Energy


Tired of gyrating oil and gasoline prices? Sure you can use natural gas to supply your home with energy. How about adding solar as a source of energy also? Create a diversified portfolio of energy sources so you increase the odds you’ll have a source from somewhere. Does your house get enough sunlight? You’ll have to run the numbers to see if it makes sense. You might be eligible for government tax credits. In any case, Amazon offers a wide variety of solar panel products from which to choose.

Dan Froomkin tries to stir up hatred of people who work for, and invest in, oil companies:

A good chunk of these profits is coming right out the pockets of the American public, thanks in part to astronomical gas prices and to $4 billion to $8 billion a year in deficit-increasing tax subsidies that oil companies continue to get, long after the incentives those subsidies were designed to create ceased to make economic sense.

Rather than invest their profits in such things as product development, new facilities, hot talent or research — things that could create jobs, improve consumer offerings and accelerate alternative energy production — three of the five big oil companies are spending large amounts of that money buying back shares of their own stock.

Economics Professor Mark J. Perry has a little fun with this silly story by changing the industry and companies.

On a serious note, people who work for oil firms are investing the way Froomkin says. It’s just invisible and not headline grabbing.  It would be good to eliminate all corporate subsidies and lower the tax rate but people who think like Froomkin wanted the subsidies incentives in the first place.  That’s crony capitalism and Froomkin was for it before he was against it.

Yes, you read that right. Not shortages of fossil fuels but an abundance of them. Mark Perry with the details.

But Palin differs, saying, “We’ve got to allow the free market to dictate what’s most efficient and economical for our nation’s economy. No, at this time, our country can’t afford the subsidies. Before, though, we even start arguing about some of these domestic subsidies that need to be eliminated — should be — we need to look at ending subsidies and loans to foreign countries and their energy production that we’re relying on, like Brazil.”

Here.

The lady needs to verbiage to describe free markets.  Doesn’t quite make sense.  The “free market” is not a dictator.  It is a process of give-and-take, trial-and-error, and discovery.  It is what works. Further, subsidies are not luxuries we cannot afford. They are political actions implemented by government that distort what buyers and seller truly want. They prevent sellers from discovering what buyers truly want because sellers have to satisfy a new party to transactions: politicians.

Mark Perry links to a Bloomberg article that plots a country’s share of world oil production against that country’s democracy index.  Then he links to an article in the NY Times about the Eagle Ford Field in Texas.

It does not quite support my thesis that oil supplies are constrained by government ownership of petroleum fields but it comes close. Prices are high because governments own those fields and they have to approve the extraction of petroleum. That holds back supply and keeps an artificially high price. You can see the reluctance of U.S. politicians to approve new domestic drilling.

Yea. The headlines sound promising but the devil is in the details. We’ll see if the regulations and permitting process actually loosen up.

This action proves another point that contradicts the Democrat’s claim that oil companies and speculators are causing the price of oil and gasoline to increase. It is governments that control access to the lands that contain petroleum, natural gas, and other energy resources: “national oil companies that hold over 90% of the earth’s conventional oil endowment”

The president noted in his address that the Justice Department had formed a task force to look into potential market manipulation or excessive speculation in oil, and he repeated his call for a repeal of the $4 billion a year in tax incentives the oil industry receives.

Democrats repeat this ritual every time gasoline prices increase. The Obama administration’s actions completely undermine this claim.

Oil companies have gotten efficient at refining crude into gasoline. They’ve been at it for years so they have had time to become better at what they do.

“We can’t afford to continue this kind of being in shock when gas prices go up,” Obama said from a town hall-style meeting of roughly 500 employees at Gamesa Technology Corp., a wind turbine manufacturing plant in Fairless Hills, Pa.

“We’ve got to have a sustained energy policy that is consistent,” he said. “There is no magic formula to driving gas prices down.”

What? This is your doing. You don’t want more domestic oil and gas drilling and you want food used to make biofuels. Hence, higher energy and food prices.

Here.

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