Disclaimer: As an arm-chair economist, chances are I have no idea what I'm talking about, but lets have a brief thought-experiment about the economics of oil production.
Fact #1: We are approaching the limits of current oil production.
Number of barrels per day in April 2004 (in thousands). Country Production Capacity Surplus capacity Algeria 1,200 1,200 0 Indonesia 970 970 0 Iran 3,900 3,900 0 Kuwait 2,300 2,300 0 Libya 1,450 1,450 0 Nigeria 2,350 2,350 0 Qatar 760 850 90 Saudi Arabia 8,300 10,000 - 10,500 1,200 - 2,200 United Arab Emirates 2,120 2,500 380 Venezuela 2,450 2,450 0 Iraq 2,300 2,300 0 Crude oil total 28,100 30,270 - 30,770 2,170 - 2,670 Via: MSNBC: OPEC to raise quotas as oil stockpiles jump
Source: Energy Information Administration Short-Term Energy Outlook -- May 2004
Fact #2: There are many important uses of petroleum other than pumping it into our cars. Many drugs could not be developed or produced without the use of petroleum. Plastics permeate nearly every aspect of our modern lives.
So, considering that the demand for gasoline is relatively inelastic to begin with (it doesn't reduce much in response to price increases), any future growth of petroleum demand will most likely be met with steep price increases, as pictured in the tiny graph to the right. This is as opposed to more supply coming online as it becomes more profitable to sell the oil in a free market.
What does this all mean? Well, for one the oil situation isn't likely to get a whole lot better in the short term. (i.e. My vacation this summer is going to be very expensive). And unless petroleum suppliers start bringing new capacity online, or there is some breakthrough in pumping or refining technology, its not likely to get better in the long term either. We may be witnessing the start of the gasoline crunch. If we had some good national leadership, we probably would've already started a crash program to develop some sort of alternative energy source. There are some promising possibities in biodiesel and hydrogen but so far nothing has really caught on. But given the fact that there are many vitally important non-energy uses of petroleum, its equally important to devote future petroleum reserves to non-energy uses.
Would you believe that your average college student doesn't know that plastic comes from petroleum? I sat in a room full of 35-40 people, and when asked what plastic is made from, I was the only one with a hand up... Scary.
The US is not a country that prepares itself for the future, we are a reactive country. As long as the rich are getting richer, everyone puts their blinders on. For example, the Japanese are still leading the way with their hybrid technology, and even some their non-hybrid cars get much better gas mileage than pretty much any respectable American car. Mike's dad just bought a 2004 Civic that gets 38 MPG.
One would think that American consumers would be outraged at the lack of options, the abundance of SUVs and the soaring gas prices. From what I've seen, people just complain and keep pouring gas into their Hummers. Only big cities have mass transportation, so in order to be productive citizens, we're all expected to just grin and fill up.
L.
Hybrids are definitely a step in the right direction, but we need to finish the step and divorce transportation from fossil fuels completely. At least there is some justice for SUV owners. It costs them $100 to fill up their 50 gallon gas tanks, something they probably do once a week. (How often to you hit 500 miles in your car?)
Yes, people just grin and bear it, but the economics of it say that there is an opportunity cost. The money that they're spending on increased fuel prices isn't being spent on something else. Hopefully they're not making the choice between filling up that Hummer and putting food on the table, but there is definitely a choice. Money is a scare resource for everybody. (Well, maybe not Mr. Gates, but as far as I know he doesn't drive an SUV).
I think the point Liz was making is that of course hybrids aren't the ultimate solution, but that at least some people recognize that we need to research ways to decrease our usage of and dependency on oil. The problem here is that we are content to continue using it for everything in life without a thought as to what happens when oil costs $100 a barrel.
Because our economy is so dependent on gasoline, the leadership in this country ought to have a coherent plan to reduce that dependency and come up with alternatives. Most people in the US commute over 30 minutes to work, which probably means a 50 or 60 mile round trip. If people can't afford to get to work, our economy will definitely end up in the crapper.