March 31, 2006
Why $5 Gas Is Good for America
I came across an article in the Dec '05 issue of WIRED which argues that high oil prices should be welcomed, not feared, and that the market will provide the answers without any help from government subsidies. All of the companion pieces ("As Prices Rise, Technologies Emerge", "$20-$30", "Digital Oil Fields", "$30-$70", "Ethanol", "$70 and up", "Oil Shale") which can be reached from "Plus" section of the initial article are worth the read as well. You guys will love it.
Oil and Energy
Posted by LatteSipper at March 31, 2006 7:26 PM
You may have tapped into the magic that is ThreeSources. There is no shortage of argument among those who vote alike nor paucity of agreement between (among now) those who vote differently.
The article makes a great case that price is a valid communication medium and incentive. "The cost of developing entirely new energy supplies is daunting, but the money is available - and we're not talking about the $14.5 billion porkfest served up by Washington's recent energy bill. The global oil industry will rake in three quarters of a trillion dollars this year. And when that kind of money is up for grabs, investors are never far away."
What it misses is the lack of free markets in energy. Oil is cartelized by the producing countries, regulated in its refinement and distribution and then taxed heavily to the purchaser. I suspect a truly free oil market would give us dollar gas.
The other missing piece is the proclivity of Congress to regulate actual profits. You missed that discussion around here, but the specter (pun intended) of windfall profits tax will dampen progress on these technologies. Five dollar gas may bring more gaseous senate hearings than Hydrogen-spewing superbugs.
You may have tapped into the magic that is ThreeSources. There is no shortage of argument among those who vote alike nor paucity of agreement between (among now) those who vote differently.
The article makes a great case that price is a valid communication medium and incentive. "The cost of developing entirely new energy supplies is daunting, but the money is available - and we're not talking about the $14.5 billion porkfest served up by Washington's recent energy bill. The global oil industry will rake in three quarters of a trillion dollars this year. And when that kind of money is up for grabs, investors are never far away."
What it misses is the lack of free markets in energy. Oil is cartelized by the producing countries, regulated in its refinement and distribution and then taxed heavily to the purchaser. I suspect a truly free oil market would give us dollar gas.
The other missing piece is the proclivity of Congress to regulate actual profits. You missed that discussion around here, but the specter (pun intended) of windfall profits tax will dampen progress on these technologies. Five dollar gas may bring more gaseous senate hearings than Hydrogen-spewing superbugs.
Posted by: jk at April 1, 2006 9:07 AM | What do you think? [1]