Letting the market do it

I've reiterated my small "l" libertarian leanings (see here for example) on many occasions. Therefore, it would be reasonable to assume that I would be sympathetic to an argument such as the one presented by the Mackinac Center for Public Policy. This is a more focused example of the market oriented philosophy that would also look to market solutions for greenhouse gas emissions, peak oil and its consequences, and pretty much any other issue.



And I am sympathetic to these arguments. But I've come to believe that the market is incapable of providing solutions within the time frames that are relevant to these problems. Many of them, in particular, peak oil (and peak pretty much anything pertaining to natural resources), anthropogenic global warming, and ocean acidification are in this category. The "purchase decision" for solutions to these problems (assuming that solutions even exist) must be made far in advance of any obvious benefit of the purchase. This is one ingredient in a recipe for market failure.



Further, the "market" is dependent on the efficient and accurate transfer of information. Anyone who searches the internet for "anthropogenic global warming" will be bombarded with conflicting information presented as absolute fact. It's almost necessary that he or she become an expert to sort through the noise. And this is not unintentional. The professional noise makers are well aware that destroying the efficiency of the information systems upon which those who make the purchase decision rely is a recipe for maintaining the status quo. This is, of course, their aim.



It's not impossible for purchasers (in this case, the electorate and the population as a whole) to make long-term decisions at short term pain, such is the case for 401K plans, IRA's, insurance purchases, and others. The difference is that (relatively) accurate information about the costs and benefits is available and that someone can make money by providing both the information and the product. Such is not the case when the product is greenhouse gas reduction and reduction in rates of energy utilization, or, to a lesser extent, an increase in vehicle fuel economy. These are, in my opinion, clear examples of market failure.



My friend Michael, over at Only In It for the Gold, is struggling over the failure of the market to provide accurate information. He's a climate scientist and an expert in geophysical modeling. The information gap has become so important to him that he's considering changing his career direction in an attempt to close it. I wish him all success and recommend my readers follow him. There's a link in my blog list at the right side of this page that captures his latest posts.

COMPLETELY off topic

No one who knows me would call me "reliably conservative" or, for the matter of that, "reliably liberal." I do tend toward a viewpoint revolving around upholding the Bill of Rights (strictly, and believing that it means what it says), privacy, personal responsibility, and personal freedom. As I've written previously, I listen to the views of moderates and extremists at both ends (as if political thought were a line segment) of the political spectrum.



During the presidential debates last summer there was the usual blather, easily tuned out as being quite predictable. But in the final debate, Bob Schieffer was questioning the candidates on their views with respect to selection of Supreme Court Justices. Obama stated that "the most important thing in any judge is their capacity to provide fairness and justice to the American People." My ears perked up at this, Obama has taught Constitutional Law. No mention of understanding of the history and meaning of the Constitution of the United States? No mention of common law and equity? I worried.



Now Obama has been presented with the opportunity to put his philosophy into practice. As with all Presidents before him, the rhetoric of his campaign has had to yield to the realities of the office in some cases (appointment of lobbyists to his team, Iraq withdrawal timetable and actualities, etc.) but for the most part he's done what he said he'd do. With respect to the Supreme Court, this is certainly the case. His nomination of Sonia Sotomayor clearly follows the tenets laid out in his debate statements. Of course, it also belies his pro forma statements that his choice will not be based on gender and ethnicity. It's a little far-fetched that the big pushes were to nominate a woman and a Hispanic and that his choice happened to be a Hispanic woman but that race and gender were not motivating factors. I really wish he'd not said something so transparently ridiculous.



More to the point, Justice Sotomayor, from all I've read and heard so far, is an exceptionally intelligent woman and one with an extraordinary record of personal accomplishment. But to what extent will she be able to live up to the oath that she will be required to take should she be confirmed? That oath would be as follows: "I, Sonia Sotomayor, do solemnly swear (or affirm) the I will administer justice without respect to persons, and do equal right to the poor and to the rich, and that I will faithfully and impartially discharge and perform all the duties incumbent upon me as (title) under the Constitution and laws of the United States. So help me God."



The quote being replayed most frequently on the conservative media outlets came from a panel in which Sotomayor participated at Duke University School of Law in 2005. She said "All of the legal defense funds out there, they're looking for people with court of appeals experience, because it is, court of appeals is where policy is made." She went on to say, accompanied by much laughing from the audience, "And... I know this is on tape, and I should never say that, because we don't make law, I know... I'm not promoting it and I'm not advocating it." The Southern California Pacifica outlet, KPFK, played a lengthy excerpt from that panel, implying that the "right wing media" was taking Sotomayor's comments out of context.



I'm no more a follower of right wing talking heads than left, but my impression of the entirety of that series of statements left me with the impression that Sotomayor was acknowledging that she was a policy maker but that, nudge nudge wink wink, "I shouldn't really say so." The audience clearly got the joke.



Sotomayor has also said "I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life.” Excuse me? What if Justice Scalia had said "I would hope that a wise white male with the richness of his experiences would more often than not reach a better conclusion than a Latina woman who hasn’t lived that life.” His public life would have been immediately over, he would have had to skulk off in disgrace accompanied by the hoots, hollers, and catcalls of the liberal orthodoxy. And, most importantly, RIGHTLY SO. Anyone who holds such views, even if he or she is savvy enough to not declare them outright, should be found out and precluded from judicial service.



Do I think that anyone is capable of machine-like objectivity with complete absence of any influence of his or her life experiences in rendering judicial opinions? Of course not. We're not, after all, Vulcans (I'm referring to old school original series Vulcans, not smarmy, horny, weepy Vulcans of the current Star Trek movie). But the constant goal of a Supreme Court Justice should be to approach, as closely as possible, such detachment. The Constitution of the United States, as amended, has ample protection for the underprivileged. Social policy, within its constraints, is to be determined by the Legislature and executed by the Executive branch as chosen by the electorate. The Judicial branch is tasked with assuring that neither of the other branches violates the protections afforded to the people in the Constitution, as amended.



I'm reasonably sure that, barring some hidden skeleton in Sotomayor's closet, she'll be confirmed. I'm alarmed that the single thing that concerned me most in Obama's pre-election statements is now being carried out in his Presidency. This looks to me like a big step toward government by feeling and not by rule of law. The subtext of much of Obama's domestic policy has revolved around wealth redistribution and social engineering. Given Sotomayor's statements and record, this appears to be a bold step toward pursuing that agenda.

The "smart" car

I've put "smart" in quotation marks for a reason. Is it smart? Here we have a very small vehicle in which storage space and room for more than two occupants are sacrificed in return for a promise of great economy. Is the trade off worth it?



Let's assume that economy is the only consideration for the purchaser of the smart. The purchaser will then select the smart fortwo Pure, with a base price of $11,990. I'll add A/C, the "Silver metallic tridion safety cell" (though I don't know exactly what it is, since it has the word "safety" in it and everyone I've spoken with is concerned about the smart fortwo's safety, I'll add it), the alarm system and the premium radio. I'll leave out the heated seats, power steering, and metallic paint. The options bring the total to $13,420. We should note that most people don't tend to get the base model, but this will put the best face on the purchase of a Pure.



So what do I get for my $13,420? This is not a car review blog, so I'll only look at the fuel economy aspect of the purchase. The EPA estimates the car to provide 33 m.p.g. in the city, 41 m.p.g. on the highway, and 36 m.p.g. combined. For comparison, the Volkswagen Jetta Diesel gives 30 m.p.g. in the city and 41 m.p.g. on the highway. Admittedly, some won't purchase a diesel. For those, how about the Mini Cooper at 28 m.p.g. city and 37 m.p.g. highway or the Toyota Yaris at 29 m.p.g. city and 36 m.p.g highway? Of course, going the hybrid route will up the mileage ante, but also the price, so we'll ignore those for this post. The low end base price of the Jetta Diesel is $21,990, the Mini Cooper is $18,550, and the Yaris $13,005. The Jetta and the Mini are significantly more costly than the Pure, so we'll go with the Yaris. The base cars in this range are all pretty bare, so we'll figure a similar amount in options and compare the Yaris at about $14,450 and the Pure at $13,420.



The Yaris offers seating for five (nominally) and storage area with a 1.5 liter four cylinder engine. The smart fortwo offers seating (ready now) for two, storage for a few grocery bags, and a 1.0 liter three cylinder engine. Clearly, the Yaris offers significantly more utility at a price that's not dramatically higher. Thus, the big incentive for the purchase of a Pure, other than kitsch, would have to be the fuel economy.



It's recommended that the Pure, whose US engine configuration has a relatively high compression ratio of 10:1, be fueled with premium. Thus, purely from a cost point of view, the Pure is handicapped by about 8% (depending, of course, on actual prices) compared to the Yaris which uses regular grade fuel despite its 10.5:1 compression ratio. Assuming that regular is selling for $2.45/gallon and premium for $2.65/gallon, the Pure will burn $0.0646 worth of premium fuel per highway mile while the Yaris burns $0.0681 worth of regular. In the city, the Pure burns $0.0803 worth as the Yaris burns $0.0845 worth. Because the Pure is fundamentally designed as a city commuter car (though I see them on the freeway) let's analyze a 10,000 mile year (lower than the mean but reasonable for a city car) consisting of 90% city miles. The Pure would burn $723 worth of premium while the Yaris burns $829 worth of regular. The Pure saves $106 in the year, not enough to make a car payment but I would certainly bend over to pick up an envelope with that amount in it.



In terms of carbon dioxide, the Pure would emit something like 5,490 pounds during this "typical" year while the Yaris was emitting about 6,250 pounds, a difference of 760 pounds. The average US family emits something like 22,880 tons of carbon dioxide per year (though I question the accuracy of that figure) so the 0.38 tons saved by the Pure compared to the Yaris seems rather small. In comparison to replacing an incandescent bulb with a compact fluorescent though, it's a big deal.



Is the smart fortwo Pure (or the other higher priced models) worth the sacrifice? For someone who must spend lots of time (and miles) alone or with another person in a car and doesn't anticipate a lot of highway driving, or as a second car in a two car family, it may be a good choice economically. Is its 33 m.p.g. city and 41 m.p.g. highway mileage as good as I'd expect from such a diminutive vehicle? My initial gut reaction was "no" but I'll take a look analytically in another post.

The Obama High Speed Rail Initiative

President Obama has proposed a $13 billion dollar high speed rail initiative. Based on the statements accompanying his announcement, it would appear that Obama's primary motivation for this program is economic stimulus, although he did state that "we must start developing clean, energy-efficient transportation that will define our regions for centuries to come."



So, how efficient is rail transportation? Surprisingly, not particularly. While the famous CSX claim that railroads can transport a ton of freight 436 miles on a gallon of fuel is factually correct, this outstanding efficiency would not seem to carry over to our passenger rail system. In 2005, Amtrak reported an energy intensity of 2,935 BTU/passenger mile. Using 129,500 BTU/gallon for diesel #2, this is about 44.1 passenger miles/gallon. If I'm on the freeway in my Land Rover LR3 with a passenger in my car, I do as well or better (net of the conversion from the energy equivalent of diesel fuel in automobile gasoline).



On the other hand, very high figures for passenger miles per gallon can be found. For example, on the French TGV Duplex on the Paris-Lyon route with two intermediate stops, the train consumes 17.65 kilowatt hours/train-kilometer over a distance of 427 kilometers, or a total consumption of 7536.55 kilowatt hours. This is 2.7132x10^10 J (joules). This train has 545 passenger seats and if we assume an occupancy factor of 0.8, we see that the train converts 0.0404817 kilowatt hours/passenger kilometer.



Finding an equivalent passenger miles/gallon figure is fraught with difficulty, but let's proceed undaunted. I'll assume a diesel generator with efficiency of 50%, we find that the generator would use 276.26 btu/passenger kilometer or 444.6 btu/passenger mile. This is the fuel in 3.4332*10^(-3) gallons of diesel fuel. This is 291 passenger miles per gallon of diesel fuel. Wow, big difference!



What explains this huge difference? Part of it is the load factor. In fiscal year 2007, Amtrak's load factor was 48.9%, so increasing this to 80% (though this article states that a load factor of 65% technically makes a long distance train sold out, because allowances have to be made for entraining/detraining passengers at intermediate station stops) would effectively increase the passenger miles/gallon to (80/48.9)*44.1 or 72.1 passenger m.p.g. This is still a sad comparison to the TGV Duplex and not much better than airline service. I haven't been able to explain the remaining discrepancy.







The geographical areas contemplated by the Obama plan would seem to make sense for the types of route on which the TGV, for example, excels. That would be routes of intermediate length connecting the center portions of relatively large concentrations of population. There are further advantages of new rail over new road. Most importantly, for a given capacity, the amount of land required for rail is much smaller. This assumes, of course, that that capacity is actually used but the same can be said for passenger cars.



On the other hand, evaluating only from an energy efficiency point of view, it would seem that intercity bus service with a high occupancy factor is easily the best option. And to the extent that people could be induced to leave their cars for buses, the need to build new infrastructure could be avoided. This may be one of the reasons why it doesn't happen.

Clean Tech

Last Saturday morning I hopped in my Piper Saratoga and flew it from Long Beach, CA to Houston, TX to attend a conference called "Clean Tech." This was, of course, ironic at best and hypocritical at worst, given that the theme of the conference was renewable energy, clean technologies, etc. But it was a nice flight. In any case, I got plenty of material for multiple posts, which is a good thing, since the well had run a bit dry.



Today, the keynote address was given by James Woolsey, former head of the CIA and currently a Senior Vice President at Booz Allen Hamilton and a venture partner at VantagePoint Venture Partners. I found him to be entertaining, well-versed, and engaging. He's a long-time advocate of strong steps to ween ourselves from our security threatening dependence on oil and is quite aware of the issues surrounding peak oil.



I had a chance to speak with Mr. Woolsey for a few minutes after the session. He had advocated taking a series of steps that would result in drastically reducing the role of oil in our society. He drew an analogy with salt in the pre-refrigeration days, when it was the only method of preserving meat. Wars were fought over salt, over trade in salt, etc. He pointed out that technology enabled us to move past the point where salt was anything but a commodity, and outlined his vision for doing the same with oil.



I don't think it will be so easy, but my question related to the effect such a development would have on the political stability in Saudi Arabia, who has already warned us not to be hasty about moving to reduce our dependence on their oil. His position is "better now than later, when they are a nuclear power," certainly a point well taken.



We also spoke briefly about what it takes to get things done in the United States. I suggested that we have developed and refined a nearly flawless system for preventing significant programs from being implemented. Mr. Woolsey pointed out that World War 2 was a counterexample, recalling how the Detroit auto industry turned on a dime to the manufacture of war materials. My regular readers (are you there dear?) will remember that I've pointed out on multiple occasions that the single-minded, goal oriented, "we're all in this together" environment of that time is exactly what is needed and what is missing as we suffocate in our current miasma.



I suggested that the incredible accomplishments of that period couldn't have been made had the political and social environment then been similar to what it is now. He conceded that it will be difficult but stressed that that makes it even more important that we do whatever it takes to achieve consensus around a demand for action.



All in all, I found Mr. Woolsey to be optimistic and determined. It could be argued that he has a dog in the fight financially (several dogs, actually) but I play a lot of poker, and I don't think he's bluffing. It's heartening that people with knowledge, access to capital, and political connections are moving in the right direction.


Credit to Brian at The Goleta Air and Space Museum, an online aeronautical photo and video collection, for the picture of my Saratoga.