Re: Poll: "Britons doubt cause of climate change"

On Jun 22, 2:08 am, sizy_one <sim...@xxxxxxxxxxxxxxx> wrote:

I tend to wonder whether Western Governments are that worried about
peak oil as profits seem to be rocketing through the roof of late.  It
seems to me that profits are set to go up exponentially with the
decrease in reserves.  The Governments of the day seem to care more
about the health of the financial markets than the health of the world
population.

I imagine there will become a point where rising prices will affect
the security of the nation state.  If you can't keep your private army
fed they're not going to protect you!
Just before arriving at that point there will probably be alternative
energy discoveries unleashed that will lead to another round of
profiteering by the major corporations supplying the suitably culled
world population of the future.

The only response possible to an increase in demand that outstrips
capacity to increase supply is an increase in price. It would appear
that the demand curve for oil is rather inelastic (amount demanded is
uaffected by change in price) but this will not always be the case as,
at the upper reaches of the demand curve, limits of general
affordability are reached. Prices then will stabilise.

In the meantime, the worst thing any government can do is to take
actions like reducing fuel taxes in order to reduce pump prices. Any
such reductions will not materialise or at least for long and the
revenue loss will go straight into the coffer of the producers who at
the moment hold a commodity that is in short supply.

High prices will eventually drive back demand which will eventually
feedback on price. There is already good evidence that this is
happeng. Abelard yesterday pointed to an article which showed that
driving miles in the US are down by billions. Living in a tourist area
I'm convinced that driving miles are down here too this summer (though
the weather has not been that good) We have reports from third world
countries that governments are ceasing to subsidise motor fuel
(previously subsidised to the point that it was sold at below cost in
some cases) . If these reports are true then reduction in demand
represents the best hope for a reduction or at least a stabilisation
of price in the short term.

The next worse option for governments would be to hit the oil
companies with windfall taxes. These windfalls came out of consumers
pockets and not out of government coffers. The tax structure will
ensure that a goodly proportion will go into government coffers
anyway. The medium to long term approach to the problem is that at
best the rate of increase in supply will have to be accelerated or at
worst any decline will be managed. Whichever the case this is going to
require investment and much of it. Investment will only come with the
reasonable prospect of future profits ahead.

The long term solution is of course obvious. Global dependence on oil
has to be cut. This cut will have to come in various forms
conservation and the development of alternative energy forms are two
obvious routes to such a cut. The development of new forms of portable
(transport) fuels is another. All this again is going to rely upon
investment. We rely primarily upon the energy companies for this
investment. It will not come from government. We must not baulk
therefore when energy bills rise.

.

Relevant Pages

  • Re: OT : so this is what our troops are dying for in Afghanistan !
    ... Prices and profits are only relevant for the top cats that are ... My point was merely that any "cheap oil" motivation ... a deliberate policy of your government. ...
    (sci.electronics.design)
  • Re: Poll: "Britons doubt cause of climate change"
    ... peak oil as profits seem to be rocketing through the roof of late. ... capacity to increase supply is an increase in price. ... that the demand curve for oil is rather inelastic (amount demanded is ...
    (uk.politics.misc)
  • Re: Why Are Oil Stocks Up
    ... Profits provide tax revenues. ... Standard Oil from the 19th century, Exxon, Mobil, Chevron, etc., etc. ... conversely monopolies have always in time hindered general economic ... our current government is waging a war against the lower ...
    (uk.politics.misc)
  • Re: (OT)Re: If Bush Attacks Iran, He Wont Get My Taxes
    ... windfall profits that generates. ... Are you saying Big Oil is not as happy as a pig in shit when oil is ... Whatever the price, people can't be complaining about gas pump ... Even as their overall profits have soared, major oil companies are earning a relatively modest 8.7 percent profit margin -- the portion of the sale of each barrel that hits the bottom line. ...
    (rec.aviation.military)
  • Re: Why Are Oil Stocks Up
    ... Profits provide tax revenues. ... strongly in regulation and state centralisation and public ownership. ... > Standard Oil from the 19th century, Exxon, Mobil, Chevron, etc., etc. ... require permission from government agencies to raise or even lower ...
    (uk.politics.misc)
Loading