Matt L wrote:The car companies have actually had the tech to do this for years but for some reason letting a computer drive a car is something most people just aren't comfortable with and that hasn't changed over time. Humans will only accept a certain amount of automation and loss of control and what we have now in cars is about the limits so unless it is forced upon us by governments it won't happen.
An Iranian news agency also reports that the country has stopped importing gasoline from Venezuela, resolving a decades old conundrum of the oil-rich state.
If Iran has the second largest pool of known oil reserves in the world, why have they been importing 840,000 gallons of gasoline a day from Venezuela? The answer in part is sanctions. The other part: The refineries are a mess thanks to decades of subsidies.
Iranians who drive cars have been able to fill their tanks for less than 40 cents a gallon since the government tried to appease citizens during the Iran-Iraq War back in the 1980s.
By 2007, gas subsidies made up 38% of all government spending. And the refineries were in such bad shape the government started rationing. By September 2009, the Iranians began importing massive quantities of gas from their friends in South America.
In mid-December last year, the government apparently read the writing on the wall and began to phase the subsidies out. This morning, gas in Iran is $1.60 a gallon for the first 15 gallons every month. After that, your average mullah is paying $2.80 a gallon.
Mission accomplished: In less than two months, overall gasoline consumption is down nearly 23%. “Iranian officials have told us since early 2010 that they had gained self-sufficiency in petrol output,” says Venezuelan ambassador to Iran David Velasquez, “and do not need to import the refined oil product.”
Heck, the Iranians are feeling so flush they just struck a deal to provide nearly 6 million barrels of gasoline to their next-door neighbors in Afghanistan, according to state-run TV.
Afghanistan’s NATO-backed government swears it is untrue.
A "Model" of Chaos
The Middle Eastern and North African (MENA) countries produced 22.7 million barrels per day in 2010, rather more than U.S. consumption.
However, two of those countries can be left out of the equation. Iran already is run by radicals - any change there would be an upgrade. And Iraq is a democracy that's host to 50,000 U.S. troops; one must hope that a regional collapse would pass it by.
Realistically speaking, even if run by radicals, Middle Eastern countries will not stop exporting oil; they need the money. And it won't even matter if these countries refuse to export to the West: If their oil goes to China, India or elsewhere, it will simply be a substitute for - and therefore free up - oil that had been coming from other regions.
Now I will concede that a wholesale change to economically inept regimes in the Middle East will lead to reduced output. For instance, when the Shah Mohammad Reza Pahlavi was ousted in the Iranian Revolution of 1979, output fell from 6 million barrels a day to 3 million - a 50% decline.
A decline of a similar magnitude seems a reasonable assumption for Middle East countries that succumb to radicalism. If all of them except Iran and Iraq went radical, that would reduce global energy output by 9.9 million barrels per day - or 11.4% of last year's total world output.
It used to be very difficult to figure out how much price effect a supply shortfall might have, but fortunately we now have a "control experiment" to use as a model. I'm talking, of course, about the record-oil-price spike of 2007-08.
A Calculated Impact
Between the summer of 2007 and its successor in 2008, oil prices rose by 70% while U.S. consumption fell by 4% (when the year's modest economic growth is corrected for).
That means the "price elasticity of demand" - an economic term that measures the responsiveness of buyers to a change in price - is about 4/70. Plug that figure back into the supply shortage of 11.4% and you get a price increase of about 200% (Output Reduction of 11.4% x Price Elasticity of 70/4 = Price Change of 200%).
In other words, were we to have a "worst-case scenario" revolution in the Middle East, we would be looking at the current price of oil (about $100 per barrel) increasing by 200% - to about $300 a barrel (Current Price of $100/Barrel + 200% Increase = New Price of $300/Barrel).
You can quibble with the exact number: Europe has higher gas taxes than the United States, so would see less of a drop in demand than we would; emerging-market economies, on the other hand, are much poorer, and might well see an even-bigger drop-off in demand, perhaps even returning to bicycle transportation.
Even so, our $300-a-barrel estimate feels like a good round number that's backed by logic and a certain economic soundness.
Under such a scenario, we'd be looking at U.S. gas prices of about $9.57 a gallon - up from the current $3.19. The cost to the typical motorist - who uses about 500 gallons of gas - would be an additional $2,700 (assuming that his usage declined by 11.4%).
That's not enough to afford the payments on a $41,000 Chevy Volt, suggesting that government-backed schemes to shunt the citizenry out of their gas-guzzlers still remain uneconomic - even with crude oil at $300 a barrel.
The more-damaging economic impact would be on the U.S. balance of payments. The $265 billion that it cost to import oil in 2010 would balloon to about $800 billion. And that's including the decline in oil-related consumption that would result from the big surge in oil and gasoline prices.
Were this scenario to become real, we'd watch as the U.S. balance-of-payments deficit soared to more than $1 trillion. We might even see a collapse of the U.S. dollar - at the very least, an implosion of the greenback would be a very real possibility.
Pulling 4% of gross domestic product (GDP) out of the U.S. economy would absolutely tip us into a recession. And this second downturn would be somewhat deeper than its 2008-09 predecessor.
Inflation would also be a problem, probably rising into double digits as it did in the 1970s - essentially "stagflation," given the already-high unemployment rate the nation currently faces.
At this point, it would matter a lot what government and the U.S. Federal Reserve opted to do.
If the administration then in office followed the fiscal "stimulus" and ultra-loose money policies of 2008-10, the result would be economic collapse. The budget deficit would soar toward $3 trillion, and the shortfall would be impossible to finance: Nobody would want to buy that amount of U.S. Treasuries from a country with such a massive balance-of-payments deficit.
Meanwhile, with short-term interest rates 10% below the inflation rate, inflation itself would spiral into hyperinflation.
The result would be a total economic collapse.
Man and pony try to board train
Let's start with U.S. gas demand. Gasoline represents 43% of our oil consumption. That means a huge portion of our oil habit goes into our cars, boats, and lawnmowers.
U.S. gasoline production is cyclical from year to year. The low point occurs every January and peaks in the summer. But over the past six years, each peak and valley has been lower than the previous one.
Since 2005, we've used less gasoline each year. Month-over-month, 2011 consumption has been much lower than 2010. The most recent data, from March 2011, shows us 3% below 2010 and 1% below 2009.
We see the same pattern in our oil import data...
This March was the lowest volume of oil imports for that month since 2002.
geoff_184 wrote:Mind you, heaps of people over there are buying hybrid cars these days, so less demand for petrol. Over time we'll see oil consumption go down, but the driver culture continue. Here in NZ we all buy second hand imports, and the hybrids haven't trickled through to that yet. Eventually we'll see car use start to increase here again, as hybrid imports make driving affordable once more in the face of rising petrol prices.
COMMUTERS would be prepared to pay up to $4 extra to get a seat on a train and as much as $5.80 to avoid a five-minute delay.
A report released today by the Tourism and Transport Forum has found time really is money to passengers, with every extra minute of unexpected waiting time worth $1.15.
But of most value to commuters was securing a seat in peak periods, with the research finding it was worth $3.97 to passengers to not have to stand.
The Improving Your Commute report recommended public transport providers take advantage of commuters' willingness to pay for better service by trialling a "premium carriage" on trains.
Premium passengers would be guaranteed a seat but would also have access to drinks, free newspapers and wi-fi.
A train trip from Sydney to Brisbane could take as little as three hours on a 350km/h high-speed rail link, a federal government study says
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