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May 2, 2006
Gas Prices
Ouch! For the first time, filling up my six cylinder truck went to $50.00. How should I feel about this? As a consumer, it sucks. Assuming normal mileage in a year, my gas bill could top $5,000. The problem is that in order to buy a more fuel efficient vehicle, I would need to spend $25,000. Even if the new car cut my gas bill in half, it would take 10 years to recover my investment; ignoring opportunity costs. As an investor, I am thrilled with the huge profits the gas companies are making. My hope is that .09 cents of every dollar they make will go into new technologies and energy R&D. Is 9% profit too much? Is Wal-Marts 6% too much? What about the federal government making .18 cents per dollar off of gas, plus the tax on the corporate profit which would raise their stake to 20% of the dollar. Wonder why the media isn’t crying about that? More than likely everyone believes that the money will go into our education system which continues to drop to the bottom of the industrialize world. So as a tax payer, I am neutral in the gas prices since I am not sure where they are going to spend the money, maybe I’ll get that $100 someone promised last week. Ok, enough crying…. :-}
Posted by Todd at May 2, 2006 1:10 PM
Comments
Many say we will see $3.50/gal this summer. If you factor in Iran, who knows how high it could go. Everyone knows America MUST get off the oil. After September 11, 2001 I expected our President to call on Americans to GET OFF THE OIL. I was expecting a speech like the one JFK gave that motivated us to reach for the moon. As you know, this never happened. Eventually I realized that the only way this is going to happen is for us to do it ourselves. To that end I created this idea and have been trying to make it a reality..
The EPA is offering a research grant opportunity that I believe is a perfect fit for this idea. I have sent an e-mail to a hand picked list of university professors who have experience with government research projects. I’m looking to form a research team to apply for the EPA grant, conduct a social-economic experiment and surveys to determine to what extent the American public will support it, project the economic potential of WPH, and identify logistical, social and political obstacles as well as opportunities.
All government grants are awarded based on merit of the proposed research. I believe WPH has merit but your help is needed to verify it. You can help by posting your feedback. Let the professors and the EPA know what you think about WPH. Do you think this idea is worth pursuing? We need to know if Americans will support a plan like this.
Do you have any ideas to improve the plan?
Share any and all of your thoughts.
Tell your friends and family about this Blog post and ask them to post their thoughts on WPH
http://wepayhalf.org
Thank you
Craig
Posted by: Craig at May 2, 2006 9:39 PM
Todd, it's a long way from metadata, but what the heck...
This is largely supply and demand in action. Supply is constrained while demand is increasing, therefore prices rise to meet the demand. Continuing unrest in the middle east raises the risk premium of the investments, translating into an increase in prices as well.
These increasing prices make substitutes for gasoline more attractive and economical (and make hard-to-get-at sources of oil financially attractive). The profit motive will drive people to invent/create alternative sources of energy.
All is well. Economics, the profit motive, and good old science and engineering will save the day.
It will be interesting to see whether existing oil companies will be the ones to bring these new substitutes/alternatives to market. History seems to indicate that they won't, but who will?
Posted by: Bob Kitzberger at May 4, 2006 7:10 PM