<DrumBeat: March 5, 2009 The Oil Drum DrumBeat: March 6, 2009>

146 comments on The Price of Oil: If it's Broken, Why Not Fix It?

Comments can no longer be added to this story.

| Show without comments | PDF version

BobGreasy on March 5, 2009 - 12:36pm Permalink | Subthread | Parent | Comments top

It's just a disagreement. Thank you for thoughtful well written responses.
It's all a work in progress but believe me what many think is not a concern.
Sometimes that changes in a heartbeat.

Comments can no longer be added to this story.
mididoctors on March 5, 2009 - 1:57pm Permalink | Subthread | Parent | Comments top

the problem with in the long run type arguments is the last guy to get it wrong isn't proved wrong until its game over. oscillations between market force and command control is a common factor in our history.. who gets the laugh laugh? therw was a post by galacticsurfer the other day which hit the proverbial nail on the head..

I think there are counter intuitive solutions in what to do about the oil price. One being that the lower price while making oil cheaper and discouraging alternative energy production does mean that the oil is likely to stay in the ground longer as the oils real value as measured by how much it cost to get out of the ground causes production to decline.. which is conservation by virtue of market stupidity and perhaps economic chaos.

which on reflection is not such a ideal solution.. you have a big balloon to squeeze and where ever you press somewhere else it pops out.

to me the solution is rationing because then the price is largley irrelevant.. the price never addressed depletion in the first place back in 18 hundred and whatever.

if we are going command economy go the whole hog I say

Comments can no longer be added to this story.
lengould on March 6, 2009 - 3:46pm Permalink | Subthread | Parent | Comments top

the oils real value as measured by how much it cost to get out of the ground

Therein lies the flaw in free markets as presently constituted. Its like saying that the true worth of a bushel of wheat is merely the cost of harvesting it and transporting it to market. It's not, it's that PLUS the cost of replacing it in a sustainable manner, forever. Way too much oil is today showing up on markets simply at the cost of pumping known reserves, and consumers need to be clearly told that's not the correct price. Unfettered markets, by definition, will revert to selling a commodity at simply its marginal cost of shipping given a 1% surplus of supply, regardless of tomorrows likely shortages. That needs to be fixed, and I think the article does a fair job at starting the discussion.

Comments can no longer be added to this story.
HFat on March 6, 2009 - 6:59pm Permalink | Subthread | Parent | Comments top

You should quit using this misconceived "free markets" notion.

The behavior of individuals, governments and corporations with regards to consumption of non-renewable resources is the issue, not what's going on in any market. That behavior is not significantly different than it was in the USSR for instance.

The article is not proposing a non-market alternative. It just talks about taxes and governments. This is hardly remarkable as most markets owe their existence to governments and taxes.
The article is not addressing the non-renewable nature of oil either. Instead, the proposal is manifestly designed to deplete US resources faster (and non-US resources a bit slower).

Comments can no longer be added to this story.

146 comments on The Price of Oil: If it's Broken, Why Not Fix It?

Comments can no longer be added to this story.

| Show without comments | PDF version