Re: Alternative source of fuel oil

On 29 Aug 2005 09:46:58 -0700, "Larry Caldwell" <larryc@xxxxxxxxxxxx>
wrote Re Re: Alternative source of fuel oil:

>kmein...@xxxxxxxxxxxxx
>
>> I don't know the real statistics but anything that requires large
>> gov't subsidies to get into operationprobably isn't a good idea in the
>> first place.
>
>Every biofuel plant in the country has been runnig full bore and
>profitably now that gasoline and diesel are up to $3 a gallon. If you
>had waited until the market demanded the secondary sources, the
>technology would not have been developed and the plants would not have
>been built. It is not like running short on crude oil is a surprise to
>anyone. Everybody has seen it coming for decades. Having the plants
>built and in production has cut 3 to 5 years off of the development
>cycle for the next batch of plants. Only the head-up-their-ass
>contingent have objected to the development subsidies, and this year
>they are learning just how big a batch of fools they were.

What happens when the developers sink $millions into a plant based on
$65/bbl oil and then the Arabs drop the price? Just like they did in
the early 1980s.

The only way to get energy independence is for the feds to put a
*FLOOR* price on oil of say $70/bbl. The difference between FLOOR and
market prices < $70 would be made up by a tax used to fund alternative
source development.

With a FLOOR price assured, developers will invest in development with
some assurance that the Arabs can't pull the rug out from under them.
--
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