Thread: Economics of oil and alternatives

Let's look at alternate energy. I am currently writing a reserch paper on how some alternate energies can improve the economy. I'm trying to spend as little time as possible on the enviornmental aspects. Although these may be important, and will definately have an effect, I think to much is being said about that, and there is to much bad information on the web and in the media. I'm more intrested in the economical and political sides of the argument. Please include your views on oil and other alternatives.

Economies are determined by an efficiency, productivity and the customers access to a product or service. With in the total are hundreds of sectors, which can have independent effects on the general.

In any discussion of the US and the energy sector, its difficult to leave out the *Environmental* issues. IMO, those behind many if not most all the movements, have created an expense most do not understand. This expense is passed on to the consumers, but the real effects lay in the time required to replace or alter the landscape of simply doing business.
Politically the problem becomes Independence from potential enemies of our system and our cash value, enhancing there ideology's.

Rather than writing a book on the issue; Just to build a new home anyplace in the US, cost from 1500.00 to over 20,000.00 per home *Impact Cost*, which deals primarily with environmental issues. Factory and/or other business ventures are much higher and in the case of energy (any sector) the cost can prevent even an attempt.

To your thread; Although I have personal doubts on ethanol (Cost to food products and transportation problems) the push to require 10% in all gasoline products certainly has stimulated the agriculture sector, with in the economy. I understand, there is a surplus of ethanol available today which could lead to a higher requirement in the future. Some are giving gasoline price apparent steady price, compared to the price of crude now nearing 100.00 PB, to ethanol.

A more general point that occured to me: over the past years debates about alternatives for oil usually centered on the question "are alternatives competitive with oil"? So the assumption was made that only when the alternatives to oil can compete on price and quality will they become succesful. But recently it seems that people's preferences are changing, many consumers will choose 'green energy' even if it's 5 or 10% more expensive than oil-based energy.

In a way it's the old argument in economics between consumers as price and quality optimisers, and consumers as human beings. As human beings consumers don't want to be looked at by their friends as polluters, as selfish people who prefer their own benefit to the benefit of society. And the same is true for firms, at least in Europe. Just about every product has some 'green mark' on it, to show that they're doing their bit for the environment. It's becoming a fashion.

So my advise for your project would be to look into this process of changing preferences, it may be just as important as the hard facts about price and quality of different energy sources.