Tuesday, June 10, 2008

More on Fuel

A reader of the blog (Don) has been active in the comments section lately, and I certainly welcome his insight and arguments. He is quite intelligent and understands free markets.

I agree with most of what he said, but I do have two slight differences of opinion:

1. While he concurs that we should have more alternative fuel research, he states that government tax dollars (our money) should not be spent on it and that the free markets are the best equipped to handle it.

Well, I agree, that in the UNITED STATES, the free markets are the best to handle it (and apparently the only way it will get handled), because our recent PRESIDENTS, ADMINISTRATIONS, and CONGRESS as well, on both sides of the political spectrum, are too screwed up to do anything about it. In other countries (e.g., European countries), governments have no problems implementing alternative energy sources such as nuclear, wind and solar power. (France and Germany get most of their energy from alternative energy sources).

I personally would not mind if some of our tax dollars went into alternative energy research/implementation. Why? First, I would MUCH rather have our tax dollars go to this endeavor rather than the TRILLIONS that are going into the Iraq War. Second, it would be one of the greatest things our government could do to improve national security. Why should we still be paying all this money to corrupt OPEC countries who sponsor terrorism? They will be using our oil money for improving their weapons. Third, the high price of fuel is essentially a "hidden tax", isn't it? EVERYTHING is more expensive....driving, flying, FOOD. It is crippling the country.

So, while I welcomed high prices in oil now to provide the private industry with the free market impetus to bring on alternative energy, if our blundering and inept government had done something about this a long time ago (back in the 70s, 80s, 90s), we would not be in this position today. I want the pain now so that the future generations don't end up living in the US when oil costs $300 per barrel.

2. Don also argues that we could be drilling in Alaska for oil. This is NOT the solution!! There are only about 4 months worth of oil up there. Then we would be done and would be back at square one again! We need long-term solutions and thus, should not destroy peaceful Alaska for a 4-month band-aid.


Will said...

you go Steve. Allow me to point out a way political blogging could be more interesting. i vote (democracy!) we skip the 'hey all you wack-job conservatives' and 'liberals such and so' b/c then we have to spend way too much time hearing why 'i'm a conservative, but not what you think conservative means' or 'i'm a liberal but not just b/c my mommy is' etc. etc. Just the issues and just the opinions so we don't have to triangulate these categories that are useless anyway.

Will said...

fossil fuel use is a MARKET FAILURE. why? b/c the 'invisible hand' does not incorporate future environmental costs into current price. There are ways to incorporate these costs (e.g. consumption taxes) that will incentivize decreased consumption; these strategies must be implemented by a centralized, democratically-elected body that takes into account the welfare of future generations. We call such bodies 'governments.' We can't have several privately-funded interventions any more than we could've had two halves of the transcontinental railroad meet in st. louis with two different gauges.

Cocameister said...


I agree with the consumption tax and the necessity for it to be imposed by the government, with the aim of improving conditions for future generations.

Anonymous said...

In the Arctic National Wildlife Refuge there is a 4.3 Billion barrel (95% probability) recoverable oil supply. This equates to a 12 year supply if it is used to replace 5% of the current U.S. oil consumption.
If it is used to replace all of the Saudi Arabia imports it represents an 5 year supply.
The recoverable amounts are according to a 1993 United States Geological Survey (USGS) study.
The daily U.S. oil consumption is about 20,000,000 (20 Million) barrels of oil per day.
The imports from Saudi Arabia are about 11.5% of the U.S. consumption.
Per the same 1993 study, the high estimate of the recoverable oil supply in the Arctic National Wildlife Refuge is 11.8 Billion barrels (5% probability) and is not discussed here.

Bob said...

"A single kilometer-wide band of geosynchronous Earth orbit experiences enough solar flux in one year to nearly equal the amount of energy contained within all known recoverable conventional oil reserves on Earth today," the report said.

"The country that takes the lead on space solar power will be the energy-exporting country for the entire planet for the next few hundred years," Miller said.

Very, very expensive but I would rather the money being spent on oil wars go to this type of project.


Cocameister said...


I totally agree.

Regarding the post by "Have a Nice Day", I agree with the numbers you provide. But, I do not view as getting off of Saudi oil for 5 years as a victory. That is NOTHING in the scope of time. If we had enough for 500 years, that would be something. But 5 years means in 2013, we will be facing this same dilemma.

Let's look at countries like Brazil, Spain, France, Germany, etc. for their energy models and we will realize how foolish we are being by thinking MORE oil is the solution.

Bob said...

A poster from Venezuela on a Yankees message board said that he pays $.12 US per gallon!

Don Martin said...

1 - If Europe is so great, and if government research is so great, then why didn't all that European government research prevent this worldwide crisis? Sure am glad they paid all those gas taxes just so we could all be screwed in the end anyway.

The fact remains that a private American company eventually will solve the problem just like private American companies have solved 95% of the world's problems.

And then you'll blame them for something else later.....

Oh, I know "several privately funded interventions" strike fear in the hearts of brainy people who like their own kind pulling the levers for everyone else, but those "interventions" did a pretty good job inventing the car in the first place.

I am sorry if Henry Ford didn't get his Model T finished on Mussolini's timetable, though.

The fact is that we NEED "SEVERAL PRIVATELY-FUNDED INTERVENTIONS." One of these companies will solve it (GM already says it has -- but I bet a Japanese country gets it done the best).

2 - Fossil Fuel use is NOT a market failure. Fossil fuels are in high demand. It is no surprise the prices are high. The problem is that a cartel controls much of the oil, and that restricts supply and competition.

3 - Drilling in ANWR will not solve this problem alone or make us energy dependent. It is just one of many things we need to do for a long-term strategy to avoid such crises in the future. We also need more refineries. I am still waiting for this Congress to pass a single piece of legislation (i.e. see above) that will ease gas prices.

Just one.

Don Martin said...

The march to slavery always seems to begin with these words.....

"I agree with the ______ tax and the necessity for it to be imposed by the government, with the aim of improving conditions for future generations."

Oh, it's for the children? Well, hell, sign me up! The chains barely chafe. It's for the children after all.

Don Martin said...

Comrade Chavez nationalized (i.e. "stole") the oil industry in Venezuela, because his (or any) government could not develop one efficiently itself. He gives the oil to his citizens at a high discount, so they forget about their relatives rotting in his prisons for daring to speak against him. Talk to me in 10 years about how this economic "policy" goes for Venezuela. Venezuela also drills in the Gulf of Mexico, where American companies are prohibited by our environmental laws from drilling.

But, yeah, Hugo is great. If he murders a few thousand more political prisoners, he might be as great as Che Guevara and wind up on t-shirts.

Don Martin said...

Hmmmm..... the European models have them paying 2 to 3 times more for gasoline than we do....

Not so sure I want to copy that.

But, if you want to copy their willingness to adopt more nuclear power, let's talk.

julie said...

Don needs his own blog.