Posting in Design
The way to assure new investors a profitable market for long-term projects is to wipe out the price advantage old, unreliable feedstocks. And the best way to grow all manufacturing is to provide price stabilitiy to the energy market.
The last few months have shown what is wrong with the energy market and that, in a word, is volatility.
Once a field is established it's dirt cheap to pull oil or gas from the ground. When energy prices cratered early this year Saudis and others still made money.
But oil and gas are also political assets, hence subject to disruption. The recent price run-up, and a possible new spike over Iran, attests to that.
So what the market most needs is price stability. That's what cap and trade, the most controversial aspect of the President's energy and climate proposal, is designed to provide.
While it's being pushed as a bill to slow climate change, cap and trade can also have a very positive impact on the energy market.
It raises the price of oil and coal, acknowledging the real costs of burning it, which brings those costs closer to what alternatives like solar, wind and geothermal bring to market.
It's not a perfect market solution. To my mind, a price floor would be better. Set it at a price that delivers profits to those with solar, wind and geothermal resources, and you have the assurance they need to invest.
But for now cap and trade is what's on the table. And where arguments over polar bears and glacial melting are nice, they won't do for businessmen with short-term profit goals.
It's a reduction in volatility that's the winning political formula. The way to assure new investors a profitable market for long-term projects is to wipe out the price advantage old, unreliable feedstocks. And the best way to grow all manufacturing is to provide price stabilitiy to the energy market.
Jun 23, 2009
Absolutely amazing that anyone thinks price controls would do what they are intended to do. Please! Anyone truly interested should look at what happened under Richard Nixon when we tried to fix the price of gasoline. Dana, you are old enough to remember. Economic examples of this abound in recent history around the world. We do succeed at one thing when we do this. We make everyone equally miserable. As recently as December of 2008 there were 700 scientist "on record" as being on the opposite side of the 52 UN IPCC scientist on the issues surrounding man made global climate change. You can read the Senate Minority Report at the following link, which provides quotes from many of these scientist as well as a listing of their findings and who they are: http://epw.senate.gov/public/index.cfm? FuseAction=Files.View&FileStore_id=83947f5d-d84a-4a84-ad5d- 6e2d71db52d9 Here for your edification are just two quotes from this report: ?Creating an ideology pegged to carbon dioxide is a dangerous nonsense?The present alarm on climate change is an instrument of social control, a pretext for major businesses and political battle. It became an ideology, which is concerning.? - Environmental Scientist Professor Delgado Domingos of Portugal, the founder of the Numerical Weather Forecast group, has more than 150 published articles. ?CO2 emissions make absolutely no difference one way or another?.Every scientist knows this, but it doesn?t pay to say so?Global warming, as a political vehicle, keeps Europeans in the driver?s seat and developing nations walking barefoot.? - Dr. Takeda Kunihiko, vice-chancellor of the Institute of Science and Technology Research at Chubu University in Japan.
Energy stability but at what cost? Stability is a good thing but paying twice as much per btu for stability? I don't know Dana, not sure you thought this all the way through. The economy is rough right now and we want to increase energy costs? Doesn't make much sense to me. Let's wait until we can afford it and can take the leadeship roll. Doing this right now will really hurt an already stumbling economy. Noble gesture but we need to slow down and be realistic, wait until we can afford it. This thing is far from free.
Energy prices went nuts when the Clinton administration opened up energy futures to speculators with some regulation and the Bush people made it virtually unregulated in 2007 causing the price run up in 2008. Before all this the only people who could buy oil or gas on the energy futures market were industries that depended on energy price stability for their business. Like steel mills, power plants, airlines and trains. Go back to the old regulations and this mess clears up in a few weeks.
Dana, up front I must ask forgiveness for what I am about to say, but you have two problems here. First, you are economically illiterate. Anyone with any sense of economics would understand that market forces work best at lowering prices and creating stability. Using the tried and true Statist Line of looking to the State(the Feds) to regulate things into compliance, is really nothing more that Fascism. And our current president is using Fascism to control the nation's economy. The fact that about 90% of 'so called' journalists vote Democrat, gives yourself away here. Secondly, you are a perfect example of the fact that the profession of Journalism, is the lowest rung on the intellectual ladder, even lower than education majors. And that is saying a great deal here. What I am saying here is that you are completely blind to how the real world works. Perhaps you would be better moving to Euroland. I'm sure you would fit right in.
30 yrs ago they said we were heading into an Iceage. Guess what? They were wrong then too. Fact: this kneejerk con would push us into a fullblown depression. Make GE et-al super rich at our countries expense. And have next to no impact on the GLOBAL weather patterns. Now if inventors build a better system, people will buy it. However, cap and trade is gov based extortion, nothing more. Anytime the opposing views are treated with these ad homenu attacks, something stinks. An informed citizen.
Dana, I see the Kool-aid is flowing nicely on this blog. Another socialistic web site. I thought I was going to be informed rather than preached to. Cap and trade (or as I call it trap and tax) is only a method to make the libs feel good and raise taxes. When does it stop? You seem to have glossed over the comments about the lower class (the liberals biggest supporters and supposed benefactors) being those most affected by this plan. Yea, they will be "exempt" from the "tax" but they will be exposed to the increases in good and services! Oh thats right, food stamps will take care of that right? Will you be so positive when DC gets around to taxing the internet? What kind of "carbon foot print" does your laptop have? I for one do not want to work for the collective but for myself and keep the money I "EARN". I want to be able to do what I please, when I please and how I please.
You get what you incentivize. If your incentives are aimed at the production of coal, and oil, and natural gas, through tax deals and other things, that's what you're going to get. Just as in health care, if your incentives are aimed at creating more services, and you have the same people determining the service load who profit from services, you pay for more services. So the key to changing markets is changing the incentives. Cap and trade puts wind and solar on a level playing field with hydrocarbons, by forcing buyers of hydrocarbons to account for the external costs they have been ignoring. It removes the current subsidy we give all forms of carbon energy.
There is a factor which is overlooked in the push to decrease our dependency on petroleum. Only a little over a third is converted to energy products, the remaining two thirds is used for hundreds of other products we depend on in our everyday life. These petro-chemicals are used for everything from pharmaceuticals, to plastics, synthetic fiber, with asphalt as the final product of refining. Whatever is done with the energy portion, all these products will still be required and at the same production rates. It is ironic, but as the demand for the gasoline and kerosene decrease, what could be done with it?
To AntonioSosa: Haiti and the Domincan Republic are both on the same island. One is poor (Haiti) and the other is not (The Dominican Republic). The island is not a big enough one for climate or other geographical factors to be significant. The real reason for the difference has everything to do with humans how they treated the environment. The Protugese settled the Dominican Republic. They wanted a Naval base and that was all they cared about. Haiti was settled by the French who wanted to turn it all into plantations which would make them rich in the short term. When the soils were depleted, they'd just kick the colony away and find some other land to plunder. And that is what they did. As a result, Haiti, once one of the biggest producer of sugar, now can't grow much of anything. No food for the locals, no means of production, and of course they are poor. On the other hand, the Dominican Republic spent the time not doing much of anything. Now they are better off.
There are far better alternatives - such as really doing something real rather than on paper. This administration seems very focused on playing the media to their advantage and delivering nothing different. For a real alternative we could build a vast number of wind farms and solar power plants around the world and link them as different areas have different demands at different times. Energy equalization whilst costly to install will be better than the Trillions of tons of CO2 we put into the environment and the Trillions of dollars we poor into a corrupt and broken system. Visit www.jonathanrosecompany.com to see how companies can change our world and our finances with a little smart thinking
China and India are big polluters. They may be unable, at the present time, to afford the incentives needed to develop this new economy. We can. Which means we can then export to them and restore our balance of trade. You have anything other than energy technology that can possibly provide the revenue to make a dent in our current trade deficit with China? I don't. They already love all our brands. They even like to drive Buicks.
Fred Singer is a noted denier of global warming. There is nothing wrong with being outside the scientific consensus, in scientific terms. But there is something very wrong with being outside it in policy terms. If Singer could, through evidence, persuade the majority of scientists he's right and they're wrong, that would be one thing. But he has not, and he will not. So while he has the right to say whatever he wants, I don't take what he says as science. It's like spontaneous combustion, or the idea of people living alongside dinosaurs. It's non-credible.
The present energy market is filled with incentives for the production of oil, gas and coal. Those markets developed through incentives. That model is unsustainable. Coal, gas and coal produce pollutants which are killing us. We know that. These costs need to be accounted for. Renewable industry needs a profitable price point and a level playing field. This bill offers both. I refuse to condemn your grandchildren to death due to ignorance or fear or short-sightedness.
Does this sound vaguely familiar: "The Smoot-Hawley Tariff Act (sometimes known as the Hawley-Smoot Tariff Act; officially the Tariff Act of 1930) was an act signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports were reduced by more than half." This bill set off a trade war and many economists credit this bill as a major factor in the great depression. History repeats itself......
So we are going to artificially raise prices on our energy for what reason ? so we can all suffer ? This is greedy government at it's best. How about looking at what a failure it is in Europe ? This is about tax money. Plain and simple. We need to drill for oil here in good ole USA. we have a huge supply here. decades worth. oil shale alone could get us by quite nicely. we'll keep investing and developing alternative fuels but it will take time and will need to be cost effective. Temperatures have been failing for years now. They can't even prove that CO2 is harmful to the environment. For every "expert" that says we are undergoing climate change I can find an expert to refute these shamful "findings" based on hocus pocus voodoo. Average cost to a US household will be $1600. awful. ridiculous. this will anger a lot of people. Where are your facts ? No research. Mr. Blankenhorn is once again involved in a biased piece of "reporting". Also....price floors historically do not work. they have been tried in other countries and resulted in supply shortages. How about this...you guys go back to journalism school and start over !
God you have got to be kidding-yeah it brings price stability, at about 100% higher energy prices than we currently have. Sorry author, the public is no longer duped into this global warming hysteria. It is not a proven fact, the science is still inconclusive, and no one on the "pro" warming side ever takes into account the sun's activity. Why oh why do people worship at the alter of green? Cap & Trade is not working in Europe and it will not work here.
Cap and trade does nothing for the environment. It is only about money. How better to cover a tax than as a green project? The US is NOT the worlds polluter, it is China. Without China and India on board there is no progress possible and China is rapidly growing as a polluter. Now if I could only pass on my energy bills, direct and indirect, to the author ... This is a very naive post.
Obama?s ACES Act (cap and trade), however, will cost many of us our businesses. It will cost many of us our jobs. It will cost all of us our freedoms and our future. No patriotic and informed American can support the ACES Act (global warming/cap and trade scam), a huge Ponzy scheme that will kill the U.S. economy. Cap and Trade ?would be the equivalent of an atomic bomb directed at the U.S. economy?all without any scientific justification,? says famed climatologist Dr. S. Fred Singer. It would significantly increase taxes and the cost of energy, forcing many companies to close, thus increasing unemployment, poverty and dependence. Cap and trade represents huge taxes and cost increases, which will hurt mostly the poor and the middle class. Cap and trade will give dictatorial powers to Obama and will further enrich his billionaire friends (Gore, Soros, Goldman Sachs, Obama?s Chicago Climate Exchange friends, GE, the United Nations, etc.) -- all at our expense and at the expense of our children and grandchildren. Those brainwashed to the point of wanting to destroy the economy to "prevent global warming" are behaving like the most primitive human beings who were duped into believing that human sacrifices would ensure them good weather. Human beings don't have the power to control climate! And killing the economy will not help the environment. Poor countries can?t protect the environment. Just look at Haiti!
We have been living in Montana for the past 5 years and I am not suprisexshopto find it #3 on the "worst" list. Considering asexy shopmove to Idaho to escapthe high cost of living a low income in MT. There may not be a sales tax here but they get you if you own property!