Wednesday, April 15, 2020

The oil crash solution, sprawl vs. Covid-19, urbanists want our density+affordability, the induced-demand con, and why not to live in NYC

Just a few items this week, but good excerpts:
"There’s a quality about Houston, though, that transcends its built pattern: affordability. For decades, Houston has been the nation’s leading example of an “opportunity city”. It has, like coastal cities, high demand—aka fast growing job opportunities and population growth. But unlike those metros, it builds lots of housing, thus stabilizing prices. The median home price is $190,000, which is just 4/5ths the national average, according to Zillow. Midtown’s median home prices are $309,000, extremely low for a centrally-located urban neighborhood. This affordability has made Houston a refuge for expats from expensive states, and for immigrants—it is now the nation’s most diverse city. 
The affordability can be tied to both Houston’s density and sprawl. Rather than one being good and the other bad, both forms of growth have helped stabilize prices. But the multi-family infill housing is the most organic outcome to be found in the Houston model. If America had a more market-oriented urban approach, those aspects of Houston—the density and affordability—would be the ones most likely replicated. For this reason, “getting a bunch of Houstons” should be an urbanist goal."
  • This is pretty much the perfect solution to Houston - and the country's - energy woes.  And it should please both the right (nationalism and the economy) and the left (increasing the cost of carbon).  Coincidentally, I went to Rice with this guy! 
"A farsighted leader, argued Andy Karsner, a former U.S. assistant energy secretary, “could have imposed a variable U.S. tariff or fee on imported oil, which would be easily absorbed while prices are now slumping.” Such an import fee “could dynamically and automatically kick in incrementally if prices fell below an agreed floor, say $40 to $50 a barrel — the price that U.S. producers need to stay in business and supply America. The fee would disappear if prices jump above the agreed level. Brent crude is now around $31.” 
If we guaranteed U.S. oil producers a predictable price floor to enable the least indebted and most productive of them to survive, Karsner told me, it would pay multiple benefits: “It would raise money for us to invest in infrastructure; prevent job losses for skilled engineers and multibillion-dollar bailouts for U.S. oil companies; keep manageably low gasoline prices for U.S. consumers; and strengthen our energy security from predatory efforts by Russia and Saudi Arabia to wipe out our domestic oil industry.” 
But, most important, it would accelerate our clean energy transition, by shielding our electric car industry from foreign-manipulated gasoline prices and our wind and solar industries from temporarily suppressed natural gas prices."
"Several experts are advancing another explanation, too: Features that have long been viewed as liabilities — the state’s solitary car culture and traffic-jammed freeways, a dearth of public transportation and sprawling suburban neighborhoods — may have been protective
“Life in California is much more spread out,” said Eleazar Eskin, chair of the department of computational medicine at the University of California, Los Angeles. “Single-family homes compared with apartment buildings, work spaces that are less packed and even seating in restaurants that is more spacious.” 
Many scientific studies have found a correlation between population density and the spread of flu and other infectious diseases, something that may exist for the coronavirus as well."
"Imagine Verizon, AT&T, and T-Mobile discovered that, no matter how much they expanded their cell-phone networks, people kept buying new smart phones and using those networks. Would they decide to stop expanding their services for fear of turning too many people into smart-phone junkies? Of course not; so long as revenues covered their costs, they would happily expand to meet the demand. 
The point is that almost anyone would consider that an investment leading to increased use to be a sign of success. Yet Transportation for America sees it as a sign of failure. Would T4A have us stop building libraries, hospitals, and schools because the ones we build get used by readers, patients, and students?"

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At 1:19 PM, April 17, 2020, Anonymous Anonymous said...

Comment from Gary Bennett:

I (Rice alum, BA in History '65) was advocating a variable tariff on imported oil much like the one mentioned here forty years ago, albeit to a smaller audience. I did get one shot at a bigger readership, however, as the Philadelphia Inquirer printed the following. I have cut it somewhat to eliminate some no longer timely issues & meet space limitations. Also note that the impact of gasoline waste on climate change was not addressed (though already on my own worry list):
I read with sadness David Osterfeld's August 5 article, ‚“Cheap Oil
Won't Hurt the U.S.” Let us leave aside for the moment the fact that the author has consigned to oblivion tens of millions of ordinary people in the Southwest
and West who are being hurt now and being hurt badly (most of whom do not
own Cadillacs and never expressed a desire to “freeze a Yankee” (caricatures
notwithstanding). The truly frightening aspect of the article is the way
“logic” is invoked to prove that extravagant consumption is conservation and
that “draining OPEC of oil” is anti-imperialistic. ...
[C]ompanies are going out of business, skilled workers are leaving the
field without being replaced, and invaluable technological know-how is being
lost. The permanent loss of natural resources, capital, labor and technology
is hardly saving for a rainy day.
The alternate energy sources in which the author professes faith are
even more illusory. You cannot put a gust of natural gas or lump of coal in a
car's fuel tank; and the technology of conversion is being destroyed by
today's prices and government shortsightedness. All alternate sources of
energy, even conservation, are long-term processes (involving decisions
about where to live and what car to buy), not magic wands to wave at a
crisis. ... We are apt to forget how traumatic the “short
run” can be (as in 1973-1982).
Though there are many “strategic materials,” it would be hard to name any other material the loss of which would cripple us so quickly and completely. Under the banner of Free Trade, England allowed itself to become absolutely dependent on imported food in the late nineteenth century, and suffered dearly in two world wars for the extravagance. ...
But it is primarily America's future we must worry about. It is possible
to benefit from the temporary glut without mortgaging our future. This is our
greatest chance to fill the Strategic Petroleum Reserve on the cheap. And an
oil import fee is the greatest no-lose device one can imagine. What
consumers lose at the gas pump, they gain back in tax relief (or, perhaps a
more urgent need at the moment, deficit reduction). In the process, three
important goals are served: demand remains stable, as people are
encouraged by prices to conserve; the domestic oil industry is maintained,
for the immediate relief of the producing regions of the country, and the
long-term security of everyone; alternative energy technologies, which we
shall eventually need desperately, are nurtured. ...
Marxists would suggest that it is simply another example of ideas serving economic interests: the Northeast uses its media dominance to promote short-term regional interests at the expense of the long-term good of the nation. ...The means to both peace and prosperity lie in anticipating and
planning for one's future needs. Enlightened self-interest increases one's
chances for survival; ignorant greed and stupidity lessens them.
Gary Bennett
published in The Philadelphia Inquirer in August 1986


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