Tuesday, May 25, 2004

Boycotting the oil companies is pretty naive, since one has to buy it eventually anyway. A better far better idea (IMHO) is to fire the current crop of politicians whose endless myopia has contributed so heavily to the current mess.

Then again, even politicians & society had done a better job on energy issues, we'd probably be undergoing a price spike up to $1.50, and complaining just has hard......

I've been looking up information on gasoline prices. First point: after you adjust for inflation, todays gasoline prices are no big deal. The long term average since 1919 is about $2/gallon (adjusted for inflation). Here's an interesting graph (I hope this comes through!):

Another feature of gas prices is that the overall trend is downward (after adjusting for inflation), as production has become more efficient. Also, there is a trend upward since 1997.

What is not obvious here is that US production peaked around 1978 (if I remember right), resulting in increasing dependance on imported oil since then. With their increasing market power, OPEC muscled up oil prices in the 70's & 80',s resulting in the 1981 peak oil price (I sure remember paying $1.50 a gallon in '81--which is equivalent to nearly $3/gallon in today's dollars).

The other thing impacting the graph is the jump in automotive fuel efficiency that was legislated in the late 70's. Consequently, the average fuel efficiency of new cars peaked at 22.1mpg in 1987. As those fuel efficient cars replaced older, less efficient cars, demand for oil was greatly reduced. Improved efficiencies in supply contributed as well, but the bottom line is that without the fuel efficiency gains, our demand for oil would have been much higher, and (by the law of supply & demand), so would gasoline prices.

Obvious on the graph is an increasing trend in fuel price over the last few years. A big part of the problem there is that the fuel efficiency of new vehicles has fallen by 6% since 1987 (largely thanks to increased sales of light trucks & SUVs). Increasing demand = Increasing prices.

I figure that with our 2 drivers and 3 cars, fuel efficiency standards save us at least $2000 to $4000 per year (it's hard to say, because it's hard to know how much fuel prices would be without the standards). The savings are both direct & indirect: direct saving is through buying less fuel, indirect saving is through lower prices for fuel due to the lower demand. Not to mention lower prices for heating oil, and the prices of things transported using oil.

With 90 million American households, the automotive fuel efficiency standards easily save the American economy more than $200 billion per year (that would be about 2% of GDP). (This also partially explains the booming economy in the 90's)

So, instead of boycotting oil companies, a far better idea would be to fire the current crop of politicians who have been stonewalling any increases (or reforms) of fuel efficiency standards. Congress, in their infinitesimal wisdom, has even forbid the energy department from studying the problem of improving (or reforming) automotive fuel efficiency standards.

The National Academy's of Sciences recently published a report (I have a draft copy) on automotive fuel efficiency standards. Current standards save about 2.8 million barrels of oil per day, and with current technology, fuel efficiency can be increased by about 30-40%.

What does this mean? Well, the Arctic National Wildlife Reserve might yield about 1 million barrels of oil per day, or about 5% of US energy needs. (Or ZERO. The amount of oil in ANWR is somewhat a moot point, because it has to come through the trans-Alaska pipeline, which limits capacity to about 1 million barrels/day. The pipeline is also an 800 mile long terrorist target, and if Saudi Arabia ever falls to the fundamentalists.......). Since US cars & trucks burn about 8 million barrels/day, every 12.5% increase in fuel efficiency is worth about one ANWR.

My congressman thinks the presidents plan to save "6 billion gallons of gas over the next 5 years" is great. I think he takes his electorate for fools, since no one uses such large numbers of such small units unless they are trying to deceive. Translated, it comes down to an average of about 10 gallons per year per vehicle, and is less than a 1% increase in fuel efficiency.

Here's a Washington Post editorial on the gasoline prices which expresses some of my views (namely, that the lust for low fuel prices has been pretty darn foolish).


And another:


These are editorials, and hence are more opinion than journalism. But they seem to cover the bases.

Here's an another excellent article on energy issues. It's a bit old, but still timely. The author's contention is that energy efficiency would play a major role in shifting US energy use. As a statistician, nothing impresses me like accurate predictions, and the 1st graph is particularly impressive since it shows the accuracy of predictions the author made in 1976.


At any rate, I'm already boycotting Exxon oil because of their stance on climate change. They are trying the same strategy that the tobacco companies did about 20 years ago, by attacking the science and the scientists. It's crazy when you think about it.

And I'm expecting oil prices to drop some after awhile, but to show a long term increase. Existing cheap oil reserves are being depleted, and potential future oil reserves are either high cost or high risk (like Saudi Arabia & Azerbajan (sic)).

such are my thoughts & rantings.... I'll post this on my weblog for posterity.

-----Original Message-----
Sent: Thursday, May 20, 2004 1:21 PM
Subject: FW: try anything

>Subject: FW: try anything
>Okay everyone, I don't know if this is just a sneaky ploy from one of their
>competitors or if this is real. All I know is I drive an SUV and I'm in the
>market for an economy car because gas is killin' me. I am willing to try
>anything that might work


> I hear we are going to hit close to $3.00 a gallon by the summer.

> Want gasoline prices to come down? We need to take some intelligent,
> united action. Phillip Hollsworth, offered this good idea: This makes
> MUCH MORE SENSE than the "don't buy gas on a certain day" campaign that
>was going around last April or May! The oil companies just laughed at that
>because they knew we wouldn't continue to "hurt" ourselves by refusing
>to buy gas.

>It was more of an inconvenience to us than it was a problem for them.
> BUT, whoever thought of this idea, has come up with a plan that can
>really work. Please read it and joi! n with us!

> By now you're probably thinking gasoline priced at about $1.50 is super

>Me too! It is currently $1.97 for regular unleaded in my town.

> Now that the oil companies and the OPEC nations have conditioned us to
> think that the cost of a gallon of gas is CHEAP at $1.50 - $1.75, we need
> to take aggressive action to teach them that BUYERS control the
> marketplace....not sellers With the price of gasoline going up more each
> day, we consumers need to take action. The only way we are going to
>see the price of gas come down is if we hit someone in the pocketbook by
>not purchasing their gas! And we can do that WITHOUT hurting ourselves.


> Since we all rely on our cars, we can't just stop buying gas. But, we
>CAN have an impact on gas prices if we all act together to force a price

> Here's the idea: For the rest of this year, DON'T purchase ANY
> gasoline from the two biggest companies (which now are one), EXXON and
> MOBIL. If they are not selling any gas, they will be inclined to reduce
> their prices. If they reduce their prices, the other companies will have
> to follow suit. But to have an impact, we need to reach literally millions
> of Exxon and Mobil gas buyers.

Monday, May 17, 2004

this is a hoot....

Go to www.google.com and enter the keyword "weapons of mass destruction" in the search engine field. Click on "I'm feeling lucky" and carefully read what's coming up.

Wednesday, May 12, 2004

Mom forwarded me the latest chain email (see below) whining about how much foreign aid the USA gives to countries which don't vote with us the UN. Here's my 2 cents....
Hi Mom,

Kind of over simplified. I wonder what the break down is between military related aid & humanitarian aid? Often it's the military aid that the governments want & which keeps them in power & works as a bribe for them to vote our way. And which all to often causes more trouble in the future (After all, 20 years ago, our government was sending weapons & other support to "freedom-fighters" like Osama Bin Laden in Afganistan. Too bad they turned out to hate us as much as they hated the Soviets, but I guess our government think it relevant at the time.)

(NB: I know that Egypt gets so much aid as part of a peace treaty between them & Israel, so that's really a separate issue).

And it's amazing that a big poverty stricken country like India with around 1 billion people gets only about 200 million in aid (I bet it's mostly military too). That's less than $1 per American per year, or <$2 per American taxpayer per year.

The email also skips the fact that the US is one of the stingier Western countries: we spend <1% of our Gross Domestic Product in foreign aid--which is the low end of the spectrum. At the high end is some of the Scandinavian countries at >2% of GDP (and as far as anyone can tell, >2% is what is needed).

Of course, the periodic emails like this one that circulate boasting about American generousity and whining about how excessive it is, always focus on total figures (not per capita), and never differentiate military aid from humanitarian.

One also has to consider how much worse things might be without the humanitarian aid to other countries. Very often the common people are friendly to the US, in no small part due to the humanitarian aid. (Unfortunately, too many others are unfriendly to the US, in no small part due to the use of the military aid against civilians).

One great thing about my job is that I often get to meet talented & bright people in various travels. At one investigator meeting, I ate dinner with a Doctor from Pakistan who fled because of trouble with local version of the taliban. One of the religous thugs had cut his wife's arm with a knife in the marketplace because her sleeves were too short, the local police were too scared to prosecute, and by the time the story ended, a collegue was shot dead, and he had to flee the country. He guessed that only about 5% of the people actually sided with the taliban, but the rest of the population was too intimidated to stand up against them. Between government corruption, the religious thugs, the poverty, etc., etc., the country is a basket case.

What does this have to do with the UN & foreign aid? I'd rather the government of Pakistan oppose the USA in public forums like UN votes and work with us behind the scenes in dealing with the real problems. And I'd like to increase my share of the foreign aid to Pakistan from $0.04 to over a dime , as long as the aid goes to win the hearts & minds of the people (but not just to prop up a corrupt government which is worsening the problems). Since Pakistan has both nuclear bombs, and a lot of Islamic militants who want to use those bombs against the West, cutting foreign aid is about as "penny-wise, pound-foolish" as one can get.

I guess some people just don't "get" what 9/11 was about, and what is going on elsewhere in the world.....

-----Original Message-----
Sent: Wednesday, May 12, 2004 7:56 AM
Subject: FW: How They Vote In the UN

>Below are the actual voting records of various Arabic/Islamic States which are recorded in both the US State Department and United Nations records:
> Kuwait votes against the United States 67% of the time. Qatar votes against the United States 67% of the time. Morocco votes against the United States 70% of the time. United Arab Emirates votes against the U. S. 70% of the time. Jordan votes against the United States 71% of the time. Tunisia votes against the United States 71% of the time. Saudi Arabia votes against the United States 73% of the time. Yemen votes against the United States 74% of the time Algeria votes against the United States 74% of the time. Oman votes against the United States 74% of the time Sudan votes against the United States 75% of the time. Pakistan votes against the United States 75% of the time. Libya votes against the United States 76% of the time. Egypt votes against the United States 79% of the time. Lebanon votes against the United States 80% of the time. India votes against the United States 81% of the time. Syria votes against the United States 84% of the time. Mauritania votes against the United States 87% of the time.

US Foreign Aid to those that hate us: Egypt, for example, after voting 79% of the time against the United States, still receives $2 billion annually in US Foreign Aid. Jordan votes 71% against the United States and receives $192,814,000 annually in US Foreign Aid.

Pakistan votes 75% against the United States receives $6,721,000 annually in US Foreign Aid. India votes 81% against the United States receives $143,699,000 annually in US Foreign Aid.

Perhaps it is time to get out of the UN and give the tax savings back to the American workers who are having to skimp and sacrifice to pay the taxes.

>Pass it along. Everyone needs to know this. Might even mention it to your congressman, who knows it anyway...what a disgrace...no wonder the
world has no respect for us!

Tuesday, May 11, 2004

Some of you may have seen the Republican add attacking John Kerry for "flip-flopping" with the quote from Kerry's own mouth:

"I actually did vote for the $87 billion - before I voted against it"

Sounds ridiculous? Well read below for the rest of what Kerry had said.....

John Kerry
"Ladies and gentlemen, the president made the decision as to when to send our troops to war, no one else - he decided the date," he began. "And on the date they went into Iraq, they didn't have the armament on the Humvees, the armored doors, they didn't have the equipment they needed in some regards, and they didn't have the state-of-the-art body armor at that moment when they went in.

"Secondly, this is very important, I actually did vote for the $87 billion - before I voted against it. Joe Biden and I thought this: we thought since a lot of mainstream, regular folks in America were sharing a big burden of this war, we thought since those families are sacrificing, that just maybe the wealthiest people in America would be willing to also contribute, and so Joe and I brought an amendment to the $87 billion, and we said, `This should be paid for now, not adding to the deficit,' and the way we should pay for it is say to the wealthiest 1 or 2 percent of Americans, instead of accepting $690 billion of tax cuts over the next 10 years, wouldn't you just be willing, in the spirit of patriotism and sacrifice, to just take $600 billion?

"And you know what? The president said no; the Republicans voted no."


Friday, May 07, 2004

I have an Uncle who holds some strong opinions. He wrote the following in an email, and I've got about 3 case studies in my piles illustrating the kind of bias in statistical analyses that are so common.

Below is his comments, my explaination, and a discussion of a spectacularly biased analysis from 1998.


An Uncle wrote:

I also have studies statistics and have use numbers to make a lot of decisions. It works!! But only when you use the numbers as numbers were meant to be used--without trying to prove a theory that you already have about the outcome. I have used numbers to determine a lot of things about costs of military systems and times to scrap systems instead of updating them and numbers only lie when political pressure comes to bear on the solution. For example, a system that should be scrapped will close a base in a powerful senator's state. I fear that the same kind of thing happens a lot when the data you need comes from sources that can easily be altered or subjectively changed as necessary to prove a point. Add to that, when analysts have as liberal a bias as you seem to have, the results can prove anything they say they do. For many years I felt that "Statistics" was a science but now I have concluded from what I see the liberal press trying to tell me about the world we live in, it has become worthless. It has about as much value to the future of this nation and the world as our education system and our legal system. In the real world the pendulum always swings so far in either direction and then comes back to reason. Talk to a liberal and if the swing is not going farther to the left, the world is going to end.


It's a fair criticism: many folks use skewed analyses to "prove" their point, regardless of their political orientation--even politically neutral folks. And it's not easy for casual observers to see the flaws in an argument, and unless you've got some insights into the processes that went into an analysis, it's hard to judge. As someone who makes a living from mathematics, I look for technical merits & fallacies, especially with an eye toward whether they are using appropriate techniques for the the data at hand.

And of course, often when all you have in front of you is a newspaper article, it is impossible to judge whether the analysis is competent or not; for that, I rely (as much as possible) on original articles from scientific journals, and (also if possible) other articles on the same topic, possibly reaching different conclusions.

Now for the rest of this post: back in '98 the Energy Information Agency published an estimate of the cost of the USA complying with the Kyota agreement on controlling CO2 emissions. As experts responsible for estimating the costs of energy costs of the nation given current conditions, they carried a lot of weight, and the estimated cost was whopping huge (though I don't remember what it was). One big problem though that was not noted: while they did a great job of say, estimating the cost of gasoline over a year given current supplies and trends, they had a history of being way off in longer term estimates. (For instance, they overestimated the cost of reducing sulfer emissions by a factor of 4!)

Below is an excellent analysis of the why the EIA CO2 study was so far off. It's a great case study of how analyses can be biased in subtle (or flagrent!) ways.


Date: Fri, 16 Oct 98 09:41:51 -0500
Subject: [EENet]: Romm review of EIA Climate study
Reply-To: eenet@esa-online.org


Several days ago an article from the Washington Post was posted to the list on the report from the Energy Information Administration on the projected economic costs of the Kyoto Protocol to the US. Below is an excellent critique by Dr. Joe Romm.
Jim Ball

FOR IMMEDIATE RELEASE CONTACT: Jon Coifman, 202/463-6670
WEDNESDAY, OCTOBER 14, 1998 Dr. Joe Romm, 202/483-1024

The Same Defective Methods by the Same Federal Agency Recently Overestimated Clean Air Act Costs by 400 Percent

A new 250-page study by the Department of Energy on the costs of meeting the global warming treaty is so riddled with economic flaws, analytical errors and outrageous policy assumptions that it is "rendered completely irrelevant," according to Dr. Joseph Romm, who recently left his post as DOE's top official in charge of energy efficiency and renewable energy technology.

The analysis was prepared by the Energy Information Administration (EIA), which is known equally among energy economists for both excellent short-term forecasting and grossly inaccurate long-term prognostications, according to Romm.

"The new study continues EIA's history of erroneous long-range predictions, including their four-fold overestimate on the costs of reducing sulfur dioxide pollution just a few years ago," he said.

According to Romm, the EIA study wildly overstates the carbon price required to reach various levels of emissions reductions, resulting in grossly inflated projections for increased energy prices and short-term, transitional impact on economic output. Even with its built-in bias, the new study found the U.S. could meet the Kyoto treaty terms with "no appreciable change in the long-term [GDP] growth rate."

"The EIA analysis expressly forbids the market from reacting intelligently." said Romm. "They overestimate the costs and underestimate the savings offered by both low-carbon fuels and key alternative technologies, including cogeneration, fuel cells, and advanced end-use efficiency."
The study yields grossly inflated cost estimates because the EIA has:

-- Ignored a mandate from Congress, failing to model the actual treaty rules;

-- Arbitrarily prohibited all energy users from responding intelligently to market signals;

-- Barred all proactive government policies;

-- Frozen monopoly utility regulation for two more decades;

-- Ignored existing laws like the Clean Air Act;

-- Ignore or inaccurately modeled key technologies;

-- Used an economic model it knew was highly inappropriate;

-- Did all this knowing these are exactly the same reasons it overestimated the cost of clean air laws just a few years ago.

Fatal Flaws Undermine EIA's Analysis

The problem with EIA's economic analysis lies in the assumptions used by agency modelers, assumptions that are even more pessimistic than those in the deliberately bleak forecasts constructed by treaty opponents.

EIA Prohibits Emissions Reductions from Starting Until 2005.

EIA makes the highly unlikely assumption that we will wait until just three years before the Kyoto mandate kicks in 2008 -- to even start reducing emissions, forcing the economy to absorb sharper, more drastic cuts than necessary. And the delay means the abrupt changes will start from a higher emissions baseline.

In reality, energy intensive industries can and will make sensible, long-term capital decisions that dramatically reduce greenhouse pollution long before 2005, but EIA number crunchers forbid them from doing so -- forcing the economy in their model to turn on a dime. EIA effectively overrules the many voluntary reductions underway by companies like British Petroleum and the U.S. steel industry, which have pledged 10 percent emissions cuts from 1990 levels by 2010.

EIA Ignores Explicit Congressional Instructions, Kyoto Treaty Provisions.

By expressly prohibiting either anticipatory action or emissions cuts in their model until after 2005, EIA ignores the explicit instructions of the House Science Committee Members who commissioned the report to "assume that the United States will begin to respond by 2005 to both reflect anticipatory actions by industry and consumers, and to meet the Kyoto Protocol's Article 3.2 requirement that ‘Each Party included in Annex I shall, by 2005, have made demonstrable progress achieving its commitments under this Protocol.' " [emphasis added]

EIA Assumes There Will Be No Policies to Reduce Costs of Transition.

EIA further assumes that Congress will not pass a single law, tax break or other policies to make it easier and cheaper to reduce emissions. In fact, EIA ignores key policies and trends already underway that will sharply reduce costs:

EIA freezes current utility monopolies until 2020, even though 17 states and the U.S. Congress are already well on the way to deregulation, even though EIA acknowledges "this may not be appropriate in the near future" Besides reducing baseline rates, competitive electricity pricing will open markets for cleaner, more efficient technology.

EIA ignores tougher Clean Air Act standards already being implemented for ozone and particulate pollution that will sharply curtail the artificial price advantage now enjoyed by obsolete, inefficient coal power plants over cleaner, more efficient alternatives (including gas, cogeneration and renewables).

FATAL FLAW #4: EIA Ignores Technology Changes Already in the Marketplace

EIA ignores or artificially limits technologies that every other major study has indicated would play a major role in reducing the impact of Kyoto:

COGENERATION: Widely seen as a major opportunity for greenhouse pollution cuts, since existing ‘cogen' technology cuts carbon emissions by almost half with zero increase in energy costs. Even if delivered coal prices (the price of coal plus new carbon tax or permit prices) rise 70 percent and electricity prices double, adoption of this proven money-saver rises only three to four percent from baseline by 2010 -- and then stays flat until 2020!

RENEWABLES: EIA artificially constrains renewable power; even when carbon and electricity prices soar through the roof in the model, renewable market share hardly budges. Utilities are the only sector allowed by the model to begin planning investments before 2005, yet event with "perfect foresight" that coal prices will jump 350 percent, renewable capacity is only 10 percent higher than the baseline in 2010.

FUEL CELLS: Even in its most extreme scenario -- a carbon tax of $300 per ton and a doubling of conventional electricity prices -- EIA assumes that today's rapidly-evolving fuel cell technology will play no part in the power generating market for the duration of their analysis.

FATAL FLAW #5: EIA Uses Calculating Tool Rated "Highly Inappropriate" to Figure Costs

After building this set of restrictive assumptions, EIA applied them to a commercial short-term forecasting tool known as the DRI model. This tool is very reliable for short-term analysis, but is notoriously flawed when it comes to long-range accuracy. As economists Dale Jorgenson and William Nordhaus noted in April, 1997, with specific respect to global warming policy:

"For longer term projections [the DRI model] is highly inappropriate and has some important limitations that are well-known to the community of economic forecasters. For example, the DRI long term projections are extremely sensitive to assumptions about energy prices. This feature is totally at odds with most empirical work ... "

EIA Repeats Admitted Errors that Ruined Previous Forecasts

EIA makes the exact same mistakes it made just a few years ago when overestimated the cost of sulfur pollution cuts by a factor of four. EIA's accounting of what went wrong then is conveniently included in the new Kyoto report. The explanation applies equally to the new analysis:

"There has also been downward pressure on . . . costs because generators have taken actions to comply with the SO2 limitations earlier than anticipated."

"There has been more fuel switching . . . than previously anticipated."

"Finally, technology improvements have lowered the costs of flue-gas desulfurization technologies, or scrubbers . . . The cost of SO2 compliance was overestimated to a large extent because compliance relied on scrubbing, a relatively new technology with which there was little experience."
A virtually identical set of errors work together to vastly inflate the cost estimates in the global warming treaty analysis.

"EIA's study is wholly irrelevant and has no bearing on the actual impacts of the of the Kyoto treaty on U.S. markets of our economic activity," said Romm. "EIA has simply shown what it will cost if we use a brain-dead approach to meet the treaty."



Doonesbury has an excellent send up of the Blue-Red political divide. The series starts at the following link:


Monday, May 03, 2004

Check it out & compare these websites claiming to bring some balance to the media "culture" wars.

First is the newest:


A good example of their reporting is:


in which a columnist (Linda Chavez) is called to task for lying about calling John Kerry a "communist apologist". One can read Chavez's column, her denial, and then judge for oneself as to her honesty.

Contrast the 'just the facts' approach of mediamatters.org with it's well established 'conservative' counterpart, mediaresearch.org, which seems like it's more about editorializing than factual information.

Media research did post a decent description (and partial transcript) of Ted Koppel's recent Nightline program in which he read the names of our soldiers that died in Iraq.


The contributers seem to bend over backwards to read into Koppel's comments sinister liberal policy agendas, but one can read for themselves Koppel's statements in support of our soldiers, and judge for oneself.