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Bailing out the auto industry and SUV owners

Discussions about the economic and financial ramifications of PEAK OIL

Re: Bailing out the auto industry and SUV owners

Postby MrBill » Wed 13 Aug 2008, 07:59:40

And I will take Denmark's experience over Cuba's anyday!

$this->bbcode_second_pass_quote('', 'U')nlike America, Denmark, which was so badly hammered by the 1973 Arab oil embargo that it banned all Sunday driving for a while, responded to that crisis in such a sustained, focused and systematic way that today it is energy independent. (And it didn’t happen by Danish politicians making their people stupid by telling them the solution was simply more offshore drilling.)

What was the trick? To be sure, Denmark is much smaller than us and was lucky to discover some oil in the North Sea. But despite that, Danes imposed on themselves a set of gasoline taxes, CO2 taxes and building-and-appliance efficiency standards that allowed them to grow their economy — while barely growing their energy consumption — and gave birth to a Danish clean-power industry that is one of the most competitive in the world today. Denmark today gets nearly 20 percent of its electricity from wind. America? About 1 percent.

And did Danes suffer from their government shaping the market with energy taxes to stimulate innovations in clean power? In one word, said Connie Hedegaard, Denmark’s minister of climate and energy: “No.” It just forced them to innovate more — like the way Danes recycle waste heat from their coal-fired power plants and use it for home heating and hot water, or the way they incinerate their trash in central stations to provide home heating. (There are virtually no landfills here.)

There is little whining here about Denmark having $10-a-gallon gasoline because of high energy taxes. The shaping of the market with high energy standards and taxes on fossil fuels by the Danish government has actually had “a positive impact on job creation,” added Hedegaard. “For example, the wind industry — it was nothing in the 1970s. Today, one-third of all terrestrial wind turbines in the world come from Denmark.” In the last 10 years, Denmark’s exports of energy efficiency products have tripled. Energy technology exports rose 8 percent in 2007 to more than $10.5 billion in 2006, compared with a 2 percent rise in 2007 for Danish exports as a whole.

“It is one of our fastest-growing export areas,” said Hedegaard. It is one reason that unemployment in Denmark today is 1.6 percent. In 1973, said Hedegaard, “we got 99 percent of our energy from the Middle East. Today it is zero.”

Frankly, when you compare how America has responded to the 1973 oil shock and how Denmark has responded, we look pathetic.


source: Flush With Energy

UPDATE: RE: Cuba's the best example we have? Answer: No, it is not.

$this->bbcode_second_pass_quote('', ' ')The most energy-efficient countries are all similar to Japan. In many cases, they do not have access to abundant sources of energy and have sought efficiency as a matter of energy independence — in the case of (No. 2) Denmark as an urgent national priority since the oil shocks of the 1970s. Hong Kong, Ireland, Israel and Italy all make the list as well.

The U.S. doesn't. Using energy intensity as a measure, the U.S. is using slightly more than 9,000 BTUs per dollar of GDP. The top 10 countries use 7,500 BTUs or less. China uses 35,000 BTUs per dollar of GDP.


source: The most energy-efficient countries
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Re: Bailing out the auto industry and SUV owners

Postby Ibon » Wed 13 Aug 2008, 09:10:12

For the last two posters I would suggest that comparing Cuba to either the USA or Denmark is like comparing apples to oranges. Perhaps comparing Cuba to some of their neighbors with similar socio economic conditions would be a better choice. Dominican Republic, Haiti, Jamaica, or even Puerto Rico, Nicaragua, El Salvador.

Embracing some contradictions is certainly required if your going to discuss Cuba with an open mind. The last couple of posts fall into the classic polarized positions.
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Re: Bailing out the auto industry and SUV owners

Postby MrBill » Wed 13 Aug 2008, 09:27:18

That's me. Polarized. I only like what works. And I do not waste kudos on what doesn't just because they may have backward neighbors that are doing even worse. I am quite happy not living in Latam and certainly do not see them as examples to emulate. So I guess you can disregard my opinions because obviously my mind is not open enough to accept economic failure as a qualified success.
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Re: Bailing out the auto industry and SUV owners

Postby joelcolorado » Wed 13 Aug 2008, 10:36:18

I always am amazed at the ppl like Gore and on here complain about USA use of power but I see THEY are still online using electricity etc. Depends on whose ox is being gored.
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Re: Bailing out the auto industry and SUV owners

Postby Ludi » Wed 13 Aug 2008, 11:42:52

$this->bbcode_second_pass_quote('joelcolorado', 'I') always am amazed at the ppl like Gore and on here complain about USA use of power but I see THEY are still online using electricity etc. Depends on whose ox is being gored.

For me, it's sort of a matter of degree. I live in Texas, one of the biggest energy hogs in the entire world (might be beat by Dubai or somewhere like that). But I use about as much energy in my household (which includes a home business) as someone in Europe.

To a degree, unless we're living like Bangladeshis we're being hypocrites. It just depends on how much of a big fat stinking hypocrite one chooses to be. I'm probably a moderately plump, not too odiferous hypocrite. :)
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Re: Bailing out the auto industry and SUV owners

Postby Ibon » Wed 13 Aug 2008, 11:46:47

$this->bbcode_second_pass_quote('MrBill', '.') So I guess you can disregard my opinions because obviously my mind is not open enough to accept economic failure as a qualified success.

Mr.Bill, your opinions not only count and your example of Denmark or Japan are excellent counter arguments to those who want to take a romantic view of Cuba or see the post peak oil world as some Wendell Berry fantasy of agrarian bliss where we have banished industrial civilization and technology........BUT, you are polarized when your criteria for measuring success is framed only within economic parameters. Cuba is an excellent case study in a society which although is an economic failure, is very rich in social capital and resourcefulness and intelligent organization of the optimal use of their limited resources. The fact that those limited resources stem from a system which is an economic failure does not discount what they have accomplished.

If you were going to send delegations around the world to help developing countries cope with the post peak oil world you certainly might want to include a few Cuban urban planners and permaculture specialists in tropical agriculture along the technological expertise from countries like Denmark or Japan. Don't you think so Mr. Bill?

Let's assume an optimistic scenario that 25% of the population of the United States become disenfranchised citizens post peak oil without the opportunities to participate in the good life that the other 75% will continue to enjoy with the help of some of the technological innovations that will come out of our policies to fight resource constraints. Disenfranchised Americans are and will be living socio economically increasingly under similar conditions many Cubans live in today. Think Katrina. Now isn't the Cuba experiment post peak oil instructive and perhaps valuable as an important component of solutions going forward?

The analogy on the energy front is that there are no silver bullets to solve our liquid fuel crisis but instead many silver bb's .

Isn't what Cuba is doing and what Japan and Denmark is doing part of that rich tapestry of solutions??

Mr.Bill, come on now, step out of your idealogical box. The same goes for all you Cuba lovers who think that country is full of happy campers.
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Re: Bailing out the auto industry and SUV owners

Postby joelcolorado » Wed 13 Aug 2008, 11:54:02

They are so happy in cuba they take boats and risk their lives to bring that happiness to the USA
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Re: Bailing out the auto industry and SUV owners

Postby Ibon » Wed 13 Aug 2008, 12:03:48

$this->bbcode_second_pass_quote('Ludi', ' ') It just depends on how much of a big fat stinking hypocrite one chooses to be. I'm probably a moderately plump, not too odiferous hypocrite. :)

Sometimes I love you Ludi.......
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Re: Bailing out the auto industry and SUV owners

Postby MrBill » Thu 14 Aug 2008, 02:30:29

You're right, Ibon, the Cubans have managed to adapt to a reality that has been largely forced on them inspite of their leaders not because of their leaders.

Whenever I criticize I criticize governments not the people. People are people. I can get along with ordinary Iranians or Palestinians or Israelis or Venezueleans, but still harshly criticize their governments and their actions.

Just like I am Canadian, but I feel perfectly free to collectively criticize Canadians and their government if and when I think they are going in the wrong direction. Especially their whining, complaining and relying too heavily on the government to solve all their problems for them. I can hardly read ctv.ca or cbc.ca news stories and the related comments by readers without feeling slightly disgusted by the comments, which typically criticize any and all initiatives, and start something like "really, we live in a rich country, the government should do something about (insert problem)...."

That is not ideology unless somehow fiscal conservatism and social liberalism combined with a realization that nothing is free and that rights and freedoms come with obligations and costs counts as an ideology? If so then welcome to the Church of MrBill! ; - ))
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Re: Bailing out the auto industry and SUV owners

Postby halcyon » Thu 14 Aug 2008, 09:15:37

MrBill, good point on Denmark. However, we are still talking of different things.

Denmark did what they did over a period of 25 years after an oil PRICE shock that then eased. Cuba did what they did over 5-10 years in a face of an oil SUPPLY shock that lasted quite a time for them. The economic conditions were also different. So, different shocks, different responses.

I like the Denmark model myself, and it's closer to the OECD countries. I have no romantic notions about Cuba.

However, if we hit a global declining net exports of 5% p.a. or more in a few years, then any type of Denmark approach might not be feasible. We should have Denmarked ourselves two decades ago. IF/when TSHTF, it may be way too late. It all of course depends on so many factors, that it's impossible to forecast.

In the end, we may have to mix our own brand of magic elixir to fix our own disease as it may not come only in the form of PO, but along other converging problems (AGW, economic crisis, etc). Time will tell, but it's good to stay cognitively flexible and open for any tool that fits the situation, once it starts evolving.
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Re: Bailing out the auto industry and SUV owners

Postby MrBill » Thu 14 Aug 2008, 09:25:54

I kind of like the term Denmarkation based on the word demarcation as in we should have Denmarkated our economies from reliance on external imports of energy a generation ago after the first OPEC supply shocks! ; - ))

I should be clear about my expectations. Denmark or Japan is what you might get if you plan ahead. Cuba or Zimbabwe is what you get by default if you do not plan ahead. It is the default option. Just let your economy become a Haiti and let the people adapt as best as they can.

That, of course, is not something that I would aspire to. But that is also not to say that this is where most of the world is headed post peak oil. Collectively we have not taken the necessary steps to Denmarkate our economies, so we are still too reliant on foreign imports of oil that are in any case on the backward slope. What is left is perhaps only regional and local solutions based on their experiences.
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Re: Bailing out the auto industry and SUV owners

Postby yesplease » Sat 06 Sep 2008, 15:32:12

$this->bbcode_second_pass_quote('Canuk', 'T')here are threads already on EV's that go into far more detail but they have significant issues beyond the tooling costs such as electricity, infrastructure, material restraints, etc. Switching to EV's would require enourmous investments in infrastructure and would require a significant time frame to implement - it is far simpler to use our existing infrastruture more effciently.
What electricity, infrastructure, and material constraints?
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Re: Bailing out the auto industry and SUV owners

Postby cube » Sat 06 Sep 2008, 16:31:38

$this->bbcode_second_pass_quote('MrBill', 'I') should be clear about my expectations. Denmark or Japan is what you might get if you plan ahead. Cuba or Zimbabwe is what you get by default if you do not plan ahead. It is the default option. Just let your economy become a Haiti and let the people adapt as best as they can.
hmm unfortunately planning only works if you have the option of making changes.
There are certain aspects of a nation's economy that are so firmly held in place they simply can NOT be change or at least not without a catastrophic loss.

For example once a freeway gets built you're pretty much stuck with it for the next 30 years. Regardless of what happens to the economy, hell or high water once a freeway is in place then by gosh it's going to stay that way for a long time! Suburbia is also like this and we all know that public transit and suburbia is like oil and water, they do not mix.

However not to sound all doom and gloom,
While we may not be able to swap out a freeway in exchange for an electrified passenger railroad (at least not anytime soon) we do have the option of --> driving smaller cars.
How much of a financial loss to the car companies and the "ripple effect" to the economy if everybody decides to drive a car half the size of an SUV remains to be seen.
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Re: Bailing out the auto industry and SUV owners

Postby Ibon » Sat 06 Sep 2008, 17:07:37

The smaller cars suddenly don't look so small anymore when all the other cars around you are the same size.

Auto manufacturers can put all kinds of luxury gadgets and amenities to make more profitable models.

A hummer drove by us the other day. First one I have seen on the road since awhile here in Seattle. It looked embarassingly out of place. I think the drivers either are going to sell it or move to Texas.

It is very unpatriotic to drive around with that vehicle as long as such a high percentage of profits for gasoline flow out of the country.

More and more people are beginning to get this even though they hate to admit it.
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Re: Bailing out the auto industry and SUV owners

Postby mos6507 » Sat 06 Sep 2008, 20:33:23

$this->bbcode_second_pass_quote('cube', '[')b]we all know that public transit and suburbia is like oil and water, they do not mix


Speak for yourself.
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Re: Bailing out the auto industry and SUV owners

Postby cube » Sun 07 Sep 2008, 00:07:13

$this->bbcode_second_pass_quote('Ibon', 'T')he smaller cars suddenly don't look so small anymore when all the other cars around you are the same size.
*looks at location*
I live in the "U" district.
I'm quite sure you know what that is. I'll let the other forum members guess what "U" means. :twisted:

Funny that you mentioned it because I just saw a hummer driving along "the Ave" today.
I can't speak for the rest of the nation but you're more likely to see a smart car then a hummer in Seattle.
The issue I have with car manufactures is they really aren't making fuel efficient cars.
Even the smart car has an embarrassing
City/highway (mpg) == 33/41 (EPA 2008)
I'm guessing the reason for the poor efficiency is because the engines are configured for performance that and also being weighed down by a myriad number of fancy electronic options like power windows and air conditioning.
Even the much touted hybrid cars gulp more gasoline then the technologically primitive but lean cars of the late 1980's.

The biggest change I expect to see in the near term (now till 30 years) will be cars getting much much smaller. Infrastructure changes will happen later.
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Re: Bailing out the auto industry and SUV owners

Postby Ibon » Sun 07 Sep 2008, 01:34:42

$this->bbcode_second_pass_quote('cube', '
')I live in the "U" district.
I'm quite sure you know what that is. I'll let the other forum members guess what "U" means. :twisted:


I live part time in Madrona, within an hours walk of the U district.

I met an old republican farmer the other week in Idaho. We talked about fuel prices and government incompetency and it was actually quite enlightening how much we had in common in spite of our divergent political views.

He mentioned to me that his father in the 1950-s had a chevy that was a V8 with a four barrel carburator that got 21 miles to the gallon. He said to me, "How is it possible that these SUV's today get almost half the gas mileage of the car his father drove a half century ago?".

That comment really struck me.
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Re: Bailing out the auto industry and SUV owners

Postby yesplease » Sun 07 Sep 2008, 02:06:29

$this->bbcode_second_pass_quote('cube', 'E')ven the much touted hybrid cars gulp more gasoline then the technologically primitive but lean cars of the late 1980's.
Only because the tests of those early 80s cars were much more forgiving. According to the adjusted EPA estimates a Civic HF coupe from 85 gets worse mileage than a Prius even though it's a half ton light, wayyy smaller, is slower IIRC, and has next to nothing in the way of creature comforts.

Granted, if we cut out all the fat we could have hatches that can pull 80-100mpg, but it isn't like cars from the early 80s were spectacularly efficient.
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Re: Bailing out the auto industry and SUV owners

Postby joelcolorado » Sun 07 Sep 2008, 10:11:57

I saw an engineer on TV and he had a Civic and had put on ugly metal tail and covered the wheels and put on a front air lower dams, etc. Changed the aerodynamics and went from 35 to 70 mpg. He was telling that the cars of 1921 have the same aerodynamics of todays cars.

I have read documentations about that before so no wonder we dont get better mileage.
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Re: Bailing out the auto industry and SUV owners

Postby MarkJ » Sun 07 Sep 2008, 10:38:01

$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('cube', 'E')ven the much touted hybrid cars gulp more gasoline then the technologically primitive but lean cars of the late 1980's.
Only because the tests of those early 80s cars were much more forgiving. According to the adjusted EPA estimates a Civic HF coupe from 85 gets worse mileage than a Prius even though it's a half ton light, wayyy smaller, is slower IIRC, and has next to nothing in the way of creature comforts.

Granted, if we cut out all the fat we could have hatches that can pull 80-100mpg, but it isn't like cars from the early 80s were spectacularly efficient.


Yep. The revised 2008 EPA testing methodology used to estimate fuel economy (aggressive acceleration, speeds up to 80 MPH, A/C usage and low temperature cold start drive cycles) has lowered MPG estimates substantially. The revised testing methodology even punished the highly efficient diesel powered vehicles like the 50 state legal Volkswagen Jetta TDI which is rated @ 29 mpg city and 40 mpg highway by the EPA, although real world fuel economy may be substantially better.

Two of my sisters currently own Toyota Prius Hybrids. Their city/village/town fuel economy is incredible in comparison to the Honda Civics I bought for them years ago.
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