Understanding the Issues 2008: Energy

Corn is turning out to be a very poor fuel alternative.

Corn has been become a political tool, a proverbial third rail and ultimately it is a joke. It is things like "corn as fuel" which make me want to fire every politician we have. The use of corn in the relatively small amounts that we utilize now is already seriously straining the food markets. It is supposed to be an answer? It's not even close and that argument doesn't even get into the points about it sucking as a fuel anyways.

Corn is turning out to be a very poor fuel alternative.

It is, however, great for cleaning the colon!

On another note. I mentioned this in the "Water as fuel thread":

I don't understand why we have to legislate big oil companies into this. Why can't we simply make it very worth their while to develop other sources? I think it is slightly naive to think we can simply leave big oil in the lurch and expect a new solution any time soon. To do this quickly and as effectively as possible it seems to me the answers need to come from big oil themselves. Make it a good business decision for them and they'll lead the way. And if they are leading the way then we'll probably get better answers than some bureaucratic crap solution based on a fairly tale like corn.

On another note. I mentioned this in the "Water as fuel thread":

I don't understand why we have to legislate big oil companies into this. Why can't we simply make it very worth their while to develop other sources? I think it is slightly naive to think we can simply leave big oil in the lurch and expect a new solution any time soon. To do this quickly and as effectively as possible it seems to me the answers need to come from big oil themselves. Make it a good business decision for them and they'll lead the way. And if they are leading the way then we'll probably get better answers than some bureaucratic crap solution based on a fairly tale like corn.

You've basically nailed this whole energy argument down in one post.

Who and how can we get big Oil to bring solutions to the table when their profits are just fine the way they are?

You've basically nailed this whole energy argument down in one post.

Who and how can we get big Oil to bring solutions to the table when their profits are just fine the way they are?

By incenting them to invest in other fuel sources, diversifying their product portfolio. As great as oil is doing for them right now, that may not always be the case, and they know this. If they've got another product that they can make money off of, the market risk that big oil's shareholders currently must assume will be partly assuaged by the presence of another basket to hold their financial eggs.

You've basically nailed this whole energy argument down in one post.

Who and how can we get big Oil to bring solutions to the table when their profits are just fine the way they are?

They key is to obviously make their profits better in some way. There has to be a serious carrot for them. Big oil isn't evil, they have no emotions other than a desire for more money. Make it so they can make more money with alternate fuels and that's what will happen. And quickly. With a big enough carrot I bet we could be 50% alternate fuels in 10 years. But it will need to be a serious carrot. And one that weakens barriers to entry within the energy market. If some mid level company can figue out a way to make hydrogen work and has the capacity to market it and sell it then big oil will have to follow suit. Just throwing hydrogen out there as an example.

Should I go ahead and name the candidates now?

By incenting them to invest in other fuel sources, diversifying their product portfolio. As great as oil is doing for them right now, that may not always be the case, and they know this. If they've got another product that they can make money off of, the market risk that big oil's shareholders currently must assume will be partly assuaged by the presence of another basket to hold their financial eggs.

You're right, and this has been part of the on going dialogue behind the scenes. I think once this election get's settled, it's all about reaching a happy medium with big Oil, the consumer, and the environment.

Truth is most of these proposals won't be fully implemented before 2030 anyway. So before we even get out the gate, we shouldn't get our hopes up too high.

I am no economic expert on this stuff. I have a college level understanding of economics and zero targeted understanding of the energy market but I think in general what I'd do is:

- First off I'd abolish any current tax break that oil companies get. Let's start with a clean slate.

- Identify a reasonable timeline for becoming oil independent. This will require understanding what oil reserves we have and how long they would last us at certain levels of usage. The idea here is to figure out at what point we can raise the proverbial middle finger to the middle east and say "Hey, were good now. We've got enough to last us 50 years in reserve". I am guessing that would mean we'd need to reduce our oil usage to approximately 2% of what we use today. I have no idea how realistic that is. Or whether it is realistic at all. I suppose there will always be a need for oil at some level no matter what.

- Construct a roadmap to oil independence. This will be hard since we have no real solid idea what the key to oil independence is. Maybe it is corn or hydrogen. Maybe biodiesel. Maybe a mixture. Probably a mixture. But we need to be reasonable. How long would it take us if we started today with full funding to overhaul our infrastructure? Once we uinderstand what generally needs to be done we can figure out how long it would take and how it can be done.

- Structure an incentive to big oil to follow the roadmap or even outperform it. If we figure out we can be 50% oil independent in 10 years then structure a tax incentive, A MASSIVE ONE, over the next ten years that forces them from a busniess perspective to get it done. Then slowly reduce the tax incentive over the next however many years it will take to be 100% independent. At the end, the old oil infrastructure will be gone and we'll using whatever else we have. Then we can start simply taxing the hell out oil comsumption to inhibit any type of revival.

All it takes is for everyone to be honest and reasonable. We simply can't ram this down big oil's throat at the expense of their profits and expect it to work. The reason they have so much influence is because they have money and they will do every thing they can do to keep their money and influence. The only reasonable way to get them to go along is to make it more proftiable to NOT USE OIL as a source.