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HOME arrow - Privatization arrow The King of Sproil
The King of Sproil
Written by Scott Silver   
Friday, 30 December 2005

I suppose I should be thankful that Randal O'Toole is no longer spending his days pushing recreation user fees as his preferred mechanism for fixing the USFS. In fact, I am delighted that he's largely moved on from public lands issues --- though I deeply regret that he has dedicating himself to being the King of Sproil.

That said ..... and knowing Randy's fee-proclivities, I wonder how long it will be before he jumps onto the Congestion Pricing  (or Differential Pricing ) bandwagon which would, of course, be a natural fit. When he does, will the many conservationists who have been promoting congestion pricing (sometimes called Value Pricing) stick to their free-market guns? Or will they feel unclean, being in bed with Randy.

I hope folks will read how Randal's latest screed (appended). If you should wonder who pays him to write this material, here's the answer . If you've interest in reading more about the multitude of organization like Randal's that are supporting sprawl and opposing public transportation,  (i.e., the company Randy's keeps), here's a useful resource.

Scott

PS... Silly me. I didn't until just this moment, think to GOOGLE for the combination "Randal O'Toole" AND "congestion pricing". Had I done so, I'd have seen that there are several hundred hits.

--- begin quoted ---

Chicken Littles   

Central planners delight in clucking that the world's oil is drying up and fuel prices are headed sky high. Even if true - a big if - their solutions to curb America's demand for personal mobility won't fly.

 By Randal O'Toole - Contributing Writer


Is the world about to run out of oil? And if it does, will Americans move from low-density suburbs back to high-density cities and get around by streetcar and light rail instead of by car?

According to the peak oil hypothesis, world oil production is about to top out and gasoline prices will soon rise above $20 a gallon. Oregon land-use planners use this theory to help justify programs that make life difficult for Oregon families who get around by automobile. Though Oregonians drive for nearly 90 percent of passenger travel, the Land Conservation and Development Commission (LCDC) has told the state's major cities to somehow reduce per-capita driving by 10 percent.

In response, Portland and other cities are increasing traffic congestion by promoting higher-density housing, reducing roadway capacities and making parking difficult. Reducing congestion, planners say, would simply encourage more driving and decrease the number of people riding expensive light-rail trains.

One of the chief proponents of this view is James Howard Kunstler, author of the 1994 book "The Geography of Nowhere: The Rise and Decline of America's Man- Made Landscape," and "The Long Emergency: Surviving the End of the Oil Age, Climate Change, and Other Converging Catastrophes of the Twenty-first Century," published earlier this year.

Kunstler thinks that suburbs, big-box stores and other features of automotive civilization are "trashy and preposterous." He is overjoyed to think that the end of oil will force Americans to stop driving and move back to high-density cities.

Yet Kunstler's dream depends on four separate claims:

1. We are rapidly running out of oil and fuel prices will soon become unaffordable for ordinary auto drivers.

2. There are no substitutes for oil for powering automobiles.

3. Higher prices will necessarily mean less driving.

4. Less driving will favor high-density cities over low-density suburbs.

If any one of these statements is wrong, then the high costs planners are imposing on Oregon commuters and families are pointless. Yet a close look reveals that all four contentions are probably wrong.

The idea that we will soon run out of oil is highly questionable. Past claims that oil supplies are running low have usually proven wrong. In 1920, the U.S. Geological Survey officially estimated that the U.S. had just 6.7 billion barrels of oil left in the ground. Since then, the nation has produced nearly 200 billion barrels and still has more than 20 billion barrels of proven reserves. It is worth noting that all major fluctuations in fuel prices in the last 50 years have been political and not related to actual oil supplies in any way.

Geologists estimate the world has about a trillion barrels of "proven reserves." But this only includes what is known as "light oil," that is, oil that is easy to pump from the ground. Light oil generally costs about $5 to $20 a barrel to extract, and higher prices simply represent profits for oil companies and oil-producing nations. Economists project that a trillion barrels will last 30 years or so.

But light oil is not the only oil in the ground. Alberta has at least 1.8 trillion barrels of "heavy oil," which is thicker and more expensive to extract and refine than light oil. Venezuela has 1.2 trillion barrels, and even more heavy oil can be found in Australia. Heavy oil becomes feasible when oil prices reach $40 a barrel, and Alberta has already started working some of its heavy-oil fields. The world has enough heavy oil to last at least 50 years after the light oil runs out.

The next step is to turn to oil shale, of which the largest deposits are right here in the United States. Wyoming, Colorado and Utah have at least 2.6 trillion barrels of oil shale, and another trillion barrels or more can be found in other parts of the world. Oil shale may become feasible when prices reach $100 a barrel, and it could extend world supplies another 50 years. Moreover, experience indicates that, as we turn to heavy oil and oil shale, new technologies will reduce the costs of extracting these energy sources.

Even prices of $100 a barrel should not frighten motorists because increases in gas prices are not directly proportional to oil prices. Between 1971 and 1981, inflation-adjusted oil prices more than quadrupled but gas prices increased by just 76 percent. By 1990, oil prices were still twice 1971 levels, yet gasoline prices were just 10 percent more than in 1971.

Eventually, oil will get expensive, though it may take a century or more. For Kunstler's argument to be valid, however, he also has to prove there are no substitutes for oil. "No combination of alternative fuels will allow us to run American life the way we have been used to running it," he declares.

In fact, there are plenty of substitutes. The first one is simple: more energy-efficient cars. The average American car today goes 42 percent more miles on a gallon of gas than a car in 1970. Hybrid-electric cars are only one way to make cars even more efficient. Americans bought gas-guzzling SUVs in the 1990s because gas was cheap. If gas prices were to permanently rise, Americans could easily double the fuel economy of their cars.

Other potential power sources include hydrogen, biodiesel, ethanol from corn, solar power and even coal gasification. Though we cannot guess which of the many alternatives they will choose to fuel them, Americans will still drive vehicles on four tires two and three hundred years from now.

Two technologies that will never replace petroleum-fueled autos are light-rail transit and streetcars. Most people will just not give up the mobility provided by the automobile for a slow, clunky train that doesn't go where they want to go. This explains why, despite all the hype, rail transit carries less than 1 percent of Portland-area passenger travel.

Whatever the source of energy, Kunstler assumes higher fuel prices will mean less driving. This is also questionable. Over the past 50 years, Americans have consistently spent about 9 percent of their incomes on automotive transportation. When fuel prices declined, we did not spend less, we just spent our savings on bigger, more luxurious cars. When fuel prices went up, we did not increase our spending, we just bought more fuel-efficient cars.

In other words, when gas prices rise, Americans trade off luxury for fuel economy. Perhaps they get a six-disk CD player instead of a 12-disk, or a manual lumbar support instead of an electric one. While people may respond to short-run price increases by driving a little less, in the long run they simply cut back on other automotive expenses.

If anything limits the amount we drive, it is not the price of fuel but the amount of time it takes to get somewhere. By increasing congestion, Oregon planners may slightly reduce per-capita driving. But in the long run, employers will respond by moving somewhere that allows their employees and shippers to travel without wasting so much time and fuel in traffic.

Finally, if fuel ever gets really expensive and there are no substitutes, Kunstler presumes Americans would respond by moving into the high-density, mixed-use communities that Portland planners favor. Kunstler thinks this is "a glorious way to live," but not all Americans agree. In fact, in a recent poll, 82 percent of Americans aspired to live in a larger home in the suburbs while only 18 percent wanted to live in the city closer to their work, public transportation and shopping.

While high fuel prices might lead some to move back to the cities, others could choose a different course. More people might telecommute, allowing them to move to small towns or rural areas. High fuel prices might drive more jobs to suburban or exurban areas where congestion, and the amount of fuel it wastes, is lowest. High travel costs might even favor one-stop shopping centers such as Wal-Mart and Fred Meyer over the smaller shops that planners like because people can make their purchases in only one trip.

One place to see how high prices affect people is Europe, where extreme fuel taxes push gasoline costs to $5 or $6 a gallon. Yet Europeans drive more and more every year, European cities are rapidly suburbanizing, and big-box stores are popping up everywhere. Even as planners try to make Oregon look more like Europe, Europe is looking more like the U.S.

This suggests that all the costs planners are imposing on Oregonians - the congestion, the unaffordable housing, the restrictions on our freedom and property rights - are for nothing. Ironically, Portland-area congestion wastes more than 20 million gallons of fuel each year, not to mention 40 hours of the average commuter's time. Yet planners plan to create still more congestion in the hope that a few more people will take the light rail.

Someday oil shortages may cause gasoline prices to rise, but it is not likely to be anytime soon. Far from devastating our economy, changes in energy supply will lead Americans to become more fuel-efficient and explore new energy technologies. If anything devastates our economy, it will be the intrusive government regulations and expensive rail-transit systems that planners want to impose on our cities.

--

Randal O'Toole ( This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ) is an economist with the Thoreau Institute (ti.org) and author of "The Vanishing Automobile and Other Urban Myths."

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