A market-driven revitalization of the world oil refining sector is the best and fastest way to reduce both oil demand and related air emissions, including CO₂. A combination of market-based pricing–absent from foreign refineries (most politically owned and/or managed)– and new investment brought forth by the improved profitability of such pricing, could reduce the demand for crude oil by between eight and twelve million barrels per day, or about 10–15 percent.

A Bold Hypothesis

This rather astounding assertion can be educed as follows:

• Most countries subsidize refined oil product consumption, usually middle distillates (diesel and kerosene) at the expense of gasoline and other products;
• Owing to the price controls on heavily used middle distillate products, most oil refiners outside the U.S. and a few other countries lose money;
• The subsidies to middle distillate users, at the expense of gasoline and LPG consumers, creates an “unbalanced” demand barrel – one that defies both economics and chemistry;

“I can find virtually no one—in government, in the environmental community, in business or in the press—who thinks that the Kyoto Protocol has even the proverbial snowball’s chance in hell of coming into effect in anything approaching its current form.  This is every bit as true internationally as it is in the United States.”

– Paul Portney [then president: Resources for the Future], “The Joy of Flexibility: U.S. Climate Policy in the Next Decade,” Keynote Address, Energy Information Administration Annual Outlook Conference, March 22, 1999, mimeo, p. 2.

Joe Romm at Climate Progress is increasingly fighting his own flank as a number of Left environmentalists are moderating their climate views in response to scientific and political realities. His enemies list grows and grows, the latest being Newsweek’s Jacob Weisberg, whom Romm challenges (and more!) …

A few weeks ago, the Congressional Research Service (CRS) published a report on carbon capture and storage (CCS) technologies for coal-fired power plants.According to CRS, commercialization and widespread deployment of CCS will require “demand pull” regulation, such as Clean Air Act New Source Performance Standards, combined with cap-and-trade or carbon taxes; and it will require support for “technology push” RD&D (research, development, and demonstration) via government grants, tax preferences, and loan guarantees.

CCS will not be deployed on an industrial scale without “demand pull” regulation, because burning coal with CCS will always be more expensive than burning coal without it. Yet “technology push” RD&D to reduce CCS-related cost penalties is also critical. Although CRS does not explicitly say so, it implies that if CCS costs do not decline dramatically, carbon caps or taxes would make coal generation uneconomic.…

Many in the energy business, whether or not they support President Obama’s positions on energy and the environment, are likely to think, “Look, the US is a big ship. It cannot be turned around in a couple of years, and even if they tried, you can right the course at the ballot box.”

Actually, you can’t. The United States is still a nation of laws, and without strong political support, the acts of one administration cannot be easily reversed or undone by the next.

But there is more to the story than simple inertia and political head-counts. Each new administration enters with an agenda of positive goals. Spending time and political capital on your predecessor’s agenda can often find its way to the bottom of the to-do list. Moreover, a new president has only a limited circle of advisers.…