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Archive for the ‘Economics’ Category

Why we don’t all drive diesels?

09 Sep

Wired had an article today entitled “VW’s Prius – Killing Diesel gets 62 mpg“.  Kudos to VW for more incremental improvements to not only the fuel efficiency, but also the emissions performance of their engines.

Like most Autopia articles, the story is light on facts and mostly designed to produce a storm of comments.  This time using the over the top headline to draw the partisians; one of their trademarks.  Naturally, it had the desired effect, and a mild hybrid vs. diesel flamewar was the result…not to mention lots of pageviews for Wired.

In any article like this that stresses the fuel efficiency of diesels, some commenter always insists that it’s the ultimate proof that we’re all wasteful idiots in the US because we don’t all drive diesels.  If we were smart, like the Europeons, we’ld all drive diesels.  First off, it isn’t true; they do have both diesel and petrol vehicles in Europe, although diesels are more popular than they are here.  So, it’s a fair question:  Given the higher energy potential of diesel and the the better fuel efficiency of the engines, why don’t we all drive diesels?

Well, the answer lies with crude oil refinement.  Refining the crude is essentially a distillation process where the component hydrocarbon marterials separate at different temperatures.  The shorter hydrocarbon chains like LPG and gasoline separate at lowest temperatures, the kerosine and diesel separate next, and, finally, the heavier fuel oil and tar products separate at the highest temeratures.  In the end, the average refinery gets about 20 gallons of gasoline and 9  gallons of diesel from every 42 gallon barrel of crude.

Now through processes known as cracking, some of the long hydrocarbon chain distillates can be broken into shorter chains to maximize gasoline production.  Other processes can combine shorter chains to maximize diesel production, but there are limits to what can be done with these processes.  Currently, the most diesel optimized refinery on the planet manages to turn about 42% of its crude to diesel.

So, considering that base percentages of distillates, the limits of the optimization processes, the fact that the marterial transports side of our transportation system is based on diesel, and, worldwide, the increase in demand for diesel is outstripping the demand for gasoline, I don’t think we’ll all be driving diesels any time soon.  Then again, there’s always biodiesel.

 

Problems in Education: It isn’t about money

03 Aug

While catching up on last week’s news, I ran across this op-ed piece in the New York Times by David Brooks.  He laments our dwindling lead in competitivenes and fingers our inability to maintain the education gap we enjoyed for much of the last century as the culprit:

America’s edge boosted productivity and growth. But the happy era ended around 1970 when America’s educational progress slowed to a crawl. Between 1975 and 1990, educational attainments stagnated completely. Since then, progress has been modest. America’s lead over its economic rivals has been entirely forfeited, with many nations surging ahead in school attainment.

Since then, we’ve been trying to buy are way out of the problem, as inflation adjusted, per pupil spending has steadily marched up.  This, unfortunately, is doomed to fail:

In “Schools, Skills and Synapses,” Heckman probes the sources of that decline. It’s not falling school quality, he argues. Nor is it primarily a shortage of funding or rising college tuition costs. Instead, Heckman directs attention at family environments, which have deteriorated over the past 40 years.

Heckman points out that big gaps in educational attainment are present at age 5. Some children are bathed in an atmosphere that promotes human capital development and, increasingly, more are not. By 5, it is possible to predict, with depressing accuracy, who will complete high school and college and who won’t.

This is a societal problem which will require much more creative solutions than just raising my property taxes.  Although, in the end, that will probably happen too.

 

Discussing Energy Policy: A Change I Can Believe In

25 Jul

A friend a work suggested I check out the Pickens Plan:

So, I visited the website and watched the video:

I was intrigued.  A charming old Texan talking to charts; he kind of reminded me of Ross Perot.  But, what of his figures?  Check this page at the DOE website.  The 70% figure might be a bit of an exaggeration, but given the trend lines it’s not far off.  Look at the weekly import figures in the Navigator, and do the math.  It’s a staggering amount of money we are sending out of this country every year.  Money for a consumable that literally goes up in smoke within a couple of months.  Money that in turn finances others growth, not ours, and drains our economy and contributes to the weaken of our currency.

Next, I caught an appearance on CNBC on YouTube:

The quality is poor and it’s broken into eight parts, but it is worth your time.  This was earlier this year, and there are some rather accurate predictions about where we’re at right now.  Toward the end, he recalls a discussion he had with Bob Dole about energy policy when he was running for president.  He gave his ten minute pitch.  When he finished, Bob told him that he was probably right, but that energy dependence was one of the sleeping dogs of politics.  If Clinton wasn’t going to wake the dog, neither was he.

Well, with oil at $130 a barrel, the dogs awake. It’s time to have that discussion, and neither of the current candidates are anywhere close to reality.  This isn’t a complete solution, but it’s a place from which to start and evolve.