Despite the fact that Katrina (and to a lesser extent Rita) demonstrated how weak our nations energy infrastructure is, who thinks that we will change?

I am taking bets that people will allow oil to run out (then panic) before a real plan is put in place to find alternative sources for energy.

9/26/2005 8:05:00 PM

I really hope oil runs out in my lifetime.

I'm sure it will fucking blow and pandemonium will set in as well as panic, but I think it'll be the only thing that will force the world to change energy sources.

9/26/2005 9:50:34 PM

^i hope i live a shorter life than this guy

9/26/2005 9:55:24 PM

the oil won't run out for a hundred of your lifetime

9/26/2005 9:55:41 PM

^ I doubt our current rate of consumption is sustainable.

Oil is not in an underground lake, it is in rocks and once a site is at "peak oil" it is all downhill from there. The extraction of the remaining half of the oil becomes exponentially more expensive.

9/26/2005 10:02:03 PM

people are already starting to panic.

But they are also taking seriously plans to use alternative energy sources.

9/26/2005 10:36:22 PM

We will wake up one morning and there will be no oil. Luckily I have been saving oil in my basement for like 9 years. I dont know how to turn it into gas though.

9/26/2005 10:41:24 PM

Quote :

"Oil is not in an underground lake, it is in rocks and once a site is at "peak oil" it is all downhill from there. The extraction of the remaining half of the oil becomes exponentially more expensive."

and for that very reason we will not wake up one day and have no oil. The price will increase steadily until there is a profit motivation to research alternative energy sources in earnest.

9/26/2005 10:51:28 PM

Not again, damn it. What is with some people? You make an idiotic thread, spread disinformation, and when reasonable people turn up to reveal the truth you go away for a month or so and start another thread to try it all again.

How did Katrin demonstrate weakness of our energy infrastructure? The absolute worse-case scenario occurs and everything works out pretty well. Actual shortages were rare, only affecting geographically isolated markets.

Quote :

"I am taking bets that people will allow oil to run out (then panic) before a real plan is put in place to find alternative sources for energy."

And the most insulting part of this crap is that you have no real solutions to the problems you make up. Who do you think should make a "real plan"? And what would this plan you speak of entail? Should the police be deployed to peoples houses to stop them from burning gasoline in yard empliments? Perhaps the price of a gallon should be $5 or higher? That would definite wipe out any potential alternatives. (at $5 a gallon after taxes, the wholesale price would probably be about 75 cents a gallon due to dramatically reduced demand, alternatives couldn't compete at dramatically lower prices)

9/26/2005 11:24:24 PM

because we can sustain this rate of oil usage indefinitely

9/27/2005 1:25:52 AM

someone's got a hardon for oil...

9/27/2005 1:41:36 AM

Thanks to Smath74 and Luigi for point out that LoneSnark completely missed the point.

Maybe we can talk the short bus into backing up a little and letting him hop on.

[Edited on September 27, 2005 at 8:57 AM. Reason : n]

9/27/2005 8:52:58 AM

Quote :

"because we can sustain this rate of oil usage indefinitely"

Maybe, maybe not. I don't see how it matters. If we can't, then we won't and people will begin using alternatives. You make your plans for the future, everyone else will make theirs, that is how the world works.

I just don't understand why you think society needs "A Plan" as if society was an entity that existed, much less capable of making plans. So, I'll ask again, what policies do YOU think George Bush (the government) should adopt and enforce with the threat of violence?

For a more reasoned argument, see aaronburro above. But I've never seen any evidence that you three are capable of comprehending the complex realities involved.

[Edited on September 27, 2005 at 9:28 AM. Reason : .]

9/27/2005 9:28:35 AM

Quote :

"because we can sustain this rate of oil usage indefinitely "

doesn't matter. eventually the unsustainability will lead to shortages, which will drive up the price. and because of that, eventually the price of oil will be such that alternative energy sources become worth it.

AND, since the sustainability will not drop like a rock, but rather gradually, then we can also expect that the supply will not drop like a rock either. Thus, at some point someone is going to say "hey, I can make some money in a few years if I research alternative energy..." and he will do it.

thus, no problem exists --> "problem" solved

Quote :

"Thanks to Smath74 and Luigi for point out that LoneSnark completely missed the point."

thx to you for missing the point, along w/ Smath74.

btw, its pretty bad when I am pointed to as a source of reason

9/27/2005 9:38:48 AM

Quote :

"So, I'll ask again, what policies do YOU think George Bush (the government) should adopt and enforce with the threat of violence? "

Why are you talking about violence?

Its simple. Investigate alternatives and make those alternatives available to consumers. Once business invests in said alternatives and people begin to realize that they have choices (maybe even a better choice) then we begin to develop a diversity in our energy market.

Lets say Hydrogen is the "next big thing." Everyone doesn't need to run out and buy a Hydrogen car, but some people will. If there is a fuel pinch and the people who want gas are paying 3-times as much as people using Hydrogen then people will start to wonder if they could switch themselves.

Not everyone would switch.

Not everyone has to swtich.

No one is holding a gun to anyone elses head demanding they do so.

9/27/2005 9:39:41 AM

Quote :

"Why are you talking about violence?"

because thats more or less how the gov't enforces its policies, maybe?

Quote :

"Its simple. Investigate alternatives and make those alternatives available to consumers. Once business invests in said alternatives and people begin to realize that they have choices (maybe even a better choice) then we begin to develop a diversity in our energy market. ... Not everyone would switch. Not everyone has to swtich. No one is holding a gun to anyone elses head demanding they do so."

thats great. let the private sector do it. Why should the gov't invest in such research when its not economically feasible? the gov't has more pressing concerns about which to worry. Don't make it have to spend more than it needs to. Plus, the gov't stands to gain little revenue from this research, making it even more of a loss of public funds. If private companies will do it themselves when the demand is strong enough, then there is no problem with letting private companies foot the bill themselves.

9/27/2005 9:43:18 AM

^ Then the govt really needs to get out of the oil business.

9/27/2005 9:44:47 AM

too bad the gov't isn't "in the oil business"

9/27/2005 9:51:28 AM

Quote :

"So, I'll ask again, what policies do YOU think George Bush (the government) should adopt and enforce with the threat of violence?"

setting aside this ridiculousness about violence, Here are my ideas:

1.) more tax deductions or credits on flexible fuel, hybrid, and other energy saving vehicles
2.) more tax deductions or credits on alternative energy run homes
3.) pay people handsomely for energy they put back into the grid using green energy sources
4.) how do we pay for all of these tax credits? tax the hell out of polluters and petroleum. Grandfather in the people who already have non-green cars so that they don't get punished for something they didn't know about, but then charge them out the ass for a new car, so that they want the greener car more.
5.) stop subsidizing farmers so that they create too much of their crops, only to dump them on third world countries. If and when the energy infrastructure falls apart, the midwest needs to be growing produce, not soybeans and corn that's only suitable for animal feed. Now, if they use that corn to create ethanol for energy, that's different.
6.) encourage people to buy and sell locally as much as humanly possible. Don't go overboard punishing them for not doing so, but make it a very rewarding experience through education, incentives, etc.

I do have more.

Quote :

"too bad the gov't isn't "in the oil business""

are you fucking kidding me, or have you lost your ability to reason?

Quote :

"# Estimates of federal oil subsidies in the U.S. range from $15 billion to $66 billion a year * $66 billion annually, according to the Florida Energy Extension Service * $34.4 to $57.6 billion annually, according to an International Center for Technological Assessment * $15.7 and $35.2 billion annually, according to a report compiled for Greenpeace "

http://www.wwrecethanol.com/ethanol/subsidies.html

[Edited on September 27, 2005 at 10:02 AM. Reason : ,]

9/27/2005 9:59:43 AM

Ok, so your objection is not with subsidies, just who they went to, great

Would you be satisfied if all we did was get the government out of the energy business? (you know, as a compromise)

US Peak Oil criticism from wiki:
A key criticism is that American oil production may have peaked because it was cheaper to extract and import oil from elsewhere, most notably Saudi Arabia, and so the peak in production had nothing to do with any lack of supply in the ground.

[Edited on September 27, 2005 at 10:23 AM. Reason : .]

9/27/2005 10:15:12 AM

Quote :

"are you fucking kidding me, or have you lost your ability to reason?"

haha, thats what I thought too.

9/27/2005 10:41:30 AM

Quote :

"Ok, so your objection is not with subsidies, just who they went to, great"

no, I object to subsidies in general. However, I feel the same way about them as I do about government as a whole. I don't like it, it doesn't usually work, and it usually leads to corruption and waste. HOWEVER, if we DO just have to have them, they should be used to promote the general welfare, protect the environment, and keep people healthy. They should NOT be used to subsidize the oil industry and big business.

9/27/2005 10:51:19 AM

Quote :

"eventually the unsustainability will lead to shortages, which will drive up the price. and because of that, eventually the price of oil will be such that alternative energy sources become worth it."

One problem with this scenario is that cheap oil is what would enable us to make a massive transition over to alternative energy sources. If oil was scarce/expensive it would be much harder to create the infrastructure necessary for such a huge transition. It's sort of a downward spiral because as oil would become more expensive the transition would be more expensive so the market mechanism your talking about might never actually happen.

9/27/2005 12:04:06 PM

^^ Sounds reasonable to me.

^ As for you, sir, that is a rather oversimplified argument.

I believe the element you have overlooked is this: althought building the necessary infrastructure to transition from oil would cost more as the price of oil increased, the expected profits too would skyrocket. It strikes me, that since the "construction" aspect of the alternative industry would be an up-front fixed cost, where-as the expected profits are over time, ever higher oil prices would make such systems ever more likely to be constructed.

9/27/2005 1:29:00 PM

I don't see why investment in alternative energies would yield higher profits than investment in oil since, in this scenario, there is no infrastructure for alternative energies so the creation of them requires oil, making them proportionatly more costly than oil. So the "upfront fixed cost" isn't really fixed, it's determined by the cost of oil.

Also, investment in alternative energies would be more risky since it's not completely clear what we mean by alternative energies. There doesn't seem to be one clear-cut best alternative to oil and people will lose a lot of money betting on the wrong horse. It seems like most investors would tend to stick with the safer bet on oil.

9/27/2005 2:01:07 PM

http://abcnews.go.com/Business/CSM/story?id=1140560

New story from ABC News:

Quote :

"But is the world really running out of oil? The short answer is no. Earth is swimming in the stuff. What's changed is that the era of cheap oil — a period that has lasted 150 years — is showing its age. Only a dramatic breakthrough — either in technology or consumption patterns — can forestall its conclusion in a decade or two. If it happens, the end of cheap oil would have a profound effect: stunting world economic growth, constraining China's rise, and challenging Western lifestyles. America's joy ride, in particular, could come to a screeching halt. "The US has 2 percent of the world's proven oil reserves. But it burns 25 percent of the world's transportation fuels," says an analyst close to the oil industry who asked not to be named. "This isn't going to work out in the long run." The problem isn't readily apparent from a supply viewpoint. When the world's first oil well was sunk in Pennsylvania in 1859, the Earth contained at least 6 trillion barrels of crude oil, geologists estimate. So far, we have used only about 1 trillion barrels. So what's all the fuss about? Part of the worry has to do with access. Of the original 6 trillion to 8 trillion barrels in the ground, the industry is capable of extracting only about half — 3 trillion to 4 trillion barrels. Lots of oil is locked in difficult underground formations that are hard, if not impossible, to exploit using current technology. Moreover, those first 1 trillion barrels were among the easiest to reach. The days of easy gushers and overnight millionaires are long gone. Now the going gets harder."

More info in the article.

I suppose this starts to answer the question. Now that oil will get more and more expensive the alternative fuels are going to start looking a lot more appealing.

9/27/2005 2:01:41 PM

yea, I guess my argument is that we should start making the switch now, while we have plenty of cheap oil and the cost of switching is lower than later on when it will be much more expensive.

9/27/2005 2:13:40 PM

^ agreed. But see, the cost is lower to US, not to the oil companies who run the country.

9/27/2005 3:09:08 PM

Quote :

"Now, if they use that corn to create ethanol for energy, that's different. "

I'm sure you'll find every midwestern senator behind you on pushing for subsidies and tax credits on that one. I still don't understand why we don't move to greater ethanol and biodiesel production: we've got insane amounts of surplus grain that we buy to prop up agriculture prices, at very least, why not just use that power to at very least force the entire country to run 10% ethanol blends at the pump? They're already doing it here in Missouri and Illinois, and it hasn't blown up anyone's car yet.

9/27/2005 3:16:47 PM

Because ethanol is still more expensive than $60 oil. So is biodiesel.

[Edited on September 27, 2005 at 3:32 PM. Reason : D]

9/27/2005 3:31:49 PM

Quote :

"are you fucking kidding me, or have you lost your ability to reason?"

i dunno. I'm not the one who is saying that giving money to oil companies equates to "being in the oil business," am i? We subsidize farmers, but we aren't in the "grain business," are we?

9/27/2005 7:55:45 PM

I would say that the govt is in the grain business.

If you look at all of the ways that the govt influences the production, harvest, storage and trafficing of grain then there is actually quite a bit of control. As a nation we are not in a crisis for food and there is no reason to 'tighten the ropes' on the industry.

If there were to be a crisis then you would see how much influence there is on that industry and oil is the same way.

If you overlook the control and influence the govt has over a wide variety of interests then you are blind.

9/27/2005 8:41:19 PM

Quote :

" They should NOT be used to subsidize the oil industry and big business"

I am in favor of subsidies used to build more refineries and in exploratory drilling. An easier way would be to relax the rigorous laws that prevent these companies from expanding their capacity, which Bush is also working on.

9/27/2005 10:57:31 PM

Quote :

"I don't see why investment in alternative energies would yield higher profits than investment in oil since, in this scenario, there is no infrastructure for alternative energies"

jugband, the assumption was that further investment in oil would be fruitless. If we could drill ourselves out of the problem then "Peak Oil" as I understand the drunken ramblings has not occured yet.

That said, as the price of oil rises, the estimated per-unit profit off alternative energy grows dollar for dollar.

Economics teaches us that up-front fixed costs filter out over time. For example, let us postulate it is going to cost me 100 million dollars to build enough infrastructure to sell my alternative to gasoline (lets say ethanol). Let us then assume that I am going to sell about 100 million gallons a year. Let us also assume that after all this construction I can sell my ethanol for $2 a gallon.

If I must pay off my fixed costs in the first year, then my pump price would be $2 + ($100M/100M units) = $3
If the ambient price for my form of fuel is $2.50, then I'm turning a loss of 50 cents on every gallon sold, or a first year loss of $50M. If I want to break even or turn a profit, then I must extend over more years, either way my annual profits are fairly low.

On the otherhand, if as you postulated the price of oil doubles to $5 a gallon, at the same time doubling my fixed costs, then I could pay it off in one year alone!
$2 + ($200M/100M) = $4 to break even, or $1 profit off every gallon sold! After just the first year, I would have already made $100M in profit!

[Edited on September 27, 2005 at 11:45 PM. Reason : ..]

9/27/2005 11:43:06 PM

maybe its just me, but when I think of someone being "in the X business," I think of them as actually selling X. Subsidizing X is not the same to me as selling X.

9/28/2005 12:37:18 AM

^^ that's a good point. Were you including regular production cost though? The upfront cost would be building the infrastructure, the regular production cost would be the cost of growing the corn or whatever, processing it, and shipping it (which would probably initially be dependent on oil prices). I'm not sure how much it costs to produce ethanol per unit, but it seems like, with the price of oil affecting your cost at so many different points, your total cost (infrastructure+production) might never be cheaper than oil. I mean, eventually it would, but at that point we might have already suffered a massive blow to the economy.

9/28/2005 10:53:41 AM

Your objection is valid, you are just looking at it from the wrong angle. The problem you are describing is not the fundamental economics but the inability to predict the future. If it takes a whole year from the day you begin construction to begin production, then you need to know whether the price one year from now is going to be $2.50 or $5 (linking back to my earlier example). If it is going to be $2.50, then you will lose money the first year. If it is going to be $5, then you will make all your money back plus more in the first year.

The problem is, you need to decide to begin construction today in order to enter the market one year from now. If you believe it is going to be $2.50 you may abandon the project even if one year from now you discover it is $5.

Conversely, if you begin construction today and discover it is only $1.50 a year from now, then you have lost your entire depreciated investment.

As such, for society to prosper the pool of capitalists need to accurately predict the future, otherwise both they and society suffers.

9/28/2005 1:59:48 PM

GOD WE NEED MR. FUSION.

9/28/2005 2:09:27 PM

Quote :

" i dunno. I'm not the one who is saying that giving money to oil companies equates to "being in the oil business," am i? We subsidize farmers, but we aren't in the "grain business," are we?"

um, yes

9/28/2005 2:15:03 PM

At least we all agree we should not be in either business.

[Edited on September 28, 2005 at 2:30 PM. Reason : .n]

9/28/2005 2:30:34 PM

Quote :

"Because ethanol is still more expensive than $60 oil. So is biodiesel. "

I would imagine though that with increased demand and research, we would be able to make it more cost effective. Especially if we used a fraction of the federal money we're throwing at both corn and oil right now.

9/28/2005 2:35:59 PM

dude, biodiesel is made from leftover cooking oil, lye, and alcohol. it is NOT more expensive than oil in large quantities at all. Hell, some people reprot making it for $1 / gallon at home.

9/28/2005 2:37:06 PM

Why are you guys even worrying about this crap?

The free market will take care of everything.

9/28/2005 2:44:13 PM

^^ Then why aren't you using the stuff? If it works, go do it. If it is cheaper in large quantities than oil, then you need to go open a chain of grease stations accross the state so people can partake of the cheapness.

Until you do that, the facts are on our side. People are not using your fuel in droves, hence it must not be significantly better than regular gasoline or diesel.

9/28/2005 4:39:13 PM