Bela Lugosi’s got nothin’ on Big Coal, but the parallel is humorously appropriate when you consider blood sucking air pollution, global warming, mountaintop removal, strip mining, coal slurry ponds, acid rain, and such. From today’s Boston Globe Editorial No Subsidy for a Filthy Fuel”:
The United States has immense coal reserves — enough to make it the Saudi Arabia of this fossil fuel — so proposals for liquefied coal have become the unkillable Draculas of US energy policy.
I don’t think we’ve learned anything from decades of subsidizing Big Oil, in spite of Exxonmobil showing record profits that sound more like a GNP. And now we’re going to add Big Coal to the subsidy mix?
The coal industry wants help from Uncle Sam because liquefied coal is still far too costly to be competitive. A recent MIT study on coal estimated that it would cost $70 billion to build the plants needed to replace just 10 percent of US gasoline consumption. Bills before Congress would provide government-backed loans for plant construction, subsidy protection against drops in oil prices, and a long-term contract to supply the Air Force with the alternative fuel. Coal-state lawmakers, including Senator Barack Obama, Democrat of Illinois, are pushing for the measures.
And here’s what nobody seems to know. Don’t be fueled by the term “clean coal”. Here’s one of the (many) rubs. (emphasis below mine):
All of this largess, though, would replace gasoline with a fuel that would generate about twice the carbon dioxide emissions of gasoline
No proven effective or efficient ($$) way to sequester (or bury) CO2 exists although there has been attempts to pipe it back into coal mines and oil wells. I don’t expect and hope not to see Governor Deval Patrick of Massachusetts on the hot side of global warming on this. The focus of this editorial is gasoline but the same could also be said about pipeline gas, home heating oil and the like.
But when it comes to replacing gasoline, the government should be subsidizing an alternative like cellulosic ethanol, which emits 90 percent less carbon dioxide than gasoline — and not liquefied coal, which would just speed the warming of the planet.
…or wind or solar or efficiency or conservation but they’ve got the right idea.
actual leadership wanted.
Coal-to-Liquids is great foreign policy if your only concern is the Middle East. It’s terrible environmental policy, and it’s terrible foreign policy once you come to terms with the notion that 21st century diplomacy will center around climate issues. Bush’s tactics [along with the nations of China, India, and Australia] have already led to a substantial erosion of trust placed in America by European nations.
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The fact remains that if national leaders really thought that the 24% of oil America uses that comes from the Middle East was a real problem, we’d see policy proposals that could conserve that much fuel within 10 years, half of which would be conserved immediately. How?
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p> * Reduce speed limits, and enforce them. 15% savings on highway fuel efficiency. * Improve CAFE standards. We could get 24% more efficient vehicles by 2017. * Improve and expand mass transit options, for local, commute, and between cities. Again, that’s a long term project, but could save 5%-10% fuel usage without forcing anyone to change habits; it’d simply provide a more attractive transportation alternative that happens to use less fuel. * Ethanol — from Brazil. Biodiesel — from tUSA. We could shave 5% demand within five years. The state of Massachusetts has taken some leadership with this, rolling out biodiesel on July 1 of this year (B5). * Raise the gas tax. Yes, it’s “regressive” for middle-lower class folks [the poorest in the country don’t drive — they take the bus]. But, the price at the pump will encourage people to choose more efficient means of travel the next time they buy a vehicle, but also in the mean time every time they’re idling and could turn off the engine, every time they could walk/cycle to the corner store, every time they could hop on the T, every time they could catch a ride with a colleague to work.
Every single one of these things would have been done if America considered using Middle Eastern oil the danger that we perceived WWI and WWII. These types of government programs and taxes pale in comparison with the sacrifice our parents and grandparents made during war time for the good of the country.
…except the speed limit thing. I like drive fast. I’ve never really understood why driving slower is better, because for the most part going less than 70 on the highway seems to involve a lot of braking to stay that slow, so energy is wasted in acceleration and deceleration. Is it to do with getting above the terminal velocity for the car due to air resistance? or is it that there’s an optimal velocity that balances the forces?
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that said, i think an outer loop commuter line somewhere between 495 and 128 would be great to connect the outer parts of the commuter rail so it could actually be used usefully. so that some one could take the train from Worcestor to Framingham and then switch north to go to Fitchburg or Bilerica, without having to go all the way into Boston first. Specifically, a line connecting up the stations that are the sometimes endpoints (like Framingham is for the Worcester line and South Acton for the Fitchburg – the only other line i know is the Franklin line but I don’t think that has a stopping point)
It’s fun.
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But, drag is why 65 mph uses so much more fuel than 55, and 75 more than 65.
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Since drag increases with the square, 65 mph creates over 30% more drag than 55 mph. Gas/diesel engines can be tuned to be slightly more efficient at particular speeds, but not by enough to overcome the difference in drag.
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The “braking problem” isn’t quite what you’re suggesting. In fact, re-read your third sentence — it makes no sense. Driving slower requires more braking than driving fast? When you’re driving faster, you’ve got to brake to get down to that slower speed, and then brake some more. Speeding faster than most other cars uses dramatically more fuel, because of the rapid accelerating and braking to which you refer.
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More to the point is that everybody would be 10 mph slower, so there wouldn’t be this perceived zoom-brake. Note that I explicitly encouraged enforcement of the speed limit. $100+ tickets do wonders to get people to cruise at legal speeds.
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55 mph instead of 65 mph uses less fuel, creates fewer traffic accidents, and results in less deadly results when accidents do occur. It means that [without traffic delays] you’ve got to leave about 10 minutes earlier for every hour of travel.
Drag (physics) and derivations
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There are two drag force* equations, one of which is apparently valid at “low” velocities, and the other, which you cited, is valid at “high” velocities. Aside from the fact that “low” and “high” is relative, and it is unclear what the tipping point is, you only cited the one for “high” velocities. The equation for low velocity indicates that the drag force at low velocities is proportional to the velocity, not the square of the velocity.
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Regarding *, for physicist pedants, I know full well that drag “force” is not recognized as one of the four forces in physics.
some people act like linear drag is the only force đŸ™‚
The degree in fluid dynamics is relevant…
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For low Reynolds Number flows, drag is linear; it’s purely viscous. If you are an amoeba, you live a low Reynolds Number life. If you are driving a car, you are not. So the relevant drag equation for driving is the speed^2 one.
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Want a test? Ride a bike at 15mph. Go to 20mph. Go to 25mph. Not that gaining each incremental mph gets a lot harder (the power required actually goes to the v^3, but as we’re talking about energy use (which is force x distance), not power (which is energy/time, or force x distance / time, which = force x speed), it’s the v^2 that’s relevant).
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Where it gets interesting is this: The Cd is the drag coefficient, but it is not constant. It varies with speed. And it varies a lot when the boundary layer of flow goes from laminar to turbulent. In fact, it gets a lot lower when the flow is turbulent (which happens with higher Reynolds numbers). This is the main reason why golf balls have dimples- they induce turbulence, which actually reduces drag, so the ball goes farther.
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Now, as it turns out (and I’m going from foggy memory on this), the laminar-to-turbulent boundary layer for a car happens somewhere around 60-80 mph. Which means that the drag force will vary as something less than speed^2. It’s even conceivable that drag could go down with increasing speed over a certain interval, but that would be pretty crazy and I don’t think that happens in the real world. But you might get a speed interval over which drag doesn’t vary much.
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But at the end of the day, driving slower = less energy used, no question about it (down to a point around 30-40mph; you will can actually get lower mph at lower speeds b/c as you slow down, your car won’t slow down engine RPMs proportionately (it’ll downshift), which causes more revs per mile, which results in more engine drag, etc.).
stomv is right on this. The difference is indeed significant.
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I clocked it out once when I lived in Texas, in an early 90s Honda Civic.
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Boston to NYC, approximately 200 miles, average speed of 50 mph, the car’s mileage was 38-40 mpg.
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Austin, TX to El Paso, approximately 500 miles, keeping up with the speed of the “traffic” average speed in the mid to high 90s for the entire trip save fuel stops, the car’s mileage dropped to 20-25 mpg.
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It is extra exciting, on a drive like that, to count the cans of Bud flung out of the window of the truck you are following…
My sentence probably does make no sense, it was more to do with the perception of when I’m driving, which is rare-ish.
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As far as Raj’s comment about first order drag, I think the assumption is that since the viscosity of air is small, the second order drag is hte first effective force that really matters. Though I’m sure your equation should have a negative sign.
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I think the forces I was talking about balancing were the drag force from the air and the friction from the ground decrease that happens when go over a certain speed and your tires act like smoother objects. I’ve been doing too much small scale physics the last few years, but I’m teaching an intro level lab this summer and realizing I really need to remember how to do these everyday macro level problems. I do want to do a serious look at this, but my original comment was mostly from gut perception of some one who likes to drive on the pik, at 70-75 mph đŸ™‚
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It seems to me that there a few different parameters, the effective cross-section of the car and the mass of the car, and of course what the different effective friction coefficients are for different tires on different surfaces at different speeds.
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But my question I still haven’t seen shown clearly is whether traveling the same distance at different speeds uses gives different efficiencies. I’ll give you the benefit of the doubt, but I’m the kind of person who isn’t usually convinced until I work it out myself.
Anytime someone says something like this …
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“I don’t think we’ve learned anything from decades of subsidizing Big Oil, in spite of Exxonmobil showing record profits that sound more like a GNP.”
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… alarm bells go off in my head.
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Quite simply, those “record profits” are not quite what they seem.
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Big oil companies run an average profit margin of between 8-10%, which is about half of what your average bank (15-16%) makes.
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It’s the volume that makes people think these companies are hauling in huge amounts of cash. The truth is that when you look at things like profit per employee, return on invested capital and free cash flow, they’re almost underperformers.
Given that (From Fortune Magazine):
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I don’t think they can cry poverty. Regardless of their size, Exxonmobil is NOT a bank, and I’m certain you can see the difference. And they seem to be trapped in the same devil-may-care do-as-we-wish fossil-fuel bubble as the Bush Administration
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Your “volume” defense reminds me of a classic SNL skit from way back which is a spoof of a talking head bank advertisement. First Citywide Bank touts their slogan and brilliant business plan…”We make change.”
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It’s always good for a good laugh.
…reports of corporate profits with something of a grain of salt. Why? Largely because corporations are required to report income on an accrual basis. As applied to the oil industry, this means that every reporting quarter, they are required to re-value their inventory (in this case, oil reserves) and report any increase in value as “income” (and any decrease as a loss). And that is whether or not they have actually received any revenue from the inventory. The price of oil has increased markedly in recent years–not monotically, but markedly–and it is not beyond the realm of possibility to assume that at least some of the “profits” that oil companies have made is as a result of presumed increases in the value of their inventory. If and when the value of their inventory is reduced, their “profits” will be much reduced.
source to check in on for financial statement analysis.
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http://quicktake.mor…
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To your inventory concern, Raj, increases in valuations in inventory are proportionally miniscule compared to increase in revenues you’ll see when you click on the 10 year income comparison tab.
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Somehow, this doesn’t look like a company in need of massive government subsidies, even if you overlook their offensive disregard of climate change and funding of junk science. I’m surprised Exxonmobil gets so much sympathy at a site like BMG.
Somehow, this doesn’t look like a company in need of massive government subsidies, even if you overlook their offensive disregard of climate change and funding of junk science.
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…and neither are any of the other oil companies.
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The oil industry is heavily subsidized by US taxpayers. US taxpayers are paying to militarily protect oil fields abroad. And, unless things have changed since I took tax law (things might have changed in the 35 years since I took tax law), Federal tax law allows for two concurrent (not alternative) forms of depreciation for companies’ oil reserves: actual depreciation and the oil depletion allowance.
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The oil depletion allowance was instituted long ago because at the time it was difficult, if not impossible, for oil companies to accurately determine the amount of oil in a given oil field, and so the feds allowed oil companies a deduction on the basis of the amount of oil that was pumped from their fields as a substitute for depreciation. Subsequently, it became possible to reasonably accurately measure the amount of oil in an oil field, and the feds allowed the companies to take a depreciation deduction as well as the depletion allowance.
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I don’t think that’s right. As it stands now there’s no revaluation of proven reserves. That may change in the near future, but for now the companies all use LIFO so the current earnings are actually reduced in a rising oil market relative to actual cash received.
The SEC requires companies to calculate a comparison of net capitalized costs of proven reserve properties to the discounted present value of future cash flows from the related reserves.
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IIRC, they use the commodity price on the last day of the quarter for valuation purposes. Because they can’t use the daily average, most of them use hedging activities to minimize risk due to declining commodity prices.
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I think the SEC wants them to do that, but the effective date of the FASB is November of this year, 2007.
I thought it was a current requirement.
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I’ll do some more research on this but I could have sworn the SEC already did. In fact, I’ve definitely seen the SEC explanation in some oil companies financial disclosures.
Tax v. SEC v. GAAP
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FASB 159 allows early adoption but the effective date is November.
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Even if, any idea if the mark-to-market adjustment on proven reserves flows through income? It may be an equity adjustment only. I don’t know the answer.
My understanding of this was based on earlier regulations (the “1978s”).
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Regarding adjustments/income, I’m not sure either. It may be an EA only. I’m basing this only on the fact that hedging is so prevalent, which I wouldn’t expect otherwise.
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Of course the main problem with anything regarding “proven reserves” is the “proven” part. You can’t exactly dive into a well and count the barrels.
…sonar technology is used to detect oil fields and their likely size–the latter to determine whether it is economically worthwhile to drill. The technology has improved markedly since the early days.
Sonar is used, as well as other technologis, including computer modeling.
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But even with the most accurate tools available, it’s not physically possible to do a perfect inventory.
I’ll admit that it isn’t physically possible to do a perfect inventory, but computer modeling is better than nothing.
… if you had typed with your eyes closed.
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Exxon, like any stock, has its ups and downs. It was trading at 70 bucks in March and closed at 82 today. That’s good performance but at other points in the past it’s been lower or higher (hell, not that long ago it was at 20 bucks).
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What is not arguable is that Exxon is one of many oil companies, all of which are critical to the business infrastructure of the U.S.
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And while subsidies are (to me) generally loathsome, basing your like or dislike of subsidization on the “profits” of a company without taking into consideration their profit margin is ridiculous.
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It’s like this: if you argue today that their profits are massive and because of that they are unworthy of gov’t subsidies, an argument can be made on a pure business level that if their performance lags in the future, they would be worthy of subsidies.
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This is not to discount your argument that ExxonMobil should NOT be subsidized, just that using their pure profit level to make the argument is bad business. Seriously, this is Business 101 stuff.
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Oh, and my banking example was just that … an example. Many other companies have much higher margins and some lower.
I think we agree that subsidies are generally not good business for the government, since they create dependency and a parasitic relationship. (Sound familiar?)
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But if you’re going to use them, they should be judged on whether they provide incentives for “useful” behavior, and how efficiently they do the job. That’s why giving profitable oil companies subsidies doesn’t really make that much sense: Are they really providing society some extra value for those subsidies, i.e. through more plentiful and cheaper gas, to the point that its worth the investment? Or are they just pocketing the cash?
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OTOH, if the gov’t creates incentives for investment in technologies that society will find useful in the long-term, but which currently don’t exist, then that’s worth doing.