JoeSpareBedroom wrote:
"HeyBub" wrote in message
...
JoeSpareBedroom wrote:


Would you agree that we need to reduce our dependence on foreign
oil?

Sure. But since oil is fungible, how can you reasonably do it?




Please rephrase the question. Based on the word "fungible", I'm not
sure what you're asking.

Here's part of the economics of the problem as I see it. Let's hypothetically
assume that gas prices stabilize for the long term at 2.75/g which I think most
people would agree is more than reasonable to live with (thinking long term
now).

Given this hypothetical we can reduce the issue of lowering our dependence on
foreign oil to...

a) choosing something greener
b) not sending money to the middle east

Now let's hypothetically assume an alternative is discovered that is perfect
regarding points (a) and (b) but which costs 3.00/g. I think the vast majority
of people would be delighted to pay that difference (roughly 8%) to accomplish
the goals of (a) and (b).

Now of course this is so successful that the cost of foreign oil now drops to an
effective gasoline price of 2.00/g because we are no longer buying so much of
it. Now with a price difference of 50% you are going to lose a lot of
supporters to the alternative fuel. That is how commodity pricing works in
world markets. If you are a significant consumer of a commodity and you reduce
your usage then the price drops and there will be tremendous pressure as a
result of that drop for consumption to go back up.

The only way I see us reducing our foreign oil consumption is if an alternative
is found that is so dramatically cheaper than FO that it will still be cheaper
when the inevitable price drop in FO occurs.