Fox News is blaming Biden; MSNBC’s blaming the war in Ukraine. CNN is talking about sanctions on Russia that aren’t even in place yet, and pundits are bringing up factors ranging from COVID restrictions lifting to supply chain economics. There are even some perfectly reasonable references to the now-defunct Keystone XL pipeline.
Regardless of how reasonable it all sounds, none of this is responsible for gas prices spiking almost $2 a gallon in the past month, and saying it is diverts attention from the real problem, and what it is we actually can do about it.
The pro-Keystone voices are a perfect example; they’re logical, mathematically sound, and all share the same basic error. Let’s start there.
Oil pipelines are vastly more efficient than other methods of transport, saving only supertankers. They are the mode of choice for moving petroleum in those places where vast oceangoing vessels are startlingly ill-equipped to travel, such as Montana and Alberta. The objections to Keystone XL were varied, but for the sake of this discussion we’ll oversimplify: There are compelling environmental reasons to object to exploiting oil sands and oil shale production, such as in the vast fields feeding Hardisty, where Keystone begins.
The cancellation of Keystone XL was political, a sop cynically cast to those legitimately concerned with climate change in the 2016 and 2020 presidential elections. There were real objections to the proposed route through the vulnerable Sandhills region and across the Ogalalla aquifer*, but the primary rallying cry was simple and indisputable: Fossil fuels consumption has a global impact, and it should be opposed. Which would be fair enough if stopping a pipeline would prevent or even slow oil use — but of course it doesn’t. Instead, that crude oil is now moved with tanks and tanker trucks.
Pipelines are the most efficient means of moving crude oil. This isn’t up for dispute; it’s one of those absolute truths. We have it on such high authority as Transportation Secretary Pete Buttigieg, speaking for the Biden Administration. They’re also far less prone to damaging spills than trucks or trains, and they burn an obscene amount less energy. XL would have increased capacity by half a million barrels per day; that’s over 150 million tons. Even inefficient pipelines run at better than 300 BTU per ton-mile; the most perfect train that never had to brake or transfer loads runs at about 600 not counting intermodal facilities, and trucks cost 12-20 times as much. (Source: OSTI.gov reports, including but not limited to #6715373 from 1978. If you’re interested in checking my math, let me know. -Editor)
Let’s not forget: Oil is a commodity, and as long as there’s demand, it will continue to be produced and then moved to market. Protesting a pipeline without demanding other changes means you prefer trains and trucks. Put another way: If you have to move oil, use a pipeline or you’re just wastefully pumping carbon into the air for no gain and increased risk of spills. (Obviously, don’t route your pipeline upstream of reservoirs or through Native burial grounds and you’ll face less opposition. -Editor)
The ideal course of action is to reduce overall power consumption while increasing reliance on renewables. Most oil is consumed in transportation rather than power generation; the USA alone burns eight million barrels of gasoline per day, which accounts for almost two thirds of our total oil use. By comparison, electrical power plants are only about 5%, much of which would be useless for other purposes (hence Elon’s push for electric cars -Editor). However, since 50% of electrical production goes to power grid losses anyway, this isn’t a complete solution, merely one part in a highly complex equation that eventually ends in solar panels on every roof and parking lot, plus wind farms wherever we can squeeze them in.
Which brings us to the error. Remember, way back at the top, I mentioned an error? No? Well, I’ll refresh your memory: The pro-Keystone voices share a common error with everyone else when it comes to high prices at the pump.
The actual cost per barrel of oil is exactly what it was when this crisis began. It costs not one single dime more to produce a gallon of gasoline than it did in January. Taxes are the same 15%; gas station owners make about a 3% profit per gallon, and that hasn’t changed. The cost of refining is one gallon in four; the cost of moving it to the pump is about the same. The only single factor that has changed is the price of crude oil on the commodities market — period.
Commodities traders look at the global oil market and they see the potential to make money. There’s war; there are disruptions in supply; production cannot increase overnight, and demand isn’t decreasing. Simple economics tells us the price will go up, and so it does.
But the worldwide supply of available oil has decreased by, perhaps, one quarter of a percent due to the present conflict. The USA produces twelve million barrels per day; the Ukraine thirty thousand. Russian oil exports haven’t even been touched. Only the LNG supply to Europe has been interrupted, which is under 2% of global energy — and that’s being rerouted to other customers even as we speak. In justice, the price of a barrel should have risen perhaps 5%, and the price at the pump by maybe twenty cents per gallon. The present spike is due almost entirely to rampant speculation in a volatile and panicked market. It’s not greedy oil companies or a canceled pipeline; it’s not Germany shutting down its nuclear power plants, inept foreign policy, or some war halfway around the world that are doing this; it’s Wall Street, hedge funds, and your own 401K.
And it’s you, flying to that next vacation, buying the new iPhone and IKEA furniture you don’t need and can’t figure out how to assemble anyway, turning the heat up and the A/C down and leaving the light on when you leave the room. It’s your boss, who wants you back in the office even though productivity is up and sick days are at an all-time low. If we want, we can even blame those truckers out there clogging up the Beltway even more than it normally is. If you oppose high gas prices, the simplest solution is to not pay them.
If you’re looking for someone to blame,
you need look no farther than yourself.
What it all adds up to is this: If you want to save the planet, reduce carbon emissions, fight big oil and coal, and so on, your biggest and best possible contribution is to not drive — and certainly don’t fly; take a train if you have to travel (one round-trip air ticket to London burns 10% of your total annual energy consumption -Editor). Your second best is to stop buying stuff; personal vehicles only burn half of our gasoline, and commercial deliveries consume a vastly higher percentage. Telework if you can; use public transit if you must.
There’s a plus side to this: When you’re to blame, you also have the power to fix things — or, at least, to do your part, which is all we can ask of anyone.
- Don’t fly if you can possibly avoid it. Amtrak will take you almost anywhere in the country for a far lower energy cost per mile.
- Work from home if you can. If you must commute, the very least you can do is carpool. Take a bus; take the subway; walk, run, or bike.
- Sure, turn the heat and A/C down, turn off the light when you leave the room, and always remember to unplug your cell phone charger. It’s not much — in fact, it’s almost negligible — but it’s something.
- Stop buying so much stuff.
- If you’re a hedge fund trader profiting off oil and gas futures, maybe you should consider looking for a productive line of work. This isn’t really your fault; it’s the system, and if you weren’t doing what you do the price difference would be negligible; you know that as well as I do, and probably better. So maybe you should apply some of that brain power toward designing a new commodity supply system, one that’s not so volatile, and that doesn’t turn an innocent trader into a war profiteer. Meanwhile, if your conscience is bothering you about all that money you just made, find someplace to donate it.
This problem is yours, people. Take ownership; help to fix what you can. If you don’t do the minimum, you’re failing yourself, your children, your planet, and your country.
Work from home. It’s your patriotic duty.
If what you just read pisses you off, that’s not because it’s wrong. People are wrong every day and it doesn’t get to you. If you’re upset by this article, it’s because deep down you’re afraid it’s true.
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*NOTE: Real objections don’t necessarily mean the same thing as compelling or even meaningful. The Ogalalla Aquifer underlies half the midwest, and the oil that would have been moving safely through a pipeline is now being carried by trucks and trains over the very same reservoir — except without the impervious clay bed that underlies pipelines. -Editor