--- In [EMAIL PROTECTED], "Dan Minette" <[EMAIL PROTECTED]> wrote: > >So, either your > > proposing tripling the price of oil in this country, or you are > > proposing a policy with about as much near-term relevance for energy > > independence as drilling in the Arctic National Wildlife Refuge. > > I remember near term energy independence being a policy of Nixon and Ford > and Carter. :-) It's not really achievable. So, it seems reasonable to > decrease our dependency now, by raising fuel taxes by, say, $0.50 gal per > year for the next 10 years, or some similar means.
Adding $5 to the price of each gallon of gas over the next 10 years? Its totally impractical, of course, and would probably seriously increase poverty in the United States and dramatically lower our standard of living even if it were possible, but that is about what it would take. Many people are noticing the increased use of "alternative energy", and are incorrectly concluding that we are "closer" to energy independence than ever. Unfortunately, I don't think that is the case. For example, to consider why eight years ago, the nominal national average price of a gallon of regular unleaded gasoline was $1, and today it is $2.23, and just four months ago it was $2.98. For the most part, the price of gas has double/tripled because there is more demand for gasoline than supply at the cost of production, and therfore in a free market, those demanding the gasoline bid up the price until enough people drop out and the market clears. Those dropping out of the market are turning to alternative fuels and/or choosing to not engage in consumption (e.g., forgoing a trip.) Thus, I would venture that most of the increased use of alternative energies (and alternative energy remains a tiny slice of overall consumption), is simply serving to reduce the demand for fossil fuels. This reduced demand would then feed primarily into lower prices, with little effect on overall consumption. As another example, there is the famous quote from a former Secretary-General of OPEC that "the stone age didn't end because the world ran out of stone, and the oil age will end long before the world runs out of oil." When the oil age does end, however, I'd be willing to bet that the very last barrels of oil will probably come out of Saudi Arabia - since that's where the cheapest oil in the world comes from. Thus, any drive for "energy independence" is even less likely to cause the US to withdraw from the Middle East because as the price of oil is bid down through lack of demand, the first production to be displaced would likely be high-cost US production, and the very last bits oil production to be displaced will be all that cheap, sweet, Middle Eastern crude. And unfortunately, "alternative energy" sources are a very, very, long ways from being able to compete with the costs of Middle Eastern oil production on a free market. JDG _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
