In today’s New York Times, Tom Friedman argues that the best way for the U.S. to fight Iran is to “end our addiction to the oil that funds Iran’s Islamic dictatorship.”
Well, good news Tom, we’ve done it! Oil demand in the United States is down for the year, and with the proactive policy manuevers from the current administation, in addition to technological innovation, there’s a good chance it won’t return to previous highs.
That means, you guessed it, we’ve broken our “addiction” to oil.
Housing bust: There will be fewer new neighborhoods springing up in the next few years, which means less sprawl, which means less driving. Peter Tertzakian, who inspired this post points out in the Calgary Herald, “Suburbanization can only go so far and even diehard commuters have a limit on how much time they can tolerate wasting in a [car.]”
Promise for rail infrastructure: This one is tenuous, but if California installs its high speed rail, that’s going to take a lot of cars off the road, and cut back on flights. Increased attention to not just high speed rail, but all rail travel across the U.S., which the DOT has promised, would also cut back on oil use. While critics question if travellers want to use rails, we agree with Tertzakian, trains are way better than cars for commuting.
Fuel Efficiency: When Obama rolled out his new fuel efficiency standards this year, he said it will reduce our need of oil by 1.8 billion barrels, the equivalent of what we imported last year from Nigeria, Venezuela, Libya, and Saudi Arabia combined.
Yesterday the Department of Energy hammered another nail in the coffin of oil demand in the United States as it handed out $8 billion for fuel efficient autos. Nissan, Ford and Tesla are all going to use the money to bring electric cars to the masses. Nissan and Tesla will be producing 120,000 electrics annually by 2013. Just about every car company is developing hybrid or electric car technology.
The Internet: There’s no need to travel to the store to buy C.D.s, and less need for them to be delivered by UPS or FedEx to stores. It applies across the board for shopping purposes. That’s less oil being used all around.
The web also helps us stay at home for work. Here’s Tertzakian:
New networking, virtualization and collaboration technologies like telework and telepresence that seemingly have nothing to do with oil consumption are all in fact challenges to the transportation paradigm. Because two-thirds of a barrel of oil goes toward moving people around, stakeholders in the oil business can no longer ignore information and communication technologies that starting to meaningfully alter the way we communicate over distance. In case you were wondering, North American air travel statistics are showing the same diminishing trends as vehicle miles traveled [which are declining as seen in the chart above.]
The only thing that’s missing is an increase in the gas tax. We’re not holding out breath on that one, since no politician has the stones to raise the price of gas, even if it would align with nearly everyone of his policy aims.
Naturally this isn’t enough to fight Iran, or any other “bad guys” as Friedman calls them. Any oil demand reductions we make will be offset by emerging nations. China’s growing at a fantastic pace. India’s producing a $2,500 car, which is selling very well. That’s why oil prices are still on pace to break $100 in the next 2 years.
But that’s not the argument in this case. For the past decade we’ve been told we’re addicted to oil. Well guess what, we’ve managed to kick the habit. It feels pretty good, doesn’t it?
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