Last summer, I built a new home in Gloucester, Ma. Since I did not want to use fuel oil, and since many of my neighbors have natural gas in their homes, I asked National Grid, the local natural gas provider, to run a line to my new house. No way, said National Grid. It’s a long way – about a quarter mile – and it’s very expensive and we won’t do it. So, as an alternative, I installed a geothermal system. It cost a lot, but I got a tax break, and I don’t have to burn fuel oil. Unfortunately, most people can’t afford such systems and end up burning oil, much of which we refine from petroleum we buy on world markets from countries that seem to dislike us intensely.
It was a very irritating experience, and since we do not have natural gas available at my home in Florida either, it got me thinking about why natural gas is so hard to get. After all that cogitating, I concluded that like many who will read this, I just don’t understand. It could be, of course, that the experts are right, and the great issues of the day really are too complicated for me to understand. Then again, it may be that we’re stuck with a political system that simply refuses to take on the tough problems we need to solve.
Take the price of gasoline, for example. The press – newspapers, talking heads, political “experts” – are full of conversation about how the President’s electoral chances are being adversely affected by the price of gasoline. Of course, no one bothers to explain just what it is the President can do about gasoline prices, and no one seems to care. Like all things, anything bad must be someone else’s fault – in this case, the President’s fault.
And there is, of course, no conversation at all about the things we could actually do to reduce automobile fuel costs – and other national problems like unemployment and energy independence. It seems that the folks we send to Washington are great at raising money and spouting slogans and lousy at coming up with solutions.
So maybe someone can explain why we don’t take advantage of our huge deposits of natural gas to solve several problems more or less simultaneously. First, let’s pass legislation requiring every company that provides natural gas to homes and businesses to connect any home or business that wants gas. We already require telephone companies to provide universal service, and we all pay for uneconomic telephones with those pesky surcharges on our phone bills. Is there some reason we cannot require universal natural gas service, and recapture the costs associated with installing the lines via service charges on all users?
Installing all those gas lines – and additional pipelines to move gas around the country – would generate lots of jobs, which we certainly need. Given the economics of oil vs. natural gas, making natural gas service universally available will cause a lot more people to heat their homes with gas, which is currently selling at record low prices and for far less than its price in other countries. When we’ve done those things, we will have put a lot of people back to work, generated lots of jobs, saved consumers lots of money and taken a big step towards energy independence.
While we’re at it, it would be sensible to pass legislation requiring every filling station to have at least one natural gas fueling point and additional legislation requiring that all cars manufactured in the United States after 2015 be equipped to run on either natural gas or petroleum derivative gasoline. The result? Still more jobs, a much higher level of energy independence, and much lower fuel prices for drivers.
I’m sure there are people who would oppose these steps. The automobile manufacturers would tell us that making cars dual fuel capable would be very expensive, while the oil companies would no doubt proclaim that mandating natural gas for cars is state socialism. And the natural gas providers would no doubt claim that they cannot possibly live with the adverse cash flows associated with fronting the cost of installing gas lines to all those houses. In my view, none of those objections hold much water, since the public benefits of these changes would be huge.
What do you think? Are such solutions really beyond us?
Excellent points, well articulated. Unfortunately it would require us to stop blaming each other for all things bad and further require us to, (dare I say it?)cooperate!
ReplyDeleteBob Crandall for President, is what I think.
ReplyDeleteI agree with you Kent
ReplyDeleteWell said. I have often wondered the same thing. We have a gas line that passes through Maine but we can't use down here in Hancock County. When I was fortunate enough to be an AA Captain and living in Wisconsin there was natural gas to every little nook and hamlet and heating our house was nearly free.
ReplyDelete"What do you think? Are such solutions really beyond us?"
ReplyDeleteAs a generally optimistic citizen, it pains me no end to say this, but - yes. I think such solutions are beyond our governing body. They seem so bent on the game of politics that they are unable to create policy any longer.
I'm with Kent !!
ReplyDeleteYogi
Mr Crandall...what are your thoughts on how we can change our political system to have Senators and Congressmen to get things done for the good of our people instead of this grid-lock?
ReplyDeleteMr. Crandall, why did you have to leave AMR? Your toughness and no nonsense managing had us in a good place. Even if our name survives, nothing else is "right."
ReplyDeletemy thoughts exactly Kent.. Crandall for President!!!!
ReplyDeleteWell, after being an AA employee that encountered several bus fires at DFW Airport on the way to work, CNG (compressed natural gas) isn't the way to go. And oh, great idea, put yet another service charge out there in order for people to use natural gas. Sorry Bob, more government intervention didn't work for the Nazi's and it won't work here.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteBob, your comments are a welcome taste of what a forward thinker should be. Unfortunately, our society has been breeding leaders who don't lead. They are sadly trapped on the path of least resistance and risk-taking, whilst riding on the crest of the wave set in motion from their predecessors.
ReplyDeleteWe, as a nation, can certainly accomplish incredible things, but only with forward thinking and risk-taking leadership. Your generation is sadly fading into history, and those of us who would take up your mantle are forestalled by the mediocrity of those you thought would continue your charge.
As is in business, so it is in politics, and sadly...so it goes in education as well. Things will certainly change, but may need to be preceded by economic and social upheaval in order to clear the path for new real leaders to emerge.
I think that, corporately, we have lost our common sense. That it has become the norm to pass the buck, and blame someone else for why something (anything, fill in the blank with your favorite lost cause) isn't getting done.
ReplyDeleteIt's part of this "victim" culture that we now find ourselves surrounded by. "It's not MY fault..." The problem is, no one wants to step up and take responsibility. It's too *hard* and it might be *messy*, and someone won't *like* it, and so let's all blame each other, and go get a latte.
Change is always hard, often messy, and it's a sure-fire thing that someone, somewhere, along the way won't like what you are doing. But we need to just pull up our big kid panties, and get going.
We *can* still change as a nation - but we need leaders who can show everyone (especially corporate America) the way through the mess, the difficulties, and the whining. We need to hire - through the voting booth - people who have that drive, that vision, and that talent... and who aren't afraid to use it.
And we need to all work together - and quit worrying about our little factions, special interest groups, and pet projects. We need to ALL work for one cause ONLY: America.
Bob, your points about natural gas, and the inability of "leaders" in Washington to do anything sensible about energy (and lots of other urgent needs), are spot on. On the topic of natural gas, I recently recalled, from three decades ago, a helpful technology that one hears little about these days: residential cogeneration. The idea was elegant: use natural gas to generate electricity at each home or apartment, and capture the residual hot water (too cool to drive a turbine, but plenty hot for warmth) to heat your home (and make hot water). What happened to that idea, which, as I recall, had compelling operating economics and was only waiting for people to build the small generating devices?
ReplyDeleteRob, Zara Eberly says HI! (Remember the temp selling chocolates outside your office?)
DeleteWhere have you gotten to, we often wonder about your fortunes.
Since I am not sure if you know this I hoping you check in here often.
ReplyDeleteA website has been created http://bringbackbob.com/Guestbook.php
Employees of AA are requesting for you to come back and fix American Airlines.
I hope you will check it out. Even more so I hope that you will return to American Airlines. It has been said many, many times over on this website you are the only one the employees trust, respect and believe in.
Just thought you should know.
Correction...Since I am not sure if you know this I am hoping you check in here often.
DeleteHey Buddy,
ReplyDeleteCurse the darkness or step up and light a candle. We need your leadership. AASAAP.
Mr. Crandall, You have been missed the whole time you were away from AAL. Seriously!
ReplyDeleteNow to the natural gas idea, your thinking could save the nation which would make you a great Energy Secretary provided you could get the ear of a presidential candidate who is as enlightened as yourself. I would not want you to suffer through the nightmare of running for office as someone suggested because you are too nice of a person. but your talents as a problem solver and leader would benefit the entire country.
Hi Bob!
ReplyDeleteReally enjoy the blog, but wonder if you're not being entirely truthful. A man as accomplished as yourself must know the true difficulty behind your recommendations. When someone says, we should switch to natural gas instead of oil, what they are really saying is- We need to take on the oil industry and win. You need to unpack that, lay out a game plan.
You said we should take on student loans and switch from oil. I agree 100%. How? In 2005 the student loan companies got congress to change the law so that student debt is no longer eliminated by bankruptcy. That's muscle. They're not about to roll over for you, me, or the 300 million other citizens. As it stands, there is an ENTIRE industry, the corporate reformers, who are spending millions in order to reap billions in for profit education. How EXACTLY do you propose we take on those people? Already there are stories of people taking out student loans for kinder gardeners. When they finally win completely and gain access to the trillions of dollars the USG spends on education they will become as entrenched as oil. If we can't stop an industry like that, before it becomes a monster, how on earth could we take on the oil companies?
Also, saying "Pass a law....." is unhelpful. If you say that, you need to break that down into figures. Pass a law with 100% voting yes? by giving each legislator $1,000,000.00 each? Great plan, that could work, we just need $435,000,000.00 for the house and $50,000,000 for the senate. Though those guys are pretty rich, I doubt they'd all roll over for just one measly dollars. Though that's a damn good plan. If you say pass a law, you need to say how- we get a coalition of x and we get natural gas to lobby hard and we get Y removed from committee Z to...etc.
My point in all this is that nothing is going to change. Things are only going to become more of what they already are. Education will continue to be privatized and the costs of attendance will rise. We will rely on oil even more. We will continue to shortchange infrastructure. Inequality will rise. This will continue to happen because there is no group powerful enough to remake the US in any significant way. Actually, any group powerful enough to do so would not do so to effect positive change (by our standards) because that wouldn't net them enough profit.
You seem like a reasonable guy but these are unreasonable times. It doesn't even make sense complaining about this stuff anymore, just go with it. If I were you, I'd invest in big oil, for profit schools, and debt collectors- you can't lose.
All very good points! Who is John Galt?
ReplyDeleteHas anyone been to Argentina lately?
ReplyDeleteI was there last May 2011 and went to both Cordoba and Buenos Aires and was flabergasted to find more than half of the cars running on natural gas - compressed natural gas (CNG) specifically. I'm talking about your basic private transportation and not just public transportation buses and taxis.
Argentina, as the USA, is sitting on huge reserves of natural gas and they are using them. Demand is so high that gasoline-to-CNG conversion shops have popped up all over towns just like the Jiffy Lube shops in the USA. I even sat down with a mechanic and he showed me how easy and and cheap it was to convert. Maybe a thousand dollars. What's the payback?
Well all the Exxon and Shell stations I saw were selling CNG at the equivalent of FOUR cents a gallon vs. four DOLLARS a gallon for gasoline (or naphta as they call it). It doesn't take long for you to get your conversion costs back and you can keep your car bi-fuel running on either gasoline or CNG. You don't have to worry about running out of CNG because every single gas station offers CNG for sale in addition to gasoline.
Yes, you have to install a steel tank in your trunk [looks like a SCUBA tank] that takes up spare tire space, but for FOUR cents a gallon of CNG I'll walk to the gas station to fix my flats. The steel tank has to be recertified every two to three years. Some people hang the tank under the car. Those are those white tanks hanging under the car as you drive down the highway.
In Cordoba, Argentina, (population 800,000)then, everone I asked was running on CNG. Well, maybe 80% of the cars. I was told you can even order your new car to run on CNG because the savings are huge.
People don't think twice anymore about going out for a drive. They just get in their cars and go. In the USA, if I jump in my Chevy for a six-pack of Budweiser, I've blown one day's pay!
I don't know what kind of legislation they may have passed in Argentina, but I think it may have been the market forces that put gasoline in the back seat. The demand may have been so overwhelming (with some kind of government pilot programs) that Exxon and Shell simply couldn't miss out on such a huge CNG market nor could they meddle in local country politics to block the sale of CNG as easily as they do in the USA.
Back in the USA, however, I feel cheated of the opportunity to burn CNG and I feel embarrased to pay $4.25 a gallon knowing the USA is lagging behind other countries we sometimes think as "developing countries."
There are many involved in this "scheme" to block taking CNG to market - to the private car market. Maybe it's the insurance companies who refuse to insure modified cars, maybe its the petroleum companies who have no economic incentive to modify their exisitng distribution systems (until we pump the Earth dry of crude oil); however, we are simply foolish and economically stupid to be growing corn, cooking and fermenting it, and then mixing it with gasoline thinking we are working on solving the crude oil importation problem. You don't have to cook anything with natural gas - and certainly not the USA's books as the oil companies have keeping us blind to better fuel alternatives than just putting corn juice in our gas tanks.
Maybe we just need to open the first conversion shop and the first CNG pumping station at the local Stop N Go.
In any event, if anyone wants to see the future - a clean burning and cheaper future - then it's already here in Argentina where over two million cars are running on CNG.
Just an independent citizen with no econmic interests in CNG but just echoing Mr. Crandall's observations and thinking of how much spending money we would free up in the USA by converting to CNG - spending money that my college econmics professor said would multiply many times over and create thousands of jobs.
Certainly Budweiser sales would skyrocket!
Marvin
Cars in Brazil also run on both CNG and oil, just flip a switch. Brazil is energy independent and does not have to kiss OPECs ass. This country could be the same if our politicians, and the idiots who keep voting these dinosaur politicians into office, decided to be energy independent also. If President Kennedy commited our country to put a man on the moon in a decade, then we can easily make a commitment to become energy independent in the same time. Between oil, gas, wind, solar and nuclear, there is no reason not to. Imagine the amount of jobs created with such an undertaking. Unfortunatly, our politicians answer to corporate America and not the American people. It's time to wake up folks.
ReplyDeleteBob, another thing we could do is to get rid of the red tape that makes solar energy expensive, I believe every new building and home should have solar feeding the grid. We should really invest in electric cars and use gas to run the power plants, and hydrogen would be a good alternative for cars.
ReplyDelete"Last summer, I built a new home in Gloucester, Ma. Since I did not want to use fuel oil, and since many of my neighbors have natural gas in their homes, I asked National Grid, the local natural gas provider, to run a line to my new house. No way, said National Grid. It’s a long way – about a quarter mile – and it’s very expensive and we won’t do it. So, as an alternative, I installed a geothermal system. It cost a lot, but I got a tax break, and I don’t have to burn fuel oil. Unfortunately, most people can’t afford such systems and end up burning oil, much of which we refine from petroleum we buy on world markets from countries that seem to dislike us intensely. "
ReplyDeleteI built my house a few years ago. I designed it to have a lot more insulation, R52 walls and R70 ceiling. South facing triple pane windows heat the house in the sunny days in winter. I only have a 2 ton heat pump for 2,650 sf, I could have installed a smaller one but they did not have one that size. The ducts are a lot smaller too.
Our electric bills would be about $80 in the winter, all electric.
Put the money in insulation not the heating system.
I later added 3KW of grid tied solar which produces about 40% of what we use now.
In Washington no one wants the other person to take credit for a job well done. So they leave problems like fuel cost alone. Also the lobbiests have way too much control in Washington and they get what they want.
ReplyDeleteSo we need to take matters into our own hands. The other day I saw this college kid driving a diesel fueled Mercedes Benz that had a sign on the back window saying that it was running on vegetable oil.