Oil

While winter is in full swing in Tehran with snow blanketing the capital, senior officials of the Islamic Republic can be forgiven for feeling hot. Over the past three weeks, the major powers have dramatically turned up the pressure on Iran over its nuclear programme. We have now entered the oil-squeeze phase.

Chest-thumping threats by senior Iranian officials in recent days to close down the Strait of Hormuz sound like the proverbial cutting off one's nose to spite one's face. Iran's economy is overwhelmingly dependent on oil sales, most of which moves through the Strait to markets in Asia and Europe. A shut-down of the Strait would largely close the taps on Iran's own oil sales.

At some point in the coming months, the confrontation between the West and Iran over the Islamic republic’s nuclear program may reach a breaking point. Even assuming the two sides manage to avoid full-fledged military conflict, the crisis could still cause significant disruption to the world economy. An embargo against Iranian oil exports, or a move by Iran’s leaders to close the Straits of Hormuz—or both—could send the price of oil soaring and jeopardize the re-election hopes of leaders from Paris to Washington.

Yesterday, everyone involved in the support and opposition to the Keystone XL pipeline got what they wanted: Obama tossed a squib to environmentalist supporters whom he's previously disappointed, and Republican boosters of the pipeline got to turn the Obama's refusal (which they accelerated by attaching a February 21 deadline for approval to the payroll tax bill) into a talking point against Obama in the upcoming election. In a country without a greenhouse gas strategy or an energy policy, this is passing for political action, but it's really... nothing, a draw, a symbol of symbols.

A different and more dangerous breed of climate denier commanded the stage at the recently concluded international negotiations in Durban, South Africa. These were not the usual cranks blathering fossil-fuel-industry talking points about how the science is all rubbish aimed at fostering a liberty-crushing world government. No, this breed is even more frightening, precisely because its members are not wacko outsiders. Rather, they are Serious People who actually run governments, or at least negotiate on behalf of those who do.

Gasoline-wise, 2011 has been a very expensive year. Who knows what gas prices 2012 will bring? Rather than giving lovely gadgets that will only consume more energy, like everyone else, here are three ways to stuff the gift of *less gas* this holiday season.

Victories against climate change have been rare, so it’s vital to recognize them when they happen. The Obama administration’s decision to delay the Keystone XL pipeline is one such victory—arguably the most important achievement in the climate fight in North America in years.

So far, we haven't faced any true problems of scarcity of oil or other fossil fuels. What we have faced are high prices, which are the result of constraints in fuel production, shipping and refining around the world. Finding more oil will not necessarily bring down the price of gasoline in the U.S. unless supply significantly exceeds demand — and there's no incentive for oil producers to make that happen. What's more, U.S. refineries now export around 536,000 barrels of gasoline a day — more than we have since World War II — so U.S. consumers pay the world’s going rate for gasoline.

Even though the U.S. economy grows at an anemic rate of perhaps 1.5 percent and 1.9 percent (or less) in this year and next, the world economy is likely to expand by well over 3 percent in that same two-year period. The world demand for oil is expected to increase, concurrently, by about 1.5 percent annually. The most recent projections by the U.S. Energy Information Administration (EIA 2011a) suggest that – absent major disruptions – the growing demand for energy worldwide will continue to push oil prices up in a slow but steady movement.  Absent dramatic changes in U.S.

America's 20th largest bus service -- hauling 120,000 riders a day -- is profitable and also illegal. It's not really a bus service at all, but a willy-nilly aggregation of 350 licensed and 500 unlicensed privately-owned "dollar vans" that roam the streets of Brooklyn and Queens, picking up passengers from street corners where city buses are either missing or inconvenient. The dollar van fleet is a tantalizing demonstration of how we might supplement mass transit to include privately-owned mini-transit entrepreneurs, giving people alternative ways to get around, and creating jobs.