Why or why not?
Don’t you think that might result in gas shortages?
Yes I do, but wouldn’t that put pressure on the market to allocate resources to more sustainable fuel sources?
If you want cheep energy just let the market produce energy. If sustainable fuel sources really are a cheaper way to create power then the market will “automatically” produce them.
I think that’s the consumer’s prerogitive in a free society. I don’t think anyone should put a gun to the consumer’s head for the sake of their unbelievable end-of-the-world stories.
I think you have it backwards. Artificially lowering the price the of gas gives less of an incentive to invest in alternative energy. If solar panels are only profitible when gas is $5/gal, why would anyone buy solar panels when gas is $3/gal?
Also (and I could be completely wrong about this), gasoline usage stays roughly the same whether it is $3 or $5 per gallon so I don’t think the rise in average price is completely a function of supply. In my mind, shortages will be localized in situations where there really conveniant name brand gas station has to charge the same as the inconvenient off-label station. That nice downtown BP will not be able to maintain supply when it is the only station for 3 miles and is charging just as low a price of everyone else. At the same time those cheaper stations on the wrong side of the street will not be able to move their product when you can get it for the same price at a superior location.
When hydrocarbons are essentially depleted as a fuel source, how will the market proceed to offer these alternatives in a cost effective and timely fashion without allocating a substantial amount of resources and research to them before the fact?
Hydrocarbon producing companies will naturally diversify into other fuel sources as hydrocarbons deplete in order to stay in business. That is where the allocation of resources and research will come from. Business who want to stay in business when their gravy train is coming to an end, invest in other venues to keep the gravy train going.
If/when the supply of hydrocarbons starts falling, their price would rise making alternatives more competitive. Humans/markets are also forward looking. (They plan ahead). If the market anticipates an impending hydrocarbons supply deplition, it becomes a good idea to invest in alternatives even when the current price of their production is higher than the price of hydrocarbons today in anticipation of gaining energy market share in the future. No date exists where hydrocarbons go from fully satisfying demand to satisfying no demand at all. Supply and demand – and everyone’s future projections of same – change, hence market prices change affecting the present and projected profitability of everything.
No need for a government bureaucrat to worry his little mind about saving the world. The world is perfectly capable of saving itself through the system of private property and voluntary exchange of same.
How about instead of a cieling… we just have OPEC stop artificially restricting supply…?
Just a thought.
Why do you think your preferences should trump other people’s?
The owners of oil (OPEC) can control/restrict the amounts they sell however they want. The problem are government policies beholding economies to such control through privileges, subsidies, and regulation (translate: parasitic and/or pea-brained socio-economic engineering). A free market can easily find its way around a monopoly it deems abusive.
No, no, only the wise leaders in gubmint have that kind of foresight. The private sector is just focused on the next quarter’s earnings. The President and Congress are focused on the next election which is a really long time horizon!
Clayton -
That’s rubbish. the primary motive of any firm is to increase its short term profits. driving millions and billionsof $ into potentially wasteful research for something that will happen 50 years down the line isn’t something they would be inclined to do. there is no money to be made from investing in alternative fuels if these firms cant package and market it within a couple of years.
hence, we need good old government to subsidize these industries into investing in new technologies.
Can you support this? Sounds like bare assertion to me.
Again, support?
Translation: “I know better than you do, but you’re in my way, so I’m going to use the aggressive power of the government to get you out of my way.”
Nonsense, oil reserves are growing. The whole notion of “sustainable” energy is based on a fashionable fallacy, it assumes that current resource stocks should be able to last forever without any changes. But obviously there are changes. Humanity constantly invents new technologies, so it is wholly arbitrary to want current resources stocks to last forever. That’s as if people in the year 1900 had gone through great pains to make the use of horses possible into all eternity. It would have been a waste of resources and humanity would be much poorer than it is now. But we’re doning exactly that with oil.
You sound like you know a lot about investing and how profits are made. What are the annual profits of the business you’re running?
And how do you plan to do that?
See, that’s the thing with reality. It’s easy to just say what would be great…it’s a whole other thing to actually have a legitimate way to make that happen. Here’s a much better solution.
Plenty of industries see their profits 50 years down the road. Yet they make that investment. Most oil rigs take 25 years to break even. What you are forgetting, I think, is that every investment, even if it may only pay off in 50 years, still has a present value, so you can sell it for money. All you have to do is build something now that may have value in the future, and somebody will buy it. So companies are perfectly willing to invest in long-term projects, and you see them do that all over the place.
“How about instead of a cieling… we just have OPEC stop artificially restricting supply…? Just a thought.”
Another example of the mishmash of thinking that is the left. You’d think restricting the oil supply would be a good thing to an environmentalist.