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By Robert Rapier on Aug 11, 2008 with no responses

A Reader Critiques My Energy Plan

While I have done a lot of critiquing on my blog, reader Evan Mitchell turned the tables on me and provided a thorough critique of the energy plan I recently proposed in An Open Letter to Our Next President. Evan sent it to me by e-mail, and I asked and received permission to publish it here. Other than a bit of formatting, it is as I received it. Portions of the plan I initially proposed are in blockquotes in the text.

Regular readers know that my main purpose here is to engage in and foster debate around our energy policy, and it is with that in mind that I present Evan’s critique below.

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Hi Robert,

I read your energy plan and I am completely on board with the goal of where the whole letter is trying to go. I think we have a lot in common. I sincerely think about this topic very frequently and I offer some constructive criticism and suggestions for addressing additional interrelated topics, should any open minded political power actually take this letter anywhere.

I really believe that your R-squared blog community has the potential to responsibly shape the future of the US. We have a unique engineering problem, an over use of energy that is caused by humans, civilization. Solutions will require more than the technological solutions which contributed to the original problem. The US is sadly run by the advice and influence of a few corporate chairpersons. We desperately need to “take the power back” and redistribute credibility to common people, and to voice common folks’ practical and experienced opinions about the feasibility of our future development and/or undevelopment.

For your referencing convenience, my comments are in blue font, my solutions or useful suggestions are underlined.

Your introduction and address are eloquently written, I cannot do any better myself. Within the past decade, I too have invested much thought of the same ideas you present in the five points. I have since discovered that intensely progressive ideas need more development to work smoothly, there needs to be a fair, universally truthful method when such changes are forced, which maintains the merit and respect for the hard work of every citizen. Though you and I want to become crude oil independent, many hard working folks are not so far-sighted, or comfortable enough to embrace such drastic lifestyle changes. They become understandably offended at the slightest hint of shame in the status quo for which they work very hard.

Politically our ‘great’ ideas immediately get trash-canned as bipartisan ‘liberal crap’ I know this because my disgruntled, hard working, near to retirement age dad listens to talk radio constantly in his work van, and he is programmed (nearly brainwashed) to judge any progressive change as a senseless hurdle created by the ‘damn liberals’. After carefully breaking that ice, he is very reasonable, open to, conscientious of, and interested in discussing the real problems in our culture. People have a tendency to isolate one problem, and go to battle against it, when the problem is multifaceted, and requires many interrelated solutions to effectively conquer. As you may be well aware, energy balances can get very complicated and require measurements from many different, but interrelated sources and angles. It is my opinion that your energy letter could benefit from some mention of changes to our infrastructure, or the way we get around, instead of focusing on what kind of boxes we do it in. This is really damn cliché, but we need to ‘think outside the box(es)’.

1. We must improve the fuel efficiency of our automotive fleet. It is an embarrassment. Here again, we have sought the easy solution: Just increase CAFE standards. Most people view this as a relatively painless solution. They think that instead of their Ford Expedition getting 14 mpg, the automotive industry has tricks up their sleeves that can push it to 24 mpg. All that is required is a bit of legislation, which doesn’t affect me, the consumer. But that’s not the way it works. To achieve 24 mpg, we are going to require a fundamental change in the SUV mindset.

We have fuel efficient vehicles available now, we just need to convince people to buy them. I propose to offer rebates ranging from $500 to $2000 for vehicles that achieve high fuel efficiency. I propose to penalize vehicles that achieve low fuel efficiency. I propose to phase these changes in over the next 3 years.

This is an old issue, the MPG debate, and it is a self perpetuating debate for the continued use of gasoline as a transportation fuel. How does the energy efficiency compare to a diesel vehicle, a natural gas vehicle, or a hydrogen fuel cell vehicle, or a human powered vehicle? All these fuels have different energy concentrations for their respective fuels quantities. We should instead focus on relaying the message of equivalent energy consumption and get away from the reactive focus on the price of gasoline. Personally I like the food equivalent standard, which I have actually figured. It conveys how many available fuel Kcals, or food energy equivalents, are required for a mile or a Km of vehicle operation. It is fascinating to know how many Haitians starve on the commute to work every day, maybe even useful to know how much corn a tractor eats to make more corn (not even an ethanol joke).

It is my opinion that green cars are not optimally offered as a sincere means to improve our world, but more as an offering, to appeal to a niche market, which is very profitable to auto makers. I have heard that the Hummer uses less net energy to produce than the Prius. Even if it is just propaganda, it raises a significant debate which reveals that Prius consumers may not be completely aware of the overall truth to their thoughtful and responsible consumer decision. It is also important to note that the Prius is by far, not the most economical vehicle to own and operate and not accessible to all concerned consumers. I am using the Prius as an example, because there are currently emissions tax benefits, HOV lane benefits, etc. for Prius owners, though the Prius may not genuinely be the only or the best option for progress in our transportation culture. There are no such taxes for VW diesel passenger cars, which are similarly expensive, polluting, and efficient. I would have to install training wheels on my bicycle (needs 4 wheels) to reap any emissions credits or fiscal benefits.

I would like to see better ways to promote fair competition among transportation innovators than the black and white, discriminatory subsidies and tax breaks promoting select cars. Besides, I’m sure there are scenarios where the SUV can provide an economical means of transportation, but these scenarios are just not often encouraged, recognized, or commonly practiced. A 15-passenger van can be far more economical and eco-friendly than a Prius, if it is not singly occupied, driven daily, or empty. There could exist a community of two or more families who commute to work and school via bus, bicycle, train, etc, and share a van between them for higher occupancy trips and/or or moving quantities of stuff. The community’s responsible planning and appropriate use of available tools is not fiscally supported by a rebate on a new, single occupancy, get my wealthy, lonely self to the lonely work parking lot-car.

2. Continuing with the theme of the first proposal, we need to find other ways to reduce our fuel consumption. Europe provides a useful guide here, as the average per capita energy consumption in Europe is half that of the U.S. How do they achieve this?

Primarily, they have achieved this by making fuel very expensive. Because I don’t think it would be fair to penalize you as a result of the decisions made by previous administrations, I propose to make this proposal revenue neutral. The goal here is not to collect more taxes; it is to encourage behaviors that reduce fuel consumption. So here is the specific proposal.

The average American consumes 1,000 gallons of gasoline a year. I propose to increase the federal gasoline tax by $0.20/gallon this year, $0.30/gallon next year, and then $0.50/gallon in each of the three following years. The total tax increase I am proposing is $2.00/gallon. This would still put gasoline prices at less than they are in Europe, but by having a clear understanding that gasoline prices won’t be going down, this will encourage conservation measures.

In order to offset the burden of these higher taxes, I propose a tax credit equivalent to the increased tax burden for the average American. This is equivalent to $200 in the first year of the tax. Those who use less gasoline than the average will actually see their overall tax burden go down. Those who consume more than 1,000 gallons per year will see an overall increase in their tax burden – and will therefore have a strong incentive to reduce their fuel consumption. For those whose fuel usage is for business use, the fuel taxes can be deducted against your business income.

Though I personally would not complain about such a tax on fuel, I would not be overly excited or motivated to support it, because I already ride my bicycle weekdays, year round, and there is little immediate benefit for me. If I was an average Merican, limited to commuting singly by car, I would have an old car, be incapable of buying a newer more fuel efficient car, not making enough money to reap any idealistic tax benefits from the latest technology, and my kids would still be hungry and I would legitimately bitch at a tax directed against my current sad state of affairs. Personally, I won’t get any free bicycle parts or dry socks, and bus fare may just go up more with the fuel directed taxes. So again, the common folks who are planning responsibly and using their tools appropriately are still out of the loop. The middle class and poor will be targeted to get poorer. Merican’s don’t take kindly to it, and won’t openly support it.

3. Solutions will be required on the supply side as well. However, too many “solutions” to date rely heavily on fossil fuels, which is the very problem we are trying to mitigate. Therefore, I am appointing an independent panel of experts across multiple disciplines – environmental, energy, agriculture – to evaluate various sources for 1). Reliance on fossil fuels; and 2). Negative side effects. There will be specifically defined criteria that alternative sources must meet in order to qualify for tax breaks. For example, energy “producers” – fossil and alternative – will pay a surcharge on the fossil fuel inputs they use to run their operations. This will encourage a move away from the use of fossil fuels to produce “renewable” energy.

Here’s the big hit! This is where a little careful action can actually act the way we want it to, to promote responsible planning, and appropriate use of tools. Consumerism is king. Capitalism is USA’s game. Curb your consumerism in a fair manner, and this mother will invent, innovate, re-evaluate, and promote change for the better. In a democracy you can’t fairly direct taxes against already targeted fuel consumers, but I think we might be able to apply taxes that evenly distribute the burden and responsibility to all consumers, and encourage suppliers and fuel consumers to make better decisions overall. My solution is to construct a system that will tax every officially traded good based on the physical constraints of product mass, and distance moved. This is an energy tax fairly applied to every material consumer good.

Now, like any plan, this will be met with harsh criticism, but I want to acknowledge, I realize there will be some drawbacks to such a tax.

-how can we possibly calculate all this information, isn’t that too much work. No, our country’s military developed a very powerful satellite location/navigation system called GPS, and our technology companies are busily developing GIS software to utilize this technology. Microsoft and McIntosh companies are both Merican innovators. Let’s put our own technologies to work, make our own stuff, and make our economy strong again! Maybe this could somehow create a push for full adoption of the metric system! Now that’s exciting!

-black markets and smugglers may be a popularized crime, sick the war on drug soldiers on it, they are experienced, it may leave drug smugglers fewer places to hide and help the drug busting cause.

-The uniformity (quality) of our consumer goods will likely decrease as smaller local business emerges: yeah I know, but that’s inevitable and needs to gradually be realized as our energy sources dry up anyways.

-What about small items of negligible weight, which are usually sent by the USPS, UPS, FEDEX, etc? These organizations have already worked out and built in a tax to accommodate the significant mass, distance, and volume expenses, maybe we could exempt such small items as CD’s, small letters, etc, pertaining to domestic sharing of info and legal documents, and continue the tax over a carefully determined weight limit. Cooperating with these organizations should prove very helpful, everybody will be affected fairly, business will continue, but less impulsively.

-What about items moved very short distances, is that fair? You are a locale, act like one and fiscally benefit from local interaction and help your neighbors, is that such a bad thing? Isn’t that the whole point? Maybe a special rate, or a number of zip codes crossed can be applied for the more locally moved items near zip code, state, or national boundaries.

-Major warehouses and distribution centers will become less effective, and more complicated, causing due stress to such workers and in time restructuring will happen causing said jobs to be ‘lost’. This is also a sad reality of the energy crunch, but at least there will be more warning signs of unemployment than the alternative economical crashes. If you think optimistically, and of jobs as you do of mass and of energy, jobs cannot be created nor destroyed, only modified or transferred.

-Energy products that are transported by machines which use energy products will be doubly taxed: Yup, that’s why it is an energy tax. Its whole purpose is to gradually, naturally, and fairly encourage capitalism to streamline our uses of energy and energy products. For instance, electricity won’t be heavily taxed, because it has very little mass associated with its transport, but it already has an inherent disadvantage built into its storage and transmission over long distances. So this tax encompasses the fair encouragement of; local economic development and GDP, renewable and local energy sources and energy sources which produce electrical energy. Also encouraged will be the consumption of products which; require less fossil fuel and foreign oil inputs and are produced locally under humane working conditions and locally accepted environmental controls.

4. In order to lessen our dependence on fossil fuels for heating and electricity, I propose to extend tax credits for installation of solar systems, especially those for solar water heating. Tax credits for installation of wind power, geothermal power, tidal power, and various other qualifying energy sources will be extended for 10 years.

-YES! Solar water heating needs to get much more support, PV just isn’t as efficient and doesn’t last. This is a topic I don’t have a lot of input into, I’m not a home owner. I would like to see better encouragement for; more responsible land development that is more reasonably linked to infrastructure, rebuilding/restructuring abandoned border areas between urban and suburban, more dense housing communities, again, thinking of the whole community, outside the box(es) and picket fence(s). I do like the idea of using smart grids (Excel energy Boulder, CO) to monitor energy use, and maybe in an advanced electrical energy grid system, we can provide tax breaks per capita, to those who use less electrical energy, further encouraging solar installs and proactive landlords.

5. From my viewpoint, we need to move to a future in which electricity drives our transport systems. The electricity would be derived initially from existing sources like coal and nuclear power, but increasingly from solar, wind, and various other renewable sources. Improved battery technology and energy storage technologies are the key enabling technologies required. Therefore, I am proposing to significantly increase the funding and resources devoted to these technologies. Cash awards will also be available to inventors meeting certain key milestones – as inspired by the Automotive X PRIZE.

These five proposals are merely a start. I understand that for some of you, these changes will be painful. But the pain is coming regardless; I am just proposing to manage it in a more effective and predictable manner. For too long, we have been too passive in managing our oil addiction. The time has come for more aggressive measures.

-Yup, good idea! Bush was surprisingly on it with his fuel cell (better batteries) funding.

Such proposals would not be without harsh critics, and would require strong leadership to push them through. Special interests will line up to protect their pocketbooks. Short-sighted politicians will try to protect a few at the expense of many. Will you be the president who takes a stand, tells the hard truth about our energy predicament, and pushes through measures that secure a brighter future for our children? Or will you be like the long succession of presidents who have made hollow promises and offered false solutions – only to see our dependence worsen?

I hope I wasn’t too harsh. The political hurdle is formidable and I just want to see everybody’s concerns addressed so this stuff can happen sooner than bipartisan later. I still haven’t figured a way to gain wide support for the ‘energy’ tax’, but I think it is at least workable. I have a good grasp of reality and ideas, but I lack your eloquent way of presenting such information that is invaluable in the political process. Let’s all work together so I can again spell Merica with a capital A, in good conscience. I have faith in addicts, I’ve encountered many addicts who are not dumb, and who have come up with very clever solutions and adaptations to their supply needs.

Thanks for maintaining your blog, and dispelling common energy myths in the US.

Evan Mitchell