THE Oil Demand Thread (merged)

[MrBill]

Core demand for oil may be relatively inelastic in the short-term, but we have seen swings of 2-3% over the course of one month recently. That is significant as in the supply & demand which has been balanced, 2.5% of 85 mbps is around 2 mbpd. That translates into a large swing in prices based on trader's perception. Of course, that +/- 2 mbps extra supply can also disappear rather quickly if you have a natural disaster or terrorist attack that affects supply.

Most of our economy runs on just in time delivery. Reducing the supply chain to lower the cost of stocking inventory and in paying interest on unsold inventory. Higher oil prices do reduce demand as companies, UPS for example, examine their supply chains and try to make fewer, larger trips, instead of many, smaller trips. Things like free delivery also either get cancelled or a delivery surcharge is added which tends to reduce demand.

Driving for leisure also tends to be reduced when prices get psychologically higher. As many Americans have several vehicles, they may also chose to drive the one that gets better mileage. Teenagers may not be able to afford to go cruising on a Saturday night and may instead either stay home or go to a club. Substitution to a less energy intensive form of entertainment. This is all at the margins and does not affect core demand.

However, demand destruction also takes place at the secondary and tertiary levels. On one level what goods & services we forgo in order to keep driving, for example, movies, restaurants, non-essential shopping, etc. This reduced demand in the overall economy due to the choice to continue to drive versus consume. Then on the tertiary level as consumers buy less, less is made to replace inventory which was not sold. This reduces consumption of energy in manufacturing. Taken farther and you may have a recession as consumers save and do not spend. This reduces demand further.

So it is not true that oil is inelastic. Core demand is quite inelastic, but may vary by 2-3% in the short run. In the medium term lifestyle changes do have an affect of demand for energy. In the long run, as Jaws mentioned, the physical plant and energy saving assets replace less fuel efficient alternatives. Certainly Europeans have learnt to live with energy prices which are 2X higher than in America, so demand is not totally elastic, but they have made lifestyle trade-offs which are less energy intensive.

[lorenzo]

Thx Aahala and Jaws, and especially Mr Bill for the good examples of substitution and changing behavior.

I was wondering whether core demand wasn't changing very quickly as well. E.g. decisions are being made on replacing oil-fired power plants by more coal and even marginally, renewables. I understand that, e.g., when consumers massively decide to switch from heating oil to natural gas (heating is a core demand for oil, isn't it?), the problem of the inelasticity of "energy" demand in general isn't really affected, but the specific inelasticity of oil changes in such a case. This was the case in Europe, right after the 1991 oil price hikes.
The push towards more fuel efficient vehicles is another mid-term form of substitution as well - especially strong in Europe (less so in the US), which appears to have a more elastic demand. Gas-vehicles, and a push towards biofuels touches the core of oil demand.

(Does anyone have any good numbers on elasticity of demand in different countries over time?)

Finally, I was thinking more about the issue of "collective psychology" amongst consumers; people finally begin to learn from experience that over the long term oil has a volatile price. Maybe it's farfetched to give this as an example, but my sister just bought a new car, and the entire family, from my grandma to my dad all told her to radically choose for a super-fuel efficient one; we even had some kind of a family reunion about it where recent memories of retail price hikes were evoked!

So I think that given our collective experience with high oil prices over long periods of time, our collective memory may become a more serious factor in the drive towards substitution and the "mental" support of consumers for alternatives. Of course, that's just one factor, because as you've said, oil is definitely strongly linked to infrastructures, and these are far harder to substitute.

[untothislast]

One of the great things about these forums, is that if you approach other people's submissions with an open mind, you can learn a lot.

The one thing which troubles me, is that we're applying our main focus to the energy capacity derived from oil, when it's also important to consider that most of our material goods rely on derivatives - such as plastics.

I can well imagine a world learning to cope with less energy - or indeed developing new or alternative means of producing it - but unless we're considering going back to manufacturing everything out of wood and stone, what do we do when scarcity renders the price of our material goods prohibitive?

[donshan]

The important thing is that oil demand is only inelastic within a short timeframe. Over the long-run it becomes more elastic. That's true for any point in time. If the oil supply were to suddenly fall by half, the price would still shoot up catastrophically. But if the oil supply we to fall by half over 20 years, we would see much more elasticity.

Only if you use price to control consumption. During World War II the supply of gasoline available to the Civilian economy probably dropped by more than half. The price did not rise, because laws were passed to ration fuel to essential needs, and the price was fixed. This controlled economy not only worked, it soared to production levels that won World War II.

Applying that idea to coming fuel shortages, it "is possible" for example to give diesel trucks hauling food to the city priority on diesel fuel at acceptable prices to control food costs, while trucks hauling the non-essentials pay market prices.

We do this today, by subsidizing home mortgage interest which helps one sector.

I predict if times get tough the WWII model will return. If it becomes a choice of food availability vs. more McMansions I think the choice will be obvious and we will subsidize essentials. Just like high taxes on liquor and tobacco, higher taxes on wasteful energy products can force reduced demand for oil very quickly, and a fixed gas ration will drop the sales of Hummers immediately.

[MrBill]

One of the great things about these forums, is that if you approach other people's submissions with an open mind, you can learn a lot.

The one thing which troubles me, is that we're applying our main focus to the energy capacity derived from oil, when it's also important to consider that most of our material goods rely on derivatives - such as plastics.

I can well imagine a world learning to cope with less energy - or indeed developing new or alternative means of producing it - but unless we're considering going back to manufacturing everything out of wood and stone, what do we do when scarcity renders the price of our material goods prohibitive?

I am not a chemist. Introductory Organic Chemistry was the hardest two years of my life! However, I believe there are many organic feedstocks for plastics that are non-petroleum based such as carbon (C), hydrogen (H), nitrogen (N), chlorine (Cl) and sulfur (S). Of course, they may yield less than petroleum, so there is still an incentive to preserve oil for manufacturing instead of burning it. Think of all those old growth oak trees which would have made better furniture than firewood?

How Plastics Are Made

[donshan]

I am not a chemist. Introductory Organic Chemistry was the hardest two years of my life! However, I believe there are many organic feedstocks for plastics that are non-petroleum based such as carbon (C), hydrogen (H), nitrogen (N), chlorine (Cl) and sulfur (S)]

MrBill, you still learned some chemistry
My degrees are in chemistry, but I too struggled with Organic chemistry that is more like learning a foreign language than science. If you give a good chemical engineer enough investment capital, they could cook up all the plastic products we use without oil or natural gas. The problem always has been can you be price competitive with alternative methods? The cheapest way wins in the market.

For example, Peabody Energy ( A very large US coal company) just announced an industrial scale coal gasification project to make 35 Billion cu.ft/ of natural gas from coal. Natural gas is mostly methane-CH4. The process Peabody will use is old. Take carbon (C) from coal plus hydrogen from water (H2O) and you can make methane (CH4). Methane can be made into Ethane (C2H6) and so on to as long a hydrocarbon chain you want, even diesel fuel. Add in Cl and F from their salts, Add N from the air, sulfur (S) from the piles left over from de-sulfuring oil, and you can cook up most of the plastics made today. It will cost more than using natural gas that comes up the gas well already mostly methane and ethane. However as we get short on natural gas Peabody thinks it is time for coal to be competitive.

[untothislast]

Thanks to MrBill and Donshan for following up on my query. A I said, you can learn a lot in this place!

[MrBill]

I used to say I like Chemistry so much, I took it twice!

And, what about sources of organic plastic like corn starch? Are they price competitive or do they produce inferior quality plastic (i.e. limited uses)?

[donshan]

And, what about sources of organic plastic like corn starch? Are they price competitive or do they produce inferior quality plastic (i.e. limited uses)?

Corn starch is a carbohydrate. Look at that word "carbohydrate". All carbohydrates are complex molecules of carbon, hydrogen, and oxygen. They can be converted into a wide variety of other molecules. Ethanol fuels are basically made from corn starch.

As an aside, the human body reduces ALL carbohydrates into glucose in the blood. Some diabetics go to extremes to avoid just "sugar" in their diet, but pig out on pasta. There is a slight difference in the speed of digestion into blood sugar, but both sugar and pasta end up as sugar in the blood eventually. We extract the energy to live and release the wastes as water and carbon dioxide.

[jaws]

Only if you use price to control consumption. During World War II the supply of gasoline available to the Civilian economy probably dropped by more than half. The price did not rise, because laws were passed to ration fuel to essential needs, and the price was fixed. This controlled economy not only worked, it soared to production levels that won World War II.

Applying that idea to coming fuel shortages, it "is possible" for example to give diesel trucks hauling food to the city priority on diesel fuel at acceptable prices to control food costs, while trucks hauling the non-essentials pay market prices.

If it was possible to refight WWII without socialism, and the results turned out worse, maybe you would have a point. On their own price controls create more problems than they solve. The last time they were tried, the 1970's, it created a gas crisis. When they were lifted the gas crisis went away.

[donshan]

Jaws:

Don't get me wrong. I believe in free markets. I was just pointing out that there are other ways to control consumption other than just price, such as tax policy and rationing. Price controls alone will increase demand (effectively lowers the price) and make a shortage worse as it did in the 1970s.

The WWII model also had enforced demand destruction-rationing, that was not done in the 1970s. Under a rationing plan, it forces people to park their car and ride public transport, use a bike or walk. That produces demand destruction. Even a liberal gas rationing program (pick any number you want) such as 100 gal a month scheduled to decline each year would cause slowing of gasoline use by changing both buying and driving behavior. It would also affect our shopping and business strategies, on how to keep sales up with people driving less, instead of today's business model based on growth every year. A controlled reduction in gas demand could keep a dropping supply in balance with demand and make price controls unnecessary. A system that rations gas by price, say gas is $25/gal and only the rich can drive, is a formula for riots, just like VIPs going to the head of waiting line is resented.

BTW I was there for BOTH the WWII gas rationing AND the 1970s gas lines. No fun either time. During WWII the typical family got by on about 3 gallons a week. Gas ration coupons were saved up and trips very carefully planned. There were plenty of buses available. always full, so that one could totally avoid driving a lot of the time. People were no different, the day rationing stopped, it was Party time.

[untothislast]

Jaws:

Don't get me wrong. I believe in free markets. I was just pointing out that there are other ways to control consumption other than just price, such as tax policy and rationing. Price controls alone will increase demand (effectively lowers the price) and make a shortage worse as it did in the 1970s.

The WWII model also had enforced demand destruction-rationing, that was not done in the 1970s. Under a rationing plan, it forces people to park their car and ride public transport, use a bike or walk. That produces demand destruction. Even a liberal gas rationing program (pick any number you want) such as 100 gal a month scheduled to decline each year would cause slowing of gasoline use by changing both buying and driving behavior. It would also affect our shopping and business strategies, on how to keep sales up with people driving less, instead of today's business model based on growth every year. A controlled reduction in gas demand could keep a dropping supply in balance with demand and make price controls unnecessary. A system that rations gas by price, say gas is $25/gal and only the rich can drive, is a formula for riots, just like VIPs going to the head of waiting line is resented.

BTW I was there for BOTH the WWII gas rationing AND the 1970s gas lines. No fun either time. During WWII the typical family got by on about 3 gallons a week. Gas ration coupons were saved up and trips very carefully planned. There were plenty of buses available. always full, so that one could totally avoid driving a lot of the time. People were no different, the day rationing stopped, it was Party time.

Personally, I like a little Socialism in public transport systems.

The privatised free-market model, as imposed in my part of the UK, has been a disaster. We used to have a fully integrated network of buses, ferries and trains - all running to a timetable with clockwork precision. My first job, in 1980, was viable only because I could cross a peninsula by bus, catch a train, then travel on another bus to my workplace - all with full confidence that each of my connections would be there on time. In over eighteen months in the post - and over a cumulative journey of 20 miles - I think I was only ever late once.

Cue privatisation.

The new bus companies surveyed the travellers on a daily basis, establishing at which times of day the buses were relatively highly patronised, or when they ran near empty. Within a few months, half the services had been withdrawn, and to some rural destinations there were no services at all after 7pm. The highly prized, and incredibly ingenious timetabling system, went completely out of the window. A transport network run on the undersatnding that it primarily be utilised as a public service, became just another means by which venture capitalists could squeeze some money out of the local citizenry. By the way, the much touted claim that 'competition will keep prices competitive and low' - has been complete crap.

The happy results? Under usage of buses and trains, which run well under possible capacity. Increased congestion, as travellers flock to buy cars instead (people no longer even sharing journeys with their own family members - it's strictly one person per car). Boomtime for people constructing car parks and new roads - and unnecessary depletion of a much-prized resource. Which is the reason why we're all here in the first place.

Entrepreneurs can be wonderful, in their place, but not necessarily as providers of public transport networks.

[aahala]

Rationing by allotment rather than price only is superior in the very short
run to control consumption of the underlining product. Black markets soon
develop.

Rationing by allotment of one thing to control consumption of another can
work for extended periods. The WWII example is the classic example.
Gas rationing had almost nothing to do with gasoline, but rather rubber,
which was necessary for the war effort and in short supply.

People who didn't need all their gas allotment could transfer the gas
to another illegally, but what they couldn't transfer, unless they gave
up driving entirely were their tires.

If you wanted to use the allotment method to reduce gasoline consumption
then constrain the manufacture and sale of new cars and replace parts,
allowing the purchase thru some lottery system. Since almost no one could
build these things in their basement, transfering the right to buy in a black market would still occur but gas consumption would decline as well.

[MrBill]

Personally, I like a little Socialism in public transport systems.

The privatised free-market model, as imposed in my part of the UK, has been a disaster. We used to have a fully integrated network of buses, ferries and trains - all running to a timetable with clockwork precision. My first job, in 1980, was viable only because I could cross a peninsula by bus, catch a train, then travel on another bus to my workplace - all with full confidence that each of my connections would be there on time. In over eighteen months in the post - and over a cumulative journey of 20 miles - I think I was only ever late once.

Cue privatisation.

The new bus companies surveyed the travellers on a daily basis, establishing at which times of day the buses were relatively highly patronised, or when they ran near empty. Within a few months, half the services had been withdrawn, and to some rural destinations there were no services at all after 7pm. The highly prized, and incredibly ingenious timetabling system, went completely out of the window. A transport network run on the undersatnding that it primarily be utilised as a public service, became just another means by which venture capitalists could squeeze some money out of the local citizenry. By the way, the much touted claim that 'competition will keep prices competitive and low' - has been complete crap.

The happy results? Under usage of buses and trains, which run well under possible capacity. Increased congestion, as travellers flock to buy cars instead (people no longer even sharing journeys with their own family members - it's strictly one person per car). Boomtime for people constructing car parks and new roads - and unnecessary depletion of a much-prized resource. Which is the reason why we're all here in the first place.

Entrepreneurs can be wonderful, in their place, but not necessarily as providers of public transport networks.

Let us set aside the greater good argument for a minute. We all recognize that there is a place for public transport to minimize the effects of congestion and as more environmentally friendly. However, I just want you to look at your post from another angle.

Let us assume we kept the original schedule, but removed all direct subsidies. In other words the passengers would have to pay all their own variable costs. We eliminate fixed costs because these are inherent in roads and other infrastructure.

So the passenger could take the bus, train or ferry anytime as before, but now there was no public subsidy. How much would you be willing to pay? What is the costs climbed from a subsidized (guessing here) GBP 2.00 to GBP 20.00 to pay for the extra capacity? Would you pay it? What if you were the only passenger on the bus at 10 p.m. in the evening and the charge was more than a taxi? Would you still pay to take the bus?

Would you pay more to take a national state owned airline than fly on a budget airline? Let us say the difference is GBP 200 for good ol' State Air and just GBP 75 for Budget Airlines? If I look at airline deregulation those numbers are not even fanciful. They are very realistic.

Answer honestly. Most people believe very strongly in something right up until they have to pay directly out of pocket for it.

[Doly]

So the passenger could take the bus, train or ferry anytime as before, but now there was no public subsidy.

I'm not sure that trains are not subsidized now. Can anybody clear this one up?

But how many Londoners would be willing to pay more for trains that were only full to capacity in rush hours, instead of having half the people standing? I think a significant amount would be happy to pay double. Unfortunately, such a service does not exist. And I think it doesn't exist because of physical constraints of the rails. There are only so many rails and so many trains that can run through them at a given time. Another proof that when free market fights against physics, physics always wins.

[MrBill]

So the passenger could take the bus, train or ferry anytime as before, but now there was no public subsidy.

I'm not sure that trains are not subsidized now. Can anybody clear this one up?

But how many Londoners would be willing to pay more for trains that were only full to capacity in rush hours, instead of having half the people standing? I think a significant amount would be happy to pay double. Unfortunately, such a service does not exist. And I think it doesn't exist because of physical constraints of the rails. There are only so many rails and so many trains that can run through them at a given time. Another proof that when free market fights against physics, physics always wins.

that is unfair because the question remained unanswered? instead you posed a new one?

of course the trains are subsidized as the rails and infrastructure was already there and it is leased at a fraction of its replacement cost

so physical capacity depends on many variables. in moscow for example they have a wonderful metro system. during peak times they run a full train every 60 seconds. speed up the london metro to a train every 60 seconds and no delays and you could move more people faster and fewer would have to stand. on the otherhand, despite moscow's excellent metro system, the roads are wide and the city is succumbing to urban sprawl which lures moscovites into their cars. now roads are becoming more crowded and less efficient during peak times. however, also in moscow driving is a status symbol, so whereas I took the bus to work, most of my colleagues prefer to drive?

[jaws]

The new bus companies surveyed the travellers on a daily basis, establishing at which times of day the buses were relatively highly patronised, or when they ran near empty. Within a few months, half the services had been withdrawn, and to some rural destinations there were no services at all after 7pm. The highly prized, and incredibly ingenious timetabling system, went completely out of the window. A transport network run on the undersatnding that it primarily be utilised as a public service, became just another means by which venture capitalists could squeeze some money out of the local citizenry. By the way, the much touted claim that 'competition will keep prices competitive and low' - has been complete crap.

Just what makes you think it made sense to provide mass transit in rural areas in the first place? That's the root problem with socialism, it doesn't calculate costs. If you're running a bus on a seldom-used rural line you are wasting even more resources than cars would.

The reason prices went up is because they were too low under socialism, once again because they couldn't calculate costs. Adjusting prices is how you determine demand, thus how you determine where to add more service and where to remove it. Yeah it doesn't feel good to lose your privileges when your subsidies are taken away, but for the people who were paying the costs of these subsidies it is much better.

[donshan]

Rationing by allotment rather than price only is superior in the very short
run to control consumption of the underlining product. Black markets soon
develop.

Rationing by allotment of one thing to control consumption of another can
work for extended periods. The WWII example is the classic example.
Gas rationing had almost nothing to do with gasoline, but rather rubber,
which was necessary for the war effort and in short supply.

People who didn't need all their gas allotment could transfer the gas
to another illegally, but what they couldn't transfer, unless they gave
up driving entirely were their tires.
.

Yes, during WWII tires were a more critical issue than gasoline. When WWII broke out almost all rubber was natural rubber that came from overseas, much of it in areas quickly seized by the Japanese armies.

Synthetic rubber was invented, made from petrochemicals, and by the end of WWII rubber was much less of a problem. Tires today are just as much a part of the oil/ natural gas problem as fuels.

When Peak Oil occurs, the downhill slope of availability will not be a short term issue. Society MUST adapt first to dropping the growth of oil use from say 2% per year to zero growth and then negative growth where we use less oil each year.

If we only use price of oil to achieve the demand destruction in this new era, many have predicted rising and even astronomical prices of gasoline. Already, the small price increase in gasoline is creating conspiracy theories about Big Oil, leading politicians to bring the oil CEOs in to Senate hearings today to explain themselves! Imagine what the politics will be like during the down hill slide after Peak oil, if gasoline prices REALLY start to climb!

Today I heard the CEO of Exxon give his opening statement in a Republican called Senate hearing into "price gouging" by the oil industry. Proposals are being floated of a 50% tax on "excess profits" that the oil industry does not immediately reinvest in new energy exploration, production and refining. Exxon clearly is against such a proposal and the CEO made a very clear argument against this idea. He pointed out that government runs on short term political cycles of 2,4 and 6 years decision making, whereas the energy industry has to invest over decades long time frames and he cited one project that took 10 years to get going an will take 40 years to recover investments.

I too think a "windfall profits" tax would be counterproductive, when the oil industry is going to need massive amounts of capital to keep oil supplies coming. The fact the idea is being floated is the red warning flag.

The problem is that voter outrage at rising gas prices, can lead to the ouster of politicians supporting free market price as a way of rationing fuel. The new socialist politicians could institute "quick fix" plans that make the long term fuel shortage worse. BTW note that the Democratic candidate just won the Virginia Governors' race, after President Bush made a personal appearance to support the Republican. The result is regarded as a litmus test of changing politics ( Obviously Bush has other problems besides just high gas prices).

Currently I see both the US government and the public still supporting and believing in " maximum growth possible" of the economy which requires unlimited growth in oil supplies, and giving no thought to a "zero fuel growth" strategies. This is a state of denial.

Unless those supporting free markets find a way to start society toward the future implications of Peak Oil and adopt policies to reduce oil demand growth, we will get stupid policies instead and resulting chaos making the hot tempers in gas lines of the 1970s look tame.

There are 210 million vehicles in the USA today. The recent Risk Analysis study done for the US Dept of energy found it will take 10 to 20 years of crash effort policies and investment BEFORE the peak hits to make a difference. The free market supporters better get busy.

http://www.energybulletin.net/4638.html

[CARVER]

About the public transit. MrBill gives the example of the cost reduction in the airline industry due to competition among airlines. That shows it can work. However what you usually see over here is that the state owned public transit, is usually privatized as a monopoly within the country or regions. So there is no competition among bus companies. If you want to go from one place to the other there is only one bus company, so you have no choice. It's the same with trains. Even trains and busses are not really competing, they complement eachother. Unlike with the airlines, where you can usually choose between at least 4 competing airlines if you want to go from A to B.

They do compete with private transportation, mainly cars. But like Jaws mentioned people tend to have difficulties with calculating the costs. Not just the socialists, but even the capitalists, all people. Because we do not know the real costs, and on top of that different people value things differently. So how can we possible make rational decisions? We only make rational decisions on what we know, but what we know might be very incomplete or wrong. And we usually don't even bother to make decisions on everything we know, we just don't really think about it. How many people really compare the different options for transportation? How many price in all the factors:

- Own car -> costs of: purchase, insurance, repair, maintenance, parking, travel time, fuel costs, flexibility, environmental damage, stress from driving, comfort, status, etc.

compared to

- Train & Bus -> costs of: tickets, travel time (risk of delays), comfort, environmental damage, etc.

How many actually calculate this and assign appropriate values to the different factors, and based on that make a rational decision? I think most just don't know, they might have a figure in their head, but have no idea whether it is valid. Ask them when they would trade in the car and start using public transit, they probably would just flap something out, but have no idea really why that specific figure. It is just not something they think about, because that can be pretty complex.

The same goes for the environmental damage. How do you put a price tag on that? We do not know the real costs. What increase in medicare costs result from the increase in pollution for example? We know that less polution is better than more polution, but how much better, and thus how much is that worth? If we do not know, then should we be cautious or should we ignore it completely because we do not know the real cost of it. I would think it is better to be cautious, so I would put a 'high' price on extra pollution (meaning you opt for the high side of your estimated costs range for the pollution). It seems however that most governments go with not calculating them in at all, or go with the low side of the range. After all we are trying to compete, so if others do it we will too, we do not have the luxury to be cautious (or more, we are not prepared to give up our luxury for caution). Let's just hope they do not turn out to be wrong, but if they are wrong at least we are all wrong, so we can still compete.

This all makes it difficult to predict what would happen if we reform the public transit. I think if more people would use the public transit, the public transit system would be able to improve a lot. If the public transit system would improve a lot, a lot more people would be willing to use them. (A chicken and egg problem). I'm hoping the state will start such a project, I doubt the privatized public transit companies are willing to make such an investment (in time).

[MrBill]

This all makes it difficult to predict what would happen if we reform the public transit. I think if more people would use the public transit, the public transit system would be able to improve a lot. If the public transit system would improve a lot, a lot more people would be willing to use them. (A chicken and egg problem). I'm hoping the state will start such a project, I doubt the privatized public transit companies are willing to make such an investment (in time).

Both Donshan & Carver make good points.

All I can say, Donshan, is that political expediency will be the end of us, which is why there may be no solution to peak oil other than to run out? If you doubt markets can solve the problem, then I also doubt that command & control policies can either? If the public and their politicans will not allow oil & utility companies charge their true cost of production + cost of capital + reasonable profit due to short-term considerations then which public is going to accept demand rationing by those same politicans? By that time we are already experiencing brown-outs and serious energy supply disruptions á la Argentina. From there it is too hard to climb back up that slippery slope. We have 25 years and the clock is ticking. Forget Hillary in 2008-2016. By that time we have wasted 11-years of that original 25-years 'given' to us by the IEA.

Carver, Germany is not perfect. I have many complaints about how it is run. However, they do have good public transport. Major cities have a network of buses, trams & subways linking outter communities to the railway stations. I am thinking specifically about Frankfurt am Main and Munich here. The transport network is clean and efficient, but not cheap. Fare are quite expensive. However, likely less than the cost of driving. These cities still experience traffic congestion problems. However, there is wide exceptance, even amoung the professional class, to using public transport because it is clean and efficient. I don't mean to use the term professional class, but it is to illustrate that public transport is not just for the working poor and anyone who can avoids it and drives. That is all.

However, you put your thumb on the pulse. It is about critical mass and economies of scale. Which is the opposite of the death spiral where you offer just enough inefficient public transport that it is inconvenient to use, so no one does, and therefore it becomes expensive per rider to maintain, so why have it in the first place.

Jaws may be right about user levels and costs versus useage, but you have to have a certain critical mass to make public transport affordable and useful. If you fall below that level like in many major US cities like L.A. then there is no use to have it at all. I prefer the German model and I would challenge Jaws to prove to me that it is overall more expensive or wasteful including all costs of road building, etc. than in an American city like L.A.? Thanks.