Gas to plummet below $25 a barrel next year

[PhilB]

Originally Posted by Mooosman

+1

My thoughts exactly. When fuel prices are artificially high, the demand for more efficient cars will go way up, and automakers will get their ass in gear and respond with better, more fuel efficient cars. The reason the automakers didn't care about green cars during the SUV boom was because SUVs were what was selling. They were the 'trendy' thing to have.

Nick

When prices are genuinely high, you get incentive for innovation. When prices are artifically high, you get market distortions, black markets and smuggling, and inefficiency, and loads of unnecessary pain among those who are economically not well off.

Originally Posted by Gaolee

Market forces are American, as far as I can tell. I also don't care what people drive. My point is to harness market forces to spur innovation. The technology isn't so far out of line from what it needs to be. Take a look at the level of horsepower a stock engine has now in comparison to what it was fifteen or even ten years ago. Technology is advancing all the time. Markets provide the incentives.

If fuel prices were high, and people still wanted SUVs but also wanted efficiency, I have no doubt Americans would figure out how to make them efficient. There's all kinds of technology to do so already in place, but the incentives to use it aren't there. Use of lightweight materials, precise manufacturing, carefully mapped fuel injection and so on has produced 200 horsepower out of 1000cc motorcycle engines. Apply the same kind of thinking to getting 30mpg out of a Chevy Suburban, and it would probably get done. It might be a hybrid, but it also might be a pure gasoline engine.

So, if that makes me a communist, so be it. I always thought a communist was for collectivizing everything, not using market forces for a beneficial end. What do you know- communists like the market.

The motorcycle is a small thing, sure, but it means I will be commuting with far less fuel used. I don't need to carry around a whole van to get myself from one place to another. The van gets used to haul big loads, and when it isn't necessary, I use alternate transportation. I could give you a very long list of things we have done as a family to reduce our energy use, a lot of it for reasons associated with prices. Market forces at work again. Go figure. We are somewhat more sensitive to energy prices than some people. Perhaps less than others. It's market driven, and it has to be in order to work.

Real market forces, yes. But distorting the market to meet social engineering goals is not using market forces, it's using force to make people behave how you want them to, which is wrong.

I don't like SUVs any more than anyone else; I think they are remarkably stupid vehicles. I also note that they exist in the first place primarily as a dodge to the last round of market meddling -- if it wasn't for the the previous CAFE regulations, they probably would be a much smaller market segment. (That is, we are where we are in large part due to the usual effects of distorting the market to meet social engineering goals. Surprise.)

The LAST thing this country (and its economy) needs is high fuel taxes. Talk about counter-productive! The hubris of those who think they have the right (or even the knowledge and ability) to guide the actions of everyone else "for the greater good of society" is stunning, not to mention highly dangerous.

PhilB

[Gaolee]

Yes, taxes distort markets. They can be targeted distortions or random distortions. Currently, the tax code is excessively complex, partly because the government tries to use tax credits and deductions to herd our behavior a little. It works up to a point, because things like mortgage interest is deductable and it causes problems. An area where it causes problems is health insurance. It's deductable if you are a company providing insurance to your employees but not if you are buying it for your family. The code causes all kinds of distortions as it is currently written.

Shifting the taxes from one place to another modifies our behavior. There's no reason the overall tax rate has to change, although I will agree a fuel tax is the kind of regressive tax I generally don't like. If we were to reduce some other forms of taxes, reduce agricultural subsidies and use fuel taxes to build and rebuild various forms of transportation infrastructure, it could do us a lot of good. If it is administered poorly, it could be a disaster. Based on past performance, it would probably end up a bit of both.

[636blurr]

Here ya go gaolee posted this on the china thread but since its all happy happy joy joy in europe with high fuel prices. here ya go. Fishermen fuel protest blocks EU base - CNN.com

Growth slips in countries using the euro

UK Truckers Cause Mayhem in Fuel Price Protest - Economy - Javno

[Gaolee]

A spike in prices, for whatever reason, causes problems. As long as the market can adapt, higher energy prices will make us more efficient. It's pretty straight forward in my opinion. The Europeans were reacting to the huge runup in prices we all suffered. It had nothing to do with the price of fuel prior to $140/barrel oil, taxed or untaxed.

[PhilB]

Originally Posted by Gaolee

Yes, taxes distort markets. They can be targeted distortions or random distortions. Currently, the tax code is excessively complex, partly because the government tries to use tax credits and deductions to herd our behavior a little. It works up to a point, because things like mortgage interest is deductable and it causes problems. An area where it causes problems is health insurance. It's deductable if you are a company providing insurance to your employees but not if you are buying it for your family. The code causes all kinds of distortions as it is currently written.

Shifting the taxes from one place to another modifies our behavior. There's no reason the overall tax rate has to change, although I will agree a fuel tax is the kind of regressive tax I generally don't like. If we were to reduce some other forms of taxes, reduce agricultural subsidies and use fuel taxes to build and rebuild various forms of transportation infrastructure, it could do us a lot of good. If it is administered poorly, it could be a disaster. Based on past performance, it would probably end up a bit of both.

The point is that using taxes to try to modify people's behavior will always get you to where we are -- with (as you note) a system that is excessively complex, and full of inefficiencies and perverse incentives. Taxation, to the extent it should exist at all, should be based on the idea of finding the fairest methods of funding the necessary government functions, with the cost for any given function borne primarily by those who benefit from that function.

Using fuel taxes to fund transportation infrastructure makes sense. But it should be based on the idea of realistic and transparent costs for those services being paid by those who use that infrastructure, so that the real economic costs are clear and properly allocated (and thus so that any alternatives can also be fairly evaluated in comparison). Not on the idea of deciding aforehand how some people think everyone else ought to behave, and then abusing government power to whack us with extra fees until we all comply.

PhilB

[Unsane125]

an attic fan is really easy to install, I just did one as a side-job, go from underneath while in the attice, use a sawzall and cut through the plywood and the shingles all at once with the dimensions of the opening on the bottom of the fan. nail it up and roof over the mounting area, it takes like 2-3 hours.

and I wouldnt suggest the spray stuff, its a huge mess and from my crews experience is more of a gimmick thing, fiber glass is better, and roof venting material is installed in any modern roof, they go under the cap shingles.

[636blurr]

Originally Posted by Gaolee

A spike in prices, for whatever reason, causes problems. As long as the market can adapt, higher energy prices will make us more efficient. It's pretty straight forward in my opinion. The Europeans were reacting to the huge runup in prices we all suffered. It had nothing to do with the price of fuel prior to $140/barrel oil, taxed or untaxed.

Becouse of the piss poor economy manufacturing has dropped, that means less jobs and get this, less recycling so more waste in the landfills. Good job. Lets do it again weeee

[SAHTT]

The solution to high prices is high prices. Demand destruction, innovation, or both. More of the former than the later in this case. Oil may go to 25 but the lower it goes the faster it will increase once demand finally begins to climb again. Tons of oil firms I follow are accelerating the halting of exploration and capacity adding projects. The illiquidity of the credit markets are making it much, much more appealing to cancel/suspend them. These projects take years to get back on line and another 1-2 years before the energy is consumable by industry. What would normally be a manageable future production bottle neck has potential to be quite severe if financing remains expensive and shareholders demand stronger balance sheets.

[1000ccrider]

I like the fact that it use to take $15 to fill the bike up, now it takes half that!

[Gaolee]

Originally Posted by 636blurr

Becouse of the piss poor economy manufacturing has dropped, that means less jobs and get this, less recycling so more waste in the landfills. Good job. Lets do it again weeee

Yeah, there's all kinds of weird things. There was a company in Wisconsin in the 1960s or 1970s who did a lot of paper recycling back when nobody did it. They were the heroes of the ecology movement at the time. Then, science progressed and figured out their processes were actually far more harmful than anybody thought. It was some kind of solvent or something they were using to bleach the recycled paper.

It's just proof we are not actually from this planet.