CONSERVE-so says the government

there's trouble brewing in the US. Apparently there is more damage to the gulf's infrastructure then they were previously letting on to.

http://www.usatoday.com/money/industries/energy/2005-10-02-gas-prices-usat_x.htm

The nation's energy chief says it will take six months for U.S. energy production and prices to return to pre-hurricane levels, and he hints at energy shortages in the interim.

That's the most blunt and pessimistic estimate yet of how long the energy disruptions caused by hurricanes Katrina and Rita will affect the USA. But it could help Energy Secretary Samuel Bodman sell Americans on a conservation campaign he plans to detail Monday.

"How long before we return to normal? It's hard to know, because we have not yet got an assessment" of damage from Rita, Bodman said in an interview with USA TODAY on Friday. He said it will be two to three weeks before the assessment is done.

And from the http://urbansurvival.com/week.htm


Let me sum up: Hurricane Ivan destroyed 7 platforms and 100 piplines and 0 rigs.
Katrina & Rita destroyed (so far) 90 platforms and (who knows) pipelines and 100?
rigs.

There are typically around 130 rigs working in the Gulf. Today, there are 23.
There will be virtually no new exploration in the Gulf for the next year or so, assuming everything stays the way it is right now. Plus, with the rigs left in operation, there are several countries bidding to have them work in their waters. Guess who wins? Highest bidder.

I wonder how high gas will go this week???

Having seen gas prices in Italy earlier this year, I am thinking there is no set limit to what a gallon may cost. Cost increases won't just affect gasoline.

Damn I love that car.. about 50 MPG to boot!! And power?? Oh boy would that car scoot!!

My first thought on seeing the new Prius design was -- hey that sorta looks like a CRX.

"We need an energy bill that encourages consumption." - Boosh

"Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy." - Cheney

is that it doesn't account for inelastic demand. It's all some fairy-tale about painless gradual adjustments of supply, demand, price, etc. They've got nothing to say about the real world scenarios where millions of people suddenly can't afford to get to work, heat their home or run their refrigerator.

very few demands are inelastic in the long run. There are things that are absolutely inelastic (crude oil deposits, physical locations, fresh water, etc.) in supply. This is the real weakness of the capitalist system as we know it.

There is nothing at all wrong with free markets. The problem is when individual corporations can corrall the financial returns to these inelastically supplied natural values.

Free markets in, say, food or clothing, tend to reduce the price and increase the production of these things. This goes for everything that is manufactured by man. As prices rise, more items are produced.

Free markets in land, water, oil, etc. tend to increase the price and reduce the supply (b/c it becomes profitable to withold their use, or under-use them, and merely hold them for speculative gain). Furthermore, because these things are generally needed by everyone, paying to access them becomes a tax, a tax that currently dissappears into the dividends of their owners.

It's important to recognize that favoring capital is the problem - capitalism is unfair to labor and encourages unemployment; treating land like capital is the crux of the problem: it reduces wages, exacerbates wealth concentration, and inefficiently allocates natural resources. Highly recommended reading: http://www.henrygeorge.org/chp1.htm

there's "elastic" in the sense of something like a rubber band, and then there is "elastic" in the sense of a badly lubricated earthquake fault.

Demand for critical resources like oil, water, etc, is elastic in that second sense. We all know that if crude oil runs out, society will "adjust", but it could be the kind of "adjustment" that occurs when a badly lubricated earthquake fault finally lets loose.

Unless, of course, a civilization looks ahead. I like the idea of not treating land like capital. That is the opposite of looking ahead. Now we are no longer talking about a pure free-market, but a partially-regulated market, yes?

but taxed. Or mutually compensated.

Title to land requires annual user fee, based on value of title. Increasing the fee tends to drive the trading price down. At the 'perfect' level, the trading price becomes zero, with all of the value converted to annual payments. This would be difficult to do, and would be counter to our historical property laws. Furthermore, it would eliminate our best clue for making assessments. A more realistic goal would be to modify existing property taxes to bear more heavily on land than buildings (most are already assessed as such), eventually eliminating the tax on buildings, and then shift other taxes to the land value tax.

Other than setting the tax rate and the assessed value, government wouldn't need to regulate the market, in the form of tarriffs, excise taxes, or price controls.

Similar theories work well for emissions permits, water/oil/mineral/coal extraction, timber rights, fishing rights, etc.

So, I guess you could call it regulated, but I'd still call it a free market. In fact, ultimately, it'd be more free than today, without sales taxes, payroll taxes, or most income taxes.

There's another set of theories altogether regarding the central bank's ability to influence interest rates. Two I like are a competitive solution, where each bank issues it's own notes, backed by whatever they choose to back them with; or even better, the government issues it's own notes according to an inflation index, and backs them with the willingness to accept them as payment for taxes.

For instance, somebody has to determine all the rules that govern the annual user fee. And then, there will have to be regulations that govern the qualifications of assessors, and laws that punish false assessment, bribery of government assessors, etc.

Since this theory of land value actually tries to account for the values of minerals, water-table, natural water filtration capacity, any ecology displaced by development, and lord knows what-all, I would predict that these rules will be quite extensive, and that "assessing" a plot of land (at least the first time) would actually be quite an undertaking, involving surveys by geologists, biologists, hydrologists, etc.

Which is all fine. I just think it will be a large body of regulations. On the bright side, if you got this system working, you could also do away with lots of current bodies of regulation. For example, our current egregious income tax regulations.

Maybe you could assess major areas by characteristic geology, ecology, etc, and then just pro-rate the value of each parcel by area. It would still be sort of like the mother of all ecological and geological surveys. We'd probably end up acquiring a lot of good bread and butter data about our land, just by necessity.

Good article on what you are talking about. Introduces a term I had never heard of before, a 'Giffen Good'.

Basically, most working people will have to keep buying fuel, at the expense of everything else, bringing on a sudden collapse scenario.

Running on Fumes
Sasha Abramsky
The Nation

http://www.thenation.com/doc/20051017/abramsky

. . .

Instead of demand for gas immediately responding inversely to rising prices, in places like Yreka demand will likely remain stubbornly resilient until the point of economic collapse, when it will become unfeasible to borrow any more to pay for gas and residents will simply have to up their stakes and leave. Paradoxically, it is even conceivable that the higher prices might, at least in the short term, lead to more rather than less demand for gasoline in places like Yreka.

In economics there is a mythical beast known as a Giffen Good. A Giffen Good is a basic commodity that absorbs a large proportion of a poor population's income. As its price goes up, more and more income is absorbed, leaving less for anything else. Because it is a staple, as other staples are forgone what little money is left over gets spent on the higher-priced good that's causing the financial chaos in the first place. Nobody's quite sure if such a creature exists. The Victorian-era British economist Sir Robert Giffen, after whom it is named, argued that potatoes during the Irish potato famine fit this bill for the starving Irish. Since potatoes already made up the bulk of their diet and consumed most of their income, as prices rose due to the potato shortages, what little discretionary money they had for meat and other food disappeared. No longer left with enough for even morsels of meat, the peasants desperately threw their remaining pennies back at the potato vendors for a few more spuds, thus driving prices of the scarce commodity up still further. More recently, two economists at Harvard's John F. Kennedy School of Government, Nolan Miller and Robert Jensen, have made similar claims about rice consumed by peasants in southern China.

Obviously, at some point, soaring potato prices would have curtailed absolute demand simply because nobody would have had enough money to buy any, and the "normal" laws of the market would have been restored. Giffen's point, however, was that prices would have to rise beyond all reasonable levels before that critical peak was reached and demand for a scarce commodity began slacking off.

. . .

It seems irrefutable that food and water are such goods. If you don't have those, literally nothing else matters, since you are in immediate danger of dying without them.

But in a modern civilization, energy is a third Giffen good. Without energy, the infrastructure we currently use to sustain ourselves grinds to a halt.

Hell, even things like the Internet are Giffen goods. My job wouldn't exist without the internet. Probably not true for everybody, but really, imagine the impact if suddenly nobody could afford the Internet. It would be pretty serious.

Maybe it is most accurate to assign a sort of "richter scale" to Giffen goods. That would allow us to say that the internet is a 5 on the Richter scale, while energy is a 8 or 9, and food/water are a 10 or 11 (or, arguably infinite).

The only question is whether we jump off the pier, or decide to make the best of things and struggle on.

Even if the poor and middle class are discontent with high gas and natural gas price, what will possibly do about it?? The sheeple will always look for leadership and there is none right now on either side of the isle!!

Now if there are actually shortages and people start to freeze to death, then we'll see some action I bet!! Too bad the democrat's are just sitting on the fence..