BS: Gas Prices II

Subject: RE: BS: Gas Prices II
From: UB Ed
Date: 06 Jun 01 - 03:24 PM

Bart, thanks for the long post. You did a great job organizing and presenting your thoughts. I especially liked the accountability comments. I can pretty much agree with your comments, but I will take exception to my perception of a wrong term.

"...the part of capitalism that encourages hard work and new ideas is good, while the part that encourages greed, envy and the other deadly sins is bad."

I don't believe its capitalism that encourages any of these traits. Rather, I believe it is basic human nature and they way you were raised, that influences that outcome. That being said, I think capitalists can promote social welfare (Please note various wealthy philantrophists). Unfortunately, there aren't enough who were raised "right" and that seems to be where government comes in.

Balance, balance, balance...

Ed

Subject: RE: BS: Gas Prices II
From: UB Ed
Date: 06 Jun 01 - 04:20 PM

Ah Carol, you must have given your old uncle fits (I'm sure he loved you dearly). With your experience, I think you're gonna peel me like an onion. Rest assured, very little surprises me anymore. What I'm talking about is the basic way the industry operates.

Begin with my initial premise of economies of scale and then mix in other exogenous variables including legislated societal programs and increasing licensing requirements and the costs do turn around. In a regulated environment, this was the only way to get folks to conserve or to build cleaner power stations. And that was ok.

My company built a coal-fired facity in the mid 1990's with pollution removal efficincies for various criteria pollutants in the 90% or better range. Of the $1.2 Billion spent, $400 Million was for pollution control equipment. Even with that price tag, it was less expensive to generate with that technology than solar, wind or dispersed generation. (By the way, my company also had over 25% of its members' load under direct load reduction programs.)

Fast forward to today, even tougher environmental requirements accompanied by unrealistic expectations for competition and you have a situation where costs now are to the levels where these alternative technologies can compete. The big question is, have we imposed the "right" level of requirements on conventional power sources or have we gotten off the economic curve (this is a question on incremental effects; where do you stop? For example, I can spend $1 million to move my pollution reduction technology from 93% to 94% efficiency. To get from 94% to 95% would cost $100 million more. Am I required to do that or have I met the criteria?)

Additionally, you may have noticed a recent rash of mergers and acquisitions among traditional utilities. This is to achieve the size perceived necessary to compete in a deregulated environment. This is clearly an economies of scale issue.

So, that's why I believe economies of scale still make sense, if one can operate in a common-sensical world. I am aware, however, that that is not the case.

By the way, hold onto your conservation hat. I expect the competitive retail power suppliers to offer discounts to customers who can shed load during peak cost periods.

Ed

Subject: RE: BS: Gas Prices II
From: Jim the Bart
Date: 06 Jun 01 - 04:43 PM

UB Dan - I don't think the cigarette companies keep marijuana illegal; they just happen to benefit from the fact that it is. They would be glad to sell both to us. The same goes for the liquor industry.

Regarding the legalization of drugs:
I believe that it is not a government's role to legislate morality or protect us from ourselves. If you know the likely consequences of smoking, drinking or getting hooked on smack and choose to do so anyway it's your choice. Unfortunately, if you cease to function properly because of your choice, you will probably end up being a burden on the rest of us.

UB Ed - I think Western thought tends to overvalue the competitive aspects of Capitalism and disregard the imoortance of cooperation in keeping the system running. A business transaction is an agreement between buyer and seller. If one or the other has sole control over the terms of that agreement the system breaks down. A businessman who has all the money in the world has no one to do business with.

Doug R - I am in favor of big business in areas where small business is less efficient and where economies of scale make sense. But our businesses get bigger (through mergers, acquisitions, hostile takeovers, etc.) not to provide better goods and services at more reasonable prices, or to provide more jobs (Ha!), but to maximize profits. The flight of manufacturing jobs from unionized states to non-unionized areas of the world should be illustrative. Big business doesn't give us jobs, they merely control them. Without big business there would have to be a lot more small businesses; small businesses with a vested interest in the communities they serve and to the people they employ. We might not have all the cool stuff we see blasted at us in a million non-stop advertisements, but we'd have plenty of other stuff, maybe better, more interesting stuff.

Big business doesn't care if we have jobs, are fulfilled in our jobs, or fairly compensated in our jobs as long as we make enough dough in those jobs to buy their crap. Doug, I respect your opinion. But I wish I could make you understand that big Business is not your friend - it is just using you.

Subject: RE: BS: Gas Prices II
From: GUEST,Gareth
Date: 06 Jun 01 - 07:13 PM

For what it's worth, take recent events in the U.K.

A reduction in the tax on Petrol (Gas, over the pond)

Followed by an immediate raise in the Price of Petrol by the Oil Co's.

am afraid that this was not down to Saddam Hussain, no matter what else is laid at his door.

Bluntly the Oil Co.s exist to make money, at our expense.

Incidently in 30 years experience in the U.K insurance industry (claims) I have yet to find a U.K. farmer who runs a Petrol powered car - they are all Deseil.

(NB UK farmers can buy Derv virtualy Tax free, for use on farm machinery only)

Expecting the Oil Co's to act with a degree of social responsability is akin to expecting a shark to show mercy.

Gareth

Subject: RE: BS: Gas Prices II
From: kendall
Date: 06 Jun 01 - 07:27 PM

OK, here it is, as brief as I can make it. I have nothing against big business as such. I do have something against their "bottom line" mentality. The profit motive is what makes our world go round, but, when these birds move to Mexico to increase their profits while undermining their own country, that is short sighted. Even L.L. Bean, a local store of world fame for quality now has stuff made in China. That's bad enough, but, the price is still as high as it was when it was made in the USA. This is one store in little Freeport Maine, and, it took in over one billion dollars last year. What happened to the American workers who used to make the goods that Bean sold? Do they care? I dont buy anything made in China. Those poor bastards work for slave wages while our big retailers get fat sucking their blood and gouging me! What have I against EXXON? there again, they were not prepared for a spill because that equipment costs money. They did a half assed job of looking like they were dealing with it, but, we all know that area is ruined. The oil is still there under the rocks and EXXON has left the scene. Now, my main bitch with EXXON, they knowingly put a convicted drunk driver, a man who lost his drivers license for O.U.I. in charge of millions of gallons of crude oil, and, while he was sleeping it off, well, some incompetent low ranking seaman ran her aground. That seems to be typical of big business, The hell with the consequences, the bottom line is ok. I will walk before I will buy another drop of gas from EXXON, or, Mobil. Lastly, I'm not stupid enough to think hydrogen burning cars will be the answer in the next few years, but, with R & D who knows what they will come up with? I'm certainly not willing to throw up my hands and say, "Oh well, what can little ol' me do?"

Now, I have a suggestion, why dont we create a special thread where we can post everything having to do with politics, relegion and gun control all in one thread? What say?

Subject: RE: BS: Gas Prices II
From: Scotsbard
Date: 06 Jun 01 - 08:03 PM

Gotta weigh in on just one thing:

Proponents of fusion power at the enthusiast level seem generally unaware of the likelihood that it will produce just as much radioactive waste as fission.

Why? ... The real problem with fission reactors is not the spent fuel, which is relatively small in size and mass and can be reprocessed (dozens of tons over the life of a plant), but the plant itself, which becomes hundreds or thousands of tons of rather randomly isotoped radioactive junk. Fusion reactors will do the same thing to their components; gradually irradiating them into unusable, dangerous junk. It's inherent in the both processes, as they both scatter neutrons and helium nuclei in all directions at high velocities.

The scientists working on fusion never mention this because it would scare off funding, and the average enthusiast apparently knows no better. The cold fusion thing was an experimental goof, but should something eventually be accomplished there, it shows a little more promise.

Until then, we should get our heads out of the sand regarding serious conservation. A 150# cyclist can haul his 30# bike 30m at 15mph for a couple of sandwiches worth of fuel. A 200# motorist consumes a gallon of gas to haul his 4000# car the same distance in half the time.

You figure out which is more efficient.

~S~

Subject: RE: BS: Gas Prices II
From: kendall
Date: 06 Jun 01 - 08:54 PM

How far do you think a dis abled 200 pounder can pedal a bike?

Subject: RE: BS: Gas Prices II
From: Jim the Bart
Date: 06 Jun 01 - 10:27 PM

So those who can bike when it's practical and drive when they have to. They don't buy the biggest, gaudiest SUV and then fire it up everytime they need to go two blocks.

My Dad never realized he was a great conservationist when he'd growl "turn the darned lights off when you leave a room", but that's what he was (and still is, thank god...). It's all about common sense and paying attention to the COST of things, as well as the price.

Subject: RE: BS: Gas Prices II
From: kendall
Date: 07 Jun 01 - 09:45 PM

Excellent statement! the price AND the cost.

Subject: RE: BS: Gas Prices II
From: CarolC
Date: 08 Jun 01 - 06:56 PM

"Ah Carol, you must have given your old uncle fits"

You're probably right about that.

"With your experience, I think you're gonna peel me like an onion."

I doubt that.

I taped the Frontline show. I'm going to have to watch it a few more times before I can comment effectively on its contents. It's incredibly informative, and also very complicated.

I agree very strongly with Bartholomew's statement about the difference between price and cost. If we try to measure the real costs of continuing to pollute our environment... costs that show up in people's health and related medical costs, lost productivity, and numerous other hidden costs that proponents of dirty energy are not talking about, I think maybe we would see non polluting energy having a much lower total cost to society.

For those who feel that the government shouldn't have anything to do with regulating the energy industry, I would like to point out that the government does have a role to play in matters that concern the common good. That's why we have a military. We don't have a private military. We have a government run military because it is percieved to be for the common good. The government regulates how we are allowed to use our motor vehicles while we are driving them (traffic laws). Again, because this is percieved to be for the common good.

It is no less legitimate for the government to regulate some aspects of how we produce and distribute energy if it is for the common good. The resources that are used to produce energy belong to the public anyway. So there's another reason that it is legitimate for the government to regulate how these resources are used, in order to maximize the benefits to society as a whole, rather than to benefit specific business entities at the expense of the common good.

Subject: RE: BS: Gas Prices II
From: CarolC
Date: 08 Jun 01 - 07:00 PM

I would just like to add that the upshot of the Frontline show was that the energy crisis has nothing to do with supply, and everything to do with profits. And they show quite a bit of documentation to back this up.

Subject: RE: BS: Gas Prices II
From: toadfrog
Date: 08 Jun 01 - 10:39 PM

One problem with all the above. The thread is about gasoline prices. That is a very different kind of problem from the energy crunch in California. Gasoline is fungible. It is easily portable. It is arguable that there is free competition in the gasoline market. So long as the antitrust laws are applied (admittedly dubious) I have no problem whatsoever with leaving gasoline prices to the free market (or with a good stiff tax on gasoline). If high gasoline prices hurt, just about everyone is free to drive less. And should. It is only the farmers who are getting screwed, by high diesel prices. And farmers are being screwed from about five different directions at once.

But electricity and natural gas are an entirely different matter from gasoline. No one can persuade me that free competition exists, or is even possible, in the market for electricity. I shouldn't even have to cite some authority to show that electricity prices are being manipulated; everybody knows this is so. It isn't even illegal to manipulate electricity prices. It is arguable that the manager of a generating firm who does not manipulate prices, and screw the public, and cause wild and crazy price fluctuations, violates his/her duty to the shareholders. It has to be regulated. It will not do to say, people should just use less electricity. Do you realize that the entire aluminum industry in the Northwest, and with it tens of thousands of jobs, is headed for sudden death because of the increased cost of electricity? And the Northwest also has steel mills, which are also headed for trouble. Probably not many Mudcatters work in manufacturing. But lots of people do, and a disaster to them may trickle down to you.

Subject: RE: BS: Gas Prices II
From: UB Ed
Date: 11 Jun 01 - 08:16 AM

Carol and Toad both make good comments. A "free market" for electricity is tough to do as the barriers to entry are high and the access to market extremely limited. Profit-driven firms will make hay as the sun shines and it currently is shining for the producers.

Carol, I particualry appreciated your comment regarding the incredible complexity of the issue, as well as your genuine interest in learning as much as you can in order to form your opinions.

I agree that certain infrastructure industries should be regulated. Toad's right, the economic impact of this "free market" could drive our entire economy down the tubes.

Carol, I also agree in principle with assessing the cost of alternative solutions versus the price. As you can imagine, this is also extremely complicated as folks attempt to quantify qualitative measures or apply mitigative measures to cure something we don't fully understand.

Ed

Subject: RE: BS: Gas Prices II
From: kendall
Date: 15 Jul 01 - 07:24 PM

What happened to the gasoline shortage? You know, the one that Bush said forces us to rape another wilderness? The price of regular is down to $1.29 here, and, it is dropping all over the country. Why? is there a sudden increase in the supply from OPEC? No, the refineries are back to work.

Subject: RE: BS: Gas Prices II
From: CarolC
Date: 15 Jul 01 - 07:41 PM

I saw something on the news tonight about BMW preparing to put a hydrogen powered car on the market. Sounds like a good plan to me. It might appeal to any consumers who may be using large SUVs for status rather than for utility.