Government Intervention

[dairygirl4u2c]

figured i haven't debated much here lately. here's something i'm pretty adamant about, which says a lot for me, given how wishy washy i can be.
i'm looking for ideas, and would be happy to hear from all those free market fundamentalists out there.

[quote]why the government should intervene more with alternative fuel.

people say the market will take care of itself. in the end, it will. but at what cost in the mean time? we should act now because we'll look back and see how much we've wasted on gasoline.

companies say they can make alternative biodesial fuels for a dollar a gallon. (using algae farms, or any organic material using bacteria to make ethanol from hte cellulose material, switch grass and other things more entergy intensive than corn etc.. and exemplified by brazil etc who are energy dependant right now from gas)
but, there's a catch 22 occuring. comanyies make alternative companies but often must put operations on hold. why? because there's no demand. the consumers who make demand say there's no supply. who can afford as a consumer to buy altnernative vehicles? the richer. does the rising prices right now of gasoline hurt them? not as much so they don't buy. but, even if they bought cars sometimes as they are now, there's still not much there in way of an infrastructure for the supply side.
the rich won't start buying more until it really starting hurting them. the poor won't do it cause they can't. the middle won't do it, probaly for the same reason. it's conventional wisdom that the rich are the ones who start these new technologies... and the conventional wisdom is probably true here too.

but, unlike many situations with conventinoal wisdom... for altrnernative fuel, waiting till the rich start teh technology isn't in the best interest of the country right now. that's because... for many other things, like buying a DVD player... fuel isn't something that's simply a perk as much, and isn't such a regular and substantial cost for the consumer. it doesn't have has a noticable affect on the economy by itself. fuel is the opposite.
while we're waiting for the rich to convert, what's happening? in the mean time, the poorer are spending their money on gas, or not being as productive as they could with cheaper gas or some gas at all. the middle class largely too. consider all that money they're spending, when they could be spending on an array of other things, better helping hte economy. it could have been going to the economy at large, instead of the pockets and primarily costs of a few. (and foreignors too, which is a major concern in and of itself)

to make it more of a practical example. say a new biodesial machine at a gas station costs fifty thousand. all that money that the poorer are wasting right now would have been more than enough to either subsidize or lend to that station. (you could lend the money to them... and ensur ethey make a tidy profit before they ever have to pay it back, if ever considering there's a risk they might not make money) the profits from one gas station alone would have been more than enough for that one station... we're not talking about outside costs "needlessly/artificially and therefore wastefully" being imputed into a system. if we invested in them as a government then, the effects would be much sooner, and the poorer and middle class would save more, and it'd be a boon to the economy. (plus all the jobs involved with the transitioning infrastructure) there'd be so much savings, you could even lend or subsidize biodisal plants too, though it'd probably not be needed.

government intervention is the way to break the catch 22 sooner when it'll make a difference for hte economy, than later when we'll look back and see all that wealth that has been squandered.
ultimately my numbers are made up, and research needs done. but, it seems more likely than not, given the situtaion, that this is an accurate portrayal of the situation.[/quote]

[CatherineM]

I believe that alt energy will go no where without government action. I hate to say this, but it is going to take Manhattan Project level of commitment, and I just don't see that happening soon. I am all for alt fuels, except for those based on food grains. I don't think we have the right to use corn etc. for fuel as long as there are people without enough to eat. It is already making the cost of food for the poor go up. They have had tortilla riots in Mexico over the cost escalation. I mean we could potentially make alt fuels out of rendered fat from poor people from the third world too. Making fuels out of residues that would normally be discarded or burned is another matter. They do that very successfully in Brazil. The most important thing to do immediately is to stop producing and buying these huge cars.

[rkwright]

[quote name='dairygirl4u2c' post='1452036' date='Jan 28 2008, 04:24 PM']figured i haven't debated much here lately. here's something i'm pretty adamant about, which says a lot for me, given how wishy washy i can be.
i'm looking for ideas, and would be happy to hear from all those free market fundamentalists out there.[/quote]

None of this is a 'catch 22' as you put it. Its simply market forces. Its cheaper for consumers to buy gas autos. Gas is cheaper than biodiesel and the cars are cheaper. Thats the reason why we don't see the big push for alt. energy cars.

You say no no no, biodiesel is cheaper and in the long run the cheaper operation of the cars might offset the more expensive car. But with all the costs factored in, its really not cheaper at this point. The cost of the fuel needs to factor in the costs of new refineries, new logistics, ect.

Look at all the conversion costs involved. Then look at the market of people who buy new cars. Then you need to convince them to buy into this new fuel, noting that their fuel may be higher and only available at certain gas stations.

It would only work if there was some sort of uniform change to biodiesel (like one you propose as mandated from the government).

My main argument is just this: We're not in a catch 22 right now. We're simply following simple economic rules. Consumers will continue to buy gas until the price of gas gets high enough that biodiesel, including ALL the conversion costs, can compete. We're not to that point yet.

[dairygirl4u2c]

i simply disagree. i'm sure more research would need done ultimately but.

if we wait until the richer can feel it, all that money that's being squandered by teh poor and middle class isn't going to the economy at large: you didn't address this point.
cause one thing i wasn't very explicit on. if they can make it for a dollar a gallon, and even if they sold it at 2 a gallon, which is what they say they'd be doing, it'd still work out right.
consider, that my google search says the average station produces 700000 gallons of fuel a year. if we have a better infrastructure sooner than later, then taken to the extreme that'd be instead of 3*700k it'd be 2*700k, with a 700,000 saving per station. that, in one year, would be more than enough to pay for a machine there. instead, we're waiting till the rich get pinched... we're wasting at most 700000 dollars a year per gas station.
i realize dthe numbers are made optimally for me, and there's a trasition period, but the point is made.

what the free market fundamentalist would say....wait till gas is 12 dollars a gallon... cause that's the only way the rich and the fuel stations are going to start doing anything: they're not going to do it sooner, cause the richer don't want to be inconvenienced by limited stations, and the stations won't do it, cause they have no consumers. 12 an hour is like fife an hour for the richer. and then, if we did it the free mar fun way, we'd have to wait for those new cars to trickle down, losing all that potential savings in the mean time.

Edited January 28, 2008 by dairygirl4u2c

[Dismas]

I am usually against subsidies on all levels. Even so, I am not a pure anarcho-capitalist. I do recognize that ideals and pragmatic solutions are sometimes at odds, often when the market is especially myopic and incapable of starting something by itself. Even so, stupid is still stupid, and should never be subsidized, ever - [b]ever[/b]. Therefore, do not be shocked by the following.

1. Ethanol: Should only be consumed as a beverage, never for powering the engine of an automobile. It is a dirty, wasteful, expensive, inefficient fuel that corrodes engines and related parts, thus causing further solid pollution. Just because Al Gore made a few million by forcing it down our gas tanks does not make it a good alternative.

2. Hydrogen: It is worse than useless as an energy source. First, it's a weak storage of chemical energy. Second it's difficult to store safely. Third, it requires more energy to produce than it returns when combusted. Fourth, the best means of producing it requires vast vats of hazardous chemicals to be in constant use, consider the cleanup. I rest my case.

3. Biodiesel: Diesel is wonderful in Florida, but try it in Wisconsin during January, I dare you. In the end, it's a massive bribe to soybean farmers.

4. Thermal Conversion: I like it, and I would understand some limited subsidy, preferably on the state level; okay, I suppose it could be justified for national security...maybe. The bright side of this is that it can take nearly anything for a feedstock. Also, it produces petroleum, which means no massive change for the average citizen. It does have its weaknesses, however those are nowhere near as odious as any of the other quack "alternatives".

[url="http://discovermagazine.com/2006/apr/anything-oil"]http://discovermagazine.com/2006/apr/anything-oil[/url]
[url="http://www.changingworldtech.com/"]http://www.changingworldtech.com/[/url]

[dairygirl4u2c]

well i admit i don't know the details of each energy source. what those links describe as thermal conversion i thought was the same as ethanol andor biodeisal etc.
that's what some of these links below would have you believe. (or maybe theremal conversion and ethanol etc are simly different by products of mass amounts of organic material, cellulose etc)
the first link is interesting in that regard.
these are where i got my info.

[url="http://www.wired.com/cars/energy/news/2008/01/ethanol23"]http://www.wired.com/cars/energy/news/2008/01/ethanol23[/url]
[url="http://blog.wired.com/cars/2007/11/the-end-of-oil.html"]http://blog.wired.com/cars/2007/11/the-end-of-oil.html[/url]
[url="http://www.wired.com/science/planetearth/magazine/15-10/ff_plant"]http://www.wired.com/science/planetearth/m.../15-10/ff_plant[/url]
[url="http://www.businessweek.com/ap/financialnews/D8U54U601.htm"]http://www.businessweek.com/ap/financialnews/D8U54U601.htm[/url]
[url="http://en.wikipedia.org/wiki/Ethanol_fuel#Energy_balance"]http://en.wikipedia.org/wiki/Ethanol_fuel#Energy_balance[/url]
[url="http://en.wikipedia.org/wiki/Biofuel_from_algae"]http://en.wikipedia.org/wiki/Biofuel_from_algae[/url]
[url="http://media.cleantech.com/459/biofuel-from-algae-on-horizon-say-exper"]http://media.cleantech.com/459/biofuel-fro...rizon-say-exper[/url]
[url="http://media.cleantech.com/node/398"]http://media.cleantech.com/node/398[/url]
[url="http://crave.cnet.com/8301-1_105-9859455-1.html"]http://crave.cnet.com/8301-1_105-9859455-1.html[/url]


i don't mind the states being the ones doing it.. i simply mostly want government generally to do it.

i would add on to your ideas... national security... too much compeotion from the states might get feds involved. i doubt it'd be a problem here, but this is a very big issue that i don't see conservative address much. somewhat tangental of an issue to what we're talking about, but not really if we were to discuss the federal government's role. esstenailly "race to the bottom" is when i think the feds can get in... it's a question of fact, whether the states are having htat problem.
consider four examples of states competing to our detriment:
1. the states competed so much that rivers were catching fire etc, ushering the age of fed enviro laws...
2. states were competing so much that all the credit companies now go to two states to be founded so that usery interest rate laws won't apply to them there, and almost all states had the laws but now they don't: whatever your sentiment to peopel victims of usery, it's still a system where society's desires are not able to work. (usery treated much like a sin in the bible incidentally)
3. states compete such that CEO have limited liability for many of their bad actions... because they want to be able to attract business headquarters.
4. without the fed minimum wage.... states were leaving states that had them etc. again, whatever your inclination, it's an issue about social values. i'm sure there'd be something that you'd want uniform that cant be bc of this.

now some competion is good in fact to help innovation along... but not always.. it's always finding that balance. not a cop out and saying no federal govenrment involvement ever.
if the states can't give subsidies andor loans bc of undue competiion, which i doubt is the case, then the feds should get invovled for that reason too.

anyway, my ultimate point is that if the alternative is viable, and at the 1 or 2 dollar value the links i have describe.... for economic reasons... the government should get involved.
if it's not viable then i don't dispute that we shouldn't get involved.

Edited January 29, 2008 by dairygirl4u2c

[Dismas]

The problem is that the $1-$2 a gallon prices are due to stacked subsidies from the moment the corn kernel or soybean hits the soil to the fermenting tanks.

Now, I don't like biodiesel, but I would take that any day over ethanol. Ethanol is total carp from beginning to end as a fuel.

[CatherineM]

I saw something on the news the other day about a car that runs on compressed air. Not sure how that would work, but it would probably be low emission. It also wouldn't have the problem of how to get the local gas stations to add it. It's not like getting them to add CNG or Hydrogen. Compressed air can be retrofitted right into the tire inflation units.

My take on it all has to do with the auto makers. I read a story about hybrids. There is a cheap, easy, safe conversion that basically allows you to plug your hybrid in at home. That means that a lot of the gas you would use to recharge it would be unnecessary. Most of the automakers refuse to make this option available, and if you have it put on aftermarket, they will void your warranty. It increases gas mileage to 150 city and 100 highway. Some of the makers have said they will add the option in 2010 dragging their feet all the way.

My last new car was in 1991. It was a 3 cylinder that got 40mpg. They don't make anything like that anymore. It was a great car, but it wasn't an SUV.

[Dismas]

[quote name='CatherineM' post='1452221' date='Jan 28 2008, 08:54 PM']I saw something on the news the other day about a car that runs on compressed air. Not sure how that would work, but it would probably be low emission. It also wouldn't have the problem of how to get the local gas stations to add it. It's not like getting them to add CNG or Hydrogen. Compressed air can be retrofitted right into the tire inflation units.

My take on it all has to do with the auto makers. I read a story about hybrids. There is a cheap, easy, safe conversion that basically allows you to plug your hybrid in at home. That means that a lot of the gas you would use to recharge it would be unnecessary. Most of the automakers refuse to make this option available, and if you have it put on aftermarket, they will void your warranty. It increases gas mileage to 150 city and 100 highway. Some of the makers have said they will add the option in 2010 dragging their feet all the way.

My last new car was in 1991. It was a 3 cylinder that got 40mpg. They don't make anything like that anymore. It was a great car, but it wasn't an SUV.[/quote]
It's not all about greed. Hybrid technology is all fine and dandy, but what auto manufacturer is going to give rights to its competition for patented technology and at what price? The alternative requires a horrifically expensive complete reverse-engineering of the competition's technology to bypass the patents.

Add to that the fact that the hybrid battery is a toxic nightmare should the car get into an accident, and then come the lawsuits. Also, how does one dispose of those batteries?

Add to that how some mechanics are now very worried about working on a hybrid, as a few have been electrocuted while doing their jobs. High amperage is BAD.

Remember also, that the batteries are just bigger versions of other car batteries, and can die just like regular car batteries, except they cost more to replace than some transmissions.

Sure, in theory a hybrid is nice, but I'd wait at least a decade before jumping aboard.

P.S. Compressed air? Think of what a car wreck would do. Think of what Wisconsin winters caked with salt would do.

Edited January 29, 2008 by Dismas

[rkwright]

I think my previous line of argumentation still stands. If consumers find that their marginal utility is maximized through gas powered cars, they're going to buy them. If companies find their marginal utility by staying with gas is maximized they're going to do it. When prices get high enough that the marginal utility is greater by switching to alt. fuels, consumers will demand and the supply will follow. Its basic economics. Theres no reason why the government needs to step in.

The government doesn't need to step in and tell me how to spend my money. If you justify the government telling me that 'you'd save money in the long run by switching to biodiesel' then why can't they tell me 'you'd save money in the long run by buying a Ford over a BMW' or 'you'd save money in the long run by buying your food from store A rather than store B'. Whatever happened to consumer sovereignty?

Government regulation is only necessary when there is some public good at stake or some morality that needs to be legislated.

Now if we want to talk about switching to alt. fuels to stop our dependency on oil, or for global warming reasons (both of which are public goods and the government has a right to regulate), I'm ok with that.

But I'm not ok with the government telling me how to spend my money more wisely.

[CatherineM]

Dismas-You are probably right about the batteries being toxic and mechanics being electrocuted. I do know the person who really solves the issue will make serious money. In the meantime, since I can't be part of the solution, I refuse to be part of the problem, and don't own a car, only a good pair of boots and a bus pass.

[dairygirl4u2c]

rk. it seems to me that i'm trying to give concrete info, like the below quote i posted above, and you're insisting on more abstractions. At the level of abstractions, anything can make sense. You should post number that are realisitc that show how the poorer spending money in the mean time wouldn't be disadvantageous.

[quote]if we wait until the richer can feel it, all that money that's being squandered by teh poor and middle class isn't going to the economy at large: you didn't address this point.
cause one thing i wasn't very explicit on. if they can make it for a dollar a gallon, and even if they sold it at 2 a gallon, which is what they say they'd be doing, it'd still work out right.
consider, that my google search says the average station produces 700000 gallons of fuel a year. if we have a better infrastructure sooner than later, then taken to the extreme that'd be instead of 3*700k it'd be 2*700k, with a 700,000 saving per station. that, in one year, would be more than enough to pay for a machine there. instead, we're waiting till the rich get pinched... we're wasting at most 700000 dollars a year per gas station.
i realize dthe numbers are made optimally for me, and there's a trasition period, but the point is made.[/quote]

Congress should at least insist on all new cars being flex capable or something.


I think this whole car issue is exemplified by alternative energy in general. Look at heating of a home etc. The technology is out there to have pay off... but it takes like 20 years for it to pay off. Most people don't want to do that. This is similar to alt fuel for cars, i'd contend, because there's a pay off consumer would get if we switched sooner rather than later.

But, unlike solar panels and such, there's a reason I'd respect the individual soverignty of the consumer in those cases and not alt fuel as much. With solar panels etc, there's no infrastructural challenges. Sure, to a degree, the prices for the solar panels etc is high, but it's not inherently undoable for a consumer to buy. With cars, it is pretty much inhernetly undoable if there's no ethanol etc stations around. This is how I justify the government's involvement primarily. The economic reasons are second, but not subservient to consumer soveriegty.

Edited January 29, 2008 by dairygirl4u2c

[rkwright]

[quote name='dairygirl4u2c' post='1452472' date='Jan 29 2008, 12:39 PM']rk. it seems to me that i'm trying to give concrete info, like the below quote i posted above, and you're insisting on more abstractions. At the level of abstractions, anything can make sense. You should post number that are realisitc that show how the poorer spending money in the mean time wouldn't be disadvantageous.
Congress should at least insist on all new cars being flex capable or something.
I think this whole car issue is exemplified by alternative energy in general. Look at heating of a home etc. The technology is out there to have pay off... but it takes like 20 years for it to pay off. Most people don't want to do that. This is similar to alt fuel for cars, i'd contend, because there's a pay off consumer would get if we switched sooner rather than later.[/quote]

I'd rather stay away from the whole numbers game. The numbers can't be so great or else the market would react that way. If there were billions to be made in it, it would be happening.

[quote]But, unlike solar panels and such, there's a reason I'd respect the individual soverignty of the consumer in those cases and not alt fuel as much. With solar panels etc, there's no infrastructural challenges. Sure, to a degree, the prices for the solar panels etc is high, but it's not inherently undoable for a consumer to buy. With cars, it is pretty much inhernetly undoable if there's no ethanol etc stations around. This is how I justify the government's involvement primarily. The economic reasons are second, but not subservient to consumer soveriegty.[/quote]

The government's role is not to come in and create an infrastructure for a consumer (unless again its a public good, but we're avoiding that). I can't think of a single consumer product that the government made the public use. Even when the government wants to discourage something, they don't mandate it. They may tax it, but they never take the power of choice away from the people.

I'm going to ask you to name 3 products in our 200 year history that the government mandated the people use. I can't think of products the government requires people to sell (like the government would say if you're going to sell gas you have to sell biodesel also). If you can name 3 I might start to be convinced this is the government's role.

[Mercy me]

One big problem that no one seems to address. Biodiesel and the such don't contain the BTUs that oil does. Politicians and advocates for speak as if oil, gas and biodiesel are the same but they aren't.

Simply put, if you fill your tank with the proposed alternate fuels you will only go about half as far. So your 30 mpg car will only get 15. Now the consumer is buying twice as much fuel.

The government just raised the CAFE standards on cars. You better believe that they are going to be designing those cars for the fuel that will get them the furthest.

[Norseman82]

One of the arguments against ethanol is that the amount of energy it takes to produce it offsets any benefits it offers. Perhaps having the ethanol processing plants run on solar and wind energy might offset this?

[quote name='CatherineM' post='1452221' date='Jan 28 2008, 08:54 PM']My take on it all has to do with the auto makers. I read a story about hybrids. There is a cheap, easy, safe conversion that basically allows you to plug your hybrid in at home. That means that a lot of the gas you would use to recharge it would be unnecessary. Most of the automakers refuse to make this option available, and if you have it put on aftermarket, they will void your warranty. It increases gas mileage to 150 city and 100 highway. Some of the makers have said they will add the option in 2010 dragging their feet all the way.[/quote]

Actually, the new Saturn Vue hybrid that is coming out has a plug-in option, and I'm going to check it out when I'm at the Chicago Auto Show in two weeks.

[url="http://www.gm.com/explore/fuel_economy/news/2008/hybrids/plug_in_vue_011008.jsp"]http://www.gm.com/explore/fuel_economy/new..._vue_011008.jsp[/url]

And the Ford Escape and Toyota Prius may not be far behind:

[url="http://www.usatoday.com/money/autos/reviews/healey/2008-01-24-ford-escape-plugin-hybrid_N.htm"]http://www.usatoday.com/money/autos/review...in-hybrid_N.htm[/url]

Additionally, hybrid cars - at least the way they work now - only engage the battery below a certain speed - I think below 35 mph - above that the gasoline engine kicks in. Now, this would be worthwhile in urban areas, and if there are enough vehicles that use such cars in urban areas than maybe emissions might be reduced to the point that major urban areas will not be forced to have specialized anti-pollution blends from April to September.

As far as the market working things out, that is fine in theory, but what is our goal here - reduce the cost of gas or reduce our dependence on oil? If the former, please remember that the demand recently has increased greatly not so much here in the US, but in China - in fact, I heard on TV the other day (it might have been on the History Channel) that in a few years (maybe even by 2010), China will displace the USA as the leading consumer of oil in the world. India is also increasing its demand. I think it is getting to the point that it is a matter of economic survival that we start switching over to alternate forms of energy.

It would be great having a Manhattan Project type of committment, but right now with out budget deficits and the baby boomers beginning to retire in 2010 adding extra demands to social security and medicare, we'd have to drastically cut back in other areas or raise taxes considerably in order to subsidize it. This isn't nine years ago when we had a surplus to use where we needed to, so I'm afraid we may have missed a good opportunity.

Edited January 31, 2008 by Norseman82