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Politics : Politics of Energy -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (2062)	8/27/2008 11:31:58 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 86356

you are trying to make something complicated that really isn't. If you have a good you want to sell for $10 for a profit of $5, then you have all the incentive you need to sell that good. You're trying to make it sound like all that oil is sitting in a storage tank ready for wholesale distribution and that's just not the case. Gov't subsidies should be used to incubate new industries, if the potential of those industries are huge and good for the prosperity of this country. When an oil company drills for oil, THERE IS NO GUARANTEE that it will actually strike a deposit. And each drilling attempt is a new venture and it's funded with venture capital in hopes that the number of successes outnumber the failures. Thus, in a sense, each deposit of oil that is discovered and profitably exploited is similar to incubating a "new industry" (at least locally). If they fail, it's equivalent to a bankruptcy and the total costs of the drilling operation are written off as such. Oil drilling will never be old and established as you want to make it out to be. Every hole drilled is a gamble, based upon the best geological and seismic data available. If you doubt this, take a look at what's happening right now in Wyoming, Montana, and Canada with the Bakken strata: seekingalpha.com NEVER FORGET that there's a reason that junior oil drillers are called "wild cats" for a reason. Every hole is a gamble and it can mean the difference between instant riches or immediate bankruptcy. investopedia.com Most VC money has been pouring into alternatives and most VCs will tell you that the industry's potential outshine all the wealth created by the Internet. Oh?? solar cells are a commodity and subject to commodity pricing pressures, especially as newer and cheaper forms of manufacturing them become commercially viable. You want to think solar, think Micro Technology (MU) and the pricing pressures they've faced against cheaper foreign production. Doubt that?? Ask SolarFun (SOLF): biz.yahoo.com At the root of our past economic might was cheap energy. If we don't do something now to diversify our energy supplies to ensure long term cheap energy, then we will not remain the most power and richest country in the world for long. Totally agree with you on this point and have stated exactly the same previously here. Oil prices are likely to surge again at some point in the future after this demand destruction has abated (presuming we're looking over the abyss of a global recession). Oil is going to run out, and it's certainly going to be exacerbated by 25K Chinese people learning how to drive each day. But do not forget that a solar industry, or even a wind powered power system is resource intensive. It will require large quantities of steel, copper, and other materials, as well as materials for transmission lines from the remote areas. Now think about how much competition those industries will receive from China, Europe, and other countries trying to do the same thing?? That's why we need to pay a bit more attention to T. Boone Pickens suggestions about NG for an interim solution as we transition to some form of alt-energy. But one thing I will add is that technology like the PHEVs stand to do more to reduce US fuel consumption than anything else I can think will be available within 10 years. Hawk

To: RetiredNow who wrote (2062)	9/5/2008 3:46:57 PM
From: TimF	Respond to of 86356

you are trying to make something complicated that really isn't. If you have a good you want to sell for $10 for a profit of $5, then you have all the incentive you need to sell that good. If I tell you I will give you an extra $1 to sell it, it's a waste of money at that point. While I don't want subsidies for oil, I think your argument is faulty. Costs are not fixed, sales prices are not fixed, finding oil is not certain etc. At the margin making the expected return from oil $1 a barrel more (using your specific dollar figures), or esp. 20% more (using your percentages), or some other level of increase, will cause more oil exploration and drilling to happen. Maybe in 90+% of cases it will make no difference, but the concern is always the marginal case, not the typical case. Such changes happen at the margin, not not at all, and then all at once.