Coyote Blog

Rosie O'Donnell is a great example of the failure of scientific education in this country.  Of late, Rosie has joined the "truthers," using her show to flog the notion that the WTC was brought down in a government-planned controlled demolition.

I will have to yield to Popular Mechanics for most of the discussion about WTC7.  However, I can, from my own engineering training, rebut one point on WTC1&2.  (Note again, future commenters, this applies to WTC 1&2.  There was a different dynamic at work in WTC 7).

Rosie, as others have, made a point of observing that jet fuel does not burn hot enough to melt steel, and therefore the fire in the main towers could not have caused the structure to yield and collapse.  This is absurd.  It is a kindergartener's level of science.  It is ignorant of a reality that anyone who has had even one course in structural engineering or metallurgy will understand.  The argument made that "other buildings have burned and not collapsed" is only marginally more sophisticated, sort of equivalent to saying that seeing an iceberg melts proves global warming.  (Note that this is all written by a person who has no faith in government and is at least as suspicious about government motivations at any truther).   

Here is the reality that most 19-year-old engineering students understand:  Steel loses its strength rapidly with temperature, losing nearly all of its structural strength by 1000 degrees F, well below its melting point but also well below the temperature of burning jet fuel.  For three years I designed piping and pressure vessel enclosures at a refinery.  Many of the processes in a refinery crave heat and run better at elevated temperatures.  In fact, what refineries can do, and how efficient they can be, is really limited by the strength of steel at high temperatures.  Refineries end up being limited to process temperatures no higher than 600 to 800 degrees, and even then these require expensive special metallurgies.  Anything higher requires a very expensive vessel lined with some sort of ceramic insulation material.

The strength curve of steel vs. temperature is dependent on the type of steel, but the curve below is about what I remember from my old textbooks.  Note by 930 degrees the steel strength has dropped by half and in the next 100 degrees it halves again.

But the proof of what went wrong in WTC1 and WTC2 does not take a college education.  You only have to look at building codes.  Building codes generally require that structural steel members be coated with a fireproofing material. 

As the critical temperature for steel is around 540°C (give or take, depending on whose country's test standards one reads at the time), and design basis fires
reach this temperature within a few minutes, structural steel requires
external insulation in order to prevent the steel from absorbing enough
energy to reach this temperature. First, steel expands, when heated,
and once enough energy has been absorbed, it softens and loses its
structural integrity. This is easily prevented through the use of fireproofing.

You have probably seen it- that foamy tan stuff sprayed on girders before the rest of the building is filled out.  In fact, this stuff is not fireproofing per se but insulation.  It is there to keep the structural steel cool during a fire, so the steel will not fail.  Generally the standards are set in the code that the insulation has to be able to stand X time of fire (generally several hours) and keep the steel below its critical yielding temperatures.   Engineers know that a building fire, which burns much cooler than a jet fuel fire, can cause steel members to weaken and fail and the building to collapse.  If this were not the case, then why do builders spend billions every year to insulate structural steel building components?? 

I wrote about this issue in more depth here.  In this post, one of the commenters listed a series of building fires and asked, why did these buildings not collapse?  The answer is:  Because insulation is applied to the building structural steel members to try to prevent the collapse.  Even insulation is just a stopgap -- if the fire burns long enough and
hot enough (or if the insulation is stripped off, say by an airplane
shearing through the building) then the steel will heat up and fail.   So there are three reasons that some buildings have fires and don't fail while the WTC did fail:

• Some building fires can and do cause buildings to collapse.  Insulation on steel members help many buildings to survive, and often does save the building from collapse, but not always.  This building did collapse, at least the top 6 stores.  Oddly, this is actually used by truthers as further proof, somehow, that the WTC fires could not have brought down the building (the link is actually one of their web sites, I think).  But in fact, the Madrid building failed the same way as WTC 1 and 2, with the top six floors collapsing.  Since the building was not fully constructed on these top floors, there was not the huge weight collapsing that created the battering ram effect that brought down the WTC.  The Madrid floors took longer to collapse, but they were 1) under far less stress, since the building above them was not complete; 2) the fire burned much cooler and 3) the insulation had not been mechanically scrubbed from the beams, so it took longer for the beams to heat up.  To me, this is a clear parallel to the official version of the WTC collapse, but even this is distorted somehow by the truthers.
• Fuel burns hotter than normal building fires, so even insulated members will heat up faster.  I have many pictures in my personal collection of refinery fires where the main thing you can see in the aftermath is all the structural steel bent and collapsed.  Truthers may not be able to find many examples of building collapsing in a fire, but you would be hard-pressed NOT to find examples of collapsed structural steel at every refinery and petrochemical fire.
• The insulation that normally protects buildings was stripped off by the mechanical action of an enormous airplane shearing through the building at 300 miles an hour. 

This is in addition to the actual removal of some support columns by the crashing aircraft, which put more load on the remaining structure and thereby hastened the collapse.

postscript: By the way, can anyone tell me why the so called "reality-based"
community, that so often criticizes the Right for theocratic attacks on
science, is so quick to fall for this pseudo-scientific junk?

Update: One other thought:  The hallmark of truthers is that they take small abnormalities or uncertainties in the failure analysis and event reconstruction as justification for throwing out the whole explanation of events in favor of an alternate series of events with much, much larger gaps, contradictions, and logical problems (e.g. how did the buildings get wired for demolition without anyone noticing? or, how did the planes manage to crash into the precise floors wired for demolition without dislodging the charges and their wiring?  or, how did such a massive conspiracy get pulled off without one leak when the administration can't even competently fire 9 US attorneys?)

Anyone who has ever done root cause analysis of a catastrophic failure knows there are always questions no one can answer when all is said and done.  And people who say things like "always happen" or "can never happen" typically don't have any real-world engineering experience.

Update2: One other thought on WTC7, since most of the sites I have visited over the last several days really seem to focus on WTC7.  I consider our government capable of all kinds of hijinx, but why WTC7?  I would argue that about 0.00001% of the outrage that resulted from 9/11 is attributable to WTC7.  How many people not associated with the truthers have even heard of WTC7?  In fact, one could argue that the strike on the Pentagon was effectively irrelevant, since no one really even seems to remember that one.

One minor note:  I saw on a conspiracy site the claim that all military planes were ordered to stand down on 9/11.  I know from personal experience that can't possibly be true.  I was in Manhattan during 9/11 and remember well people in the streets hitting the ground in fear every time a military jet rocketed over the city.

I don't buy all this conspiracy theory not because I think well of the government, but just the opposite.  I consider the conspiracies posited at these various sites to be orders of magnitude beyond this government's capabilities.  Remember Coyote's Law:

When the same set of facts can be explained equally well by

1. A massive conspiracy coordinated without a single leak between hundreds or even thousands of people    -OR -
2. Sustained stupidity, confusion and/or incompetence

Assume stupidity.

Update3:  I guess I need to throw out a few more things.  This was not meant to be a comprehensive or definitive rebuttal of the 9/11 conspiracy theories.  I merely used as a starting point one stupid comment by Rosie O'Donnell on melting, a comment I have heard a lot of times, and that I knew I could refute of my own knowledge.  Those who want to get mad at me because I did not refute this or that, sorry, go deal with the book by the Popular Mechanics guys.  The only other thing I can contribute other than engineering sanity is the fact I have participated in many engineering failure analyses and the fact that I watched the towers fall live, with my own eyes, from the streets of Manhattan.

Every single engineering failure analysis I have ever participated in, from refinery explosions to airplane crashes, has always left unanswered questions and nagging inconsistencies that had, I am sure, nothing to do with conspiracies. We had many things we could never explain about a heat exchanger fire at our refinery in 1985, but I don't think that those unknowns and uncertainties leave the door open to blame government agents for the fire. 

I'll say again, if you want to argue that the WTC buildings were demoed by explosives, you have to explain how the explosives were laid, and, more important, how the explosives and their delicate wiring and detonators survived a plane crashing into the same floors.  And by the way, given that the buildings had not external markings showing the floors, how did the people flying the airplanes hit the exact correct parts of the building?  For every problem with the core hypothesis I could name 10 problems with the truther alternative.  I have no problem with offering an alternative hypothesis to the original thesis, but it is silly to criticize the core thesis for small problems only to replace it with a hypothesis that has problems that are orders of magnitude larger.

Yet another weird SF fan points out this example of dueling Luddites.  Here is a particularly nice example:

My favorite definition of local comes from Columbia's Gussow, a
reporter for Time in the 1950s who went on to become a local-eating
pioneer. For 25 years, Gussow has lectured on the environmental (and
culinary) disadvantages of relying on a global food supply. Her most
oft-quoted statistic is that shipping a strawberry from California to
New York requires 435 calories of fossil fuel but provides the eater
with only 5 calories of nutrition. In her memoir, Gussow offers this
rather poetic meaning of local: "Within a day's leisurely drive of our
homes. [This] distance is entirely arbitrary. But then, so was the
decision made by others long ago that we ought to have produce from all
around the world."

It is hard to even begin with statement.  First, I am not sure anyone since Ghandi has really challenged the notion of division of labor, which in fact is what Gussow is lamenting.  Second, it would be interesting to ask Gussow what residents of Chad should do for locally-grown food.  Third, the last sentence is great, in that it works from the Dr. Evil Cabal theory of capitalism, positing that current trade patterns are based on "decisions made by others long ago."  And all these complaints don't even tought the silliness of somehow comparing food calories with calories of work from fossil fuels (unless Gussow is drinking Sterno at night, which might explain a lot). 

I don't have any inside information on TerraPass, the company made famous by providing the $399.75 certificates that offset all your emissions for a year.  I do know that the numbers don't seem to add up, as I wrote here and Protein Wisdom similarly wrote here.

However, I thought about their business model some (since I have been on a role with new business models) and it strikes me that it is brilliant.  Because I am almost positive that they are (legally) reselling the same carbon credits at least three times!

Think of TerraPass not as a company that hands out little certificates, but as a business who makes money through energy projects.  These projects generate electricity without producing CO2 (e.g. wind), or in the case of their cow-poop projects they generate electricity by converting a very bad greenhouse gas (methane) to a less bad one (CO2).

So, for each Kw they generate, there is a certain number of tons of greenhouse gas emissions avoided vs. if they had generated the same Kilowatts with fossil fuels.  (How many tons depends on what fuel you assume the power would have been made with -- my guess is they assume coal, since that gives them the biggest offset, though in fact the marginal fuel in most areas is natural gas in peaking turbines, which produces a lot less CO2).

Anyway, they can claim some number of tons of avoided CO2.  But I am pretty sure they are reselling these abated tons at least three times!  Here is how I think it works:

1. Their energy projects produce electricity, which they sell to consumers.  Since the
   electricity is often expensive, they sell it as "CO2-free"
   electricity.  This is possible in some sates -- for example in Texas, where Whole Foods made headlines by buying only CO2-free power.  So the carbon offset is in the bundle that they sell to
   electricity customers.  That is sale number one. 
2. The company most assuredly seeks out and gets
   government subsidies.  These subsidies are based on the power being
   "CO2-free".  This is sale number two, in exchange for subsidies. 
3. They still have to finance the initial construction of the plant, though.  Regular heartless
   investors require a, you know, return on capital.  So Terrapass
   finances their projects in part by selling these little certificates that you
   saw at the Oscars.  This is a way of financing their plants from people
   to whom they don't have to pay dividends or interest "”just the feel-good
   sense of abatement.  This is the third sale of the carbon credits.

All, by the way, entirely legal, though perhaps not wholly ethical if you really care about reducing CO2 emissions and not just being able to cover your ass to smugly deflect criticism.  This is actually a brilliant way to finance electricity projects, one that Enron wasn't even smart enough to dream up.

And there is nothing wrong with buying these certificates.  The International Star Registry has sold thousands (millions?) of people on the idea that they can have a star named after themselves.  Of course, no actual official body that names stars accepts these as real names, but that's OK, the certificate kind of makes a cool graduation gift (friends of ours did the ISF thing for my father-in-law after he died and my wife really liked it).

Postscript:  By the way, this ignores the ability of such a company to resell the same credits to multiple certificate holders, since the whole CO2 credit thing is pretty damn hard to audit and no one is even trying.  I don't think these guys are doing so, but someone will think of it.

My business had its worst results in five years.  Where is my disaster aid?   So while the California Attorney General is suing car makers for global warming and the state is rolling out an anti-warming plan, the Governator is seeking disaster aid for a big freeze?  Seems like they are working against themselves.

I think the citrus farmers should file a class action suit right away against makers of fuel efficient cars and hybrids.  I mean, wouldn't that be hilarious?

As I wrote before, the new Democratic Congress try to end certain subsidies received by major oil companies.  All fine and good, at least as long as it is really a subsidy and not just an contract obligation they would like to get out of.

One might be led to believe that the Democrats were finally going to address the corporate welfare issues they have been promising to deal with for years.  Unfortunately, it appears that they are really only looking for an excuse for some populist demagoguing against Exxon.  Subsidies still appear to be A-OK:

The Cato Institute's Jerry Taylor and Peter Van Doren are all in favor of eliminating energy subsidies.  By that measure, they find
the House Democrats' 100-hour energy legislation -- H.R. 6, the
Creating Long-Term Energy Alternatives for the Nation Act (aka the
"CLEAN Energy Act") -- to be quite a disappointment.

Energy subsidies, of course, have been a historical disaster.  If you have ever traveled around California, a common site you will see is 1) Windmills that are not working and 2) Rooftop solar fixtures that appear badly broken.  That is because these facilities were installed cheaply as subsidy magnets, rather than actual, you know, investments that made any sense.   Here in Arizona, every third rich persons SUV has this Arizona environmentally-friendly license plate that says the truck is dual-fuel.  When I moved here, I though that was kind of cool.  I know several countries that have good CNG (compressed natural gas) economies in their transportation sector.  It turns out, though, that none of these vehicles actually fill up with anything but gasoline.  Several years ago Arizona had a subsidy for buying dual-fuel trucks that exceeded the cost of conversion, so that everyone did the conversion as a money-maker. 

And these are far from being the worst.  How many billions have been sunk into R&D rat-holes that have produced nothing except some professor's tenure?  Remember that alternative energy and energy conservation technologies are among the hottest sectors in venture capital nowadays.  The VC's I know can't get enough of these projects, and are project rather than money limited.  This means that every subsidy and grant for energy can only go to one of two places:

• Projects that are already going to be privately funded, so that all they do is displace private funding, which makes them a total waste of taxpayer money
• Projects that were rejected for private funding as uneconomic or unpromising, such that the spending is a waste unless you assume Congressmen and government bureaucrats are sharper than VC's in picking investments.

My observation is the two political parties differ on subsidies only in terms of style.  The Democrats appear to have no problems with subsidies as long as they go to sympathetic and fashionable companies (e.g. Google via net neutrality) rather than companies they have deemed to be unfashionable (e.g. Exxon).

I have long suspected, but can't prove, that most of the recycling we do is worthless.  I look in my recycling bin and think -- it's got to be cheaper to start with the raw material than what's in this bin.  The problem is hidden system costs.  For example, everyone thinks they are saving energy by recycling.  But in my town, as in most towns, recycling basically doubles the vehicle miles driven by the sanitation trucks to get all the waste out, because we get a visit from the "trash" truck and later in the week get a visit from the "recycling" truck.  Plus there is all that extra labor in the pickup and the sorting.  And that is all before the processing costs.  And all this is without even considering the staggering amount of "free" labor the recycling system gets from you and I as individuals.**

The Mises Blog has a link to the online video of a Penn & Teller Bullshit! show that takes on this very issue.  Since its Penn & Teller, its both funny and smart, and comes to the conclusion that only aluminum can recycling really makes sense.  All the rest is a big feel-good circle jerk that really saves no money or energy.  Its particularly funny when they put about 15 different colored cans in front of one guys home and tells him each is for a different type of material.  The one addition I would make is that reusing an object for its original use almost always saves money -- for example, we save Amazon boxes to use when we ship things out.

Along the same lines of hidden costs, this study sent to me by a reader looks at the total lifetime energy costs of automobiles, including their manufacturing and transportation as well as their fuel use.  I can't vouch for it's accuracy, but the results are somewhat surprising -- for example, most hybrids have lifetime energy costs higher than average for vehicles.

** But recycling is easy!  It hardly takes any time!  Well, let's say it takes only an incremental 1 minute a week from each individual in the country to recycle (a number that is lower than the actual, I think).  That translates to 260 million man-hours a year or the equivalent of 130,000 full time jobs.

"These very simple guidelines,
You can rely upon:
You're gouging on your
prices if
You charge more than the rest.
But it's unfair competition if

You think you can charge less!
"A second point that we would make
To
help avoid confusion...
Don't try to charge the same amount,
That would
be Collusion!
You must compete. But not too much,
For if you do you see,

Then the market would be yours -
And that's Monopoly!

That is from the Incredible Bread Machine by R.W. Grant.  And it seems to sum up the position of gasoline retailers given this story from Denver, where a grocery store chain was successfully sued for $1.4 million because it provided gasoline discounts to customers who bought over $100 of groceries.

Gasoline retailers can't win. One day, they're
accused of "gouging" us at the pump with outrageously high prices; the
next, they're accused of "predatory pricing," which means giving us a
deal so good it's illegal....

The effect of the $1.4 million jury verdict against Dillon Co.
means that two of its grocery chains, King Soopers and City Market,
will no longer give customers gas discounts based on grocery purchases.

Safeway wasn't a defendant but it got the message and likewise
suspended its discount program at 43 of its fuel centers. Discounts
sponsored by other supermarket or big-box chains are also expected to
end.

The lawsuit was based on Colorado's 69-year-old "Unfair
Practices Act," which prohibits selling a product "below cost." The law
is supposed to be enforced by the attorney general's office, but the AG
hasn't brought an action for years because of the near impossibility of
proving that gas sales are below cost when so many grocery products are
also involved.

But the law also permits private civil suits in which winning
plaintiffs are entitled to treble damages. The plaintiffs here were a
couple of independent gasoline dealers in Montrose spurred on by a
trade group representing the state's independent petroleum marketers....

The theory behind predatory pricing laws is that a large
company will sell certain products below cost in order to drive out
competitors. Once the competitors are gone, goes the hypothesis, the
big company will jack up prices to a monopoly level.

The only problem is, this never happens. New competitors always
move fast into markets where prices are unjustifiably high.
Predatory-pricing suits are generally filed by existing companies
unable or unwilling to meet competition provided by more efficient
firms. Legal restrictions on cutting prices invariably work against the
consumer.

I pointed to a similar situation a while back in Maryland.  Thanks to Overlawyered for the pointer.

A number of years ago, when I was in marketing for the commercial aviation business at AlliedSignal (now Honeywell), I made a lot of presentations to folks that they shouldn't bet the farm on the Airbus A380 because it made no sense.  I didn't think it would ever get built.  Well, very few people in the aviation business wanted to hear this.  Most people in aerospace are airplane guys first, and business guys second.  They wanted this plane to be built and longed to be a part of it.  I left before everything was finalized, but my sense is they went off and spent tens of millions of dollars to develop products for the A380.

Well, I was right and wrong.  The plane still makes little sense, but it will get built. Maybe.  Someday.  What I underestimated in the latter question was the willingness of European governments to push the plane against the headwind of economic reality merely as a grand salve for the European ego.

What was wrong with the plane is still wrong now.  The original logic, which the company still parrots today, was that airport congestion would require larger and larger planes.  If airports are at capacity, in terms of the number of planes they could handle, the planes have to get larger, right?  Well, no.  The problem with the larger plane is that the FAA and other air transport regulators will require the larger plane to have larger spacing with trailing planes  (the larger the plane, the more they create turbulent air and very stable wingtip vortices that pose a danger to trailing planes).  In fact, regulators are going to force double or triple the spacing behind the A380 that is required of the 747.  How does the plane help congestion, then, if it holds twice the people but takes up three times the landing capacity?  Answer:  It doesn't.  The same arguments can be made where gate space is at a premium - loading and servicing times for the plane can be expected to be twice as long as a regular plane, so in effect it takes up double the gate capacity.

Glenn Reynolds links to this Popular Mechanics article covering this ground and more on the A380.

Postscript:  The alternate strategy to deal with congestion is to start to abandon the hub and spoke system and move to a point-to-point flight network using smaller planes and involving more airports.  This takes connecting traffic out of overloaded hub airports.  Its the way the market has been moving, with competitors like Southwest and JetBlue developing point-to-point networks.  Asia may be the exception to this development, and it is no accident most A380 orders are Asian airlines.

While I am patting myself on the back, I also said that the Boeing Sonic Cruiser made no sense.  The engine and body/wing technology that would make the Sonic Cruiser could either be applied to generate more speed at constant fuel consumption or to achieve current speeds at greatly reduced fuel consumption.  I predicted that 10 out of 10 airlines would prefer the latter.  And that is the way it played out, with Boeing dropping the Sonic Cruiser, the more monumental and sexy project, in favor of the unsexy but demanded-by-the-marketplace next generation fuel efficient mid-sized aircraft.

Tonight, it appears that AZ voters will pass Prop 202 to raise recreation use fees in Arizona.  Oh, you say that's not what Prop 202 was for?  It was minimum wage?  That's right.  Prop 202 raises the minimum wage in AZ by 31%. 

I have written about the minimum wage many times.  For a variety of reasons, many seasonal recreation workers in AZ, and in fact in the US, are retired folks who work for minimum wage and a camp site to take care of a facility.  They love the job, and do great work, while filling seasonal jobs that younger folks trying to raise a family can't really take on.  When you take all wage related costs -- wages, payroll taxes, unemployment insurances, workers comp, liability insurance, etc. -- wages drive about 2/3 of recreation costs.  That means that a 31% increase in wages equates to a 20% increase in recreation use fees for camping, boating, day use, etc.

What, you say?  That's not what we meant!  We consumers aren't supposed to pay this extra, you business guys are!  Well, my profit margin is about 5% of revenues, which is a pathetically low number for a service business.  Basically, I do this for fun -- I could probably make a better return investing in government bonds.  So, to avoid bankruptcy, wage increases get passed right through to use fees.  And since the law requires that the minimum wage be increased every year, it means that use fees will have to go up every year (for comparison, we have been able to hold many use fees flat for 3-4 years at a time, despite fuel and other costs).

Sorry.  My employees were happy to work for $5.15 an hour.  They did not ask for a raise.  In fact, I have a waiting list of people who want jobs at $5.15.  It was the voters of Arizona who decided that my employees could no longer legally accept this amount for their labor.  And, unfortunately, it is the voters of Arizona who will have to pay for this raise my employees did not even ask for.

Hit and Run, trying to make a different point, quoted this statement from Harold Meyerson (my emphasis added):

But the new growth of selective libertarianism in the Democratic ranks
is hardly going to be the main source of controversy in coming party
debates. More likely, that debate will pit those who think retraining
is the answer to our more layoff-prone society (that's the Bob Rubin
solution) against those who think that retraining needs to be
supplemented by, for instance, publicly funded alternative energy
programs that would generate millions of jobs (that's the solution of a
number of union leaders, and one that I favor as well). The latter
position is clearly more in the New Deal liberal mode, but Rubin's is
hardly libertarian.

Do serious people actually favor publicly funded alternative energy programs of the scale that would employ millions of people?  Note that since the total civilian labor force is approximately 150 million people, he is talking about a program encompassing several percent of the US workforce.  I am supposed to be on vacation this week, but here are a couple of random thoughts:

• A huge government make-work program seems to be an odd response to an increase in employment volatility, which is how the problem is framed, even by Meyerson.  He calls it our "layoff-prone society."  I don't accept that this is necessarily a bad thing, but even if it is, a jobs program does not solve it.  Our unemployment today is at a low level (less than 5%) so that the problem, if it exists at all, has to be volatility, not the absolute size of employment.  So a jobs program helps, how?
• I will confess a big government-funded jobs program would reduce employment risk in one way:  once someone is hired by the government, whether it be a teacher or bureaucrat,  it is impossible short of a felony conviction to fire them, no matter how horribly destructively incompetent they are.  So anyone hired by this new job program would have a job for life, I guess, though at an enormous dead-weight-loss of the overall economy.
• The current economy hovers near full employment.  That means that millions of people sucked by the government into an alternative energy program would be pulled out of areas the market currently says is the most productive place for them.  Unless the government has identified a massive market inefficiency, such a program will net reduce the productivity and output of the economy.  Remember -- these millions of people are likely employed somewhere else today, so those places they are employed either have to scale back or pay more for labor.
• Does anyone really think the government is going to make the right technology and investment choices in such a program?  It will take about 47 seconds before the investment process is politicized and spending is handed out as pork to valued supporters in key Congressional districts. (just look at ethanol and the Midwest Archer Daniels Midland lobby). Remember, the government has been pouring all its investment and subsidies and regulations (e.g. zero emissions requirements) into plug-in electric cars, which still are not there technologically.  In the mean time, the market has latched onto hybrids, a technology actually opposed at first by government energy czars in places like California (because they were not zero emissions).  Hybrids have done more to reduce automotive fuel consumption than any of the technologies, from plug-ins to fuel cells, that the US government has supported in any big way.

Postscript:  Yes, I know plug-in hybrids may be here soon, but batteries are apparently still not where they should be.  I would love to have a plug-in hybrid.  Note, of course, a plug-in hybrid is very very different from a straight electric car, which was the choice of the bureaucrats.  Also, I know that some areas have started to subsidize hybrids, for example by allowing their use by one passenger in the car-pool lane.  These are late-to-the-party efforts to claim some government credit for a private market trend already in progress.

Update:  In fact, today's SJ($) brings us a relevent example:

[Former Airbus CEO] Mr. Streiff talked of moving production jobs between
partner countries, running Airbus like a business. For the first time,
there was talk of apportioning work on the basis of competitiveness,
not national entitlement. There were hints that Airbus should emulate
Boeing with major risk-sharing partnerships, looking beyond Europe for
new product development resources and production sites. He even
committed the ultimate sin"”publicly admitting that Airbus had fallen
over a decade behind Boeing in new product development.

In his exit statement, Mr. Streiff said, "I
progressively came to the conviction that the mode of corporate
governance at Airbus didn't allow for the success of my plan." In other
words, the now former CEO implies, he was blocked by people who like
the status quo. So who would be happy with the status quo when the
situation is degenerating with each day? Well, any government official
who wants governments to stay in charge of the economy. The last thing
they want to see is private sector cash reinventing the fruit of their
state-directed industrial policy.

For the best clue to this dysfunction, consider
France's finance minister, Thierry Breton. He recently told reporters
that Airbus is a "European success," but vowed to "defend this model."
Now why would a model need defending if it were successful?

Airbus was created when European governments
orchestrated their economies, creating new national and continental
champions according to politicians' whims. As far as industrial policy
goes, Airbus was a no-brainer: The jetliner industry offers guaranteed
growth rates and extremely high barriers to entry. Take some legacy
industrial assets, insert government cash, find some talented sales
people, and watch it go. Every other European industrial
scheme"”shipbuilding, cars, Concorde"”obliterated value. Airbus was the
only state-supported success. Unfortunately, Europe's politicians
forgot a crucial fact: Airbus succeeded despite government industrial
policy, not because of it. In fact, this government interference has
created some serious trouble.

Look at the Airbus record: a series of moderate
successes (A300/310, 330), one huge home run (A319/320/321), and some
lamentable but forgivable near misses (A340, A340-500/600). But with
the full support and connivance of parent governments, they launched a
spine-breaking disaster, the superjumbo. Without the A380, Airbus would
still be a tremendous success. Instead, they've got a serious
industrial crisis, right in the middle of the best jetliner market in
years. Mr. Breton's "model" of state-guided industries is alchemy in
reverse: spinning gold into straw.

I'm not really into the culture, so prevalent here in Scottsdale, of purchasing expensive cars and boats for use as ego-prosthetics (I drive a Volvo, for god sakes, a chick-anti-magnet if there ever was one).  But I have to admit this is cool, a new supersonic business jet.  The real breakthrough seems to be their ability to substantially reduce the sonic boom, which got the Concorde banned from over-land flights, to a legal and manageable level.  They claim sound levels 99% lower than the Concorde at ground level, though this is theoretical and has not been tested.

They don't mention fuel economy -- the Concorde drank fuel. 

Oh, and the price - expected to be $80 million for a twelve seat aircraft.  For those of you who don't routinely shop for private aircraft, this price is steep even in that rarefied market.  You can get a Boeing 737 outfitted very nicely as a private plane for half that.  But this new plane will get you to your house in Gstaad twice as fast.

I am just amazed at how much bad science and ignorance gets pored into current 9/11 conspiracy theories.  For example, someone apparently did a small bit of research and found that structural steel melts at a higher temperature than aviation fuel burns.  From these two facts, each correct in the right context, comes the whole theory that the WTC towers came down in a controlled demolition rather than a collapse of fire-weakened structural members.  Of course, this is stupid. 

I did piping and boiler design for several years at a refinery.  Carbon steel, while it may not actually melt until you get it up to thousands of degrees, loses most of its structural strength between 700 and 1000 degrees(F), well below the temperatures in the WTC fires.  I lived with this frustrating fact every day, since many refinery processes crave higher temperatures.  Not only does steel's strength drop with higher temperatures, but it falls exponentially once it passes a certain threshold.  Some day soon I will post my refinery fire pictures, and show huge steel I-beam structures that collapsed from the heat of petroleum fires.  But here is a good reality check:  If skyscraper I-beams really won't fail at jet-fuel-fire temperatures, why do skyscraper builders waste millions of dollars insulating all the structural steel against building fires, which I can assure you burn much cooler than aviation fuel fires?

Beyond the basic science, most 9/11 conspiracy theories violate a couple of smell-tests.  The first and most obvious is Occam's razor.  Any theory that uses as a starting point a few small, minor uncertainties in events and explains these uncertainties with theories that have new, massive uncertainties in them is not necessarily wrong, but one has to treat it with huge dollops of skepticism.  As Jesse Walker described 9/11 cospiracy folks in Reason's Hit and Run, "They're the sort of people who will question whether a plane actually
hit the Pentagon on September 11, 2001, but won't question a theory
that can't explain just where the hijacked aircraft landed instead."

The other smell-test I use is a law I have dubbed Coyote's Law, and it goes like this:

When the same set of facts can be explained equally well by

1. A massive conspiracy coordinated without a single leak between hundreds or even thousands of people    -OR -
2. Sustained stupidity, confusion and/or incompetence

Assume stupidity.

Does anyone really believe that a Bush administration that can't keep a program involving a dozen people secret could keep the lid on a conspiracy this massive involving hundreds of people from any number of government agencies?  Isn't incompetence a more compelling answer here?

Alexander Cockburn thinks so, as quoted in Reason's Hit and Run:

One characteristic of the nuts is that they have a devout, albeit
preposterous belief in American efficiency, thus many of them start
with the racist premise that "Arabs in caves" weren't capable of the
mission. They believe that military systems work the way Pentagon press
flacks and aerospace salesmen say they should work. They believe that
at 8.14 am, when AA flight 11 switched off its radio and transponder,
an FAA flight controller should have called the National Military
Command center and NORAD. They believe, citing reverently (this is from
high priest Griffin) "the US Air Force's own website," that an F-15
could have intercepted AA flight 11 "by 8.24, and certainly no later
than 8.30."

They appear to have read no military history, which is too bad
because if they did they'd know that minutely planned operations -- let
alone responses to an unprecedented emergency -- screw up with
monotonous regularity, by reason of stupidity, cowardice, venality,
weather and all the other whims of providence....

August Bebel said anti-Semitism is the socialism of the fools. These
days the 9/11 conspiracy fever threatens to become the "socialism" of
the left, and the passe-partout of many libertarians.

By the way, can anyone tell me why the so called "reality-based" community, that so often criticizes the Right for theocratic attacks on science, is so quick to fall for this pseudo-scientific junk?

Update:  In case anyone cares, here is the temperature curve for the strength of carbon steel.

Update 2:  I am told by email that I will now be added to the long and growing list of those who are part of the conspiracy.  Cool!  Please make sure the CIA spells my name right on my payoff check.

Update3: And don't miss James Meigs here.

In every single case, we found that the
very facts used by conspiracy theorists to support their fantasies are
mistaken, misunderstood or deliberately falsified.

Here's one
example: Meyssan and hundreds of Web sites cite an eyewitness who said
the craft that hit the Pentagon looked "like a cruise missile with
wings." Here's what that witness, a Washington, D.C., broadcaster named
Mike Walter, actually told CNN: "I looked out my window and I
saw this plane, this jet, an American Airlines jet, coming. And I
thought, 'This doesn't add up. It's really low.' And I saw it. I mean,
it was like a cruise missile with wings. It went right there and
slammed right into the Pentagon."

We talked to Walter and,
like so many of the experts and witnesses widely quoted by conspiracy
theorists, he told us he is heartsick to see the way his words have
been twisted: "I struggle with the fact that my comments will forever
be taken out of context."

This reminded me a bit of the Michael Keaton Batman movie, where the Joker was handing out money to voters in a bid for popular support:

The Capitol Hill newspaper writes that Democratic
House challengers "think they have found a clever way to harness voter
anger over high gasoline prices" by selling it for less, a move that
Republicans defending their seats say is "tantamount to vote buying."

Rep. Ron Lewis (R-KY) has asked the U.S. attorney in
Louisville to investigate whether his opponent, Democrat Mike Weaver,
violated criminal code with his recent "cheap gas event"
at an Elizabethtown station, where motorists filled up for $1.22 a
gallon "“ the price of gasoline when Rep. Lewis took office in 1994.

Beyond the obvious question of just what the hell Ron Lewis had to do with or could have done to stop the run-up of gas prices from $1.22 to their current levels, it would be interesting if this turns out to be legal at the same time that actual political speech is illegal.

I don't know election law very well.  Clearly handing out subsidized gas below cost as part of a political rally is roughly equivalent to handing out $20 bills to anyone who attends said rally.  The party officials involved argue that this activity is legal as long as there is no way to track who got the largess or to tie the money handouts to actual voting decisions:

"The gas is available to whomever wishes to purchase it
at the subsidized sale price for a short time ... there's no condition
attached," Bauer told the newspaper, adding that there is no way to
track whether motorists purchasing the lower-priced fuel are registered
to vote in the district the candidate is running for, or whether they
will vote at all.

I don't know election law very well, so I will ask the readers.  If I was running for office, and holding a publicity event at which I handed out $20 bills to attendees, would that be a legal election practice if, as with the party's logic above, I hand them out to all comers regardless of their voter registration status or party affiliation and I don't do anything to track who they are?

The one the government did not support, plan for, or subsidize.

It increasingly looks like hybrids, particularly newer plug-in hybrids, will be the high MPG, low-emission technology winner in the foreseeable future.  The US and California governments, among others, have subsidized (and at times mandated) pure electric vehicles, hydrogen vehicles, natural gas powered vehicles, and fuel cell powered vehicles.  While some governments have come along with ex-post-facto promotions of hybrids (e.g. ability to use the carpool lane), hybrids have been developed and won in the market entirely without government help and in places like California, effectively in the face of government opposition (because they were stuck on zero emission vehicles, low-emission vehicles were opposed)

Plug in hybrids have many of the advantages of electric vehicles without the range problems.  They use standard gasoline so they avoid the new fuel distribution issues of natural gas and hydrogen.  And fuel cell technology may be great one day but is not there yet.  I was reminded of all this by this article by Stephen Bainbridge on why the EV-1 failed.

Update:  This reminds me of the 19th century transcontinental railroads - UP, SP, NP, GN etc.  Only one of these transcontinentals did not get any federal land grants or government financing -- the Great Northern of James J. Hill -- and not coincidently the GN was the only one not to go bankrupt in the close of the century.

A few days ago, I posted that people seem to make strange tradeoffs between the cost of gasoline and the value of their personal time.  Don Boudreaux at Cafe Hayek makes a similar observation about recent calls to reinstate the 55 MPH speed limit, pointing out that slower speed limits may save gas but they cost people time, and time is one resource that is truly finite:

In short, for every 75-miles covered on a highway, reducing the speed limit from
75 MPH to 55 MPH will save a driver $2.58 in fuel cost -- and this assuming that
the increase in fuel efficiency of the average car caused by the lower speed
limit is a whopping 10 mpg.  But the resulting greater time on the road will
cost a driver earning the average non-supervisory wage $5.82 worth of his or her
time per 75-miles driven.

By the way, it is no surprise that this always seems to be proposed by Easterners who have no conception of the travel distances out west.

As a preface, I am not a socialist planner, so I do not presume to make other people's economic trade-offs for them.  If someone out there chooses to collect Pinto station wagons or pay $10 million to go on a Russian space launch, power to them.

That being said, I will observe that gas price concerns seem to drive people to do things that they would not normally do in other contexts.  Market Power quoted this statement from the Washington Post:

"When prices go up, you're going to see some interesting things," said Tom
Kloza, chief analyst for the Oil Price Information Service in New Jersey.
"Saving money on gas is something that's just magical in this country. Rational
thought just doesn't apply to gas."

Market Power was skeptical that such irrationality exists, but I think it may be correct.  Here are a few examples:

1.  Waiting for hours:  A couple of years ago when I lived in Seattle, a local Costco put in a gas station and sold gas for 10-15 cents or so below most of the other local stations.  Every time I went there, there was a huge line -- perhaps half an hour long -- to get gas.  For a fifteen gallon fill-up saving 15 cents and waiting 30 minutes, that equates to $4.50 an hour savings for their efforts, not to mention the extra driving time (and gas!) spent getting to this one spot rather than their local station.  How many people in the line would have driven an extra 10 miles to take a job at $4.50 an hour? 

Lately, I witnessed a free gas promotion where people lined up and waited at least 3 hours for 10 gallons for free gas (people apparently had lined up starting at 4AM for the promotion that began at 8AM.  This is a bit better deal at $10 per hour, but I wonder how many people in the line would have participated in any other endeavor for $10 an hour?  Market Power points to a similar promotion in Sioux Falls, where the value of police time providing security was probably higher than the value of the gas given away.

2.  Save a dollar, pay three extra.  One of the reasons I am unconcerned with gas price gouging is that many gas stations today use gas as a loss leader, hoping to pull motorists into their store or restaurant.  In the language of gouging, what this means is that typically you are getting a great price on gas (given what the dealer's costs are) and are getting gouged on coffee and Twinkies.  Its amazing to me that people who check the Internet to find the place with 5 cents a gallon cheaper gas will then walk into the convenience store and pay whatever for Cokes and water and cigarettes and beer and coffee.  It seems crazy, but the best way to explain it is that for a number of people, a dollar saved on gas gives them far more satisfaction than say a dollar save on soft drinks.

3.  Wagering with the rental car company.  Every rental car company offers you a wager nowadays.  They give you the chance to buy the whole tank of gas in advance for something like 20 cents less than the local market rate.  Assume the local market rate is $3.20, the rental car advance rate is $3.00, and the tank is 15 gallons.  All you have to do to win this bet as the renter is to return the car with less than 1 gallon left.  If you do, you win, otherwise you lose.  Is this a bet you want to take?

But I left something out - the value of your time.  Let's say you value your marginal time at $30, and it take 15 minutes to fill up the rent car yourself.  By taking the fuel option, you save $7.50 of time.  This means to win the bet, including the value of your time, you have to turn it in with less than 3.5 gallons left, or less than 1/4 full.  The other alternative is to not stop and turn it in at the rent car place and let them fill it up at their $6.00 rate.  But even this ridiculously inflated rate for turning the car in part-full is still a better option than the pre-paid fuel as long as you don't use more than half a tank.   And I bet that the vast, vast majority of people who rent cars, particularly on business trips, don't use a half tank (a half tank at 20mpg is about 150 miles).

One of the best tests of my proposition is to see how many businesses
today act as if this gas-price-overfocus is a real phenomenon:  Car
dealerships give away free gas rather than rebates;  many many
companies are having free gas promotions;  gas stations continue to
sell gas at cost to get you in their store.  Basically, businesses
everywhere are betting that their customers will find $30 of gas more
appealing than any other $30 giveaway. 

None of the above bothers me particularly -- people are different and interesting in how they act.  That's why government planning tends to chafe everyone.  In fact, the only part of this supposed irrationality about gas prices that does bother me is the fact that so many people run to the government for price controls and gouging investigations whenever gas prices go up, and so many Congressmen of both parties see value to pandering to these instincts.  This despite the fact that gas prices are still effectively far lower as a percentage of income than they were 25 years ago.  I wish they would all go back to sipping their $8 Starbucks coffees and just deal with it.

Update:  Was on Snopes.com checking out an email that seemed like an urban legend (it was) and saw a sidebar listing gas wars as the #1 urban legend email of the moment.  ExxonMobil seems to be the bad-guy target-of-choice, I guess just because they are the largest.  The "idea" in the email is that if everyone would boycott ExxonMobil and shop at other gas stations, the price of gas would fall.  LOL.  As Snopes points out:

A boycott of a couple of brands of gasoline won't result in lower
overall prices. Prices at all the non-boycotted outlets would rise due
to the temporarily limited supply and increased demand, making the
original prices look cheap by comparison. The shunned outlets could
then make a killing by offering gasoline at its "normal" (i.e.,
pre-boycott) price or by selling off their output to the non-boycotted
companies, who will need the extra supply to meet demand. The only
person who really gets hurt in this proposed scheme is the service
station operator, who has almost no control over the price of gasoline.

Truck and Barter is not very impressed with Bush's call for us all to drive less. 

I'd like to know just why I should conserve. We supposedly live in a
capitalist society based on property-rights and free-trade; why, all of a
sudden, do you ask that I not trust that the price of fuel incorporates all the
scarcities at every level of production? What economic lever broke in the past
month? Why do you think the price system is failing so bad that we need to
"conserve" more than the price signal warrants?

I won't pretend that market prices don't exist, or that markets have suddenly
stopped working; I won't pretend that prices are inefficient allocators of
resources; I won't pretend that I cannot buy as much gasoline as I can afford at
current prices.

Furthermore, Mr. President, I will not pretend that you have legal or moral
authority to tell me how much gasoline I may purchase. I will not pretend that
your feeble call to use less has any impact whatsoever on my psyche. I will not
pretend that the Federal Government knows better than me how much gasoline I
should purchase.

Awesome, well said.  Maybe if Bush had worn a cardigan, like Jimmy Carter did when he asked the same thing, he might have been more successful.  Or then again, maybe Bush should have thought twice about channeling Jimmy Carter on any energy or economics related issue.

By the way, there is much more to the post - make sure to read it all.

Update: This one attracted a number of comments fast.  Here are some additional thoughts

Doesn't it make sense to conserve gas?  Isn't what Bush said correct?

Sure it makes sense, but I didn't need Bush to tell me.  Seeing my average 15 gallon fillup go from $30 to $45 nearly overnight told me everything I needed to know.   I adjusted my driving behavior based on how I value various types of trips.  And so, apparently, did everyone else, as gas consumption in this country dropped almost 10%.  Bush doesn't have to tell you to refinance your home when mortgage rates drop, or to buy less OJ when the orange crop failed -- prices signal these things quite nicely.

By the way, I limited my driving years ago (e.g. I live 1 mile from my office) but not because of gas prices.  Lets say 1 hour of driving gets me 30 miles in the city, and requires 1.5 gallons of gas.  The recent increase in gas prices has increased the cost of that 1 hour of driving by about $1.50.  That is NOTHING compared to how I have increased how I value my free time as I have grown older.  That hour may use up five bucks of gas but hundreds of dollars of my leisure time.  I have often told people that the biggest change you go through getting older is how much your internal valuation of your own free time goes up.  In college, I would wait for 8 hours in a line to get concert tickets at face value.  Today, I buy them market up at eBay, because that 8 hours is now worth far, far more to me than the markup.

Wouldn't voluntary conservation beyond what you have already cut back help reduce gas prices in the US?

Sure, if everyone cut back some percentage more than what they would have already done due to the price increase, then yes that might help push prices down.  Of course every person who did this would lose from doing so.  When the price increases, everyone eliminates their marginal use of gasoline, ie every use or trip that is worth less to them than the cost in fuel.  That means that the trips that remain are worth more to them than the gas (and other)  costs.  Therefore, remaining trips are a net increase to their well-being.  If a remaining trip is then eliminated voluntarily, or the cost of that trip is increased due to the increased hassle of carpooling or using public transit, then their well-being is reduced. 

However, this is the great thing about America:  If you personally value voluntarily reducing your gas consumption to help reduce prices for others, in a free society, no one is going to stop you.

By the way, here is the reason I don't worry about it:  I am old enough to have been driving in the late 1970's.  And I know from experience that allowing prices to shoot up for a period of time, without government price caps or windfall profit confiscation silliness, is going to lead to more supply and lower prices in the future.

Don't you think its unethical not to conserve in times like this?

No.  I don't associate consumption and ethics.  If it is sold legally at a certain price, and I can afford and wish to pay that price, then I don't see that morality or ethics come into play.  While there certainly can be ethical problems spending money unwisely (e.g. blowing money on coke or gambling that was needed to feed your kids), that is a different situation.  I don't feel guilty about consuming gas.

Isn't it a security issue?  Shouldn't we be asked or forced to conserve more to make the US independent of foreign oil?

There is only one time this argument makes any sense - if the world is in a full scale shooting war and all foreign trade and international markets are halted, and then we would have much bigger problems.

Short of the breakdown of world trade and markets, being "independent of foreign oil" is a mirage, an impossible non-goal.  Lets say that the world energy supply and demand was exactly the same as it was today, except that the US produced domestically exactly enough oil to satisfy domestic demand.  But in this case there is still a world market for oil.  The price of oil and gas in this country would not be more or less than it is today, except maybe for a few cents of transportation cost differences.  And if there is an oil supply shock, the pricing in the US will be virtually the same in this hypothetical situation as it would be in today's structure.

Shouldn't the President be doing something?

Sure.  Get the hell out of the way of the people who can fix the problem.  Rethink the regulatory regime that is preventing refinery construction.  Revamp the licensing approach for nuclear power.  Open up oil drilling in proscribed areas.  And find his lost veto pen and ax any dumbshit regulation out of Congress managing energy prices, taxing windfall profits, or attempting to pick winners via subsidies.

Technorati Tags:  Energy, Economics

Originally, the environmental movement counted many in its leadership with scientific backgrounds who were thoughtful advocates of improving the environment.  Unlike many "conservatives", as a libertarian that thinks more about being for property rights rather than just "pro-business", I understand that emissions guidelines are critical to the proper functioning of free markets:

In fact, environmental laws are as critical to a nation with strong
property rights as is contract law. Why? Imagine a world without any
environmental legislation but with strong property rights. What happens
when the first molecule of smoke from my iron furnace or from my farm
tractor crosses over on to your land. I have violated your property
rights, have I not, by sending unwanted substances onto your land, into
your water, or into your airspace. To stop me, you might sue me. And so
might the next guy downwind, etc. We would end up in an economic
gridlock with everyone slapping injunctions on each other. Since
economic activity is almost impossible without impacting surrounding
property owners, at least in small ways, we need a framework for
setting out maximums for this impact - e.g., environmental legislation.

Unfortunately, while many thoughtful people still call themselves an environmentalist, reasonable and scientific people no longer run the environmental movement.  Increasingly, the environmental movement has been taken over by
anti-growth and anti-technology Luddites as well as anti-free-market
socialists.

As evidence, I offer what has become an effective thirty-year moratorium on refinery construction. Forget for this post the obvious effect this has on gasoline supply stability, particularly with the EPA-mandated proliferation of special local gasoline blends.  Think instead about the true environmental implication:

The opposition to building new refineries ignores the dramatic
technological improvements that have been made since an oil refinery
was last constructed here in 1976. New, clean refineries emit far less
pollution than older refineries, with new scrubbers and design changes
that dramatically reduce sulfur and other emissions. And at the same
time our ability to model and map emission characteristics and
distribution lets us choose the best locations for new facilities "“
where they will have the least possible impact on people and the
environment.

Refineries are dirty places.  There are thousands of seals and flanges and safety valves that are going to leak some hydrocarbons.  But think on this:  Every single refinery in this country was built with at least 30 year old technology.  Sure there have been upgrades, but much of the core is still there.  I was an engineer at a refinery near Houston for 3 years and we had equipment still operating that was 50 years old, and that was twenty years ago and much of it is still there.

So what does this mean?  Imagine if every car in this country was over 30 years old.  Think of the improvements we have made in fuel efficiency and pollution control over the last 30 years- no cars would possess any of this technology.  The roads are full of cars with modern technology that are fuel efficient and relatively clean because we don't moronically prevent them from being replaced with new ones.

But this is exactly the case with refineries.  The single best, most intelligent thing we could do today for the environment, as far as refineries are concerned, is to let about 10 brand new ones be built with all modern technology, and let these newer refineries compete the older ones into closure.  And who is blocking this single most impactfull environmental step?  Environmentalists, of course.

This is not an unusual issue. I wrote about this same issue with new source review rules and Bush's Clear Skies initiative:

New source review is long and complicated, but basically
says that existing power plants don't have to upgrade to new
technologies, but new ones have to go through a very extensive
environmental review and permitting process and have a suite of
government mandated pollution control technologies installed.  OK, that
has all been clear for 3+ decades.  The rub comes when a company
considers upgrading or replacing a portion of a power plant.
For most of the life of the Clean Air Act, the government allowed
utilities to upgrade and modernize plants without having to install the
expensive suite of new controls.  The Clinton administration clamped
down on this, making it harder to upgrade existing plants.  All the
recent hullabaloo has occurred as GWB proposed to go back to the
pre-Clinton rules.

This issue is a great test for environmentalists, because
it separates them into those who really understand the issues and the
science and legitimately want improvement, and those who care more
about symbolism and politics.  Those who like symbolism have cast this
move as a roll-back, and are fighting it tooth and nail.  Those who
care about results know the following:

Experience under the Clinton rules has shown that most old
plants will never be upgraded if they have to go through the planning
process and install the new scrubbing and other technologies.  So, they
will just keep running inefficiently, as-is, until they are finally
shut down.  However, if allowed to be upgraded without review and new
scrubbers, etc., they will become much more efficient.  No, they won't
have the most modern scrubbing technology, but because they are more
efficient, they burn less fuel (coal) to make the same amount of
electricity and therefore will pollute less.  In some cases these rules
even prevent switching to cleaner fuels like natural gas. 

In other words, most scientists, including
scientific-oriented environmentalists, agree that GWB's proposal will
result in less pollution, but environmentalists still oppose it because
they don't like the symbolism of any pollution regulation appearing to
be rolled back.  You can read a lot more about New Source Review and how it actually increases pollution in practice here.

Technorati Tags:  Environment, Economics

A couple of years ago, California suffered through a summer of electricity blackouts while the state and  state-protected power monopolies nearly bankrupted themselves.  While California politicians have tried to cover their behinds by blaming Enron for the problems, the real mistake that led to the debacle was allowing the wholesale price of electricity to float higher, while the retail price remained low and fixed.  As a result, as wholesale prices skyrocketed, the State and the power monopolies had to buy high and sell low, causing massive financial losses.  At the same time, consumers saw no change in prices, so they had no incentive to change their behavior and cut back on usage, which they would have done if retail electricity prices had been allowed to rise with the market.

Via Instapundit and Gateway Pundit, comes this article about gas shortages in China and the ensuing lines at retail gas stations, that look worse than anything we suffered through in this country.  The article makes fairly clear what is going on:

The Chinese government and its state-owned oil companies are locked
in battle over artificially low gasoline prices at the pump that has
caused a massive shortage in the southern manufacturing province of
Guangdong.

For weeks skyrocketing global oil prices and rising
demand has led to a fuel-supply crunch as domestic refineries have been
caught short in Guangdong.

Some fear it is only a matter of time before gas-guzzling cities such as Shanghai are hit too.

The
government has blamed recent stormy weather for the shortfall, which is
feasible but not enough to result in the kilometre long queues at
filling stations that drivers in Guangdong have endured for nearly a
month.

As oil prices climbed, a standoff erupted between China's
National Development Reform Commission (NDRC) -- a key economic policy
planning body -- and the country's two largest state oil groups
PetroChina and Sinopec, analysts said Wednesday.

The crisis
highlights the persistent problems Beijing faces as the economy is
transformed to a more market-based system but that is often retarded by
authorities who fear loosing political control in the face of
full-fledged capitalist rules.

I blame Enron.  Anyway, I wrote about gas line and what caused them in the US here.  Some genius also attempted the same policy as China is pursuing in post-war Iraq, with similar results.

Previously, I asked "why won't ethanol just go away", lamenting what a stupid program ethanol is and how much subsidy money is poured down that drain, not to mention the effect it seems to have on the Iowa primary every 4 years.  Yet another study has shown that ethanol consumes more energy to make than it actually produces. 

Turning plants such as corn, soybeans and sunflowers into fuel uses much more
energy than the resulting ethanol or biodiesel generates, according to a new
Cornell University and University of California-Berkeley study.

"There is just no energy benefit to using plant biomass for liquid fuel,"
says David Pimentel, professor of ecology and agriculture at Cornell. "These
strategies are not sustainable."

Pimentel and Tad W. Patzek, professor of civil and environmental engineering
at Berkeley, conducted a detailed analysis of the energy input-yield ratios of
producing ethanol from corn, switch grass and wood biomass as well as for
producing biodiesel from soybean and sunflower plants. Their report is published
in Natural Resources Research (Vol. 14:1, 65-76).

In terms of energy output compared with energy input for ethanol production,
the study found that:

• corn requires 29 percent more fossil energy than the fuel produced;
• switch grass requires 45 percent more fossil energy than the fuel produced;
  and
• wood biomass requires 57 percent more fossil energy than the fuel produced.

In terms of energy output compared with the energy input for biodiesel
production, the study found that:

• soybean plants requires 27 percent more fossil energy than the fuel
  produced, and
• sunflower plants requires 118 percent more fossil energy than the fuel
  produced.

In assessing inputs, the researchers considered such factors as the energy
used in producing the crop (including production of pesticides and fertilizer,
running farm machinery and irrigating, grinding and transporting the crop) and
in fermenting/distilling the ethanol from the water mix. Although additional
costs are incurred, such as federal and state subsidies that are passed on to
consumers and the costs associated with environmental pollution or degradation,
these figures were not included in the analysis.

Reason reports that the ACLU is jumping into the fray to try to prevent Las Vegas from levying a special sales tax on strippers (emphasis added)

A Nevada bill that would impose a
10 percent tax on strip club dancing will be struck down in
court if lawmakers pass it, an American Civil Liberties Union
lawyer said on Wednesday.

"You can not have a special tax aimed at First Amendment
activity based on content," said Allen Lichtenstein, general
counsel of the ACLU of Nevada.

"Adult entertainment, which is protected by the First
Amendment, is being targeted to bear the burden of taxes where
other businesses are not," Lichtenstein said, referring to the
bill. "To single out a particular business based on content and
tax it with a special tax is unconstitutional."

Don't get me wrong, I am certainly happy that the ACLU has suddenly discovered the rights of taxpayers, but they seem a bit late to the party.  I mean, states that charge the same tax to every business, especially the same sales tax rate, are the exception.  States all charge special hotel rates, rent car taxes, airport fees, long distance surcharges, etc etc.  For example, here are just a few of the special unique industry-specific taxes on the California BOE site (by the way, you know you live in a socialist state when your tax department is called the "Board of Equalization"):

• Alcoholic Beverage Tax
• Alternative Cigarette Tax Stamp Program (ACTS)
• California Cigarette & Tobacco Products Licensing Act of 2003
• California Tire Fee
• Cigarette and Tobacco Products Tax
• Emergency Telephone Users Surcharge
• Energy Resources Surcharge
• Integrated Waste Management Fee
• Natural Gas Surcharge
• Tax on Insurers
• Oil Spill Response, Prevention and Administration Fee
• Underground Storage Tank Maintenance Fee
• Childhood Lead Poisoning Prevention Fee
• International Fuel Tax Agreement (IFTA)
• Interstate User Diesel Fuel Tax (DI) Program
• Motor Fuels
• Aircraft jet fuel tax
• Diesel fuel tax
• Motor vehicle fuel license tax
• Motor vehicle fuel tax
• Use fuel tax
•  Hazardous Substance Tax
• Environmental Fee
• Facility Fee
• Generator Fee
• Disposal Fee
• Tiered Permitting Fee
• Activity Fee
• Occupational Lead Poisoning Prevention Fee
• Ballast Water Management Fee
• Rent car taxes (by city and county)
• Hotel/motel special tax (by city and county)

This is far from a complete list, but you get the idea. This article from the Tax Policy Center explains that narrow industry specific excise taxes have a very long history in this country.  And this completely leaves off the issues of subsidies that are targeted at particular industries, such as the billions in direct subsidies received by farmers, not to mention the additional billions in price supports they get as well.  (Reason, by the way, has done some entertaining research on the millions of dollars of farm subsidies received by the family of Farm-aid founder John Cougar Mellancamp).  I am eager to see the ACLU begin tackling these other "special taxes" on "particular businesses".

I am not sure what motivated the ACLU to finally join the taxpayer cause, other than perhaps a personal financial interest their leadership team might have in this particular tax, but I for one am happy to welcome them to the cause.

Update: I am still having fun trying to imagine how the ACLU, the supposed protector of individual rights that has never had a problem up 'till now with our class warfare tax rates that are zero on some Americans and 40+% on others, suddenly had an epiphany about unequal levels of taxation when it comes to taxing strippers.  I have this visual picture in my head of the local head of the ACLU slipping a five into an entertainers g-string but getting mad when he couldn't get the two extra quarters in there to pay the tax.

Update #2: By the way, for all the flippancy in my post about the ACLU, they are absolutely right in this case, if way too narrowly focused.  I criticize the ACLU often because of the 21 policy areas it considers critical to individual rights, none have anything to do with property rights or economic freedom.  However, the ACLU is a strong and consistent defender of free political speech during a time when speech is under attack from all sides of the political spectrum.  The ACLU realized early on something the left still won't acknowledge, that it is impossible to separate regulation on spending for speech from restrictions on speech itself. 

Unfortunately, what the ACLU refuses to recognize is that all commerce, not just purchasing political ads or buying couch dances, is a form of communication and free expression.  The economy is nothing more than individuals, millions of times a day, communicating and reaching agreements to trade for mutual benefit.   Why is it any less of a restriction of free speech when the government places restrictions on this communication, say by restricting the range of wages I can offer an employee?  Or, more obviously, how can the government place regulations on what I can say about my company in an advertisement, but not on what I say about a political candidate?

The ACLU in this case seeks to evade sanctioning free speech in that dirty commercial world by apparently arguing that stripping is not commerce but artistic expression.  But by that logic, the government shouldn't be allowed to tax building and construction, for surely buildings are a strong and lasting form of art and expression.  Or how about cars - I certainly consider a Ferrari a much higher form of expression than a couch dance.  How can the government tax cars?  Or what about T-shirts with a political message -- can governments charge sales taxes on those?  What about the lawn service I pay to have a beautiful green lawn, which is the ultimate form of suburban expression?

At the end of the day, it is impossible to separate money and commerce and property from speech and expression.  Commerce is the most ubiquitous and important form of free expression we have in this country.  So far, the ACLU seems to acknowledge this fact only for topless dancers and politicians.  I wish they would extend their efforts to protect both free speech and free commerce to the rest of us.

Todd Zywicki at Volokh has an interesting post on what is driving hybrid car purchases in certain cities.  While certain segments are driven by environmentalism and fuel economy, the real boom in certain cities has come with the legal change in some cities allowing single persons in hybrid cars to use the carpool lanes.

"'I'd say 95 percent of the people who buy a Prius say it's to get into HOV,'" said Jay Taye, sales manager at Ourisman Fairfax Toyota. "'They talk about the tax break and the HOV, and once in a while they say they prefer it for the gas mileage as well.'"

By the way, he links an absolutely dead-on article about public transit in the Onion here called --"Report: 98 Percent of Commuters Favor Public Transportation For Others"

The link between the Onion article and the Washington Post story referred to by Zywicki is that what people really want is a fast commute in their car, and they are willing to pay for it.

Several years ago, I sent in a proposal to the Arizona Dept. of Transportation for their new HOV lanes in the Phoenix area, though I never got a response back.  I suggested that HOV lanes probably did not really increase carpooling, since they probably just shifted vehicles that would have already been carrying 2+ people into the faster lane.  Why should I get this artificial subsidy of a dedicated lane when I am driving my kid to a soccer game but not when I am driving myself to do productive work?  Either way, the lane is not changing my behavior.

Anyway, I suggested that instead, AZ DOT should create a number of special passes for exclusive use of the HOV lane.  The number of passes should be set as the largest number that could be issued while keeping the HOV lane moving at the speed limit at rush hour.  Maybe 5000?  Anyway, they would have the stats to set the number, and it could be adjusted over time.  I proposed that they then auction off these passes in a dutch auction once a year.  I posited that the clearing price might be as high as $1000, thus raising $5,000,000 a year that could be used for other transportation projects.

I have friends that said I was crazy, that no one would spend $1000.  Back then, I argued it in two ways.  First, thousands of people in town spend not $1000 but tens of thousands of dollars, in the form of purchasing a nicer-than-basic-car, to make their driving experience better.  In those terms, to the Mercedes or Lexus owner, $1000 was nothing and in fact the price might go higher.  Second, if each pass holder saved 15 minutes per commute, or 30 minutes per day over 250 work days, they would save 125 hours of their time each year.  Bidding just $1000 for this would mean that people would have to value their free time (since commuting generally comes out of free and family time) at $8 an hour.  I certainly value my free time at a MUCH higher rate than this.

This article cited above effectively adds another data point to what people might pay.  To buy a Prius, they are spending at least $5000-$10,000 more than a similar car that can't go into the HOV lane, and probably even more when you consider features they may be giving up to have the car.   

Today, I would bet that the clearing price for 5000 such passes may be $3000-$5000, thus increasing the annual revenue to the city/state as high as $25,000,000.

By the way, though it is a bit different than what I am suggesting, the best related plan that I know of that has actually been executed succesfully is congestion pricing in central London.

UPDATE:  Dang, reading up further in Volokh, Zywicki anticipated my post with a similar one here.

I had no idea this is what they were doing, but it is insane (via Marginal Revolution):

THE queue of angry motorists stretches for miles. Baghdad's petrol stations are drier this month than they have been since just after the American-led invasion of Iraq in 2003. Some drivers wait for as much as 24 hours, sleeping in their vehicles. When told that there is no petrol, some have lost their tempers and started shooting. How, asks a furious driver, can an oil-producing country run out of fuel?

Ask an insurgent, and he will assure you that the American army steals the oil for its tanks. Others might blame the lack of capacity at Iraqi oil refineries or the fact that the insurgents keep blowing up the pipelines. But the most important reason is that the government has fixed the price of petrol at approximately zero"”barely one American cent a litre.

I wonder if the problem in the electic power sector is similar.  See the post for the whole article, from the Economist.

For several years, I worked for a major supplier to the commercial airline industry.  Eventually, I had to leave, because the entire industry just drove me nuts - some of the worst structural problems in any industry I have seen combined with an incredible unwillingness to do anything about them.  Marginal Revolution reminds me about the airline industry with this post.

Through the 1990s, the average weight of Americans increased by 10 pounds, according to the Centers for Disease Control and Prevention. The extra weight caused airlines to spend $275 million to burn 350 million more gallons of fuel in 2000 just to carry the additional weight of Americans, the federal agency estimated in a recent issue of the American Journal of Preventive Medicine (fee req'd).

As entertaining as this is, the industry is still totally unwilling to address the real problems in the industry.

Continue reading ‘Airline Industry and Inventory Pooling’ »