It’s not easy to give any data, but I think your questions is right.
And the asnswer would be Yes.

Do you remember that when the president China went to Washington, to Bush’s official reception, the loudspeakers were playing Taiwan hymn?

The next day, Chinese people were signing checks in Saudi Arabia.

But the chimp was so happy!…

Realize that I talked just on energy and economy, and not on ecology.

Because I smoke, and not only tobacco.

But, you the economist are normally too optimistic, and “growth” is the main word of your speech or writing.

I suggest you (all economists) a different point of view about growth, by Albert Bartlett, president of the American Association of Physics Teachers.

It will help you all in this overshoot society and in American honesty.

http://globalpublicmedia.com/transcripts/645

Thkx

The main answer would be consume less and save more, the same old recipe (in the end it’s economy)!
The second, try to be more efficient in all senses: more public transportations, less suburbia, less cars and a lower thermostat (the above consume less).

This seems to be too much to ask to joe6pack american, but prices have to do the rest. They will come to balance, sooner or later, by force.

It seems that global warming is nice to see on TV, until you get a very hard drought, general fires or very dangerous floods. In the meantime…

It’s getting clear that to change “bad” behaviors, you have to attack not to Iraq, but to consumer’s wallet.
I’d say that even taxing the oil directly, the second-best solution, is not justice at all for a joe6pack living 60 miles away from their workshop. But that’s my mania, probably. Direct taxes are always unfair, for a progressive society. But this is a sort of bug (or a feature in Europe: if you are rich go to work in your BMW, if you are poor, take the train). Not all is rosy.

You know far-far more on economy than me, and I don’t want to be too grim, but green projects like those in Black Swan comments take lots of years to get developed.

So, a big crisis will change minds on consumers and investors, but not before.

Anyway, I want to give one bright green-spark in the energy madness, there is an enterprise (among thousands) that gives some hope to make it easier the transition from oil to green energy. It’s in silicon wally and it’s called nanosolar (dot com in the web).

Next year will know if solar energy investments will get cheaper removing 0s of investments, but so has to change law and regulation. An excerpt from an interview:

2 of 10 Questions for Nanosolar CEO Martin Roscheisen:

Q). Do you have customers lined up to purchase the product, and if so which companies?

A). We are lined up with the industry’s top system integrators as our partners, and it is clear we are going to be manufacturing capacity limited for about as far out as we can see. There’s presently really only two truly scalable solar markets in the world — Germany and Spain — and we do a lot there. Being a scalable market is today as much about feed-in-tariffs as about the administrative framework; tomorrow, with grid-parity PV systems, it is primarily about the latter.

For the United States to also become a truly scalable market, some ingrained bureaucracy stands in the way for that still — everything from 1920s-era conduit-around-cables and grounding requirements to insanely complicated town-by-town permitting processes. It’s hard to believe that California is more bureaucratic than Germany — but it is so in solar power. Fortunately, people are beginning to realize this and so change is possible even if it affects electric code rules designed around 1920s electric technology.

[Translated: The Green Party in Germany changed the law several years ago and it works, if Spanish socialist party wins in next elections, we'll follow in Spain (much more solar-energy)].

[The next is interesting to you (some interesting info between the lines) and dedicated to David Chiang]:

Q). An analyst told me that thin film solar companies in the U.S. are worried about price competition with Chinese solar firms. . . .is that true and something Nanosolar thinks about competitively?

A). If I ran a company based on solar thin films deposited in high-vacuum chambers, I’d worry too. Because [Chinese market leader] Suntech achieves better capital efficiency today with conventional silicon-wafer based solar factories than a typical thin-film vacuum line. That’s a problem right there. At Nanosolar though, we have a nanoparticle-based printing process that is 5-10x more capital efficient on the total line. So we have a good delta.

All things being equal, given the $/kg economics of solar panels, I don’t think the competitive end game is to be shipping them from China. The end-game winners will be optimized for net working capital days and proximity to customers. (Btw, shipping from China costs ten times as much as shipping to China these days…) The middle game will be dominated by quality issues; this is a product that people expect to last for decades.

Quality is quite hard to do with the kinds of manual factories that are behind the capital efficiency of Chinese production lines. I see a lot of big customers in Europe quite unhappy with Chinese panels. That all said, my general rule on China is that one has to recheck all of one’s assumptions about China about once every three months.

[Sorry the long post, please, but economic policy will need to be supported by fiscal and legal policies. So, a crisis + changing the chimp on charge of USA, will be necessary, IMHO]

THKX

PS: The best websites on energy, IMHO, are theoildrum dot com and energybulletin dot net.

I would also commend “Twilight in the Desert” and I don’t work for Matt Simmons either.

However, you have to have some background in petroleum to fully understand much of the book. Plenty of detailed reservoir engineering data.

For those interested in the issue, a good primer may be the work of Matthew Simmons, Chairman and CEO of Houston-based Simmons & Company International, the leading investment bank specializing in the energy industry, CFR member and author of “Twilight in the Desert – The coming Saudi oil shock and the world economy.” (Notably, when the book was published in mid-2005 Saudi production was 9.6 Mbpd, and it soon started to decline until stabilizing at 8.6 Mbpd in 2007, although it appears to have picked up since last August to 9 Mbpd in November, as commented in http://www.econbrowser.com/archives/2007/11/relief_on_oil_s.html). And no, I’m not on Simmons’ payroll.

His presentations can be found at
http://www.simmonsco-intl.com/research.aspx?Type=msspeeches
and his interviews by Jim Puplava at
http://www.financialsense.com/Experts/2007/Simmons.html

To start, I suggest the following two recent presentations:
At CalTech in Pasadena, October 23, 2007.
http://www.simmonsco-intl.com/files/CalTech.pdf
At ASPO World Conference in Houston, October 18, 2007
http://www.simmonsco-intl.com/files/ASPO%20World%20Conf.pdf

I particularly suggest reading carefully pages 37-39 of the ASPO presentation, and pages 34-37 of the CalTech presentation.

As page 37 of the CalTech presentation is precisely about the “steps to encourage energy conservation and reduce US oil consumption”, I copy below the part dealing on that subject from his August 18, 2007 interview at http://www.financialsense.com/transcriptions/2007/0818.html

JIM: If all the canaries have stopped singing – I guess as you look at this, and how important energy is to all economies – what’s plan B?

MATT: We don’t have a plan B. I’ll tell you several things that we could do that create sort of a very viable semi-plan B. But the problem is no one is doing them yet. And they have to take some sort of coordinated effort. Now, I think there’s an enormous amount of things that we could do to significantly reduce the way we drive. There are enormous amounts of things we could do to significantly reduce the amount of food miles embedded in our whole food distribution system. There’s an enormous amount of things we could do to change the way we transport goods and get things on water versus roads. But all those things basically take coordination, and somebody needs to start doing them, and we’re starting to run out the clock on that.

JIM: One of the main uses that everybody’s aware of oil is transportation, so it seems like, for example, conservation on this front can go a long way to help mitigate part of the crisis. But you know, Matt, here in California and San Diego where I live we’re finally building another couple of lanes on the freeway; we’re not building mass transit. If you look in the parking lots of stores you see SUVs, Humvees, you know Suburbans, and that’s what we’re doing here. Nobody seems to get this.

MATT: It’s what we’re doing in Maine, it’s what we’re doing in Texas. I’ll tell you though, Houston, Texas of all cities is basically probably one of the leaders in the world in a bunch of work being done to liberate the workforce – Mayor White’s calling it Flex in the City – and to start to basically encourage companies to give flexible work rule hours, and basically start letting people work where they want to and pay by productivity.

That program could sweep the nation in a 5 year period of time. This is a software issue and a mindset issue. And it’ll eliminate in most places long distance commuting and traffic congestion. So there are some things we could do but the problem is that they’re being hindered by so few people understanding that this isn’t a feel good thing or let’s do this to reduce the carbon footprint, which might or might not be an issue. This is basically a crisis because demand can’t basically grow anymore;

…

JIM: I want to get back to maybe not plan B but some logical choices here which if you take a look at all the oil that is consumed through transportation, it seems like rail or rebuilding the rail system, the barge system is a more efficient way to move goods. And I think some investors…I mean when you’ve got Warren Buffett buying railroads. I don’t know if he believes in peak oil but he does know that at $100 oil…

MATT: I suspect he understands the concept.

JIM: Yeah, because as he pointed out in this year’s Berkshire Hathaway meeting, he said at a $100 oil it’s more efficient to move goods on rail or by barge.
MATT: I don’t know if I’ve ever used the example of barge versus railroad on your program, but it involves San Diego, so let me just quickly tell you. These are approximate numbers but I had several people in the transportation business – Intermodal Transportation helped me do these – if you envision a container ship coming in to San Diego, which I would guess happens coming from China every three or four minutes.

JIM: Just about.

MATT: On that container ship happens to be 340 cargo units. What do you call them? You put them on either trains or trucks filled with goods that are going to northern New England. So Portland, Maine is your destination. That happens to be about the longest city-to-city transportation route in the United States: San Diego to Portland, Maine. If you have one of three options: keep them on the water; putting them on rail; or keeping them on the road.

It’s basically 340 trucks, and basically if you put the goods in the trucks and then you have a convoy and double crews you can do like the pony express, you could be in Portland Maine in about six days; maybe even five days. But that isn’t how trucks travel. They stop in each town and then they get the goods off, and so basically it would take on average about 25 days before the goods would finally show up in Portland.

If you put them on rail and we had a dedicated rail line, it would get there in about five days or four days and you would save about five times the amount of fuel. But we have so much of our rail system now that is one track, and so most of the time the trains are basically on the sidelines waiting for another train to pass them.

If you put them on barges and the barge business is what they call a six-pack which is three barges wide, six barges long, all chained together and pushed by one 11,500 horsepower tugboat. And you went down the Panama canal – all assuming there was no traffic congestion – and then you hugged our inner coastal water way crossing the canal in Florida and going up the East coast you’d be in Portland, Maine in about 13 days and you’d save 35 times the fuel. 35 times. So that’s the future.

…

There were some interesting additional points in his Sep 30, 2006 interview at http://www.financialsense.com/transcriptions/2006/0930simmons.html

“the only thing we can do in a 5 to 7 year period time that’s going to make a difference is an enormous change in how we use energy, and make our society far less energy intensive. And what that’s all about are some simple things like liberating the workforce and starting to pay by productivity, and let people work when they want to, and where they want to. And those that figure out a way to work close to home and get twice as much done get paid twice as much.

Step number two, is we need to take a deep breath and look very carefully about our whole food supply and how much of our food today comes from continents away that’s unbelievably energy intensive to deliver and keep it fresh – and it doesn’t taste very good. And we need to start growing food close to where we live; and we need to figure out some ways to basically redesign our buildings so that we’re not using so much energy – basically to heat them in the Winter and cool them in the Summer. And all these things basically have to be done on a simultaneous basis because there’s no single one thing that will make a difference.”

…

Lastly, my own 2 cents: is it really wise to keep fostering the construction of energy-inefficient buildings located in far away places (aka suburban and exurban McMansions), which assume the availability of cheap energy for heating/cooling and commuting? Wouldn’t it be for the greater good to allow the credit crunch to run its course, the housing market to implode and construction activity to grind to a halt until there is widespread awareness that things must be done differently?

Can’t the 2002 – 2006 fall in the saving rate be explained by household wealth effects including home and security prices? After all the consumer saving rate fell dramatically in response to rising asset prices in the 1990s, without any associated major shift in energy prices.

As you know, MEW rose dramatically from 2002 – 2006. Of course, it can always be argued that the need for MEW was a consequence of higher energy prices. A counterargument is that (apparently) MEW has been concentrated in higher income groups who are (in percentage terms) less affected by energy costs.

At least recently, the BEA NIPA data shows rising personal saving. The low point was Q3 2006 at 0.0% (the -0.5% value for Q3 2005 appear to be an outlier). The most recent value is 0.8% for Q3 2007. Interestingly enough the saving rate was also 0.8% back in Q2 of 2005 when energy prices were considerably lower.

Doesn’t your observation that the trade deficit rose faster than the growth in oil imports tend to support a household wealth model?

Can’t the 2002 – 2006 fall in the saving rate be explained by household wealth effects including home and security prices? After all the consumer saving rate fell dramatically in response to rising asset prices in the 1990s, without any associated major shift in energy prices.

As you know, MEW rose dramatically from 2002 – 2006. Of course, it can always be argued that the need for MEW was a consequence of higher energy prices. A counterargument is that (apparently) MEW has been concentrated in higher income groups who are (in percentage terms) less affected by energy costs.

At least recently, the BEA NIPA data shows rising personal saving. The low point was Q3 2006 at 0.0% (the -0.5% value for Q3 2005 appear to be an outlier). The most recent value is 0.8% for Q3 2007. Interestingly enough the saving rate was also 0.8% back in Q2 of 2005 when energy prices were considerably lower.

Doesn’t your observation that the trade deficit rose faster than the growth in oil imports support a household wealth model?

that is personal and practical. now the theoretical : relatively cheap oil is the past. oil relatively hard to buy is the future. the picture is drowned out by excessive speculation which can cause overshoot in either direction. oil could easily go back to $40, especially if it goes to $150 first.

how you tax oil is largely a matter of national outlook – look to the past and subsidise oil. look to the future and tax oil, while subsidising alternative energy systems with the revenue. face now what you will soon have to face, anyway. war does not make oil cheaper.

often u s policies seem not to make sense. is this because the country is governed to the benefit of certain interests, not the benefit of the country as a whole ? it may actually suit the elite that these massive oil profits are generated outside of the country. it may suit the elite to nail down iraq (militarily, geopolitically) while actually squeezing the flow of oil to the benefit of prices.

every $10 on the oil price costs the country . . . . . so much. but every $10 on the oil price may also produce profits for certain allies of the elite, and who knows what little favours are done in return ?

i am not saying the politicians are corrupt . . . . ah, hell, lets say it. i am.

things though have changed a bit this year, but my sense is that the adjustment has come more from a fall in investment (residential investment) than a rise in household savings/ cut back in consumption growth.

suffice to say you are right that I was making a bit assumption, but that it is an assumption that matches the us and global data till recently. a fall in us savings (v investment) has offset a rise in savings (v investment) in the gulf, russia and much of asia (china, japan).

now more of the adjustment is coming from europe. there is a section in my peterson institute policy brief that has the actual numbers.