The Fed should allow drilling on public lands, but should not provide incentives to do so. Instead, let the oil companies pay market rate leases.
The problem here is determining a market rate. If the government is the only seller and the oil companies are the only buyer, it can be a very illiquid market. If a particular property was known to have oil (rather than the normal situation where you don't know before hand), and suspected to have a lot, than perhaps you an auction could work well. Absent such a situation the bids will probably not be very high.
Getting back to an earlier related issue, if the price paid turns out to be low, that isn't any clear sign of a subsidy, because of this difficulty in determining an actual market rate. In fact even determining that the price is "low" can be difficult and/or subjective.
Or we could incubate it and get there fast with government help
Government experience with incubating alternate energy hasn't been very successful.
Alternative energy is coming. We need to be a first mover in the industry.
Why? The real wealth often goes to people/groups/companies/organizations other than the first movers.
In any case its not like R&D in these areas isn't being done in the US already.
Homes are already off the grid and have installed battery storage systems and they work just fine without losing any of the conveniences of modern life.
They either are set up to use a lot less electricity, or the cost they pay for the energy storage system would be considered uneconomical by most, or both.
"Command-planned economies don't work as well as those that evolve freely."
Agree completely. However, if we deliberately pulled together a working group of academics, industry captains, and government officials, we could do wonders.
What would these people be doing? You don't want them to implement a command based economy for energy. The other extreme would just be that they talk to each other, well they already do that, and don't need any big government run initiative to do so.
and replace it with the Alternative Energy mission. Obama plans to invest $150B over 10 years to this type of effort.
So $150 bil. worth of command=planed economic transition?
If we were to do what Brazil did and become fully energy independent
The biggest part of what they did was more drilling for oil.
Money is the root of evil over there. Take away the money and all you have are impotent Mullahs. Give them $500B a year in US cash and you have a deadly enemy, which is what we have right now.
The oil money helps and hurts the effort. Iraq's government can certainly use the oil money. Saudi doesn't always use it in ways we like, but one thing they do use it for is to keep the population content enough not to oppose the government. Imagine a Taliban like uprising (and worst case actual government taking over) in Saudi. OTOH there is the fundamentalist Islamic schools funded with the money, and also the money goes to the government of Iran. |
