There's oil in the tar sands of Canada. Lots of it. Oil companies of course want to exploit it, and part of that involved building the Keystone Pipeline.
Extracting oil from tar sands is a lot more energy intensive. You have to heat the ground and burn a lot of fossil fuel just to get the fuel out. That of course generates a lot of CO2 emissions. But the larger issue is just the concentration of CO2 in the atmosphere that will result if we exploit the tar sands like we exploited Saudi Arabia.
NASA's lead climate scientist has run the numbers. What does he say? We go this route and "it's essential game over." The game being human civilization as it exists today. See further discussion here and here.
So this has caused unusual activity in the scientific community. Scientists leaving their offices and protesting in Washington. As Naomi Klein discusses here they really didn't think there was any way to stop the corporate freight train. They've got all the money. What do we have? We have the majority of little people. But if you aren't organized, who cares?
Then came Occupy Wall St. The result? Obama for once did not cave to wealth. He delayed approval, which will scare off investors and stave off the day of reckoning. A huge win.
Of course the corporate lackeys are ticked. Profits above all else. The science and the facts be damned. The Wall St Journal says "But what about jobs!!" Jobs claims are bogus anyway, but does anybody really think the WSJ cares about jobs? They care about profits, which benefit owners. They'll be back, fighting for wealth and ownership and against people. But we've won for once.
42 comments:
http://energy.nationaljournal.com/2011/05/should-obama-back-oil-pipeline.php#1996983
Lots of good back and forth from this link both Right and Left.
The only real issue I have is saying that it won't creat jobs.
"According to a study by the Canadian Energy Research Institute, more than 342,000 new U.S. jobs are likely to be created directly and indirectly between 2011 and 2015 because of Canadian oil sands development."
That is a lot of jobs.
So the only issue you have with what I've said is you think a lot of jobs would be created. You agree with me on how this is game over for modern human civilization. So I hope that means you agree with me that stopping this was important.
I kind of suspect that's not what you mean.
BTW, your jobs claims studies are funded by the oil industry. Is that credible in your mind?
Curious Jon: what is your take on the substitution argument?
I would be willing to bet that their numbers are pretty accurate, but let's pretend their estimates are 50% high for giggles - that is still 170,000 jobs - for one pipeline over 5 years that is still really good.
And no I am not worried - in the least - about the environmental implecation because they are so insignificant it is laughable that the discussion is being had.
BTW - your so called victory may be very short lived.
http://www.foxnews.com/politics/2011/11/14/controversial-oil-pipeline-plan-to-be-rerouted-after-threat-delayed-us-approval/
HP, you mean that the oil substitutes for Middle Eastern oil? Are you asking if I like that? I think it would be good in that it would mean we don't have to wreck the Middle East as much. We're so critically dependent on Saudi Arabia that we make sure the brutal dictatorship stays in power, which is a real hardship for the people of course. So yeah, that's very appealing for me. I imagine Arabs would love it because it would mean their prospects for democracy were much better.
Chad, check your Fox News link. They say 20K jobs. And that's Fox News. Methinks your oil industry study has inflated things just a bit.
Could be a short lived victory. Power and wealth aren't going to quit, so we better not either. They're not going to quit trying to keep you ignorant of the effects of environmental destruction, nor will they quit enacting policies that they know are catastrophic for their grandchildren. Both are profitable, so they will continue. Positive change never comes easy.
I thought you knew the difference between direct and indirect labor?
Methinks you need an economics class.
All I can say is thank heaven for the Rich and Powerful who understand that energy drives the world - now I can be sure that my grand children will have heat and fuel instead of living in a hut hugging a tree.
A picture says a thousand words right - well who do you want running or shaping this country?
http://toddkinsey.com/blog/2011/10/10/tea-party-vs-occupy-wall-street-in-pictures/
Sure, sure. I know the difference. The oil industry study is counting dancers, choreographers, and speech therapists. I'm not joking. Your method, which is to say, well, cut it in half. Even half is pretty good. They can't be off by more than half. Actually, they can.
BTW, there's a show from BBC called Frozen Planet. They made 7 episodes, but American audiences will only see 6. They scrubbed one for US audiences. The one that shows the effects of global warming. Protecting you from the facts. Check it out.
Your grandchildren will be fine if all the scientists are wrong and every major international scientific body is wrong. But then maybe they know a little more than you.
Good thing for me that sceintist - over time - have been wrong more often then they have been right. If a baseball player - sceintist would be batting about .090 - well below the mendoza line.
C.C. Wallen of the World Meteorological Organization said, "The cooling since 1940 has been large enough and consistent enough that it will not soon be reversed."
In 1968, Professor Paul Ehrlich, Vice President Gore's hero and mentor, predicted there would be a major food shortage in the U.S. and "in the 1970s ... hundreds of millions of people are going to starve to death." Ehrlich forecasted that 65 million Americans would die of starvation between 1980 and 1989, and by 1999 the U.S. population would have declined to 22.6 million. Ehrlich's predictions about England were gloomier: "If I were a gambler, I would take even money that England will not exist in the year 2000."
Harvard University biologist George Wald in 1970 warned, "... civilization will end within 15 or 30 years unless immediate action is taken against problems facing mankind." That was the same year that Sen. Gaylord Nelson warned, in Look Magazine, that by 1995 "... somewhere between 75 and 85 percent of all the species of living animals will be extinct."
Here are my questions: In 1970, when environmentalists were making predictions of manmade global cooling and the threat of an ice age and millions of Americans starving to death, what kind of government policy should we have undertaken to prevent such a calamity? When Ehrlich predicted that England would not exist in the year 2000, what steps should the British Parliament have taken in 1970 to prevent such a dire outcome? In 1939, when the U.S. Department of the Interior warned that we only had oil supplies for another 13 years, what actions should President Roosevelt have taken?
Here are a few facts: Over 95 percent of the greenhouse effect is the result of water vapor in Earth's atmosphere. Without the greenhouse effect, Earth's average temperature would be zero degrees Fahrenheit. Most climate change is a result of the orbital eccentricities of Earth and variations in the sun's output. On top of that, natural wetlands produce more greenhouse gas contributions annually than all human sources combined.
It's not just latter-day doomsayers who have been wrong; doomsayers have always been wrong. In 1885, the U.S. Geological Survey announced there was "little or no chance" of oil being discovered in California, and a few years later they said the same about Kansas and Texas. In 1939, the U.S. Department of the Interior said American oil supplies would last only another 13 years. In 1949, the Secretary of the Interior said the end of U.S. oil supplies was in sight. Having learned nothing from its earlier erroneous claims, in 1974 the U.S. Geological Survey advised us that the U.S. had only a 10-year supply of natural gas. The fact of the matter, according to the American Gas Association, there's a 1,000 to 2,500 year supply.
http://wattsupwiththat.com/2008/01/17/top-ten-science-based-predictions-that-didnt-come-true/
http://www.guardian.co.uk/environment/2010/feb/21/sea-level-geoscience-retract-siddall
http://www.ihatethemedia.com/earth-day-predictions-of-1970-the-reason-you-should-not-believe-earth-day-predictions-of-2009
http://www.newswithviews.com/Coffman/mike115.htm
When you hire people - when people are working, earning money the needs for other goods and services are needed. Those 20,000 initial employees need to buy houses, cars, they need gas, food and they will take their kids to dance and baseball games that is why it is so important to make sure those jobs (even though mostly union) need to be there. If non union the number of employed people might just double and the quality of work may triple - but that is just my opinion of course.
No, the substitution effect of banning this. This is the STRONGEST argument against oil regulations in the United States, IMHO.
I'm not familiar with the circumstances here so let me give you a hypothetical. Lets say that Obama bans offshore drilling because of its risk in the United States. What would this do? This puts UPWARD pressure on the price of oil. But because the USA doesn't have a monopoly on oil production, another country, say Saudi Arabia, or Iran, or Venezuela picks up the slack and does it with alot less environmental regulation.
In which case you are worse off both by lost jobs AND environmentally speaking.
(btw, there is another - equally strong - substitution argument against oil regulations: say the United States does more of what environmentalists desire...we use more solar power, wind mills, etc...thus reducing our oil needs. What would happen? Because oil is traded on the open market this would put DOWNWARD pressure on the price of oil. Which means that it's even cheaper for places like China to consume oil. So they would likely consume MORE oil. In the end, the roughly same amount of oil is being produced but in a less environmentally friendly way. Also, all that money spent on solar and windmills just ended up being a subsidy to the Chinese - in the form of cheaper oil. )
First of all, nice cut and paste job from Walter Williams. You should credit him instead of passing this off as your own?
In any case I'll respond to more ignorance from Williams.
My claim is not about what an environmentalist may have said or what a biologist may have said. It's not about what Al Gore thinks. It's not about what some guy may have said about computers, bombs, or whatever.
My claim is about science. What is science? Science is about claims that have been vetted by what is known as the scientific method. The claim in Time Magazine that unnamed scientists expect an imminent ice age is not a scientific claim.
One part of the scientific process is called publication. To be published in the kind of journal that is regarded as scientifically credible a paper is vetted. This is not a perfect process, but it's really good. This means that many of the outlandish claims Williams talks about don't manage to get published because the peer review process expunges them.
Has a single one of the outlandish claims from Williams actually been through this process? If so, show us the publications.
Pointing to unnamed "environmentalists" who feared a coming ice age is a typical debaters trick. Impossible to confirm or deny because we don't know who made the claim. To really prove the case Williams needs to be less vague. Let's see this claim from the actual scientific literature, not Time Magazine. I don't think the claim is made in the scientific literature. And yet today climate science deniers like Williams pretend it was made within the scientific community in an effort to discredit the scientific method.
I mean, how incompetent is this guy? He's an economist at George Mason University. He doesn't think to actually check and see if a claim about a global ice age is actually made within the scientific community? Let's be charitable and assume this is ignorance and not lies. This is what passes from the mouth of an actual professor of economics. It's really pathetic.
Yeah, I see your point HP, particularly based on your hypothetical.
But these things can be mitigated. Saudi production for instance is right now controlled by us. That's just a fact. We control them. We control Iraq, which has huge reserves. Kuwait.
We do need to forge some international agreements. This is a global problem. Unfortunately the US and China colluded to undermine recent emissions agreements as we learned thanks to Wikileaks. Both China and the US are acting irresponsibly.
Maybe you've seen talk about the advancement in solar. Krugman wrote that the problem with Solyndra was that the technology advanced so rapidly Solyndra was unable to cope in some way. I don't know the details. But some on the right want to use this as an argument that we don't want to take the solar path. The fact is solar is so promising and Solyndra proves it.
In reality China is investing heavily in solar and other renewable energy. If we use less you say this puts downward pressure on prices and China will use more. More than they otherwise would. That's of course true, but how much total will be used between the US and China if we cut back and cause a drop in prices? Total we have less usage, and that's what we need.
I think I read somewhere that during some of the dramatic swings in earth's temperature that came about due to CO2, the CO2 concentration was going up .001 ppm per year due to volcanic activity. You know what it's going up right now. 2 ppm. That's so rapid in terms of the geological time scale as to be off the charts. Can modern human civilization adapt rapidly enough without enormous suffering? Melt the polar ice caps and you're looking at a 200 ft increase in global sea levels. The coastal cities are gone. Imagine the ensuing chaos. We've got to burn less fossil fuel ASAP, so I say you cut back in the US and let the chips fall. Work it out as best you can from there. But renewable energy in the US is a good first step.
We do need to forge some international agreements. This is a global problem. Unfortunately the US and China colluded to undermine recent emissions agreements as we learned thanks to Wikileaks. Both China and the US are acting irresponsibly.
Do you know why China might have colluded with the United States to thwart these international agreements?
Hint: Cuz they are dirt poor, and a significant rise in energy prices would likely leave their people starving. Would short circuit ALL of their growth. Stranglehold em.
It's all academic in the USA to talk about global warming and the mass deaths that could result in the future...but in China this is reality. This is TODAY. They can't think about tomorrow.
This is precisely why I view environmentalism as a luxury of the rich. The real trade-off here is the poor. The poor vs environmentalism...which is why us rich people choose environmentalism - we have the luxury to.
That's of course true, but how much total will be used between the US and China if we cut back and cause a drop in prices? Total we have less usage, and that's what we need.
This is actually likely NOT true. What would likely happen is that the SAME amount will be used - only more so by poorer countries, with weaker regulations.
Think about it this way: China is already using the most oil they can AT A GIVEN PRICE. If the price drops further, they dont stay the same - they increase consumption until the price hits the same equilibrium. China is a very rapidly growing country. The one thing that is slowing them down is energy costs (which is why you see such focus on it, at all levels). Any drop in price is likely to get quickly swallowed up.
Do you know why China might have colluded with the United States to thwart these international agreements?
The disincentives to curb emissions is essentially the same for all countries. In the short term it hurts. A gallon of oil has more utility in China since they are poor than it does in the US. So the amount of pain differs, but the fact that it is painful is the same for all. The question is, what is the long term pain?
China has indicated that they are prepared to make sacrifices. What they have requested is that they be permitted an increase in consumption initially as they industrialize since they are so far behind. Basically some catch up credit. So that means some increase permitted for China, but a reduction for the US. They say it's not fair that we burned it up for so long, got to a prosperous state, then kicked away the ladder now that we are at the summit. Makes some sense to me and I think it's reasonable. The US has of course refused and so China reacts in kind. They will not curb at any faster rate then they deem necessary based on their own development.
This is TODAY. They can't think about tomorrow.
But the first people to suffer from the effects of global warming are the poor. People that rely on glacial runoff to water their crops. You can afford to just pick up and move as the waters rise, but a lot of people in India and China can't.
Think about it this way: China is already using the most oil they can AT A GIVEN PRICE. If the price drops further, they dont stay the same - they increase consumption until the price hits the same equilibrium.
I imagine you understand a basic supply and demand curve. Shift the demand curve to the left and not only does the price drop. The total quantity consumed drops. The new equilibrium point is a lower price and lower total quantity consumed. But because of the non-linear nature of the curve our reduction in consumption is partially offset by the rise in consumption of others. Total consumption is down.
Did you read the Manzi article I linked to? It puts a consensus cap on alot of the doom and gloom you mention here. Wondering what you think of it.
I hadn't read the Manzi article until now. Yeah, I think that's a good discussion. I totally agree with you that we have to evaluate what our policy response should be. And we do that by assessing the risks and costs associated with mitigating them.
On the right wing generally though you get disinformation that prevents you from even having that reasonable discussion about what should be done in light of the agreed upon facts. Take Chad's arguments from Walter Williams. Take Thomas Sowell. These people are wasting everyone's time muddying the waters. If you can't even agree on the basic facts then discussion about how we might mitigate risk doesn't even happen. And so Exxon is very pleased. There's no risk that they will be constrained. That's AEI's job. By hook or by crook you block any restrictions on Exxon's behavior. That's what they get paid to do and they do it well.
With Manzi though I'd look not just at GDP but other risks. If GDP stays nice and high but 25% of living species go extinct, is that acceptable? If only Somalis or poor Africans die, maybe some Haitians, then GDP may not drop a lot. These are poor people. They don't contribute as much to global GDP. But they could starve. That's a huge deal too.
It's a full debate. You should follow it through...Manzi spanks them IMHO.
Regarding Sowell and Williams: it's part of being partisan, I guess. Die hard partisan lefties are ridiculously absurd on economic issues, righties on environmental issues. Doesn't mean you throw it all out.
I expect, for example, environmentalists to get the economics wrong with an environmental bent. Same in the reverse: I expect economists to get the environment data wrong, with an economic bent. I'm so used to it now I usually just read experts on whatever topic I am investigating. I don't trust any one person to know it all - only fields.
But there is real debate. If you follow environmental economists the discussion becomes alot harder and debatable than the low level stuff lets on.
I'm a Republican because I focus on the high level intellectual debates...if I was stuck in the pundit aspect of it, who knows what I'd be.
Die hard partisan lefties are ridiculously absurd on economic issues
I'm curious what comes to your mind here. Can we see an example?
I'm a Republican because I focus on the high level intellectual debates.
Have you seen any of the Republican debates? High level and intellectual is not how I'd describe them.
Maybe I should have said conservative. I am conservative first...which makes me SOMETIMES vote Republican. :-)
What I'm really interested in is these so called "ridiculously absurd" arguments from leftists on economics. There's the one you made a big deal of on living wage. They said increases in compensation WOULD come out of profits and they should have said COULD come out of profits, but may be compensated for in other ways, like price hikes. But I had never heard of these people anyway. Where are all these ridiculous arguments from the left? Anything from Chomsky? I'd love to see it. So much harping from you about how ignorant and absurd he is. Yet never a single example.
And remember, you disagreeing is not the same as them being ridiculously absurd. Nor is it absurd if they don't talk about what you think they should talk about or focus on what you think they should focus on. Let's see some transparently false and ridiculous claims. The kind of stuff that's easy to find with Sowell and Williams. And if Chomsky doesn't make these kinds of errors, but obviously Sowell and Williams do, maybe you should read more Chomsky and less Sowell or Williams.
HP -
Why do you think of yourself as a conservative instead of a libertarian?
How do *you* distinguish the two?
Paul,
Jon recently pointed to this post from a more recent post. I hadn't noticed that you had responded until coming back to it now. Let me answer your question:
I call myself conservative instead of libertarian for two reasons. First, I do have social conservative leanings. Though I favor legalized prostitution, drugs, and even, to some degree, suicide, I disagree with abortion and to a lesser degree, gay marriage.
Second, and really more importantly, I view conservativism as a somewhat practical libertarianism. Libertarians, IMHO, are dogmatists. They care first and foremost about theory and theoretical consistency. I don't - atleast not as much as "what works". I am perfectly fine with supporting regulations, taxes, or government interventions where it works. My beliefs are more of a starting point than an end goal. Hope that clarifies it.
Jon,
I've re-read our exchange and it looks like the closest I could come to 'not understanding a supply curve' is where I wrote this:
Think about it this way: China is already using the most oil they can AT A GIVEN PRICE. If the price drops further, they dont stay the same - they increase consumption until the price hits the same equilibrium.
You responded with:
I imagine you understand a basic supply and demand curve. Shift the demand curve to the left and not only does the price drop. The total quantity consumed drops. The new equilibrium point is a lower price and lower total quantity consumed. But because of the non-linear nature of the curve our reduction in consumption is partially offset by the rise in consumption of others. Total consumption is down.
Oh the irony. When I first read this, back when we were having the exchange, I wanted to point out your error and/or misunderstanding. But I was time limited and you had been berating me for treating you like an economic novice. So I let it go. It was after all, not germane to our point and the charitable thing to do. So what do I get for this? Later you point it out as me possibly not understanding a basic supply and demand curve.
So let me see if I understand you correctly. Are you arguing that two different economies - with different levels of supply, demand, regulations...basically elasticity - could not produce a situation where an artificial reduction in demand in one country (say USA) could result in an equal level of increased demand in the other (China)?
I'm really itching to jump more into this. But I want to get you to commit, one way or the other, to certain things first. I don't want to give you the opportunity to just say, "you misunderstood me". So please answer the question first.
I feel like I have to be very cautious with these types of questions from you because I know what will happen if I fail to qualify my answer up down and sideways. You are being very abstract, and I think that can lead to confusion. Let's talk about oil.
The price of oil fluctuates based on the demand. Some people avoid traveling during certain times of the year when travel is generally higher because the price goes up. So the amount consumed is lower than it would be if the price hadn't changed at all. Those on the margins modify their behavior.
On these conditions a basic supply and demand curve shows that if a major user stops consuming we've just had a drop in demand. This leads to a drop in price. Some wells on the margins are profitable at a higher price, but not at a lower, so they could be shut down. They stop producing oil and less oil is consumed.
Look at Law 2 for the supply and demand curve. This is exactly the opposite of what you say. You say it's likely NOT true that the quantity consumed would drop if the US consumed less oil. Are you saying Law 2 is wrong for oil?
I see where you are going - again, for the most part we agree. Our disagreement is subtle. I want to draw light upon that. So please answer my question:
Are you arguing that two different economies - with different levels of supply, demand, regulations...basically elasticity - could not produce a situation where an artificial reduction in demand in one country (say USA) could result in an equal level of increased demand in the other (China)?
Remember, were not talking about the same country - but cross country. Where, yes, different elasticities are exhibited (My main point).
Do I understand you correctly?
Btw, I could be a little clearer here. When I say elasticity, I am referring to the supply of oil, specifically.
Insofar as China is a command economy you can't strictly know, but based the S-D curve the expectation is the quantity consumed would reduce. Here's what you had said when I said the drop in demand produces a reduced total consumption (Rule 2 of S-D):
This is actually likely NOT true. What would likely happen is that the SAME amount will be used - only more so by poorer countries, with weaker regulations.
You say it's likely not true and I say based on S-D it likely is true. A commissar can ignore pricing info, but even he feels pressure to reduce consumption because of the price.
Can you please give me a simple yes/no answer? I know our disagreement - I just want to make sure it's a REAL disagreement.
Let me shorten the question for you: Are you arguing that there is not a situation where an artificial reduction in demand in one country (say USA) could result in an equal level of increased demand in the other (China) - with regard to oil?
I THINK this what you are arguing. Your preceding comments seem to affirm it. But I don't want to give you any wiggle room this time. So I want you to fully commit to it, one way or the other.
Yes, or no? And please elaborate.
Or here, let me put it another way. What exactly lead you to believe that I may not understand a supply and demand curve?
You made the claim. I am asking you to elaborate on that specifically. Not just my statement but what you concluded from my statement that violates a supply and demand curve.
Here's what led me to believe you don't understand an S-D curve. And I think you still don't understand it. You first made this statement which made me suspect you don't understand it.
say the United States does more of what environmentalists desire...we use more solar power, wind mills, etc...thus reducing our oil needs. What would happen? Because oil is traded on the open market this would put DOWNWARD pressure on the price of oil. Which means that it's even cheaper for places like China to consume oil. So they would likely consume MORE oil. In the end, the roughly same amount of oil is being produced but in a less environmentally friendly way.
A drop in demand from the US causes China to consume more (true) and the result is in the end the same amount of oil is consumed (false). I wasn't sure if I'd understood you right because I thought you'd know better than this, but then you made the following statement after I had said that if the US cut back it's usage total usage would drop:
This is actually likely NOT true. What would likely happen is that the SAME amount will be used - only more so by poorer countries, with weaker regulations.
So I've got your reasoning. The drop in price causes them to consume more. Of course. But how much more? Not enough to offset the quantity reduction that occurred in the US. So let me answer your question:
Are you arguing that there is not a situation where an artificial reduction in demand in one country (say USA) could result in an equal level of increased demand in the other (China) - with regard to oil?
All other things being equal the answer is yes. Supposing we had to choose in 2012 between flipping a switch and using solar in a way that reduced our oil consumption 10%. The world wide price would drop. Other countries would use more. But the total consumed will be less than it otherwise would have been if we didn't flip that switch. This is simple supply and demand. Find any economist and they'll tell you this is true.
Thanks for the clarification.
Question for you then: What would happen to the S-D curve if oil was completely inelastic?
Correction above: *supply of* oil was completely inelastic.
Why do you want to explore hypotheticals that have nothing to do with oil? The supply of oil does change with the price and the demand. A company is more likely to do expensive deep water exploration and drilling when the demand is higher because this pushes the price higher.
What would happen if the supply quantity couldn't change? The quantity wouldn't change. But the supply quantity can change. The higher price creates more incentive to work hard to extract oil.
That's a different discussion. We can get into that later. For now I want you to focus on my question: What would happen to the S-D curve if the supply of oil was completely inelastic?
Please answer this question first.
When I said the qty wouldn't change I meant that as my answer. Put another way just make the supply curve a vertical line. The supply qty doesn't change regardless of the price. Shift the demand curve to the left. Qty stays the same. New equilibrium point is at a lower price.
So then, assuming my hypothetical (for now, anyway) were true, would you then say my statement here would also be true:
...say the United States does more of what environmentalists desire...we use more solar power, wind mills, etc...thus reducing our oil needs. What would happen? Because oil is traded on the open market this would put DOWNWARD pressure on the price of oil. Which means that it's even cheaper for places like China to consume oil. So they would likely consume MORE oil. In the end, the roughly same amount of oil is being produced but in a less environmentally friendly way (emphasis added).
If you define the supply of oil such that it can't change, then obviously the consumption won't change. That's going to be true whether the US uses more or less. No matter what happens, increases in one location are offset by decreases elsewhere and vice versa. Your statement becomes true by definition.
Does this mean you stand by your claim that if the US were able to flip a switch in 2012 such that we were able to consume 10% less oil going forward this would have no effect on the total quantity of oil consumed?
Yes, I stand by what I said earlier: "In the end, the roughly same amount of oil is being produced but in a less environmentally friendly way" .
Surprising? I don't know why. Most economists would put the elasticity of oil at nearly fully inelastic. I'm just taking it a slightly step further. Whether, say China, eats up 95% of the drop or 100%, that's still roughly ALL in my book.
Don't trust economists? Fine, a quick google search returned this government study:
"In the short run, the supply of oil is inelastic as well"
What about the long run, you ask? Well that depends. But we can all agree that "In the long run were all dead" (Global warming wise, that is). :-)
Think about it this way:
1. Can we agree that the amount of oil in the world is physically limited?
2. Can we agree that absent artificial subsidies, oil remains one of the cheapest and most abundant energy sources the world has to offer?
3. Can we agree that as the developing world rises economically (thanks to Bretton Woods!!! ), the demand for such cheap sources of energy will only increase?
Bottom line: If we don't use it, someone eventually will. And chances are, that country will be less environmentally conscious. That was really the gist of my point.
With that said, you can say that I am wrong about the inelasticity of oil. I admit, I take a bit of a harder line on this than many. But that is far different than saying I made an argument that betrays the supply and demand curve. And really, only someone who doesn't really understand the supply and demand curve can confuse the two.
Most economists would put the elasticity of oil at nearly fully inelastic.
I don't agree that most economists would say that.
In the short run, the supply of oil is inelastic as well
I agree on this for the short term. You don't just turn a well off or drill a well instantly when the price fluctuates.
Can we agree that as the developing world rises economically (thanks to Bretton Woods!!!)
You really think economic growth has accelerated world wide since Bretton Woods? Read Bad Samaritans, from Ha-Joon Chang. I'll read a comparable economics text that you recommend if you do.
Bottom line: If we don't use it, someone eventually will.
Long term alternative energy sources could very easily be more viable, so we don't know that this is true.
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