Tuesday, April 29, 2008

It's simple economics, but the economics aren't simple

Supply and demand.

Lots of demand for oil combined with failing supplies leads to rocketing prices. Get set for a new Moore's law in oil prices!

So looking at an idea like the EV-1 or the new plug-in Hybrids - why aren't the governments pushing this new oil-free transport technology? Economics!
The other day, Insight on ABC ran a program about how Australian are wedded to their cars and high oil prices won't make us catch public transport. It's true - the country is just too big for a viable public transport system to work. We're just too spread out compared with London, Tokyo or Singapore (the examples held up as good public transport systems).

So if we NEED our cars to get around, get tradesmen to work and mums to the shops - the EV or plug-in Hybrisd seems to be the answer: Fast, cheap to run and best of all - not lining the Saudi's bank accounts. So why aren't governments behind it?

Well, the USA elected a Texas Oilman for president. No further explanation necessary.

In Australia, the automakers and oil companies are big political donors and have incredible power. It's a conflict of interest for public servants to make laws that will harm their ultimate paymasters. No big conspiracy theory - it's just economics.

Besides, governments have never been leaders of innovation. I've said it many times - none of the major inventions of the 18th, 19th or 20th centuries were promoted, encouraged or assisted by the governments. Governments follow, and if we want to turn this toil thing around, it's up to the average person to take matters into their own hands. People like Alexander Graham Bell, Thomas Edison, Wilbur and Orville Wright - ordinary people who tinkered on their own. Once we get enough momentum, the governments will have to get involved in order to work out how to tax it - again: simple economics.

So my theory is this: The oil companies know all about peak oil. They know the writing is on the wall. They've tested electric cars and they know the technology works beautifully, but the time isn't right yet. They were making billions when oil was $80 a barrel. Imagine how much they will make in between now and when the oil stops flowing?

Use the rising profits to buy the next source of power - power stations. Why the hell do you think Morris Iemma is being "encouraged" to sell the power supply of NSW? Somebody is prepared to pay for it becuase they know what the demand for electricity is going to be in the next 10, 20, 50 years. Their motto is "hold oil shares, buy electricity shares" - using the doomed profits from your oil to fund the acquisition of the next energy producers.

And then, when they've fleeced ever last possible cent out of selling petrol - unveil the electric car and raise the price of electricity to match what we've been paying for petrol!

So here's the end of my rant - I'm going to shift my focus now from WHY to HOW.

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