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If I tried hard ,I could'nt make anymore "common sense" than many of the points I've read down thru these posts ,

BUT ...........no matter how we "slice it and dice it" the energy source(cheap accessable crude) we've all been depending on since the Industrial Boom began is not a "RENEWABLE RESOURCE" !
I.E. at some point .....IT WILL BE GONE ....... and for alot of the reasons already mentioned , We will all be faceing some drastic choices to prolong the "Inevidable" !

True , It may not be in the near future that we face these choices ........

But the fact that the oil companies are'nt building any new refineries , are'nt replaceing ageing tankers , and many other "signs" , Does'nt give great confidence in the future as we know it !(think they know something we don't)

The issue were discussing now , is one of the big reasons I got out of "aerobatics" .(high compression ,High octane needed)

Did'nt want to get stuck with a High $ "mission specific" bird that nobody could afford fuel for .(that is if avgas will continue to be avilable).

We in aviation(I believe)will feel the crunch before the auto industry , just read the other day that another of the refineries that we depend on for our "specific need" was closed .
Now there are only 9 in the world produceing our "fun juice".

SSSSSOOOOOOOO..............What we gone do fellas when the well runs dry ?????????????

Might be time to do what the men from the "Old School" use to say to their kids ......................

.........SON IT'S TIME TO THINK ABOUT YOR FUTURE !!

OK, I guess I'm outta this discussion. Anyone who can't see the value of common sense (not radical) conservation, at least from a personal financial standpoint if not the bigger picture, has got to be living in some outer dimension. For every $100 we now spend for gas in the new car we would have spent $300 before. It doesn't take a math major to see the advantage and that's $200 that doesn't go into the petroleum industry's pocket. It's also $200 worth of gas that doesn't need to be pumped. It's a win/win strategy.

Carl...the reason gas is so damned expensive in all those other countries is TAXES man. TAXES!!!! Not market pressures. They pay the same basic price we do for crude oil. Their governments are the ones ripping the folks for the additional profit (taxes).

And as for Rush Limbaugh, the only thing keeping this country from turning completely socialist right now is (and has been for sometime) talk radio. The guy's a blowhard and at times an ass...but you owe him a debt of grattitude whether you know it or not. He and others like him make it their jobs to raise the hell WE should be raising, but instead we keep relatively quiet while we work at raising families and making livings.

The Vocal Minority will nearly always ride roughshod over the Silent Majority and that is demonstrated year after year by the incredible goings on in this great nation.

See ya fellas.

Dan, what scares the hell out of me is the other side's wish to limit specific talk radio shows so they can have their air time. I like my Bill Bennett, Neal Boortz, Dennis Prager, and Michael Medved.

Back to gasoline prices. My next car is going to be a mid 1990s VW Golf TDI. Yes it still burns hydrocarbons, yeah, diesel is a little more expensive, but it'll run off of sumped Jet-A for free, and cooking oil if needed. 47mpg without heavy batteries that take a lot of energy and pollution to create, and systems that regular mechanics don't quite understand yet! Diesel is my cup of tea!

I think Dan's right on. Those that can bear the cost willingly to be more energy efficient (vehicles aren't the limit; it can involve items in the home as well) and choose to do so, can make some difference in energy consumption. The energy companies will do what is in their best interests, which may or may not align with making life better for the rest of us.It isn't their responsibility to do so (we'll leave any ethical talk out...they could make nice and reduce their profit margin and pass it on to the consumers, but we should not expect or dare force them to). It is everyone's choice- we are all individual adults- and what we do has an effect. It may affect our futures as well.

And if nothing else, I don't see what's wrong in saving yourself money.

Well, let me clarify a few things.

First I agree with Dan that conservation is indeed the way to go - not only in energy, but in all things. Waste not, want not. Hey - one of the most important conservationists was Theodore Roosevelt! Conservation - absolutely - I agree TOTALLY, Dan. No question or argument with what you are saying.

And, just to clarify what I was saying, concerning the Hummers - is there really any rational reason to get something like that- or an SUV - or a Runamuck 10,000 that gets 5 gallons per mile? It is wasteful - inefficient.

Now, Reg is correct about the economics of the issue. I'm NOT going to bore people with a lesson of Microeconomics. Basically, it can be boiled down to an issue of Supply and Demand. Supply reflecting how much you wanna pay which will accrue to the supplier (marginal cost), and demand reflecting how much utility (benefit) you derive. (Total benefit can be found by integrating over the interval from zero to the point of intersection with the demand curve. If there was some way to attach a dollar amount to all costs - monetary, social, and perceived).

The demand curve is a function that can be derived from the marginal rate of substitution of gasoline/hydrocarbons verses all other sources of energy. Again, total costs can be obtained by integrating the function over the interval from zero to the intersection with the supply curve. (Further, total cost, if it could be quantified would be all monetary, social, and perceived costs.).

(BTW - for those whom I haven't lost yet, you can probably see there is a market failure going on here, in that we have included social costs - externalities.)

Let's just lump all other sources of energy together rather than anaylize each one separately - such as solar, nuclear, fuel cell, electric/battery, and so on.

The truth is that yes - you could concievably make a loaded semi truck or a freight train run around the world on the energy contained in a paper clip - that is, if you were willing to invest the needed time, money and whatever else to obtain an acellerator to break down the nuclear structure and convert that paper clip to energy.

So, ok... we invest 100 billion on our little car to go to the store. We could've done it on say a half gallon of gas.

Exaggerated and silly example certainly, but you see my point. Right now, hydrocarbon/fossil fuel is the most cost-effective method we have. Until we get economies of scale and advanced technology to make alternative forms of energy cost-effective, we would be costing ourselves a self-imposed tax by not using oil-based fuels.

Ok... so how can we spur the demand for these alternative forms of fuel to be developed and cost-effective? Well, present market conditions by themselves will have little effect until the scarcity of oil (coupled with demand - let's ignore any increase in demand and keep it static) drives the price up high enough to make alternative fuels viable. Still, we'll be paying say, $300/bbl of oil while the alternative sources are still up there. Not a solution we want. What we DO want is to bring the cost of the alternative sources DOWN to where they are comparable or perhaps even more efficient (read - cheaper) than the cost of oil-based fuel at that time. Perhaps tax incentives or rebates designed to spur demand and incentive for alternative sources - thereby subsidizing and artificially lowering the cost of alternate energy i.e. - lowering the marginal cost of substitution. I don't like bringing the government in here, as this can work both ways, and one of them is bad. The bad solution is to raise the taxes on oil making it rise in price, then it becomes artificially comparable to the more expensive alternative energy. This is inefficient and not optimal. Coming back to our cost/benefit equation - (marginal cost = marginal revenue/benefit) We end up paying more and getting no more benefit, and in the process, diverting more of our scarce resource (in this case, money) away from other means of consumption, such as savings, food, clothes, vacations, airplanes, avionics.... on and on. The contraint of the production possibility curve - oil against all other goods. Not a good outcome.

My solution? Well, nothing really novel that hasn't already been rehashed. Although I don't like government interference in the economy, ole Poobs here favors tax and investment breaks to develop alternative sources. But, do it in a meaningful way. The token breaks and incentives we've seen so far are pretty ineffective because they're just too small - like trying to put out a forest fire with a five gallon can.

I do believe there are alternative and economically viable forms of energy to be developed and refined via a technological "black box" progression of knowledge. If we had, for example, taken the advice of an advisor in Lincoln's cabinet to shut down the Patent Office because everything that had to be invented had already been invented, imagine how that would have negatively impacted mankind. We'd still be using whale oil and gaslit streets.

The solution of increasing supply was mentioned. Increasing supply is only a stopgap measure at best, given a finite resource. Oil is a non-renewable resource and is very difficult and expensive to obtain additional recoverable resources in played-out fields via secondary and tertiary means. It's also possible that the price of oil could rise so high due to demand that it chokes off any growth and we see a worldwide recession - part of a self-correcting mechanism. Supply and demand. Harsh rules in an unforgiving science.

Economics - it's earned the moniker "The Dismal Science".

I'm optimistic that there are solutions to this issue out there and that they will be developed. And they will. However, the real thing is how to implement the solution. it will become increasingly painful the longer we put it off. Problems will be solved - it's a matter of how painful the solution will be.

Anyway, enough economic theory.

Gotta use that MS, MA, MBA and 2 BA's somehow, even if it is for bathroom tissue.

Dan,

Sadly.....You are correct, we are taxed heavly here(on everything I might add ), but.... to be honest on Avgas, we pay almost the same as you do in the major cities (after currency calculations) although our country prices for Avgas are considerably higher, however.... Auto fuel, we do pay a much higher price by comparison, and based on Ed's quote of $3US a US gal, means your paying about .79c US per litre (our U-of-M) were we are around the equilivant of $1.06 US P/Lt give or take a cent or two

I am assuming Ed's quote was correct at that amount??




And yes Carl, your quite right there my friend

Moral or the story - you got it pretty good.......especially when I have heard that in some areas of Europe they are paying around $1.60US p/lt and quite possibly more

Oh yeah Matt.. the quote is correct... $3 a gallon.

Yuck-o.

Supply and demand?.....The owners of the supply demand we pay more, reduce the supply in order to drive the price up. They are organized, we(the consumer) are not. If we want lower prices on gas
we consumers must learn how to manipulate the demand. How you say, simple, boycott major brands and only buy from independant retailers. In less than a week you will see the major retailers dropping prices. Buy from the lowest price retailer forcing a price war. If they want our business, make them buy our loyalty by reducing price. Simple only if enough consumers united.

Ed:

Yes, Sir! You did an excellent job of adding a more technical explanation to my point. YOU GOT MY VOTE!

I do want to clarify a few things. I am not opposed to conservation. I am in the water business, in the PNW, no less, and I advocate wise use of all resources, even renewable ones.

But conservation is not necessarily gonna get us where we want to go, which is less expensive gas. If we succeed in driving the price down through conservation, then demand will increase because of the lower price. And then the price will go back up. So, in a macro sense, conservation will not work towards meeting our objective. Now, in a micro sense, it works great. The less of an expensive resource you use personnally gives you more money for other things. But I would be willing to wager that almost all of us would drive and/or fly more if gas were less expensive.

As a side note ... a recent study was conducted of the total societal costs of two vehicles, a Prius and a Hummer. The Hummer was actually less expensive, in terms of total life-cycle costs, than the Prius. The environmental costs of producing those batteries are incredible!

In response to the Hummer being a totally pointless vehicle, so what! So is a privately owned airplane used for nothing but pleasure flights!!! This is the US of A and I am FREE to own any kind of vehicle I want and can afford. I don't want a Hummer, so I won't buy one, I'd rather have an airplane. And I own an airplane, which I sure as heck don't "need". And if I could afford it, I would have an airplane that uses even more gas than my 150! This is a FREE country, where I am, or at least should be, FREE to be as silly as I want to be! So STUFF the arguement that nobody "needs" a Hummer.

Taking a deep breath and moving on ... using tax policy to influence social and/or economic activity is anathema to my way of thinking. It is my firm belief that, in a free country, taxes should have only one function, and that is to raise revenue. Taxing something in order to control consumption or direct behavior grates on me worse'n fingernails on a chalkboard.

Tax breaks for a favored activity are only mariginally more acceptable. One of the problems (aside from the philosophical issued raised above) I see with that approach is that it is very nearly impossible to know, in advance, what technologies might experience a breakthrough. We might throw a whole bunch of societal money at promising techonologies that end up being dead ends, while some little guy in a backroom lab somewhere, working on an entirely different problem, comes across the "one thing" that will break our dependence on hydro-carbon fuels.

I have an abiding faith in the market. If there is a promising technology out there, somebody is going to invest in the research in an effort to be the first to bring it to market and make a killing. This has happened before, and now is a propitious time in our history for it to happen again, given the unprecedented amount of capital in search of investments out there today.

Another problem I have with conservation is the use made of it by the politically correct. In my business, I am constantly hearing about the use of conservation in order to increase supply. The theory propounded, and they seem perfectly serious about this, is ... if you have five oranges and you conserve one, then you can add that one back into your supply and end up with six oranges. Yes, I have questioned proponents of this theory closely (though the units are acre-feet of water, not oranges) and they really believe that the theory works. They seem to think that I am some kind of neanderthal that I can't understand it. I guess this is new math. My theory, that you can't consume more than you have, no matter how much individuals might conserve, is considered old fashioned.

The problem with the conservation arguement today is that it is not being used to extend the utility of resources, it is being used as a vehicle to control people's behavior.

One other point in the demand side of the discussion... the demand for crude is not driven exclusively by energy needs. Crude oil is now a foundational resource for a lot of other products. Just about everything produced today has some level of plastics in it. And almost all of those plastic materials are derived from petroleum products. So even if we manage to find an alternative to hydro-carbon fuels, our dependence on oil will not go away.

And, on the subject of unintended consequences... the recent increase in the production and use of "biofuels" is in the process of creating a new worldwide crisis. The US is the major supplier of livestock feed worldwide. The major ingredient in cattle feed is corn. The demand pressure being put on corn as a result of the increase in production of biofuels is raising the cost of feed, worldwide, dramatically. These increases are having an apalling impact on third world substance farmers.

There are no easy answers ...

Reg