Real men debate gas tax

That's what Tom Friedman thinks; Morgan Downey dismisses such a tax as futile, although unfortunately the link to his previous arguments for this points to the Friedman article instead. Downey also suggests that if it were done the proceeds should be spent on transportation, and that a Vehicle Efficiency Market, which appears to be a revenue-neutral cash transfer from buyers of less-fuel-efficient vehicles to buyers of more-fuel-efficient vehicles.

Perhaps it will merit deeper investigation later, but offhand the VEM concept doesn't resonate with me because it would take years for its effect to be seen on overall consumption (given the replacement rate of cars and trucks) and does not alter the incentives of anyone who's already sunk money into purchasing a vehicle.

Environmental Economics makes the point that calculating revenue isn't as simple as multiplying current consumption by tax rate, given the elasticity of demand, and hosts some debate on what the revenue might actually look like.

In general I think a gas tax would be good for overall energy efficiency and emissions reduction; my preferred forms are this clever revenue-neutral idea which avoids the Jevons Paradox, or something that looks like Waxman-Markey. I'd be happy to debate if and when more specific arguments against are offered.

4.6 barrels per year

Morgan Downey at Scarce Whales brings us this fascinating chart:

He explains of the curious stability of per capita oil consumption since 1982 as the shift to open markets:

Why has per capita consumption been so stable since 1982 having grown at an increasing pace for the prior 120 years (chart 2 again)? The answer is that a new method of rationing demand emerged in 1983: benchmark pricing linked to transparent free liquid markets (see chapter 1 of Oil 101). Free markets and necessarily volatile oil price became the adjusting factor matching available supply to demand.

This may be true in part, but I am still surprised - economic growth tends to increase per capita consumption of resources even in the presence of free markets (which we can see with oil):

To put the global average of 4.6 barrels of oil consumption per year in perspective, the number of barrels consumed per person in 2008 in India was 0.9, China 2.2, Brazil 4.6, Germany 11.1 and the US 23.3.

Since global GDP has grown quite a bit since 1982 (I would guess faster than population), I would have expected per capita consumption of oil to rise accordingly. In other words, I would have expected the free market to match supply and demand, but to meet higher global demand. Have efficiency gains completely offset this? I'd be interested to hear if anyone has a good explanation.

Happy 150th birthday to modern oil

It was 150 years ago today that Edwin Drake struck oil near Titusville, Pennsylvania, kicking off the first oil rush and the beginning of the petroleum industry as we know it. Morgan Downey commemorates with a succinct history of modern oil production at the oil drum. As he indicates with a cheeky graphic and the name of his blog (Scarce Whales), the main use of petroleum was as a cheap lighting substitute for whale oil.