverage scale to drive down electricity production costs for their vehicles.
Despite the economic gains to be had, path dependency prevents the private sector from constructing the facilities on its own. Personal ownership is profitable for automakers because they sell more cars and can pass off increased production and maintenance costs to consumers. Consumers will not end personal ownership on their own because unlocking the associated benefits requires collective action. Furthermore, the current infrastructure of cities and suburbs supports their choice to use personal vehicles. This infrastructure must be realigned around facilities that fully support modern technology. The upfront capital, land purchases, coordination, and legal risk associated with a project of this magnitude render it a non-starter with private firms. When no one else will do what is necessary, the government must act.
Is there the slightest reason to believe that voters want this done?
Some relationship to political reality should be demonstrated.
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> | The simple reality is that oil-powered vehicles must be replaced by electric vehicles as soon as possible. Since electric vehicles rely on grid-based power generation, their total penetration of the transportation sector would virtually eliminate America’s dependence on oil and make a substantial dent in overall fossil fuel dependence. Oil is responsible for only 1% of grid-based power generation, and that number is falling. Alternative energy sources comprise 32% of grid-based power generation, and that number is rising. Failure to convert to electric vehicles will bind us to a prolonged future of oil dependence because alternatives such as hydrogen fuel have not developed quickly enough. | | | | |
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> | The free market will not do it alone. Despite their commercial viability, higher efficiency, and competitive prices, electric vehicle penetration still remains at under 1% after decades of oil price increases. The truth is that infrastructural path dependency imposes insurmountable hurdles to the construction of a national electric charging network, despite the efficiency gains available. Charging 1100 electric cars in a single area at peak hours – as the average gas station does – would require around 12-15 MW to cross into residential and commercial areas. Whether electric vehicles are charged in homes or stations is irrelevant, since the physical requirement will be the same.That sort of power would unduly strain residential and commercial distribution lines, so either those lines must be replaced with higher-voltage transmission lines or electric refueling structures must be centralized and operated in proximity to power plants. The private sector lacks the legal authority, capital, and capacity for collective action to make it happen. A project of this scale requires a coordinated national effort akin to the New Deal or Reconstruction. | | | | |
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> | Transformational political change is hard. Pursuing it requires convincing voters to prioritize, politicians to act, and adverse interest groups to back down. Yet paying $200 a barrel to power 250 million vehicles traveling an average 15000 miles a year will be harder. If something fundamental does not change, America will lose tens of trillions of dollars while forward-looking nations push ahead. The continuation of America’s global economic leadership is not inevitable, and the time to make choices is upon us.History teaches us that when the predominant energy flow powering an economy becomes too costly, growth stagnates, civilizations become poorer, and societies collapse. Oil is going away. Either we develop a thirst for something better, or we go with it. | | |
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ShayBanerjeeSecondEssay 2 - 15 Jun 2015 - Main.EbenMoglen
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| | | Despite the economic gains to be had, path dependency prevents the private sector from constructing the facilities on its own. Personal ownership is profitable for automakers because they sell more cars and can pass off increased production and maintenance costs to consumers. Consumers will not end personal ownership on their own because unlocking the associated benefits requires collective action. Furthermore, the current infrastructure of cities and suburbs supports their choice to use personal vehicles. This infrastructure must be realigned around facilities that fully support modern technology. The upfront capital, land purchases, coordination, and legal risk associated with a project of this magnitude render it a non-starter with private firms. When no one else will do what is necessary, the government must act. | |
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Is there the slightest reason to believe that voters want this done?
Some relationship to political reality should be demonstrated.
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ShayBanerjeeSecondEssay 1 - 24 May 2015 - Main.ShayBanerjee
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Ending Personal Ownership of Vehicles: A Necessary Step
-- ShayBanerjee - 24 May 2015
Introduction
The federal government must build the infrastructure capable of supporting an economy in which suppliers own road-based vehicles and consumers share them (“rideshare”). Failure to do so will permanently entrench the existing regime of personal vehicle ownership and the dependence on oil that accompanies it.
A Problem
Oil accounts for more than 95 percent of energy used in the U.S. transportation sector. That is a problem. Personal vehicle ownership ensures that it never gets solved.
By imposing insurmountable hurdles to the construction of a national electric charging network, personal ownership prevents the total replacement of gas-powered vehicles with electric vehicles. First, since personal owners are not adept at planning long-term refueling strategy, accounting for their unpredictable needs requires that refueling operations exist at thousands of strategic locations across the country. This works for oil, which can be carried to refueling stations in trucks, but serious electricity generation – the kind needed to power 250 million vehicles – requires expensive transmission lines that the private sector will not build. Second, personal owners demand that refueling is convenient and fast. This prevents electric vehicle penetration because liquid petroleum can be loaded faster than a battery can charge.
Because no other technological development will reduce oil use, only electric vehicles can end America’s oil dependence. The fuel economy of domestically purchased automobiles will improve, but not as rapidly as America’s transportation needs will increase. Meanwhile, renewed efforts to develop a commercially viable synthetic fuel alternative are arriving too little, too late.
So long as cars are dependent on oil, economic growth is capped. Oil production has peaked, and the diminishing returns upstream are savaging the American economy. The retail price of gasoline has more than tripled in the last two decades, and the cost of transporting consumer goods, raw materials, and labor are rising with it. Since wage and productivity increases are lagging, the secular trend is dragging down livelihoods and profit margins. Because the so-called “Shale Revolution” was a commercial failure and the resulting crash will further exacerbate long-term cost pressures, the problem is only going to get worse.
The drag placed on the American economy by personal vehicle ownership is not limited to entrenching oil dependence. First, personal owners are more likely to ride alone and tend to require parking in densely populated communities. These qualities increase congestion and traffic, reducing productivity, air quality, and the value of property located near major roads. Second, personal owners demand vehicles customized to support their individualized needs. This characteristic increases production costs by preventing standardization of processes and machinery. Third, preventing electric vehicle penetration deprives consumers of the accompanying energy efficiency gains. While internal combustion converts only 20% of stored energy into work, electric engines convert 80%.
No benefit of personal vehicle ownership justifies its preservation. First, while personal owners may gain some utility through vehicular customization, that gain does not outweigh the benefit of getting consumers home faster by reducing traffic. Second, while personal ownership saves consumers the costs of a driver, the long-term costs of customized production, customized maintenance, and oil dependence are larger. Furthermore, the labor costs of rideshare will be eliminated with the inevitable emergence of autonomous capabilities.
Instead of transitioning to a more robust economy, governments at every level are propping up the economic drag of personal vehicle ownership. Major cities require new parking with every office building. State and local governments prohibit the pre-arrangement of rides through electronic devices. The federal government spends $7.3 billion on tax subsidies for incurred parking expenses. The weight of government policy must be shifted in the opposite direction, and the federal government must lead the change.
A Solution
The emergence of autonomous vehicles on American roads is inevitable. Optimistic projections anticipate complete vehicular autonomy by 2026. As the disruption occurs, the federal government must construct or heavily subsidize massive rideshare facilities capable of supporting fully autonomous, fully electric vehicles.
If autonomous vehicles were predominantly controlled by rideshare suppliers, the obstacles facing electric vehicle penetration would be eliminated. First, combining autonomous vehicles with rideshare eliminates the need to construct tens of thousands of charging locations across the country. Rideshare services could integrate refueling processes into their high level planning and logistics, thereby allowing for refueling locations that are larger, less frequently distributed, and located closer to centers of power generation. Second, autonomous vehicles allow rideshare to be fully operationalized. Extended trips could be completed through tightly coordinated vehicle “handoffs” mid-trip, thereby reducing the speed and convenience advantages of gasoline. With these obstacles eliminated, electric vehicles will leverage their higher energy efficiency to drive out gas powered vehicles.
Since electric vehicles rely on grid-based power generation, their total penetration of the transportation sector would virtually eliminate America’s dependence on petroleum and make a substantial dent in overall fossil fuel dependence. Oil is responsible for only 1% of grid-based power generation, and that number is falling. Alternative energy sources comprise 32% of grid-based power generation, and that number is rising.
In addition to ending America’s dependence on oil, rideshare unlocks incidental benefits that could not otherwise be achieved. First, because rideshare centralizes logistics and planning, suppliers could coordinate autonomous driving programming that optimally reduces traffic. Second, firms operating rideshare facilities could leverage scale to drive down electricity production costs for their vehicles.
Despite the economic gains to be had, path dependency prevents the private sector from constructing the facilities on its own. Personal ownership is profitable for automakers because they sell more cars and can pass off increased production and maintenance costs to consumers. Consumers will not end personal ownership on their own because unlocking the associated benefits requires collective action. Furthermore, the current infrastructure of cities and suburbs supports their choice to use personal vehicles. This infrastructure must be realigned around facilities that fully support modern technology. The upfront capital, land purchases, coordination, and legal risk associated with a project of this magnitude render it a non-starter with private firms. When no one else will do what is necessary, the government must act.
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