retired358

An Energy Policy that Makes Cents (and Sense)

Fully agree with article.

Some additional thoughts:

We need to tap all available hydrocarbon sources. North America has some of the largest deposits of oil sands, coal and shale oil in the world.

There are processes available to convert these to fuel today at prices well below current crude prices.

The problem is the very large capital expenditures needed and the risk to these investments if crude prices were to fall.

The solution (not that I like gov. intervention but we have that already) is for Congress to pass a price support for all alternatives at say $60-65/B equivalent. This would allow the massive capital expenditures necessary to bring these (and other) alternative sources on-line.

And, it would cost the taxpayers nothing assuming crude prices remained above $65/B. Should crude fall to say $40/B, then, yes, taxpayers would support less than 20% of our energy needs at $65/B but the remaining 80% would be at $40/B for an average of $45/B. Would that not be better than the current price of $100/B?

And, if this policy were announced, crude prices would fall immediately - speculators would flee the futures market and crude producing countries would increase supplies to try to persuade companies not to invest in alternatives. They fear alternatives.

Seems like a win-win.