If you want private industry to invest heavily in alt fuel, what about price guarantees? I mean, at current oil prices, many alternatives become attractive, but few firms will be willing to "bet the farm" on unproven technology that becomes undesirable should oil prices fall.
We’re already sort of doing that with the tax benefit for the Chevy Volt; have the govt step in to subsidize a product that people wouldn’t buy otherwise. That’s all a price guarantee is, isn’t it?
You have just pointed out one of the main reasons alternative energies won’t replace oil anytime soon. The same oil cartels that can demand $100+/barrel for their oil also have the power to flood us with cheap oil everytime we get serious about driving fuel efficient cars or develop alternative energy.
You won’t see alternatives displace oil unless there is a breakthrough that makes it so economical that it’s not worth pumping oil out of the ground for its energy.
I would disagree; it only has to be cheaper than or competitive with historical peak oil price. We’re seeing that now with fracking and shale oil. My uneducated guess is that the only solution is electric, probably in the form of hybrids for private use, although in the short term natural gas for fleets seems like a good idea in the U.S. Of course that means more nuclear power plants, preferably using the thorium cycle. Planes use an enormous amount of petroleum and will continue to do so.
China can’t just turn on the spigot and have oil flow out. They are exploring and drilling now to meet domestic needs. Since they are signing new contracts, we might expect that theya re paying street prices in those contracts; possibly with a volume discout. But not anything close to what it actually costs to recover the oil. That is far less than the street price of oil.
What I ask for is a group of well-known, experienced professionals that can produce coherent strategic plans. These plans will be designed to provide a variety of affordable energy sources including coal, water, nuclear, natural gas, and oil. The net effect will be to reduce the wild swings in oil pricing or any other resource we use. I can’t trust elected officials because they have shown no ability to get the difficult jobs done. I also can’t trust corporate managers because in thier minds I only exist to put another Bentley in the driveway of their 6th home. They own all of us little lap dogs. don’t think you are their lap dog? Think again.
“You have just pointed out one of the main reasons alternative energies won’t replace oil anytime soon. The same oil cartels that can demand $100+/barrel for their oil also have the power to flood us with cheap oil everytime we get serious about driving fuel efficient cars or develop alternative energy.
You won’t see alternatives displace oil unless there is a breakthrough that makes it so economical that it’s not worth pumping oil out of the ground for its energy.”
Natural gas is already attractively priced. I can refuel at home if I put a refilling station outside my garage. The problem is that public filling stations are not widely, er even narrowly, available. If there were a few methane stations around, I think that natural gas powered vehicles would become more viable and reduce our dependance on gasoline. And even if only fleet vehicles used natural gas, it might reduce gasoline used aby a couple of percentage points; enough to stop the astronomic increases in the street price of oil.
I still don’t understand your point on China. There is no expectation that their domestic production will rise significantly, if that’s what you think will happen. What is happening is they are buying into other countries’ oil production, with many major tie-ups over the last several years. But those countries aren’t going to sell to China at any significant discount.
And no U.S. plan, even the best plan, will have much influence on the world price of oil.
“What I ask for is a group of well-known, experienced professionals that can produce coherent strategic plans. These plans will be designed to provide a variety of affordable energy sources including coal, water, nuclear, natural gas, and oil.”
You’re in luck! We already have that. It’s called the energy industry. If it’s not affordable, no one buys it and they don’t make money.
“You’re in luck! We already have that. It’s called the energy industry. If it’s not affordable, no one buys it and they don’t make money.”
And your luck just ran out. The energy industry has only one goal in life: to take as much of your money as humanly possible. And they have the ability to get just about as much as they want. Is that what you want? If so, do you work for an energy company?
Real price? I assume that you mean a lower price free of speculation. But that won’t happen. The energy industry is sufficiently concentrated into few enough companies that they control the amrket. Supply and demand don’t function anymore. You pay what they want you to pay, and you can’t get away from it.
“The energy industry is sufficiently concentrated into few enough companies that they control the amrket. Supply and demand don’t function anymore. You pay what they want you to pay, and you can’t get away from it.”
What complete nonsense. If this were true, why has the price of natural gas plummeted? Why did the price of oil crater with the economies? Some sinister plan? No, simple supply and demand. The energy industry is NOT concentrated, oil companies ‘control’ a very small portion of world-wide production. And oil producing countries have one number one, themselves. Nobody should be surprised at high oil prices when revolutions are occurring around and within the very Middle East dictatorships that produce huge volumes of oil. Undertainty and risk raise prices.
Funny, oil companies sure weren’t controlling oil prices the last SEVERAL times that oil prices cratered, sometimes for decades. We were spoiled by the recent record low prices in the late '90s. That led to the SUV glut, among other problems. But to judge current prices by the lowest price oil and gas ever reached in the last 100 years leads to nothing but incorrect conclusions.
Yet, the prices climbed back up as soon as someone found another scary reason to do so. Yet they went down for a few months, but gas has almost doubled in proce since the low a couple of years ago.
That small decrease in demand would work more often if there were reasonable alternatives to gasoline. Since we have so much natural gas, that would be a great alternative. Much better than ethanol until cellulosic ethanol is practical.
That’s the way commodity prices go. If ten people want an item and only nine items are available, the price goes up until one of those ten people decides he can live without that item.
If the government decides to deal with the “unreasonable” prices of this commodity in short supply, the person who does without will be the person not willing to wait in long lines for this commodity. Furthermore, the guarranteed low profit of making this commodity discourages a higher supply of this commodity and the shortage perpetuates.
My sense is that the former CEO of Shell Oil has found the head of the DoE too controlled by the executive branch to enable Shell to readly “buy” regulations allowing drilling is areas where it’s currently prohibited and would like to see a more independant regullatory body that’s easier to pursuade. In ahort, I think his real problem is not lack of coherent policy but lack of a policy befitting Shell Oil’s needs.
I say “no way”. While I agree with him that the current restrictions on drilling are too prohibitive, I believe less regulatory beaurocracy is a better solution than adding yet another bloated agency.
IMHO the tax dollars would be better spent in
investing in an infrastrructture to support an alternative fuel
investing in technological development in an alternative fuel
investing in the development of entirely new companies creating vehicles operating solely on alternative fuels, and
subsidizing the purchase of alternative vehicles…perhaps we could discontinue the long-obsolete and no-longer-productive farm subsidies (including any for ethanol production) and divert those fund to the investments I’ve suggested.
Note that this would not be a policy that would enhance the former CEO’s stock values…
“My sense is that the former CEO of Shell Oil has found the head of the DoE too controlled by the executive branch …”
Just the opposite. He rolled over on the oil industry. He was not suggesting more oil drilling, but alternative energy sources to control the price of oil. He was most enthusiastic about natural gas because if the huge reserves in the Appalachians between Kentucky and New York. And it wans’t just drilling, which is easy enough to accomplish. The really big cost is distribution. He wants natural gas filling stations for automobiles. The model might be Brazil and ethanol. They took a local resource and used it to reduce their reliance on imported oil products. We have an astonishing supply of natural gas in the Marcellus Shale layer. No company is going to exploit natural gas for automobiles any time soon. But a coherent energy policy that provides incentives to build natural gas stations would make conversion to methane powered vehicles much quicker.
So, it appears that both you and he agree on how the dollars would be better spent.
Who do you suppose is going to go after the natural gas? Perhaps, oh, I don’t know, the oil companies?
“But a coherent energy policy that provides incentives” Ding. Ding. Ding. There’s the word. “Incentives.” AKA govt subsidies to make the non-profitable profitable.
Natural gas for fleet vehicles, great idea. For private vehicles, not going to happen.
What does ethanol distribution have to do with natural gas distribution? How is that a model?
Natural gas is definitely a good and apparently abundant alternative energy source, but perhaps the costs of distribution make it economically unviable for automobiles.
In thinking about it, I’d have to agree that we don’t have and do need a coherent policy. I would have to respectfully disagree with him, however, that developing one requires the creation of an additional agency. As a matter of fact I’m not sure any agency, including the existing DoE, could possibly do a decent job of developing a good coherent policy in the highly politically charged and hugely lobbied environment that is Washington. The reason we have no coherent energy policy is basically the same reason we have no coherent IRS regulations. It all ends up being purely about politics. Laws get passed, regulatory agencies are created, and the regulations end up being solely about appeasing favored special interests and maintaining the growing regulatory body.
It would be nice, however, if thee were some sort of coordination.
“In thinking about it, I’d have to agree that we don’t have and do need a coherent policy. I would have to respectfully disagree with him, however, that developing one requires the creation of an additional agency. As a matter of fact I’m not sure any agency, including the existing DoE, could possibly do a decent job of developing a good coherent policy in the highly politically charged and hugely lobbied environment that is Washington. The reason we have no coherent energy policy is basically the same reason we have no coherent IRS regulations. It all ends up being purely about politics. Laws get passed, regulatory agencies are created, and the regulations end up being solely about appeasing favored special interests and maintaining the growing regulatory body.”
The additional agency is not a government agency in the traditional sense. If the board of governors have 14 year terms like the Federal Reserve does, politics doesn’t get into the mix nearly as much as it does for the other federal agencies. The IRS doesn’t work this way; it is part of the Treasury Department. The Department of Energy doesn’t work this way. It is a traditional government bureau as well. They and all federal agencies (except the Fed) are headed by a secretary whose job is to execute the President’s wishes. The
Fed is designed so that the President cannot fire the Chairman for disagreements. The board of governors is chosen because they have a deep knowledge of the industry they cover, and have a history of thinking for themselves. They operate independently of politics if they choose to. And most of the time they choose to. That’s their job.
As a libertarian, the last thing we need is another federal agency. There are several agencies (department of energy, department of commerce to name two) that could cover this. Just find the agency that seems to have the most expertise, and most sensible regulatory fit with what you want to do, and give them the mandate and funding to do it.
As for the energy industry, well, first, Standard Oil was broken up; the antitrust act was passed *specifically* to break them up. They really behaved poorly, undercutting prices to drive competitors out of business (then raising them once the competition was gone), cutting off pipeline and train access for competitors trying to move product, even sending out heavies to put a beat down on competitors directly.
In present times, anybody can compete with the energy companies that wants to, it's just too expensive to find fresh oil or other energy sources to do so. It is in fact a natural monopoly, not one enforced by the existing energy companies behaving badly. What would a new federal agency actually do about this? Nothing.
As for the obscene profits of the energy companies -- the profits are very high, but in the long term view, the remaining untapped oil, shale, and coal deposits are so expensive to tap I have heard they are expecting to spend all that cash they have banked up within the next 15-20 years just to get to it.
I could still see them flubbing it, for instance spending huge money on some 10-year project to get new coal or gas extraction going, only to find in that 10 years demand evaporated due to more solar and wind power and less coal and natural gas power plants. This renewable energy buildout will also be very expensive however.
There is no problem known to man that government involvement can’t make worse. Why do people continue to think bringing government into any situation will make it better? I’m inclined to say it never does, but there’s probably been some rare cases where it may have helped. Still, we keep hearing the call for more federal agencies, committees, oversight, etc. Do we really want things less efficient, more expensive, and at a lower quality of service? I sure don’t, but apparently many Americans do.