"Rick Brandt" wrote in message
. ..
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.


We could also reduce the price by eliminating speculators who are not
directly connected with the oil business. There's no sane reason for players
to be fiddling with the price of a commodity that's so important to the
country. Let the oil companies hedge. Keep mutual fund managers out of the
game. Too much emotion (and bull****) involved.

Having said this, I'm not convinced that lowering the price would cause the
whole country to double the miles driven. For some, yes. Not for everyone.