By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
The International Energy Agency (IEA) last week released A 10-Point Plan to Cut Oil Use.
Many of the steps seem to be no more than common sense – and would not prove unduly difficult to implement. And Asian and European countries are expected to follow at least some of these recommendations.
Alas, the U.S. is not expected to comply with any provisions.
Now, to be sure, skyrocketing oil and gasoline prices may independently cause U.S. households to curb their fossil fuelconsumption. Many can’t afford to do otherwise.
The IEA, founded in 1974 by seventeen countries – mainly from Europe, but also including Japan and the United States – was intended to counteract the activities of Organization of the Petroleum Exporting Counties (OPEC). The IEA now has thirty-one members, and as Motherboard reports , has “the goal of “cooperation on a variety of issues” relating to energy supply including a “collective emergency response mechanism” that ensures a “stabilizing influence” during times of energy crises.”
The report addresses some cursory measures to increase supply – which I won’t consider in this post. Instead, I’ll examine the proposed measures the IEA has put forward to reduce demand for oil. Per the IEA report:
Another way to help balance the market and reduce the pain caused by high oil prices is to bring down demand. Following Russia’s invasion of Ukraine, the IEA’s March Oil Market Report lowered its forecast for global oil demand in 2022 by 950 thousand barrels a day (kb/d) because of the expected impacts of higher prices and weaker GDP growth. But this would still leave the oil market very tight, with upward pressure on prices likely to remain in an uncertain geopolitical environment.
Further reductions in demand are possible in the near term, however, through actions by governments and citizens. The world’s advanced economies together account for around 45% of global oil demand, and most of them are members of the IEA. Demand restraint (see annex) is one of the emergency response measures that all IEA member countries are required to have ready as a contingency at all times – and that they can use to contribute to an IEA collective action in the event of an emergency.
In view of this and the potential emergency the world is facing, the IEA is proposing 10 immediate actions that can be taken in advanced economies to reduce oil demand before the peak demand season. We estimate that the full implementation of these measures in advanced economies alone can cut oil demand by 2.7 million barrels a day within the next four months, relative to current levels.1 The analysis in this report focuses on the potential effect of these measures in advanced economies, but their adoption in more countries would further increase their impact. Ensuring local and regional coordination of their implementation would maximise the impact. [IEA Report, pp. 5-6].
IEA’s 10-Point Plan
Most demand for oil is in transport, so the IEA’s 10-point plan focuses accordingly:
10PointPlantoCutOilUse_InfographicSource: International Energy Agency, A 10-Point Plan to Cut Oil Use.
Jerri-Lynn here. Note that pp. 7-13 of the report includes further discussion of each measure.
Even absent the worldwide oil supply crunch caused by the war in Ukraine and exacerbated by the West’s decision to impose sanctions on Russia, many European cities had already taken considerable steps to encourage people to cut back or eliminate their reliance on private cars. These cities have made their centers car-free (or at least, drastically reduce the private use of such vehicles there). Unfortunately, the U.S. lags signficantly in this regard.
The Biden administration isn’t renowned for its political courage. I mean, look at what a muddle Joe & Co. have made over mask mandates – acquiescing in their opponents’ framing of mask use as signifying a ‘scarlet letter’. I would have thought the vaunted return of the adults in the room meant the U.S. would again instead endorse long-established public health practice – such as embracing one measure long known to curb the spread of infectious diseases (and not just COVID-19): masking.
So, especially with the political blowback I foresee from high and increasing fuel prices – with no end in sight – I think this administration is unlikely to chance asking the public to take additional steps to their curb fossil fuel use – no matter how sensible they are. The last time a Democratic political leader tried that shtick was during the 1970s, when Jimmy Carter appeared in his cardigan and asked his fellow Americans to turn down the thermostat. And we all know how well that plan turned out. (Not that it wasn’t a good plan – but it’s widely regarded by the likes of Joe & Co. as having been a mistake.)
As to the specifics, reducing speed limits is a non-starter. Especially in Western states, where the roads are straight and distances vast. How about car-free Sundays? I think even in NYC, such a measure wouldn’t be attempted, as it would be seen to be politically unpopular. The challenge would be to convince city residents how pleasant it is to be able to stroll around car-free city centers without having to worry about being clocked by a car – as is the case in many European city centers. Ditto other restrictions on private car use – alternative day use based on license plate numbers. Maybe some incentives might be attempted to encourage more carpooling – but those would likely be means-tested to the point of impracticality.
As for high-speed and night train use in preference to airplanes, well, that’s a good idea. But with what high speed train network? Oh, right, there is none. Minimal night train services were limping along the last time I had a chance to use them, during the late summer of 2019 (see Take the (Night) Train Redux). I think the pandemic has probably hollowed out what were even then pretty minimal Amtrak services. So, as business travel revives – and maybe expands – business travellers must choose between cars and ‘planes as the only viable means to get from here to there. Better train service, high speed or otherwise, remains a fantasy.
Cutting public transit fares? Again, a great idea. And I’ve said so as long ago as the 1980s, when the then-head of the Greater London Council (GLC), Ken Livingstone, proposed doing so in London. And then the Thatcher government abolished the GLC.
As for the U.S., pursuing such a course of unlikely as long as city transportation authorities are in thrall to neo-liberal principles, with their ambits narrowly-drawn and their books made to ‘balance’ (within certain parameters).
And finally, the tenth proposal: encourage the use of electric cars and more fuel efficient vehicles. Well, to some extent, Democratic administrations have pursued weak versions of such policies. But not to anywhere near the degree necessary. One obstacle: in many parts of the country, there’s been little build-out of charging infrastructure. It’s hard to use the EV if you can’t easily juice it up. Another problem, assuming people got religion, jettisoned the pickup or SUV, and immediately had means to rush out and purchase an EV or more fuel-efficient car. Where are these new vehicles supposed to come from? Cars and other passenger vehicles are already in short supply, with supply chains for crucial components – e.g., computer chips – snarled.
Here, I also wish to direct readers to a recent DeSmogBlog piece documenting how the lobbying muscle of auto and fossil fuel interests helped us get from Jimmy Carter’s cardigans to our current reality – where many Americans drive massive vehicles, which get terrible gas mileage (see Decades of Lobbying Weakened Americans’ Gas Mileage and Turbocharged Pain at the Pump).
As Motherboard summarizes, the last decades have seen federal and state officials promoting demand for gasoline rather than encouraging us to spare its use:
Instead, the far more common—and in some cases implemented—initiatives have been to increase consumer demand instead by way of gas tax holidays. This reflects the fact that the U.S. has spent the better part of the last 70 years ensuring nearly every American family needs multiple vehicles in order to live productive, fruitful lives, and underfunding any and all alternatives to that lifestyle. For the vast majority of U.S. residents, there is no Plan B, no matter how high gas prices get.
Will the response to the latest round of gas price hikes this time lead to an appreciably different result? I’m not sure I’d bet on that, even though the health of the planet sure would benefit from such a long overdue shift.
I am nonetheless pleased to see the IEA produce this report. Other countries might use it as a basis to curb their oil consumption. And as for those of us who live in the United States: maybe some political leaders might step up and explain what now must be done. Better too late – far, far, too late – than never.
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I have very little time before I have to start working. I may be able to leave a better comment after work.
For now, let me just say that item number One, lowering the speed limit, has been proven to work in the past and it works in practice as well as in theory. Here is an article which explains this in sufficient detail for the layman like me.
https://www.lowtechmagazine.com/2008/09/speed-energy.html
The political problem is that in today’s America there will be no consensus for adopting it. And the pursuit of such consensus is a vain quest and a fool’s errand. Better to not waste the time and energy.
So what can people who would like to see reasonable speed reductions do? Arm themselves very heavily and set up multilane convoys on major roads all going at an energy-safe speed. Why ” arm themselves very heavily”? So that they can win the running gun battles which will ensue on every road every time they try to do this.
I’d thought, feeding us all to COVID 4.0, during a war we’d picked, meant forcing us into whatever old truck still functioned, so we’d work far more to pay for gas to avoid transit like the PLAGUE? So our kleptocrats could sell all their fracked gas/ oil stock to buy hippy-dippy PHEV & battery equities and frack a million leaky new wells to hook delusional folks… all as Russia manages to consolidate gas sales to pragmatic, grown-up Asian markets Isn’t THIS, exactly what this war’s all about?
I have never fully recovered from the shock of the 1973 OPEC oil embargo (at the start, oil was $3/barrel: another world!)
Long lines at gas stations and rising gas prices persuaded us to buy a VW Bug, and stuff our two toddlers in the ‘wayback.’ With its lawnmower-sized engine, keeping at or below the federally mandated 55 MPH speed limit was not a problem.
We still buy small cars noted for gas economy (currently, Subaru Impreza at 35 Mpg .. and it has a hatchback, great for small trees, bales of hay, and hauling ripped out wall-to-wall carpeting to the transfer center.)
And, I still find it difficult to drive over 55 MPH on the interstates.
Of course, I was probably six years old before I rode in a private passenger car, due to WW2 gas rationing. I was pushed in a Taylor-Tot, walked (or was dragged along by a grandparent) or, rarely, took a bus or train. It helped that I grew up in a small, compact city.
Great find, I love numbers without context.
According to the EIA, the world currently uses around 97 MBPD ( million barrels per day) this number isn’t included in the report, funny that.
This plan if their numbers are right and fully implemented and and and would reduce by an estimated 2.7 MBPD. Or roughly 2.8% reduction.
I would guess that oil prices being higher will probably have a greater reduction in consumption than these guidelines
It is actually surprising to me that the Federal government didn’t use everything that’s going on as incentive to introduce more EV use to the Federal vehicle fleet, and place a big order with an American manufacturer.
Seems like another missed opportunity.
Glen – It is, and the government is also missing a huge opportunity with the Post Office buying some 20,000 trucks over the next several years. The jerk who heads USPS has placed the order for gas engine trucks when he could easily have specified EV’s.
Sadly, Ole Joe won’t even push to get the jerk removed.
This list is kinda pathetic. The powers that be designed American infrastructure to be as wasteful as possible, despite the efforts of wiser but less influential people. America couldn’t have been better designed to force people to drive for what they need – strip malls, ‘bedroom communities’, so many stores being the only business in the building and having their own asphalt parking lot, total lack of public transportation, practically speaking, for many many people – well, that’s biting us in the butt now ain’t it?
I agree with the above comment, people will use less because the prices are going up. But without fixing totally unnecessary structural issues, quality of life will go down for many people as a result of these savings – seeing friends less, for example, or not being able to afford work so far from home. But it’s common for lower-income workers to have to drive farther… People have seen this coming for decades. I’ve only seen it coming for about 11 years. But higher fuel prices without wage increases are gonna be rough indeed for this country.
In order to make something like this hold with some degree of trust from the public, the administration would have to get serious about ‘shared sacrifice’. That means making the donor class pay up using at least some of the ideas floated on this website previously.
— grounding private jets
— hiking taxes like carried interest, cap gains, estate tax, corporate taxes
— some kind of ‘excess profits’ tax to stop profiteering from supply shortages
We know none of those items are on the table, so that means ordinary people won’t buy into the idea of curbing their own consumption.
I also think it would ease the pain and increase public buy in if things like minimum wage hikes, and subsidies for insulation and energy conservation in commercial and residential buildings were implemented along with hikes on gasoline taxes and even natural gas/heating oil…for those who prefer a neoliberal approach of letting the private actors in the marketplace figure out how to adjust their own lifestyles to higher prices.
A consistent, visible campaign of fighting with elites and the donor class would need to lay the groundwork for any of this stuff.
One more item… a seriously big cash/credit for crushing a dirty old big assed car. Proof of crush, cash to replace with with an e vehicle, a hybrid, or a very high mpg vehicle, and/or including a golf cart or schmancy e-bike or e motorcycle?
I have two diesels I should not drive, both get excellent fuel economy, but should be retired/ crushed due to SO2, NO2
I have no cash to replace. I cannot endure a payment for a lease.
BTW… the new vehicle fleet should be owned by the manufacturers, so they ‘own’ all the processes, including all the maintenance, parts, recycling, etc.
It would be nice to incentivize conversion from Gas / Diesels to EV
Some companies are already offering packages to do this at about 1/2 to 1/3 cost of new ev
Take it for what it is worth. The IEA recommendations to reduce oil consumption was posted on ZH over the weekend. Based on the comments the overwhelming response was negative. Few Americans will agree to change their vehicles driving lifestyles. Instead, they expect the government to do whatever is necessary to have cheap gasoline and diesel. This probably includes taking it by force from elsewhere, along with drill baby drill.
JLS, I am pretty sure Amtrak has restored all of its overnight and long distance services. From what I read, there is a shortage of equipment limiting availability. Not surprising, since most long haul equipment is 30 or even 40 years old. In the infrastructure bill, Amtrak is supposed to get substantial capital spending increases. Present long haul equipment is to be refurbished and supposedly new equipment ordered. Needless to say if every Amtrak train was full, it wouldn’t make a dent in US oil consumption.
Put in a global context, US spending on passenger rail is almost a rounding error in China’s rail spending or even Russia’s. Canada is even worse, with Mexico putting Canada to shame with virtually no passenger trains. 40 years ago it was wonderful traveling by train in Canada or Mexico.
The United States can’t have nice things when it spends a $1trillion annually on the MIC. It’s a matter of priorities.
California has been experiencing drought conditions over the past few years. Though the agriculture sector uses 80% of the available water they rarely ever are required to curb consumption even as the people living in cities and towns are coerced into reducing consumption by 15%. Lately, there has been pushback as residential users have cut back less. Shared sacrifice is not an American tradition, and it’s easy to see why. Neo-liberalism is the antithesis of shared sacrifice.
There can be no solution until we attack the crux of the problem : cars and population growth.
Cities need to be reconfigured so we can live without cars.
This is the only sustainable solution but it requires huge transformations in our way of living.
All rest is noise.
Small step: Change the child car seat laws so that families with three moderately young children can use a normal sedan car. Issue was covered someplace or other, notably as an outcome discouraging people from adding a third child.
It’s called wartime-economics: Instead of free markets you have state imposed rations: First through “regulations”, then with bread stamps, food stamps, gas stamps… and oh the glory of whitewashing outright poverty through words: collective sacrifice, healthier diet, how nice to stroll on the streets… (no green there, no nature, but never mind… ). Not to mention the principle: If we reduce demand by prohibiting behavior, than shortages magically disappear!
“Free markets” do not exist. You need a state to enforce contracts and property rights. Nice try, though.
That list sounds like that it was drawn up based on European cities and not really large countries. In any case, if you cannot force people to wear masks, how are you going to enforce car-free days or driving slower? I would say that it will take another 1973 shock before people even think about changing their lifestyles. I heard that back in ’73 that there were tons of small Japanese cars on the docks that were selling very slowly but when the shock hit, those cars disappeared all at once – and Detroit started on its slow decline. If gas prices become stuck at $8-10 on a permanent basis, how popular will those monster cars be?
But the problem remains that right now the supply issues are still problematical for not only the production of any cars but also spare parts as well. Turns out that having cars having to have over 100 computer chips has created a bottleneck preventing more cars to be manufactured. So what is needed is small, light cars that have not skimmed on safety in their manufacture and that have only an absolute minimum of microchips to run successfully. Perhaps have it so that modules can be added later that will have computer chips when supplies ease up. And for cars like that, I think that we would have to look to the east for them.
It’s not the country’s size that is the problem, it’s the developmental model that leads to sprawl and car dependence.
Around 2008-2010 I read an essay that proposed to tax gasoline to keep it at the then high price of over $4 a gallon. The article argued that gasoline should be $11 a gallon taking into account the externalities of over seas military actions and negative environmental consequences. I remember during that time the sales of large cars tanked. In the stock market companies that were developing alternatives to drilled oil were getting huge investments. Then the price of oil started dropping and all of these things reversed. If the price of oil stayed high through taxation the country would be in a better position for an oil shock.
Would anyone know where that essay is?
Have you ever checked out strongtowns.org, the notjustbikes YouTube channel, or any other of the urbanist ilk? It’s really interesting (and depressing) how deep we’ve dug ourselves into a hole regarding the infrastructure and housing developmental model. The car really is the epitome of neoliberalism, totally dependent on it as we are.
Gas gets up to $10/gallon which is going to happen, there will be a tremendous oil shock/consumer explosion. Tough (family blog). I lived through the 1970s oil shocks. What did I do? I drove Ford Pintos with stick shifts when I couldn’t walk or bicycle to my destination. Same deal today only now I’m retired, and live in a downtown urban area where I walk to the mall, bank, etc. I have no sympathy for the dumbos (poor folks excluded) who are going to get hit hard by what’s coming. The warnings have been posted for decades, and now the chickens are coming home to roost.
We have all heard the saying attributed to Winston Churchill (probably falsely) “Americans will always do the right thing–after exhausting all the alternatives.” Well, on the environment we seem to have so many alternatives still to explore. Here is an interesting look at the fraught history of the gas tax.