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Oil Consumption and Standard of Living

drz-400

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I have heard a lot about the fact that we need oil. That to me is obvious, but how much? Some people seem to think it is impossible at the moment to cut our current oil consumption without lowering our standards of living. I think this has been shown to be false over the past 30 - 40 years.



Figure Caption: Figure 9-10: U.S. Oil Consumption and Growth over Time
Until 1973, the real price of oil was relatively cheap and there was a more or less one-to-one relationship between economic growth and oil consumption. Conservation efforts increased sharply after the spike in the real price of oil in the mid-1970s. Yet the U.S. economy was still able to deliver growth despite cutting back on oil consumption.
Source: Energy Information Administration; Bureau of Economic Analysis.


Source- Krugman, Paul, and Robin Wells. Macroeconomics. 2nd ed. US: Worth Publishers, 2009. 249. Print

Keep this in mind next time you are in a traffic jam. Maybe low gas prices arn't all they are cooked up to be.
 

Orion

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Need for oil is growing exponentially with no sign of slowing.

Since it is clear that the governments and corporations of the world plan to drill every square inch of land and water in order to get at this profitable commodity, we can only do one of two things to slow the degradation. One is conserving. The U.S. uses more energy per capita than any other nation, yet it holds less than a quarter of the world's population.

The other is supplementing oil use with green energy. We are all aware that green energy cannot replace fossil fuel economy yet, but it can definitely lessen the impact. My aunt has a small windmill (for home use) outside of her farm and therefore her electricity is free. In fact, she even contributes energy to the grid which gives her credit with the hydro companies. In the U.S., however, I think there is clear collusion in the energy sector to prevent the green energy market from flourishing domestically. In Europe people don't seem to be as opposed to using green supplements but in the U.S. it has become a partisan issue that was polarized by the fossil fuel industry and their fake studies.

All that said, you can't just blame corporations. Most people are expecting the government to step in and tell them what to do, or to create some kind of green energy program. Really, it's the other way around. It starts on a grassroots, individual level, like with people using their own private windmills, buying products that don't have excess packaging (which requires oil), supplementing their use of cars with bicycling or public transit, or even just buying fuel efficient cars instead of gas guzzlers.

I don't know though. I think our modern world is far too complacent to really make changes on the individual level. There are always shining examples but I think the majority just sits there and waits for solutions to be offered up on a silver platter that don't require much effort on their part. It's this laziness that is the real root of the problem, IMO.
 

drz-400

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Need for oil is growing exponentially with no sign of slowing.

Since it is clear that the governments and corporations of the world plan to drill every square inch of land and water in order to get at this profitable commodity, we can only do one of two things to slow the degradation. One is conserving. The U.S. uses more energy per capita than any other nation, yet it holds less than a quarter of the world's population.

The other is supplementing oil use with green energy. We are all aware that green energy cannot replace fossil fuel economy yet, but it can definitely lessen the impact. My aunt has a small windmill (for home use) outside of her farm and therefore her electricity is free. In fact, she even contributes energy to the grid which gives her credit with the hydro companies. In the U.S., however, I think there is clear collusion in the energy sector to prevent the green energy market from flourishing domestically. In Europe people don't seem to be as opposed to using green supplements but in the U.S. it has become a partisan issue that was polarized by the fossil fuel industry and their fake studies.

All that said, you can't just blame corporations. Most people are expecting the government to step in and tell them what to do, or to create some kind of green energy program. Really, it's the other way around. It starts on a grassroots, individual level, like with people using their own private windmills, buying products that don't have excess packaging (which requires oil), supplementing their use of cars with bicycling or public transit, or even just buying fuel efficient cars instead of gas guzzlers.

I don't know though. I think our modern world is far too complacent to really make changes on the individual level. There are always shining examples but I think the majority just sits there and waits for solutions to be offered up on a silver platter that don't require much effort on their part. It's this laziness that is the real root of the problem, IMO.
The amount of oil consumption in the US is not growing exponentially, you can see on my graph it is linear and the slope has decreased in recent years.

Green energy is great, but things like windmills and solar panels are not going to reduce our dependence on oil. There have been huge strides in implementing these green technologies for electricity, but oil has never been our primary producer of electricity. In fact, wind now produces more electricity annually than oil. What is really causing a large amount of oil use is the transportation and industrial sectors.

I agree with using public transit, biking, all of these lifestyle changes. In fact, this is part of my point. People will not make these decisions on their own. Its not laziness, its incentives. We need to offer people an incentive to use less oil. Right now it is cheap. Give people a reason to utilize these alternatives. As you can see, conservation efforts will not necessarily lower our productivity, at least it has not been this way in the past. This shows the negative externalities and inefficiencies caused by oil consumption, if we can account for them we can become more productive. The whole problem is getting people to respond to these externalities, since they are not reflected in the market price.

Finally, I disagree with the idea of just buying a more fuel efficient car to decrease our dependence on oil. This just reinforces the behavior that we can continue to consume as much gas as we want. People will live farther away, drive more, and use more gas for the same price if we just have everyone buy a fuel efficient car.
 

Deuce

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I agree with using public transit, biking, all of these lifestyle changes. In fact, this is part of my point. People will not make these decisions on their own. Its not laziness, its incentives. We need to offer people an incentive to use less oil. Right now it is cheap. Give people a reason to utilize these alternatives. As you can see, conservation efforts will not necessarily lower our productivity, at least it has not been this way in the past. This shows the negative externalities and inefficiencies caused by oil consumption, if we can account for them we can become more productive. The whole problem is getting people to respond to these externalities, since they are not reflected in the market price.
This is a big part of the problem in this country. We have a very strong culture of individualism. Hey, it's my money, why shouldn't I be able to drive a Hummer H2 on dry pavement by myself 40 miles to work at the office? People in America react very negatively to anything that gets seen as trying to influence or curtail their choice in consumption. Gentle nudges in emissions standards and gas taxes is about all we seem to be politically capable of. We need something tougher, something to really push the incentive to switch to alternatives. The market wont switch on its own fast enough, it's just too big a task with so little push behind it. Even at WWII-style production, we're talking decades to replace the vehicles and infrastructure with.... what? We don't even know what to replace them with. By the time the market has enough need to make a serious effort to change, we'll be decades behind the curve and it'll sink us.
 
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