So When Will That Be?

Though I do not want mine, Joel's nor anyone else who writes on this blog's job to become bickering pundits, I feel that in this one instance it might be fun and invigorating to disagree with Joel.

First, on the topic of Oil Production and the evils of OPEC. I am all for the outright disbanding of any cartel which seeks to exert any form of monopoly power over its consumers but in this case these OPEC guys will feel the burn of their evil ways. It is for this reason why I believe they are acting forthrightly. Increasing oil production by 500,000 barrels a day and not seeing any drastic change in the price of oil should be a sign to the consumers of the world that perhaps this isn't OPEC's responsibility. Joel said that we are consuming "too much" oil and while I agree with him on the environmental aspect of his point the truth is that we are not consuming too much oil, we are consuming to much oil for the refineries to keep up with. If we should be upset with any big entity in the oil supply line it should be the refineries for not keeping up with times and updating their output capabilities.

For the sake of interpretation, let's use an analogy. If I were a steel producer and you were a person buying a car and you felt that car prices were just out of control and so as a service to the greater good I say," I will double my output of steel to help lower car prices." Excited about my sudden burst of goodwill you go out and look at buying a car only to find the prices have not dropped as much as you were expecting. Why is this? Well it could be a number of things but the most relevant explanation would be that car manufacturers were the bottle neck in this equation. By bottlekneck I mean that the reason the prices did not fall as expected was due to some reason inherent to the industry not to the input of materials. This could be any number of things, for example, using antiquated tools would keep the production levels relatively near where they were before the influx of steel. Though not revolutionary the point of the analogy is to make it clear that there are other reasons our oil is so expensive.

Second, in regards to the concept of Hydrogen cars. I find this suggestion to be a very good idea and generally inline with where I like to see peoples preferences heading. Joel is right we will never really feel the end of oil in as far as cars are concerned. Demand will rise so high that prices will be pushed dramatically up as the rest of the world starts buying their own vehicles. After that the relatively meager interest in alternative fuels will accelerate dramatically as well. So Joel you say you will buy a hydrogen car when you are able to, but it is only when the hydrogen car becomes cost efficient and affordable through innovation efforts made because of the rising cost of the status quo, will that ever happen. So our booming demand for fuel is more than just for our economies it will ultimately be the fuel which fans the fires of innovation in alternative fuels to roaring levels. Even more, is that you will not have to motivate people to do the same because the natural course of events and the resulting costs will be all the motivation those people need to make that decision for themselves.

Now, it is important for me to say that I too share Joel's sentiment and if I could I would but since I can't I don't. I believe in his other suggestion of trying to convince others that if they are able to and care about it they too should make the switch. It could be dangerous however to coerce those people instead of convince them because if the demand for gas falls artificially low due to federal mandates to use hydrogen in lieu of gas then we will forever be teetering back and forth in the transitional phase never having a technological advantage in one or the other.