February 3, 2023

Why Americans Became More Vulnerable to Oil Price Spikes

6 min read

More than a decade ago, when Americans faced rising prices at the pump, policymakers developed a vision to rid people of gas and oil: more efficient cars, more compact and walkable communities, more Renewable energy

“We have a serious problem,” George W. Bush warned in his speech. 2006 State of the Union address. “The United States is accustomed to oil, which is often imported from volatile parts of the world.” It was a powerful statement for a Republican president with deep ties to the oil business.

His remarks – after the rise in oil prices and Eventually reached 100 a barrel. For the first time in the country’s history – the beginning of many years of spectacular bilateral pressure to rid the country of oil and gas and better protect Americans from the shock of world oil prices.

The authorities prepared it first. Increasing the quality of the fuel economy For cars and trucks in decades. Along with energy dependence, national oil-saving plans to address the serious threat of climate change have received widespread support in Congress. Launch of Public Transportation LawyersDiscard the pump.Days to encourage passengers to board trains and buses.

Then the pace of the country slowed down. Along with rising domestic oil and gas production, the flood of cheap crude oil abroad ushered in an era of low energy prices. The increase in supply, rather than curbing demand, came to explain US pressure for energy freedom.

Fueling, Americans bought large cars and homes that needed more oil and gas to generate electricity. Cities built more highways, reduced the use of public transportation, and expanded suburbs.

Yet the expansion of drilling in the country over the past decade – which made the United States the world’s largest oil and gas producer – has ultimately left households vulnerable to price fluctuations. US oil and gas companies say They have no control High prices at the pump, citing the confluence of global factors: Kuwait epidemic, supply chain disruption and Russia’s invasion of Ukraine.

“It doesn’t matter if ‘drill, baby, drill’ is stopped as a solution,” said Michael Greenstone, professor of economics at the University of Chicago and director of the Energy Policy Institute. Are american It still has a small share of global potential and global production, and therefore cannot affect global prices much.

At lower prices, Americans change their attitude, for example, buying bigger cars that use more petrol. “And then, when these unexpected shocks happen, we become very exposed,” he said.

Security has now become a toxic concept in American politics. Oil Industry Group Energy saving frame as a deprivation. With the midterm elections, and Republicans using high gas prices to attack President Biden’s policies, some Democrats have suggested a reduction in consumption. Mr Biden himself, who came to office promising to take bold action on climate change. He urged the oil companies to increase production.However, administration officials maintained that the United States should stay away from fossil fuels in the long run.

“If you can persuade Americans to be safe, it will probably have a much more dramatic, immediate effect on price reduction,” said Patrick D. Han, an oil analyst at Boston-based Gas Buddy. Which runs apps and websites that help people see, Han said. Actual fuel prices at gas stations across the United States

“But telling Americans to use less seems like a threat – many people see it as a threat to their freedom in one way or another,” he said.

President Biden’s climate agenda has sought to address some of the demands. Of It signed the infrastructure bill last year. Public transport is the largest investment ever made, with more than $ 100 billion for trains and buses in five years.

Even so, owning one is still beyond the reach of the average person. A 10-point plan to reduce oil consumption Released last month by the International Energy Agency, it recommended measures such as the introduction of car-free Sundays in cities. The IEA claims that if developed economies implement its 10 recommendations, they could cut oil demand by 2.7 million barrels per day, equivalent to the expected global decline in Russian oil because buyers are increasingly buying. Stay away from it.

An article in Fortune states that “Energy Watchdog makes strong recommendations. Don’t plan to leave the house on weekends.”

Some economists say that on a macroeconomic scale, the increase in domestic energy production has protected aspects of the US economy from the worst effects of the crisis, for example more jobs and profits in the oil and gas sector. By creating Compared to Western Europe, where oil price shocks increase slightly because it produces less oil, the impact on the United States is “overall, more modest,” said Gian Maria Melissi Ferretti, of the Brookings Institution. Hutchins Center on Tuition Monetary and Monetary Policy.

Even so, owning one is still beyond the reach of the average person, relying more on fuel than ever before.

Instead, the United States has relied on improved technology and efficiency to control energy use.

For example, between 1970 and 2018, the fuel consumption of road passenger vehicles in the United States nearly doubled for both economists and light trucks. And that trend is expected to accelerate as the Biden administration moves to restore tight fuel economy standards, following efforts by the Trump administration to bring them back. Transportation. By far the largest consumer of petroleumAnd the biggest partner in climate change.

However, a number of factors have offset the impact of these improvements, said Eric Massnett, a researcher on emerging environmental technologies at the University of California, Santa Barbara. Americans are buying more cars: From 1970 to 2018, the American population grew by 54%, but collectively Car and truck registration An increase of 141%. And car travel, in miles, is steadily increasing, largely because the United States uses more energy per passenger and distance travel than other major countries. The number of public transport riders, which had been declining slowly and steadily since the mid-2010s, crated During an epidemic

And while all classes of vehicles have become more fuel-efficient, the U.S. Navy has steadily moved toward a mix under the influence of larger and heavier vehicles such as pickups, vans and SUVs. Performance is declining further. IEA Estimated recently That the shift to larger vehicles has negated 40% of the fuel savings that would have been possible under strict fuel economy laws.

“It’s one step forward, one step back,” said Dr. Masnet.

The same is true for American homes. With improvements in space heating, Americans now heat and heat their homes more efficiently than they did a few decades ago, suggesting that direct energy consumption, and carbon dioxide emissions, are so rapid. Why didn’t the population increase as much?

But these benefits have been offset by an increase in the size of the house.

The average single-family home built today is about 50 percent larger than comparable homes built in the early 1970’s, with homes growing in size for most of the 2010s before slowing down in the last few years. According to the census data. American homes Are one of the biggest in the world.

And while the spread may be difficult to measure, there are signs of growth. Although some cities are becoming more dense, “it is also clear that if you start new homes, more new homes are started on the outskirts of cities that contribute to low-density urban development, low-density single-family homes.” “Let’s find out now,” said Karen Seto, a professor of geography and urbanization science at the Yale School of the Environment. “We are going in the wrong direction,” he said.

Of course, some of these benefits have raised the living standards of millions of Americans. Still, ah Recent UN report Notes that rich people have a high potential for reducing the use of low-energy and global warming gases while maintaining quality of life. The report states that the richest 10% of the world is responsible for 50% of the estimated greenhouse gases, with most of this money concentrated in the richest 1%.

The report says that “clear consumption by the wealthy is responsible for a large proportion of emissions across all countries, including spending on items such as air travel, tourism, large private cars and large homes.”

It concludes that overall, measures taken by the United Nations to reduce total energy demand, such as investment in public transport, will reduce emissions in key sectors by 2050 compared to key sectors by 40%. Can help reduce up to 70%.

“This is a huge potential,” said Felix Kreutzg, a leading author of the UN report and chair of sustainable economics at the Technische Universität Berlin. “It makes it easier for every sector to reduce its emissions.”

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