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Gold/Mining/Energy : Copper Fox -- Ignore unavailable to you. Want to Upgrade?

To: Metacomet who wrote (9614)	7/28/2015 4:51:10 PM
From: sense	1 Recommendation Recommended By biggerbob68 Read Replies (1) \| Respond to of 10654

"world is in the process of weaning itself from hydrocarbons" LOL!! Right. That process consists of first using all the hydrocarbons... while imposing restrictions on that use to slow the process of consumption to benefit producers, while sustaining higher than free market prices... and then having to pay whatever it costs, after that, to sustain our uses of energy in a post-hydrocarbon world... by whatever means are then available. Long term... assuming markets are allowed to work at some point in the future... energy prices will decline to the cost of the lowest alternative... coal. Propaganda about the impending radical advancements of technology being ready to alter the balances... is just that... propaganda... and that is all it will be, as long as the focus of the discussion that is occurring remains on "price" higher than the cost of oil, instead of "cost" lower than the cost of oil. Market reality is that both the "alternative hydrocarbons" and the "hydrocarbon alternatives" have the SAME problem in addressing competition based on COST. (And, note... coal is the lowest cost form of carbon ?) Until the cost of oil alternatives... whether "alternative hydrocarbons" or "hydrocarbon alternatives"... can compete with the primary producers on the basis of cost... the market dynamic we have now will be sustained. Of course... if you don't understand the difference between price and cost based accounting in the balances in competition... you won't understand what the market dynamic we have now is... and you'll continually be surprised... a lot like Molycorp has been... as a function of "competing" based on price when that is fully controlled by your competition. The role high cost alternatives play, in the market... the same as the role regulatory restrictions imposed on cheaper alternatives (like coal, or nuclear) play... is to enable sustaining artificially high prices for oil, ON AVERAGE. There is a process occurring... in which (some) alternatives are (being allowed to proceed in) progressing in imposing PRICE caps... which are a benefit to low cost oil producers, and not a competitive risk. Subsidies of "green energy" technologies... are subsidies of the Saudi's by our taxpayers... that enable them in sustaining higher than free market pricing... and that enable them in sustaining it LONGER.. The market result of that "progress" that is subsidized... is to maximize the price... the amount of $ we are paying for oil... while EXTENDING the time period in which the price is maximized. Alternatives (of either or any type) enable the price of oil to be set, not at the free market competitive price... but at (on average) and above (occasionally) the higher price of the next lowest cost (allowed) alternative... before considering the impact of price variation. When you add the impact of price variation to that, you get short term deviations from the average, high, and low... and, as you clearly see being realized in the "alternative hydrocarbons" markets now, with a deviation to the low side... occasional and intermittent destruction of all of the prior investment made in the prior generation of the higher cost alternatives.