Much of the way America has come to live and do business is predicated on low energy prices. After the last price spike eased in the mid-1980s, many consumers, once again, appeared to give little thought to how much energy they used. They traded in their sedans for SUVs and their ranch houses for McMansions.
U.S. companies moved manufacturing overseas where labor was cheap, unconcerned with the resulting need to move products thousands of miles back to their customers. Low fuel costs facilitated "just-in-time" delivery systems -- supplies were delivered as needed, frequently by air rather than truck. The additional fuel costs were seen as a small price to pay to keep inventories low and customers supplied with the latest goods.
The era of cheap fuel began drawing to a close three years ago, and many businesses now are taking a hard look at their energy costs.
. . .
Fuel prices are causing many companies to change what they ship and how they ship it. "You want to reduce the amount of distance, you want to reduce the amount of transportation in the network," says Tom Jones, a supply-chain manager at Ryder System Inc., a Miami-based truck-leasing and logistics company. "That really leads to people doing things differently."
Ryder has adjusted engines in its truck fleet to go no faster than 63 miles per hour, down from an earlier 65 mph limit, and to shut off after they've been idling for five minutes rather than 10. Londonderry, N.H.-based Stonyfield Farm, which leases trucks from Ryder, is using onboard computers to keep tabs on whether drivers are wasting fuel with bad habits like accelerating too quickly, says Ryan Boccelli, the company's director of logistics.
Another way companies are trying to cut fuel costs is by changing their packaging. Procter & Gamble, which makes Tide detergent, shifted to more concentrated detergent last year to reduce transportation costs and to enable retailers to fit more on their shelves.
Companies that ship cheap but bulky goods are adapting the quickest. Three years ago, Kimberly-Clark Corp., maker of Kleenex tissues and Huggies diapers, started revamping its distribution network. Its distribution centers were located next to its production plants. Now the company has eight giant distribution facilities spread around the country. The new setup, which allows the company to rely more on rail, helped it save 470,000 gallons of fuel last year.
Railroad transport, however, can slow the flow of merchandise from warehouses to store shelves. That forces retailers and manufacturers to carry more inventory or risk not having enough to meet customer demand.
How deep the changes go will depend on how much longer oil prices stay above $100. And since as I've said before, the best estimate of the future price is the current price, there's no real way of knowing how long that will be.
Megan, do you have an estimate for how low oil will go? Are you saying that it will bottom out at less than $90/barrel? One hundred? Without the numbers, posts like these are essentially content-free.
Curiously, the "energy sector" itself (what is left of the old petroluem marketing cartel plus the public power monopolies) is not changing at all. These are debt-ridden firms, rather more financial, legal, and political than chemical, mechanical, or electrical engineering.
They are borrowing money and rolling over or reducing debt, thus dressing up their ancient and mostly decorative panoply of "reserves", "concessions", and "balance-sheets" on the basis of whatever sort of "story" -- fashionably "green" now -- can be used to peddle thier paper and bamboozle their political claque.
Gas-fired boilers are out, nuclear boilers are in, coal-fired boilers are in limbo, stick a wind-mill on it somewhere and ink that government guaranteed, turn-key, vendor-financed contract.
What one does not see from this sector or, of course, from the left or right of our Whig government are large-scale, systematic (a) fuel-replacement, (b) transmission-loss reduction, or (c) co-generation programs. Such programs take intellectual infrastructure and patriotic superstructure that The Predator State simply does not have.
Such plans would not just conserve energy but also all the sorts of capital that "too-big-to-fail" enterprises invariably squander as they bounce along following one "capital market" fad to another.
Or, to summarize Megan's post:
1) Most easy ways of saving oil are invisible to consumers, so
2) Stop pretending that listing the inefficient things we need to ban is the best way to go, greenies, so
3) The global warming thing just ain't workin out as your latest rationalization for your desire to get SUVs "off the road." Find another.
Megan: "And since as I've said before, the best estimate of the future price is the current price, there's no real way of knowing how long that will be."
ScentOfViolets: "Megan, do you have an estimate for how low oil will go?"
Me: Smacks head on desk, repeatedly.
"What one does not see from this sector or, of course, from the left or right of our Whig government are large-scale, systematic (a) fuel-replacement, (b) transmission-loss reduction, or (c) co-generation programs."
The reason you don't these these is that, on the whole, oil is still the most ecomonical energy source by far. One of the reasons oil companies are showing record profits right now is that governments won't allow them to invest in the core business......finding more oil. Everyone wants them to be the architects of their own destruction as an industry. Don't hold your breath waiting for that to happen ('cause it's never happened in history).
Scent of Violets- When I read your comment, I don't smell violets but something else entirely, and it's not as pleasant. This post is BLATANTLY not "content free". It may not contain content that interests you, but why should she want to do that? Megan is simply drawing the attention of her readers to a question that interests her, and begging exactly the question you ask. Why do you think she should need to have an "estimate" on the future price of oil to make this post? Frankly, you sound like a moron.
Sigh. Bergamot, if you have a point, make it. Right now, you look like you were addled before you smacked your head.
Jwh, there's a difference between a cow eating grass and a tapeworm taking up residence in your intestines. You apparently seem to be arguing that not allowing the latter to do so means making them complicit in their own destruction.
Most of these sound like bad ideas, except for expanding distribution locations.
When time and people are worth less than gas, bad things seems to happen.
And accelerating slowly is the opposite of efficient. Might make sense for a loaded truck, but it will wreak havok on traffic. Cars are more efficient when they accelerate quickly. I think in the medium run, they won't save fuel because of the impact they will make on traffic.
I think we've run into a paradox similar to the trajedy of the commons. In driving, accelerating faster is more efficient as is maintaining a lower average speed. So it makes sense to accelerate moderately and quickly and avoid wasting fuel by avoiding using your brakes (.
But, when there is congestion, such as when a vehicle is likely to hit the same traffic signal more than once, accelerating very little to maintain a low average speed and avoid brakes causes big problems. Problem is that this prevents people from entering the queue and clearing other queues. Traffic propagates backward and many more cars are forced to make many more frequent stops. The individual saves fuel, but far far more fuel is wasted by the system as a whole.
Frankly, John, you sound like an imbecile, a boob, a numerically illiterate troglodyte who is more than ready to substitute pugilism for debate. And you probably smell bad too.
Ready to stop with the gratuitous insults? Now, to rephrase Megan's post, to the extent that energy becomes more expensive, it will become economical to employ measures that cut down on energy usage. If my gas bill is $40/month in the winter, I probably won't be putting new insulation in any time soon. Make that bill $800/month, and I'll be looking around for a contractor, doing some research on the best kinds of insulation, etc. Gas at $.80/gal? Then driving that Chevy F350 around town is not a problem. Gas at $5/gal? I'm buying a Toyota.
And this was worth wasting a post over? To the extent that the topic is interesting, one must attach numbers to it. You might want to see the related earlier post on whether or not there was a speculative bubble driving up oil prices to get a sense of proportion. Some people there were crowing that they were 'right' about the existence of such a bubble because prices are going down. Gee, ya think that might have something to do with the fact that gas prices just about always fall at this time of the year, what with the summer vacationing season almost over? Without any numbers, the discussion is extremely soft, and what carries the day is mobocracy, not facts.
My point was that no, Megan does not have any predictions about the future price of oil, because as she plainly stated in her post, her opinion of price predictions lies somewhere between "meaningless" and "directly harmful".
As you continually appear to be unable to grasp this very simple concept, explained in clear English (small words!), I would suggest that perhaps it is you who may be 'addled'.
And yet, she was able to say on another thread that oil is an example of a commodity that's in a bubble right now . . . and that her earlier predictions were right.
Gee, ya mean she had an opinion on the price of oil and which way it was going to go!?!?!?!
Whadda surprise.
About the only thing that would save you from severe foot in mouth disease right now is to say that you never read those posts.
Next time, educate yourself before going into spurious attack mode, eh?
This was supposedly done because of pressure from WalMart.
As for where oil prices will go, friends in the "all bidness" say they are planning on long term prices of $80/bbl or so.
Cars are more efficient when they accelerate quickly.
You're fond of hammering on this point, aaron, but the one time you posted a link to an article, it was about stick-shift cars, and said that "brisk" acceleration and early shifts led to savings. That makes perfect sense because it lowers the total number of revolutions per distance traveled
Given that "brisk" acceleration leads to later shifts in automatics, and also to higher viscous losses because of the disparity between crankshaft and mainshaft speeds in the torque converter, I find it hard to believe your advice applies to 85% of the cars on American roads.
Scent of Violets-
"And this was worth wasting a post over?"
You've wasted three on it so far.
"Without any numbers, the discussion is extremely soft, and what carries the day is mobocracy, not facts."
For such an "extremely soft" discussion, you still chose to take part in it. How confused you are. And why the Atlantic doesn't have you as senior editor I have no idea! Why you aren't at least blogging for them is a mystery to me, since your content-sense is so much better than Megan's. You sound like the douchebags who call my radio show and complain about what I'm talking about rather than just switching stations like a person with a brain.
Anyway, don't let me stop you: back to the complaint-fest.
"The reason you don't these these is that, on the whole, oil is still the most ecomonical energy source by far. One of the reasons oil companies are showing record profits right now is that governments won't allow them to invest in the core business......finding more oil."
Somehow I doubt new discoveries of oil are going to match rising demand from India, China and the rest of the developing world.
Sigh. John, my initial post asked for some numbers. Subsequent posts have been more in the nature of a PSA. But you amply demonstrate that while you can lead a horse to water, you can't make him drink; notice that you did not address my point at all. Oh well, now we know what your opinion is worth[1].
[1]Gee, Rush Limbaugh has his own show; his opinions ipso facto must be of more worth than mine. Ditto for Savage, Imus, et al. I trust I don't have to do anything more to demonstrate the profound illogic of 'if you're so smart, why aren't you rich' nonsense.
Make that 800 a month and I'll find my own f'ing fuel.
Drive a F350 around and you're building a bunch of structures. Drive a toyota around and you are probably just drinking and driving and on your way to pick up more booze.
Rob, same engines in automatics. Just ease up on the accelerator before you move past peak torque (usually around 3000-3500 rpm) and your car will shift. Just ease off once you reach 3000 rpm (you rarely get an opporunity to even get that high), the car will shift and you can begin increasing pressure on the accelerater again without getting into inefficient RPM ranges.
aaron, 50% of my personal fleet is automatic, and I can assure you that that doesn't work; as soon as you push down again, the damn thing downshifts. I routinely run 4000 rpm on mild hills or in acceleration lanes even when it could run half that at higher throttle for the same effect. I suppose I could try to tinker with the valves but it's a lot of trouble with a lot of risk.
Anyway, I was hoping you had a link to a study that involved automatics rather than sticks, because when the car does half the driving for you, your ability to affect gas consumption is much more limited.
This is one of the reasons why I think the price of oil will eventually crash again. A high price of oil causes people to impliment measures like those described in the article. This causes demand to fall and eventually the price of oil to fall. The thing is that when the price of oil falls people are not likly to undo the efficency measures that they put in place. They will instead just pocket the savings and use the money elsewhere. This makes demand inelastic to price drops as well as price increases. It is the reason why oil is a boom and bust commodity.
No, sorry. I'm no help there. I tried e-mailing one of the people who did the study with manuals, but got no response. I haven't had much luck finding a clear answer.
I think I get less efficiency above 3500rpm, but don't know for sure. I know many cars have pretty flat torque curves and don't really drop off in efficiency until well after 4000rpm. You might play around and see what works.
I wouldn't bother tinkering around with mechanics, like you said much trouble and much risk (I have thought--not seriously--about taking off my cat/con and getting a dummy o2 sensor).
My car happens to have a decent amount of control (2002 protege). I haven't done much concrete expermimentation, but basically what I've found is there is no difference whether I accelerate hard or soft. I drive mostly suburban non-highway and have gotten about 27mpg consistently. Accelerating harder I found pretty much no change (often reaching 4000rpm), but couldn't get a good comparison since I had some repairs done on my car and major construction projects have happened. My mileage has been about 26mpg, but this week I got over 29mpg (accelerating more than recently, but trying to stay below 3500), but I think this because of construction. I took Tom Vanderbilt's advice of becoming a late merger. I think this, combined with reduced traffic after the bottleneck from cars avoiding my route (and this being vacation season) is the main reason for my improved efficiency.
I have a stick-shift Civic, and I get about 28mpg driving back and forth to work. I tried for a tank of gas to accelerate slowly, drive slowly etc. and got the same gas mileage. I get 36mpg on long trips no matter if I go 65, 80, no AC or AC. It's EPA rated at 36mpg, so I consider that as fairly efficient MPG for the car. 80mph is about 4000 RPMs, but 5th gear in a Civic has very little power at any RPM so maybe it's probably still efficient.
The thing is that when the price of oil falls people are not likely to undo the efficency measures that they put in place.
Depends how long it stays down for. Remember, these systems of "just in time" and distributed shipping centres were adopted for a reason. When oil was $30/barrel, the "lots of oil" approach was CHEAPER. When oil is $100, the "Less oil" approach is cheaper.
It isn't that people deliberately chose to use lots of oil because they like the smell of exhaust fumes. At different oil prices, different choices are optimum.
This means that after all the structural changes have been made, if oil collapses back to $30, then we will end up with a more expensive system than we had in 2004. So we will slowly start shifting back again...
And so the cycle of oil price boom and crashes that began in the 19th century will continue.