April 28, 2008

New York State and energy

A few quick notes while everyone is asleep and all the animals are fed -

This morning's Ithaca Journal has an editorial on state laws and energy, citing bills that might make some small dent in the cost of a tank of gas. The ones that just plan to lower the taxes on gas seem unlikely to have much effect to me - I never noticed the prices on the Thruway dropping much below the surrounding stations despite the signs proclaiming reductions. I agree with the Journal that locking A9211 to be "held for consideration", probably forever, is ridiculous, yet another abuse of legislative procedure. I don't think Senator Winner's proposal for reducing the power of gasoline brands is likely to make a whole lot of difference either.

Gas prices march toward $4.
Gas prices march toward $4.

The problem with our gas prices, though, is not the oil companies, state or federal taxes, or (especially) the gas station owners. Sure, I'd like to see oil companies operate at a lower profit margin, but that's not the cause of our higher prices. The cause is simple: supply and demand. The "invisible hand of the market" doesn't always work in our favor.

We've built our nation and grown our economy on the assumption that energy costs will remain cheap. That lets us live wherever we want, taking advantage of cheap energy to drive to more exciting housing filled with all kinds of energy-using devices that make our lives easier or entertain us. Americans have taken this further than anyone else, but there are lots of people out there working to emulate us. Not only that, but they're using lots of energy to make things to sell us.

On the supply side, we still have plenty of oil and coal for now - but little room to grow, and what looks like a long slide toward more and more expensive energy. We've used up the best of our coal, though we still have lots left. On oil, new discoveries keep getting big headlines as saviors - but then a few days, weeks, or months later the reality of the new fields looks smaller, more expensive, and generally less bright. Production can't climb as fast as demand.

New York never had the Pennsylvania coal fields or even their oil fields, though we do have a bit of oil in western New York. We certainly have hydropower - think Niagara Falls - but we've blown way past that capacity. New York State as a whole is much more energy-efficient than the rest of the country, but that's largely because of the New York City area's concentration of services, especially transportation.

We're on the edge of a strange new world, one in which everything we've learned about energy for the past century and a half is going to change. We'll still have energy, even oil - but the prices aren't likely to come down over the long term. It's a good time to batten down the hatches and get ready for a long (probably slow) change in the way we live.

Update: This doesn't help.

Posted by simon at April 28, 2008 7:33 AM in ,
Note on photos