In the U.S., according to the EIA graphic above, the transportation sector utilizes ~70% of the petroleum used in this country and petroleum energy makes up 91% of the energy used in the transportation sector.
In your blog post, summarize the current situation when it comes to the petroleum resource. Use the information from the textbook and/or lecture to set the stage. Then, propose a means by which the issue of a declining oil supply can be addressed in the Transportation sector. Be specific in your proposal, and use data and facts to support your proposed solution.
All facts and calculated values must be clearly indicated by underlining and/or bold facing. All calculations that you performed must be clearly indicated as such.
From the EIA graphic, it’s apparent that the transportation sector uses a larger amount of petroleum than any other industry listed. It’s also important to note that the transportation sector dominantly uses petroleum over other energy sources. From the American Economic Association, author Christopher Knittle states that Gasoline and diesel fuels alone account for 60 percent of oil consumption (1). Knittle explains that the price of petroleum is set in a global market, and government taxes on petroleum vary. Because the US is the leading consumer of oil, it seems evident that whatever regulations we put on petroleum will affect the rest of the world and their petroleum consumption. But it’s not as easy as saying that we need the US to ban petroleum consumption to positively influence the rest of the world. Because petroleum is currently so lucrative, other ideas must be implemented so that the market of petroleum is shifted.
My proposition of means of addressing the declining oil supply in the transportation sector is to create an incentive for businesses profiting off of petroleum to invest in other forms of energy sources for their uses. The transportation sector cannot wait until the oil has run out to start innovating other ways of transportation. The time is now to do so. Part of my proposed incentive for companies to use less oil is to propose a 5% tax on any company that does not diversify their innovation of transportation technology. The potential result of this incentive would push companies to innovate in increasing the potential of biofuels, electric vehicles, and hydrogen fuel cell vehicles. This would accelerate the diversity of transportation options so that in the future when extractable oil runs out, there will be capable energy sources to fall back on.
Work Cited
Knittel, Christopher R. “Reducing petroleum consumption from transportation.” Journal of Economic Perspectives 26.1 (2012): 93-118.