Reduction in Fossil Fuels
M V Bhaskar
alternatives to Petroleum and Coal is quite difficult to understand.
US Gasoline consumption is about 9 million barrels per day.
Current price is $ 70 per barrel, so the annual cost is 9 * 365 * 70 =
$ 230 Billion.
We have already seen price of $ 140 per barrel last year.
If price goes up to $ 140 again in future the burden on US consumers
will be about $ 230 Billion per annum.
So how much should US invest to find alternatives to Gasoline?
At Copenhagen all developed countries put together have pledged $ 30
Billion by 2012 and
US had pledged another $ 100 billion after 2020 to reduce GHG
emissions from all sources put together all over the world.
US should find alternatives to Gasoline because its running out and
not because it causes GHG emissions.
best regards
Bhaskar
www.kadambari.net
hgerh...@yahoo.co.uk
> If price goes up to $ 140 again in future the burden on US consumers
> will be about $ 230 Billion per annum.
> So how much should US invest to find alternatives to Gasoline?
I would point out that one of the alternatives is oil sands. There are
some measures where CO2 reduction goes hand in hand with increased
energy security, but for many others this is not so. Another example
is carbon capture and storage, which reduces the amount of CO2
emitted, but increases the amount of energy that needs to be consumed.
James Annan
> The Developed countries opposition to investment in finding
> alternatives to Petroleum and Coal is quite difficult to understand.
>
> US Gasoline consumption is about 9 million barrels per day.
> Current price is $ 70 per barrel, so the annual cost is 9 * 365 * 70 =
> $ 230 Billion.
>
> We have already seen price of $ 140 per barrel last year.
> If price goes up to $ 140 again in future the burden on US consumers
> will be about $ 230 Billion per annum.
> So how much should US invest to find alternatives to Gasoline?
The problem is that if anyone spends billions developing an
alternative that is profitable at $40/barrel equivalent (say) then the
oil companies can just pump more oil to send the price below that
level for a year or two, and bankrupt the competitor. Since oil it
highly price inelastic this is a very plausible scenario.
(Of course, another factor is the risk of spending billions and ending
up not getting anything that is profitable at less than $200/barrel
equivalent.)
James
hgerh...@yahoo.co.uk
> alternative that is profitable at $40/barrel equivalent
They might not benefit from it even with oil prices at 200 Dollars per
barrel, because other people might make use of the technology
development without having to pay a cent. Intellectual property is
supposed to deal with this market failure, but there are limits to
this, especially when it's not about specific, patentable inventions.
For private investors to be interested out of profit motives, they
need to be able to capture the benefits of their investment. I am
quite convinved that for much energy and CO2 related technology we
need direct government led investment, such as for example feed-in
tariffs or ethanol blending mandates.
Alastair
With the US oil companies making $230 billion per year, they have
plenty of cash to persuade the US congress and people that it is not a
good idea to cut back on oil.Moreover, what is an odd $100 billion
promise when that sort of money is at stake. It is a small price to
pay if the oil price doubles by the time it is due to be paid in 2020.
The only answer is for India to develop solar energy. They have plenty
of sun, and bright engineers. And they are not yet so heavily
committed to fossil fuels. Unlike the US, not every man women and
child there owns a car.
Cheers, Alastair.