Commuting - It's the Economy - Some facts and figures

If we don't have enough incentives to commute already, maybe this will help.
Here are some interesting facts from the CIA factbook. I've only chosen
comparisons between the US, Europe and Australia.

http://www.odci.gov/cia/publications/factbook/docs/rankorderguide.html

Population (2005): EU: 457 Million, US: 296 Million, Australia: 20 Million
Daily Oil Consumption: EU: 14.5 Million BBLS, US: 19.6 Million BBLS, Australia: 796,000 BBLS
GDP: EU: 11.65 Trillion, US: 11.75 Trillion, Australia: 612 Billion

Dividing some of these figures:
Daily Oil Consumption per person: EU: .032 BBL/person, US: .066 BBL/person, Australia: .040 BBL/person

GDP/BBL of oil: EU: $800,000 / BBL, US: $600,000 / BBL, Australia: $769,000 / BBL

If we tried to run a business, and our competitors held this kind of advantage on us, we'd fail miserably, and probably go bankrupt.

I'm all for commuting, and reducing oil dependency - in fact, I'm employed trying to reduce oil dependency - but those facts don't consider industry, which is a pretty large portion of the consumption in America.

Also doesn't include agriculture either.

Don't they include industry and agriculture in the GDP numbers?

I'm all for commuting, and reducing oil dependency - in fact, I'm employed trying to reduce oil dependency - but those facts don't consider industry, which is a pretty large portion of the consumption in America.

Industry and agriculture use a lot of oil here too mate.

I'm actually surprised that Aus is that good.

If you look a little more closely, you'll notice that they often compare disparate dates. For example, the oil consumption in the US is a 2003 estimated number, while the EU is a 2001 number. Also, check the GDP growth rates. The U.S. GDP is growing at nearly twice the rate of the E.U. Another interesting couple - check the labor force sizes and the GDP/capita. It tells a story. The E.U's GDP is done with people and the U.S's is done with fuel powered technology.

The moral of the story is that figures don't lie, but liars do figure (I'm not really calling the OP a liar - merely regurgitating an old saying). The same statistics can be manipulated in any number of ways to make very different points.

My college offered a course called "How to Lie With Statistics". Never took it, but I always remember it when people quote statistics to make a point (on either side of the aisle). Again, not calling the OP a liar either (I probably agree with him on a lot), just saying.

My college offered a course called "How to Lie With Statistics". Never took it, but I always remember it when people quote statistics to make a point (on either side of the aisle). Again, not calling the OP a liar either (I probably agree with him on a lot), just saying.

Could you do us a favor and look-up the textbook for the course (if there was one!) -- I'm sure not alone in being interested in reading it. :)

Sorry for being off topic ...
An example of lying with statistics: Hospital physicians prescribe Tylenol to their patients more than all other pain relievers combined.

Johnson and Johnson gives Tylenol to hospitals for free. They don't even pay for shipping. Don't ask how I know this ... I'd have to kill you.

Could you do us a favor and look-up the textbook for the course (if there was one!) -- I'm sure not alone in being interested in reading it. :)

"How to lie with Statistics" is a book, I believe originally written in the sixties or so.

http://www.amazon.com/gp/search/ref=br_ss_hs/102-0015364-7772167?search-alias=aps&keywords=how%20to%20lie%20with%20statistics

Industry and agriculture use a lot of oil here too mate.

And in Europe, I'm sure. My wager is that there's more oil 'exported' through agriculture and industry in America than in Europe (or Australia).

That doesn't mean I'm saying we shouldn't reduce our consumption here - much to the contrary, I think it's imperative. But I'm not sure if comparing these statistics is the correct way to make that case.

And in Europe, I'm sure. My wager is that there's more oil 'exported' through agriculture and industry in America than in Europe (or Australia).

But if it's "exported", it's exchanged for money that goes into GDP, isn't it?

I'll wager that if you settle on a some recent year the statistics won't be too different than in the OP. All this stuff about lying with statistics implies (or assumes) that the results would be significantly different if done for a single year, and I really doubt that they would be. Consumption, GDP, and population just don't change that rapidly from year to year.

Here's GDPs from 2005: http://www.cia.gov/cia/publications/factbook/rankorder/2001rank.html
Here's oil consumption: http://www.eia.doe.gov/emeu/ipsr/t24.xls

But if it's "exported", it's exchanged for money that goes into GDP, isn't it?

Yes, but in some industries the oil used per dollar produced is drastically different than other industries. Probably the most drastic example is agriculture. Basically the only non-oil costs are the land and the equipment - and a large cost of the equipment is the energy to smelt the iron, etcetera. The fertilizers and transportation are based on the costs of energy used.

Aluminum production is another good example - most of the costs are energy related.

So if you export agriculture and aluminum, your economy is going to be 'penalized' w.r.t. an economy that imports those items for trade with less energy-intensive products.

Gas was only 2.09 this morning...woohoo!

Yes, but in some industries the oil used per dollar produced is drastically different than other industries. Probably the most drastic example is agriculture. Basically the only non-oil costs are the land and the equipment - and a large cost of the equipment is the energy to smelt the iron, etcetera. The fertilizers and transportation are based on the costs of energy used.

Aluminum production is another good example - most of the costs are energy related.

So if you export agriculture and aluminum, your economy is going to be 'penalized' w.r.t. an economy that imports those items for trade with less energy-intensive products.

I think, perhaps, that the U.S.'s "inefficiency" of converting oil to GDP may have been the gist of the OP's point. I think the idea is, the U.S. puts oil in and gets less in terms of GDP than other countries.

Gas was only 2.09 this morning...woohoo!
And that fact totally explains the consumption figures in the OP.

We need to slap a $200/bbl tax on oil to pay for the externalities and encourage development of alternatives.

I think, perhaps, that the U.S.'s "inefficiency" of converting oil to GDP may have been the gist of the OP's point. I think the idea is, the U.S. puts oil in and gets less in terms of GDP than other countries.

Yes, this is my central point. I believe these GDP figures do include agriculture and industry. Roughly 7% of energy in the US is for agriculture. No question that some industry uses a lot more energy than others, but we also have a lot of relatively low energy industry in the US. I don't think this is a large factor.

I've travelled in both Europe and Australia. Almost all major cities have very good mass transit. Many of the drivers use mopeds or very small cars. Mercedes makes a car called the Smart Car, that is used extensively in Europe.

Bottom line - the EU and Down Under are getting more bang for their BTU.

I think, perhaps, that the U.S.'s "inefficiency" of converting oil to GDP may have been the gist of the OP's point. I think the idea is, the U.S. puts oil in and gets less in terms of GDP than other countries.
Is it inefficient? If you look at that statistic in a vacuum it is, but then look at labor force sizes and GDP/capita. You could say the other countries convert labor into GDP a lot less efficiently than the U.S. It's not a matter of efficiency, it's a matter of the methods used for production. I'm not making any value judgements about using people vs. fuel to produce goods. I'm just pointing out that you can't see oil as the only input into GDP and draw conclusions about efficiency.

Johnson and Johnson gives Tylenol to hospitals for free. They don't even pay for shipping. Don't ask how I know this ... I'd have to kill you.

The hospital then charges the patient $30 per tablet.

Off topic, but you know its true.

Gas was only 2.09 this morning...woohoo!

And that fact totally explains the consumption figures in the OP.
Saw a gas station on Sunday with two signs on the corner. $2.499 per gallon for 87 unleaded and $1.00 per liter for Aquafina. Huh?!?!

Your figures are not about the "Economy." You are simply focusing on a single factor of production, and one that is quite different in various industries. As a concentrated source of carbon, oil's market price is partly determined by its value in making drugs and plastics, for example, and not simply it's value in making gasoline to run cars.

If you are not happy with the market deciding the price of this single commodity, you can slap a 300% surtax on it, as you see in Europe. Instead of voting with your dollars, you vote politiciaons into office to make up your mind for you and tell you what you should think.

The U.S. actually has a competitive advantage compared to other countries where the cost of this single factor of production may be triple.

Coal also is a good source of carbon but the price of oil is so low, there is no market for investing what it takes to "harvest" the carbon in Coal. Our politicians could simply get together and slap a surtax on the cost of oil and divert the extra billions to other technologies. The result would be that everything would be more expensive, but not better, i.e., productivity would drop.

:)

If you are not happy with the market deciding the price of this single commodity, you can slap a 300% surtax on it, as you see in Europe.

Before the market could set the price, we'd need to remove the subsidies. I like the idea of imposing the cost of oil supply protection on oil users, too.

Is it inefficient? If you look at that statistic in a vacuum it is, but then look at labor force sizes and GDP/capita. You could say the other countries convert labor into GDP a lot less efficiently than the U.S. It's not a matter of efficiency, it's a matter of the methods used for production. I'm not making any value judgements about using people vs. fuel to produce goods. I'm just pointing out that you can't see oil as the only input into GDP and draw conclusions about efficiency.

"Efficient" in the sense of converting oil to GDP. I think that's what I said. There are many definitions of "efficient," and I wouldn't pretend to understand what it means to have an efficient economy. And, I don't think I would like one, if we had one.

Is it inefficient? If you look at that statistic in a vacuum it is, but then look at labor force sizes and GDP/capita. You could say the other countries convert labor into GDP a lot less efficiently than the U.S. It's not a matter of efficiency, it's a matter of the methods used for production. I'm not making any value judgements about using people vs. fuel to produce goods. I'm just pointing out that you can't see oil as the only input into GDP and draw conclusions about efficiency.

You make a good point. We do have a smaller labor force than the EU, with close to the same GDP. But I don't think this goes very far. When you look at the population, it's incredible that the EU burns 2/3 of the oil that the US does. But your point is well taken - it depend on how you measure efficiency. But, the fact that 42% of our trade deficit comes from imported oil, is a real problem. Even GW made this point the other night.

LABOR FORCE figures:
European Union 218,500,000 2005 est.
United States 149,300,000 2005

But their population is also higher:
European Union 456,953,258 July 2005 est.
United States 295,734,134 July 2005 est.

But, the fact that 42% of our trade deficit comes from imported oil, is a real problem.

I am always somewhat puzzled by folks saying that "imported" oil is a problem. I understand that the U.S. would be in a world of hurt if all foreign suppliers decided to cut the U.S. out of the picture, but that would also really hurt the producers. And, the incentive to "cheat" on such a ban would be very, very great.

Also, although it is probably impossible for the U.S. to produce enough oil to become "independent," how would that really work? There's a global market for oil. It wouldn't surprise me to learn that Japan and China are burning oil pumped from the U.S. I think that's one of the reasons that during the last push to drill ANWR U.S. officials said something like "and we will even promise to prevent that oil [as opposed to other oil] from leaving the country." (Not that such a restriction would make any difference at all, except politically.)

Would the U.S. close its borders to oil exports? That would probably result in the price of oil in the U.S. being artificially low (or more artificially low! if one considers current subsidies.) That would result in increased consumption.

As long as the U.S. consumes a significant amount of the world supply, whether that oil comes from domestic sources or is imported seems somewhat irrelevant. At least that's how it appears to me, though I would like to be enlightened.

It's not the source of the oil; it's the silly, subsidized consumption.

I am always somewhat puzzled by folks saying that "imported" oil is a problem.

It's not the source of the oil; it's the silly, subsidized consumption.

I think you're correct. Oil importation is not the problem. The trade deficit is a problem. It's not a big deal to import oil, if our trade is in balance. The 42% figure quoted earlier is a recent figure, after the price of oil went up drastically in the 4th quarter of 2005. Oil has typically been about 25% of the trade deficit in recent years. This just demonstrates the susceptiblility of our economy to shifts in oil prices.

I agree there's a lot of subsidized consumption, especially the road building and repairs at the State level. Here in Colorado, the legislature approved $840 Million out of the General Fund (sales tax revenue) for road repairs over a 4-year period.

Is it inefficient? If you look at that statistic in a vacuum it is, but then look at labor force sizes and GDP/capita. You could say the other countries convert labor into GDP a lot less efficiently than the U.S. It's not a matter of efficiency, it's a matter of the methods used for production. I'm not making any value judgements about using people vs. fuel to produce goods. I'm just pointing out that you can't see oil as the only input into GDP and draw conclusions about efficiency.

That brings up the question of whether our high GDP-per-person results in a higher quality of life. Some say that education levels, poverty levels, and infant mortality are good indicators. I think there have also been studies simply asking people to evaluate their quality-of-life. To my knowlege, the U.S. doesn't do particularly well when compared with the EU on those factors.


The U.S. actually has a competitive advantage compared to other countries where the cost of this single factor of production may be triple.

That explains why we have such good trade surpluses compared to them! (Wait, do we? I think I'll google that! ;) )


Don't they include industry and agriculture in the GDP numbers?
yes.


It wouldn't surprise me to learn that Japan and China are burning oil pumped from the U.S.

Apparently it's unprofitable to ship Alaskan oil to east asia now, though that was not always the case.

GDP/BBL of oil: EU: $800,000 / BBL, US: $600,000 / BBL, Australia: $769,000 / BBL

If we tried to run a business, and our competitors held this kind of advantage on us, we'd fail miserably, and probably go bankrupt.
Ignoring whether the numbers are selectively pulled...

I see something very different in those results. One barrel of oil is currently about $60. So we get $10 GDP for every $1 oil. Not as efficient as others in oil consumption, but how do we compare in other ways? Are all the other costs equal? For example, if we're using $1 oil to replace $2 labor, the numbers look great, and it looks like we're being smart. As long as oil's cheaper than the alternatives, if we're simply talking about competitive advantage (and not talking about long term environment, energy dependence, etc.), we should be burning oil.

Think about it... before we learned to utilize oil, we got infinite GDP per barrel of oil. Are you suggesting that isolated tribes deep in the African Sahara that don't use oil have a competitive advantage?

I'm not saying that using lots of oil is a good thing. I'm just saying that it's not as simple as asking how much GDP we get per unit of oil consumption.

Before the market could set the price, we'd need to remove the subsidies. I like the idea of imposing the cost of oil supply protection on oil users, too.

That sounds crazy you know? If you really believed that oil companies were somehow unfairly and specially blessed by the government, then you'd buy shares in these companies.

All of a company's profits -- whether it sells oil or toilet paper -- are reflected in dividends to stockholders and increases in their share prices to reflect future profits. Don't let politicians strip you of your common sense and well as good cents. :)

That sounds crazy you know? If you really believed that oil companies were somehow unfairly and specially blessed by the government, then you'd buy shares in these companies.

All of a company's profits -- whether it sells oil or toilet paper -- are reflected in dividends to stockholders and increases in their share prices to reflect future profits. Don't let politicians strip you of your common sense and well as good cents. :)

Huh? People do buy shares in oil companies. The stock price reflects the subsidies and the dividends. I am afraid I don't get it.

Me neither. WTF does this soapbox have to do with riding a bicycle to work?

Me neither. WTF does this soapbox have to do with riding a bicycle to work?

Less oil, fewer cars, more pleasant ride to work. (Better communities, more human interaction, healthier environment, too.)

Huh? People do buy shares in oil companies. The stock price reflects the subsidies and the dividends. I am afraid I don't get it.

You're sounding crazy again. I said you'd buy shares. In that way, you'd get the money back that you think is being gouged from you by the company and then you'd have nothing to gripe about.

There is one simple rule: if someone has something you want, you have to pay for it; or, elect a politician that will steal it from them and give it to you for your vote.

Me neither. WTF does this soapbox have to do with riding a bicycle to work?

It was originally posted as an incentive to bicycle to work.

You're sounding crazy again. I said you'd buy shares. In that way, you'd get the money back that you think is being gouged from you by the company and then you'd have nothing to gripe about.

And (attempting to remain civil in the face of provocation) you haven't considered how a market works. The only way that I could benefit from the subsidies given to oil companies is if I purchased the stock before the market "knew" of the subsidies and adjusted the price. Today, the market price for oil stock already has factored into it the subsidies.

BTW, I didn't say the company was gouging me. Objecting to subsidies because they cause overconsumption does not mean I am blaming the oil companies for "gouging" me. In one sense, I'd like them to "gouge" me some more - a higher price would reduce consumption.

It was originally posted as an incentive to bicycle to work.

So you're preaching to the choir, then?

This beast needs FOO'd!