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world energy issues: prices - firing kilns

updated sun 24 dec 00


Michael A. Turton on sat 23 dec 00

> To those who are convinced that higher energy prices are due to a conspiracy
> of big multi-national corporations or just American corporations - did any
> of you take economics in college? Do the words supply and demand mean
> anything to you?
> If you are selling your pots,you should run, not walk, to the nearest
> college or university and sign up for both macro and micro economics
> courses. Demand for energy is up because there are more people and they are
> using more energy per capita than ever before. Supply is down is some areas
> because of extreme government regulation or because of environmental
> protests. High demand + low supply = higher prices.

Gosh, thanks for the econ 101 lecture. Unfortunately, some of us have taken
econ 102, and even higher courses. You see, there are these things called
subsidies. Not mention concepts like "research" in which one learns that
per capita energy has actually declined slightly over the last 25 years, not
"Research" is a really cool concept. It can be used to avoid looking like an

"Extreme government regulation?" No government on the planet has an
unregulated energy structure, because it is stupid suicide to do so.
Those of us who took more advanced classes also learned that an energy
policy has a variety of functions, only one of which is delivering low prices
to consumers.

As for conspiracy, I suggest you curl up with several good books about the US
gov't relationship with energy companies and energy producing countries.
"Conspiracy" is too weak a word.

> To the generally misinformed: Natural gas is indeed a by-product of oil,
> however, there are many natural gas wells which have been drilled with the
> intention of finding natural gas, not oil.
> California only has about 1/3 the natural gas reserves of Kansas, with many,
> many times the population of Kansas, and that includes offshore reserves,
> which environmentalists want left alone. This is why your gas prices are
> higher.

Let's see.....the wind blowing off N. and S. Dakota + Texas could
supply the whole US electricity demand with current technology. But instead, we
burn coal, gas and oil. Could higher gas prices have anything to do with choices
made by
governments? You know, "extreme government regulation"?

> must be built - oh, but environmentalists don't like pipelines either, do
> they? Don't get me wrong, the environment is important, precautions must be made

> to avoid problems, but forbidding any research, drilling, pipelines, etc.,
> just because, might be going a wee bit too far. Many analysts feel that some
> (emphasis on some) environmentalists have gone overboard in their concerns
> about energy production.
> I'm sure I have annoyed some, but perhaps I have opened the minds of one or
> two people to the possibility that a free market system is mostly a good
> one, and freedom is good, too.
> Beth Donovan in Leavenworth, Kansas

To the severely misinformed, research, drilling and pipelines have not been
In fact, they are heavily subsidized by the government, which gives all sorts of
subsidies to gas, oil, coal, and nuclear power. I suggest you take a look at
the EIA's "Federal Energy Subsidies: Direct and Indirect Intervention in
Energy Markets" last updated in 1992 (unfortunately) and downloadable in
..pdf format from that Agency. You might find that "extreme government regulation"
favors gas, oil, coal and nukes. Nukes especially, we'd not have a single plant if
for "extreme government intervention." Drilling activities closely track the
price of oil, if price rises, drilling rises. Environmentalists make convenient
whipping boys for the oil companies and the ideologically-challenged,
but the truth is more complex.

As for the "free market system" it does not exist. Prices in all markets are
by corporate monopoly power, government regulation, informal and formal cartel
agreements, subsidies, foreign policy, etc. There is nothing funnier than a
living off federally-funded dams, federally-funded indian wars, federally-funded
giveaways, federally-subsidized agriculture, driving on federal highway systems and

generally, sucking off the Federal teat to the tune of $5400 a person annually
(in Kansas -- 1999 figures), yakking about the free market. Oh, yes, Leavenworth
county rakes in almost $8,000 a person from the Feds. Happy spending!

Michael Turton