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The Price of Oil's Replacement

Discussions about the economic and financial ramifications of PEAK OIL

Re: The Price of Oil's Replacement

Unread postby ROCKMAN » Wed 13 Aug 2008, 07:24:10

Very thought provoking Mr. Bill. Thanks.

And I'll repeat my crude oil patch charcterzation: building models of complex adaptive systems is similar to masterbation: if you're not careful you'll start to believe it's the real thing.
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Re: The Price of Oil's Replacement

Unread postby Curmudgicus » Wed 13 Aug 2008, 15:49:10

[smilie=5geezer.gif]

The thread continues to talk about an energy "Manhattan Project" in terms of taxes to pay for it.

WW2 (and WW1) wasn't financed with taxes as much as by bonds. We were just exiting the depression, and there wasn't a broad base of income to tax. Without bonds, the economy could not have handled the expenditure.

A government energy bond campaign would be worth considering. Of course, there would have to be a plan being financed by the bonds - as yet non-existent.
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Re: The Price of Oil's Replacement

Unread postby ROCKMAN » Wed 13 Aug 2008, 16:54:16

Curmudgicus,

I think the gov’t could greatly help such an effort by developing clear goals supported by taxing structures which would support those efforts. But I would still rather see private industry choose the exact path of those efforts without financial support. It’s easy to waste money on unsound theories if it’s not your money. Any alternatives that could be expanded to be of significant help will have to make economic sense. Otherwise such applications just won’t see much utilization. Also, the gov’t doesn’t have the trained personnel to assign to such a Manhattan Project. The guys that developed the bomb weren’t gov’t employees per se. They were academics supported by the gov’t. Above all else, the gov’t needs to present a unified and dedicated plan that the different industries can believe in. As much uncertainty (read: risk) as possible needs to be eliminated. As an example: if the gov’t were to mandate an increasing gasoline tax over time, the auto industry would be willing to move much faster towards alternatives. They have to believe that even if crude prices were to drop for a while the higher fuel costs would continue to move the public towards better fuel efficiency. Such a policy would actually raise gov’t revenue instead of spending money we would have to borrow from the rest of the world.
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Re: The Price of Oil's Replacement

Unread postby vtsnowedin » Wed 13 Aug 2008, 22:26:02

8) Exactly. If you tax petroleum fuels and leave alternative fuels tax free(Not subsidised) then consumers seeking the vehicle with the least cost to own and operate will drive the manufacturers to produce those cars. `Our problems today are mostly a product of our bad tax laws and a better set of tax laws would go a long way to fixing the problem.
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Re: The Price of Oil's Replacement

Unread postby MrBill » Thu 14 Aug 2008, 03:26:33

Senator Hogwash tables his $4 trillion algae to bio-fuels plan to be paid for with Alt-E bonds. The bonds carry 4% p.a. interest and are repayable from the proceeds of the sale of bio-fuel. The upfront costs are to be paid for by a $0.50 per gallon Federal tax on all petroleum products.

Senator Porkbarrel adds on a rider that would see a $500 million second bridge built in his state, so that the property his friends own rises in value.

Senator Greenwash feels the $4 trillion algae to bio-fuels plan will mainly only benefit warm, sunny states with abundant water, and not his colder, more northerly state, so he suggests a $0.50 per gallon subsidy for bio-fuel production in northern states to narrow the competitive gap.

Sentor Farmbelt is unhappy because the $0.50 per gallon Federal tax on all petroleum products, and the $0.50 per gallon subsidy for northern bio-fuels puts bio-ethanol production in his state at a competitive disadvantage. So he proposes that farmers should be exempt from the $0.50 petrol tax and that the $0.50 subsidy should apply to all bio-fuel production.

Senator Westcoast does not support the $0.50 per gallon Federal tax on all petroleum products because it will hurt interstate trucking, and as his state has the most container ports serviced by truck and rail this would drive up costs, cost jobs and reduce their competiveness. He also supports an exemption of the $0.50 per gallon Federal tax on petroleum products for truckers and rail companies.

Senator Berkenstock is opposed to bio-fuel production because he is concerned that large scale algae production might choke out marine wildlife in the affected areas, and as the unknown unknowns are still unknown that a complete environmental review of the long-term effects of large scale algae production should be undertaken, and large scale algae production should only be allowed once those unkowns are known with complete certainty.

Senator Armchair is more concerned that algae bio-fuel production will do nothing to help visible minorities. He would instead prefer that the $4 trillion plus the $0.50 per gallon fuel tax be spent on daycare for single mothers, self-empowerment seminars for low-income citizens and free post secondary education for high school drop-outs. He thinks a $0.50 per gallon tax on oil companies is a good idea to stop them from polluting the environment. He would like to see that money go to motorists to help offset the high cost of gasoline.

Senator Partisan refuses to support Senator Hogwash's Alt-E bio-fuel plan out of ideology that might be seen as delivering a party victory to the other side in an election year. He instead supports taxes on bio-fuel imports to make cheaper, foreign energy less competitive and give American producers of corn-based ethanol a greater incentive to turn subsidized corn into subsidized ethanol. He also supports repealing laws that ban drilling for oil in public schools.

The environmental group Big Green is opposed to all economic development and proposes that the government mandate unlimited mileage vehicles with zero emissions instead. 10.000 Big Green supporters fly to a national convention to make their position clear to the 2000 policy makers that have gathered in Teluride to discuss the ethical implications of algae production. They will then organize for their supporters to fly to Geneva to protest against economic development at a similar international convention.

The NGO group Crimes Against Humanity strongly feels that the $4 trillion algae to bio-fuel plants being planned in the USA would give the USA an unfair competitive advantage over poorer developing countries. And can only increase the north-south-east-west divides. They are lobbying for $4 trillion to build algae bio-fuel plants in the sub-Sahara and elsewhere. They plan to give out micro loans to women who can then cultivate algae in their own backyards and then bring that algae to collection depots in plastic buckets that will be distributed to every community. The imports of water would be paid for by interest free loans by The World Bank, and later forgiven by the G8 in a big show of solidarity with the world's poor.

Joe Public doesn't care one way or the other so long as his taxes do not go up and he can have cheap, abundant fuel for his SUV. He is a supporter of Big Green, but thinks that the ban on drilling in public schools is a bad idea. He is against the imports of cheap fuel from foreign countries that might cost American jobs. He is against the $0.50 per gallon tax on petroleum products, and thinks the government should instead tax bio-algae producers to make up any shortfall in revenue. He thinks that Senator Porkbarrel is doing a great job because he helped get the bridge and always shakes his hand at the Party's annual BBQ.
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Re: The Price of Oil's Replacement

Unread postby vtsnowedin » Thu 14 Aug 2008, 07:04:51

:-D Don't forget that Senator Bougtenpaidfor chairs the committe and will not allow it to come to a vote unless some building in his state or DC is named after him. He is working the problem late tonight with one of his interns.
Also Senator Castro is outraged that the big corporations made a profit last year on the backs of the people and wants all their assets nationalized.
As my state is represented by Senators partizan and Senator Castro and Congressman Ambulance Chaser I see little hope for the future.
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Re: The Price of Oil's Replacement

Unread postby Starvid » Thu 14 Aug 2008, 10:07:50

Wonderful Mr Bill! :-D

edit:

I love my local politicians. Today one of them has written a debate article in the local paper. The headline?

Nuclear waste positive for the entire county

I kid you not. :twisted:

If you don't believe me, here's the article: http://www2.unt.se/avd/1,1826,MC=2-AV_ID=786147,00.html
Peak oil is not an energy crisis. It is a liquid fuel crisis.
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Re: The Price of Oil's Replacement

Unread postby Curmudgicus » Sun 17 Aug 2008, 19:56:50

[smilie=5geezer.gif]

Mr. Bill,

I howled reading your political angles, and I have clipped it out and sent it to a number of friends. Thanks for a sense of humor.

The weeds choking the channel are definitely political, including ignorance and self-interest.
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Re: The Price of Oil's Replacement

Unread postby MrBill » Thu 21 Aug 2008, 05:46:57

[align=center]Truth is Stranger than Fiction[/align]
$this->bbcode_second_pass_quote('', 'S')enator Porkbarrel adds on a rider that would see a $500 million second bridge built in his state, so that the property his friends own rises in value.

Joe Public doesn't care one way or the other so long as his taxes do not go up and he can have cheap, abundant fuel for his SUV. He is a supporter of Big Green, but thinks that the ban on drilling in public schools is a bad idea. He is against the imports of cheap fuel from foreign countries that might cost American jobs. He is against the $0.50 per gallon tax on petroleum products, and thinks the government should instead tax bio-algae producers to make up any shortfall in revenue. He thinks that Senator Porkbarrel is doing a great job because he helped get the bridge and always shakes his hand at the Party's annual BBQ.

Judge won't move Sen. Stevens' case to Alaska


[align=center]Bring home the pork, Ted, and by the way, help yourself[/align]
$this->bbcode_second_pass_quote('', '[')b]Ted is a hero in Alaska. Even with the trial in Washington Ted will beat Begich. Moreover even if Ted happens to be convicted of his charges. If it was possible I would still vote for him, and so would most Alaskans; if given the chance. Ted is the greatest political entity alaska has ever had in it's short history.
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Re: The Price of Oil's Replacement

Unread postby CarlosFerreira » Thu 21 Aug 2008, 16:35:41

Guy wins election in jail. Well, he sure ships a lot of cash into Alaska. I wonder why so "social security" minded Americans from all over the country tolerate this.
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Re: The Price of Oil's Replacement

Unread postby MrBill » Fri 22 Aug 2008, 03:32:23

$this->bbcode_second_pass_quote('CarlosFerreira', 'G')uy wins election in jail. Well, he sure ships a lot of cash into Alaska. I wonder why so "social security" minded Americans from all over the country tolerate this.


He may be a son-of-a-bitch. But he's our son-of-a-bitch!
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Re: The Price of Oil's Replacement

Unread postby wisconsin_cur » Fri 22 Aug 2008, 03:49:49

$this->bbcode_second_pass_quote('Curmudgicus', '[')smilie=5geezer.gif]

Mr. Bill,

I howled reading your political angles, and I have clipped it out and sent it to a number of friends. Thanks for a sense of humor.

The weeds choking the channel are definitely political, including ignorance and self-interest.


I missed this earlier.

Yes very funny and, more importantly, true.
http://www.thenewfederalistpapers.com
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Re: The Price of Oil's Replacement

Unread postby CarlosFerreira » Tue 26 Aug 2008, 20:11:36

$this->bbcode_second_pass_quote('MrBill', '')$this->bbcode_second_pass_quote('CarlosFerreira', 'G')uy wins election in jail. Well, he sure ships a lot of cash into Alaska. I wonder why so "social security" minded Americans from all over the country tolerate this.


He may be a son-of-a-bitch. But he's our son-of-a-bitch!


Do you think taxpayers from other states see him as one of them? I was kinda expecting the "lock him up and throw away the key" fanfare.
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Re: The Price of Oil's Replacement

Unread postby MrBill » Wed 27 Aug 2008, 08:58:07

“The windiest sites have not been built, because there is no way to move that electricity from there to the load centers,” he said.
$this->bbcode_second_pass_quote('', 'U')nlike answers to many of the nation’s energy problems, improvements to the grid would require no new technology. An Energy Department plan to source 20 percent of the nation’s electricity from wind calls for a high-voltage backbone spanning the country that would be similar to 2,100 miles of lines already operated by a company called American Electric Power.

The cost would be high, $60 billion or more, but in theory could be spread across many years and tens of millions of electrical customers. However, in most states, rules used by public service commissions to evaluate transmission investments discourage multistate projects of this sort. In some states with low electric rates, elected officials fear that new lines will simply export their cheap power and drive rates up.

Without a clear way of recovering the costs and earning a profit, and with little leadership on the issue from the federal government, no company or organization has offered to fight the political battles necessary to get such a transmission backbone built.

source: Wind Energy Bumps Into Power Grid’s Limits
$this->bbcode_second_pass_quote('', 'W')ind advocates say that just two of the windiest states, North Dakota and South Dakota, could in principle generate half the nation’s electricity from turbines. But the way the national grid is configured, half the country would have to move to the Dakotas in order to use the power.

“We still have a third-world grid,” Mr. Richardson said, repeating a comment he has made several times. “With the federal government not investing, not setting good regulatory mechanisms, and basically taking a back seat on everything except drilling and fossil fuels, the grid has not been modernized, especially for wind energy.”
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Re: The Price of Oil's Replacement

Unread postby MrBill » Wed 27 Aug 2008, 09:01:58

$this->bbcode_second_pass_quote('CarlosFerreira', '
')Do you think taxpayers from other states see him as one of them? I was kinda expecting the "lock him up and throw away the key" fanfare.


All politics are local. And the good people of Alaska will get the man they deserve.
$this->bbcode_second_pass_quote('', 'S')enator Ted Stevens of Alaska won the Republican primary in his home state on Tuesday, soundly defeating six Republican challengers less than a month after he was indicted by a federal grand jury for concealing more than $250,000 in gifts from an oil services company.

source: Senator From Alaska Wins Republican Primary
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Re: The Price of Oil's Replacement

Unread postby CarlosFerreira » Wed 27 Aug 2008, 15:15:15

$this->bbcode_second_pass_quote('MrBill', '[')b]“The windiest sites have not been built, because there is no way to move that electricity from there to the load centers,” he said.
$this->bbcode_second_pass_quote('', 'U')nlike answers to many of the nation’s energy problems, improvements to the grid would require no new technology. An Energy Department plan to source 20 percent of the nation’s electricity from wind calls for a high-voltage backbone spanning the country that would be similar to 2,100 miles of lines already operated by a company called American Electric Power.

The cost would be high, $60 billion or more, but in theory could be spread across many years and tens of millions of electrical customers. However, in most states, rules used by public service commissions to evaluate transmission investments discourage multistate projects of this sort. In some states with low electric rates, elected officials fear that new lines will simply export their cheap power and drive rates up.

Without a clear way of recovering the costs and earning a profit, and with little leadership on the issue from the federal government, no company or organization has offered to fight the political battles necessary to get such a transmission backbone built.

source: Wind Energy Bumps Into Power Grid’s Limits
$this->bbcode_second_pass_quote('', 'W')ind advocates say that just two of the windiest states, North Dakota and South Dakota, could in principle generate half the nation’s electricity from turbines. But the way the national grid is configured, half the country would have to move to the Dakotas in order to use the power.

“We still have a third-world grid,” Mr. Richardson said, repeating a comment he has made several times. “With the federal government not investing, not setting good regulatory mechanisms, and basically taking a back seat on everything except drilling and fossil fuels, the grid has not been modernized, especially for wind energy.”


That reminds me of a BBC program (I think it was Peter Day's World of business) that discussed the booming urbanization in India: often whole cities were built and people would move in before the government would install basic infrastructure: electricity distribution, water distribution, sewage, telephone lines... all that is centrally controlled, and does not respond demand.

It reminded me of Milton Friedman: put the government in charge of the Sahara Desert and in five years, there will be a shortage of sand. Very disturbing.

I think this calls out to the difficulty of having "another Manhattan Poject", this time around for energy production. What do you suggest it should be the government's role in this problem?

Also, I suppose producing energy in a place with good energy production potential and then export it to, say, a difficult place with less potential for energy production, can be viewed as a subsidy. Eventually the government won't be able to afford the subsidy, and people there are living in an unsustainable position. Viking colonies in Greenland, anyone?

I wonder if the Vikings in Greenland had their very own Senator Porkbarrel?
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Re: The Price of Oil's Replacement

Unread postby ROCKMAN » Wed 27 Aug 2008, 15:26:28

Carlos,

Perhaps they should consult with T Boone Pickens. He didn't hesitate building a wind farm where there was little market for the output. He got the land cheap because there was no competition for it way out in west TX.

Oh...almost forgot to mention: about three weeks ago the Texas Public Utility Commssion authorized the construction of a $4.5 billion line to connect T. Boone's windmills to Dallas. The line will be paid for, of course, by the customers. As always, it's good to have powerful freinds in the state capital.
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Re: The Price of Oil's Replacement

Unread postby MrBill » Thu 28 Aug 2008, 03:29:00

Mind you, T. Boone Pickens doesn't want any of those wind farms on his own land! ; - ))
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Re: The Price of Oil's Replacement

Unread postby cube » Thu 28 Aug 2008, 05:34:20

$this->bbcode_second_pass_quote('CarlosFerreira', '.')..What do you suggest it should be the government's role in this problem?...
I wouldn't rely too heavily on government.
Look at how the US federal gov. has been behaving for the past several years.
If you were hoping to find the answer to "sustainable development", I think you made the wrong choice in looking up to the US gov. as a source of inspiration. :lol:
//
Milton Friedman is an interesting person.
He's managed to remain controversial, even after death.
That's very impressive!
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Re: The Price of Oil's Replacement

Unread postby vtsnowedin » Thu 28 Aug 2008, 05:51:50

In nineteenth century new england manufacturing was concentrated around the falls of the rivers to use the water power. For example the woolen mills of Lowell Mass. Work scheduals were often adjusted to match the flow of the river. Perhaps the twenty first century will see mills built in the lee of a ridge with a windfarm on it and some activities will only be done when the wind is blowing. The factory with the shortest cord to the power will have the cheapest cost.
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