Friday, May 02, 2008

Energy, It's a Gas

We in the US produce 18% of our electricity from nuclear power.

France, 80%.

We've got people jumping up and down, screaming about CO2 emmissions and something they call "global warming". Most of those same people are jumping up and down screaming about nuclear power plants being evil, while pointing out how "green" France is.

That same lobby demands all kinds of "cleaner" gasoline mixes in various places which tax the effective capacity of our oil refineries. And that same lobby holds a significant portion of the responsibility for the reason we don't have enough oil refineries. And that they are, by and large, all perilously located down in hurricane country.

Most of the same lobby argues for "renewable" bio-fuels, which so far have managed to drive grain prices up, affecting the world's poorest (and what happens in a year of massive crop failure?)

And that same lobby blames George Bush and the Eeeeevil oil companies for the high cost of gasoline. Supply and Demand? Just smoke-and-mirrors corporate-corporate Republican double-speak, of course. Economists are clearly full of shit unless they say Bush is Evil™. He has Oil Buddies™, after all.

That same lobby has also been arguing for years for higher gas prices to force us to conserve and move to other energy sources. But since, according to them, prices have gone up because of EvilBushHalliburton-Corp instead of a massive tax increase to help fund their pet socialist projects, they're whining as loud as or louder than anyone about high prices since they've found a way to pin it on their favorite boogeyman.

The same lobby is responsible for us not drilling for oil where we have it and it is accessible for a reasonable cost. ANWR. Within 100 miles of the Texas coast. I haven't heard any stamping about yet about the large reserve under the Dakotas ... but I expect it will come. It does appear as if drilling has started there.

Here's the deal. If we approved a new nuclear plant today, I'm told it would take 18 years before it would come on line with it's first delivered electron. The retiring president of Shell corporation said 15 years between saying "Yes" to responsible ANWR drilling to the time that product reaches the gas station. They've started drilling in the Dakotas, but the infrastructure to get it to the refineries and out to the gas stations will take a while. 15 years sounds like a long time, but even if it's 3 or 5 years -- we'd better be doing something about that right now.

And what are our candidates talking about? A "gas tax holiday". (I find myself in agreement with Obama on this one...WTF???) Let's see, it's an election year. What happens when the holiday ends and prices shoot back up by 18 cents a gallon? It won't matter then, the election will be over and the real reason, the real mission for the gas tax holiday ... will have been accomplished.

Oil prices are high because of high world demand (and the devaluation of the dollar). High demand means, basically, that there's less of it to go around for each person demanding it, ergo, you get yours if you are willing to pay more than the next guy. Econ 101.

What happens when we lower the price of a comodity? If you paid attention in Econ 101 (or simply to your average person's shopping habits), you know that people will buy more of it. Yes, Demand will take up the slack in a tight market, making less of it available to each potential customer, causing the effective price to rebound to where it was before the tax was temporarily repealed. So it goes down by 18 cents a gallon for a little while, only to go back up in price by that amount due to increased demand, and then -- and then at the end of the "holiday", the Feds tack the tax back on! Unintended consequences? Well, the intention is to get elected. I'm disappointed that McCain is in favor of this idea.

In the end, Government isn't going to solve our energy problems. Private industry will. Oil companies are starting to re-define themselves as energy companies. As a Saudi prince once said, "The stone age didn't end because we ran out of stones." They are putting money into hydrogen cell development and other technologies far more realistic than wind and solar for the amount of energy we use. See, they want to continue making money when the wells run dry, and they don't want to be late to the party with oil's replacement. Realistically, they have the money and are best positioned to do this.

But it's going to take a while. In the mean time, we need to be looking here at home if only to reduce our energy costs ... say get prices back down around the $2/gal range while driving world prices down for the jihadi-supporting Saudis and Mr. Chavez.

Congress needs to get crackin' repealing some of the overbearing legislation that essentially prohibits our oil companies from responding to the problem. We can drill responsibly.

"If we can put a man on the moon..."™ we can certainly drill for oil without significantly disturbing the habitat on the surface.

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