I just saw the most ridiculous thing on TV: An old guy named "Paul" from the Harvard Business Review - with the word "Harvard" written on the wall behind him about 100 times - offered the idea of "OPIC" as the most brilliant and innovative idea. What is OPIC? He said that since OPEC countries can no longer cap the price of oil by pumping more when it rises, consumers could still enjoy the benefits of price stability by organizing their own cartel to consume less when prices go up, called "OPIC."It just seems so obvious that the benefit of stable oil prices is not that people like any particular number. Otherwise, stable prices could be achieved simply by changing the size of a barrel of oil. Rather, the benefit is a predictable consumption opportunity. In other words, the only problem or cost with oil prices rising is that you can consume less. Consuming less certainly does not solve this problem! In fact, to the extent that some people already consume less when the price goes up without needing a cartel, and the price still rises, consuming still less than that to prevent the price from rising at all, makes the problem even worse!But unless he is talking about putting more oil in the strategic reserve when prices rise and OPEC pumps the same amount, he's not even talking about consuming less! I can only guess he is talking about rationing, or making it illegal for some people to buy oil, and choosing at the central-planning level who gets to use how much oil for what. This is what passes for thought at the Harvard Business Review? LOL, maybe in 1913.

Is he proposing something like anti-supply and demand? ie., when some sort of political/economic pinch is put on supply and prices get jacked, is he suggesting consumers 'get it together' to cut back demand? If that's what he's saying, your indignation is justified. On a slightly related topic, couldn't this or any government smooth fluctuations by adding more/less ethanol to petroleum? I guess ethanol does attack engine seals etc. Any chemists/economists care to way in?

QuoteOriginally posted by: zetacouldn't this or any government smooth fluctuations by adding more/less ethanol to petroleum?If they get that ethanol from the same place where you put a lever if you want to move the Moon. But most individuals can also get their ethanol there, so what need for government?

yeah sorry I should've worded that better. What I should say is that current legislation (US at least) restricts ethanol and other additives. If the law is loosed a little,then refineries could have liberty to buffer gasolene with ethanol, a comodity subject to less fluctuation, although not subsidized to the degree of oil and more expensive...

QuoteOriginally posted by: zetaethanol, a comodity subject to less fluctuation, although not subsidized to the degree of oilQuoteBetween the ethanol mandate, the 51-cent per gallon tax incentive, and the huge host of handouts and tax breaks for producers, the ethanol industry is riding high. Ethanol producers don’t need to compete with gasoline to take in huge profits; they can still haul home truckloads of cash so long as Congress remains their sugar daddy. But while corporate agriculture is getting drunk off of ethanol subsidies, taxpayers are getting stuck with a nasty hangover. Sky-high gasoline prices and the energy bill have given lawmakers an opportunity to pile on even more giveaways for ethanol. The energy bill that the Senate passed on Tuesday pours more than $2 billion in loan guarantees, demonstration projects, and downright handouts to ethanol interests. All this is just good old-fashioned pork dressed up as energy policy. But while Congress is busy giving big agribusiness the keys to the Treasury, scientists are increasingly finding that corn ethanol is no solution to America’s energy woes. Dr. Tad Patzek, a geoengineer at UC Berkeley, examined the full process of corn-based ethanol production, from seed to tank, and found in a recent report that every unit of energy created through corn ethanol takes six units of energy to produce. Dr. David Pimentel, a professor at Cornell University engaged in similar research, has also demonstrated that corn-based ethanol demands significantly more energy to create than it contains. These two studies make painfully clear what opponents of ethanol have been saying for a long time: corn ethanol is an outrageously inefficient substitute for gasoline.The ethanol boondoggle began in the 1970s as an attempt to cut back American reliance upon foreign oil. More than thirty years later, after billions and billions spent in research and development, ethanol remains commercially unsustainable, depending on taxpayer handouts and government mandates to survive – and it’s still not a viable substitute for gasoline. It's time to wean ethanol off the federal bottle and give taxpayers relief.

Pump Ethanol? First Make It Cheaper Than Gasolinehttp://www.bloomberg.com/apps/news?pid=1000003 ... 6V.ZQOoOne place that has succeeded in popularizing ethanol is Brazil, although by means that wouldn't work in the U.S. Following the energy crises of the 1970s, Brazil decided to reduce reliance on imported oil -- while increasing demand for sugar -- by mandating ethanol use and enforcing its production. Brazil's military dictatorship supported research into ethanol-burning cars and loaned money to sugar producers. The country finally ended price supports for sugar in the 1990s, though ethanol now accounts for about 20 percent of Brazil's transportation fuel usage -- compared to worldwide use of alternative fuels of less than 1 percent.

QuoteOriginally posted by: farmerQuotefound in a recent report that every unit of energy created through corn ethanol takes six units of energy to produce.......corn-based ethanol demands significantly more energy to create than it contains.........corn ethanol is an outrageously inefficient substitute for gasolinein that case, I'll stick to gasoline

I agree it's unrealistic to replace gas with ethanol; anyone can see that half the planet would have to be covered in corn/sugar cane fields etc. This would be a good fermi question but I digress. I think all I was proposing is a blended fuel with a higher proportion of ethanol, but then the octane is higher than gas, and I've mentioned that ethanol would be solvent to seals in (older) cars. I'm just old enough (late twenties) to remember the tale end of the seventies/early eighties and the last time peeople cared to this degree about the price of gas. Someone said to me recently (I've been in the US about five years) prices today in the US are still behind inflationary expectations. I maintain that it's the derivative of the price that people worry about, not the value and I still think a blended fuel with a higher proportion of ethanol would damp the oscillations?

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Maybe not invading Middle East countries would reduce the oscillations?

QuoteOriginally posted by: farmerQuoteBetween the ethanol mandate, the 51-cent per gallon tax incentive, and the huge host of handouts and tax breaks for producers, the ethanol industry is riding high. Ethanol producers don’t need to compete with gasoline to take in huge profits; they can still haul home truckloads of cash so long as Congress remains their sugar daddy. But while corporate agriculture is getting drunk off of ethanol subsidies, taxpayers are getting stuck with a nasty hangover. Sky-high gasoline prices and the energy bill have given lawmakers an opportunity to pile on even more giveaways for ethanol. The energy bill that the Senate passed on Tuesday pours more than $2 billion in loan guarantees, demonstration projects, and downright handouts to ethanol interests. All this is just good old-fashioned pork dressed up as energy policy. But while Congress is busy giving big agribusiness the keys to the Treasury, scientists are increasingly finding that corn ethanol is no solution to America’s energy woes. Dr. Tad Patzek, a geoengineer at UC Berkeley, examined the full process of corn-based ethanol production, from seed to tank, and found in a recent report that every unit of energy created through corn ethanol takes six units of energy to produce. Dr. David Pimentel, a professor at Cornell University engaged in similar research, has also demonstrated that corn-based ethanol demands significantly more energy to create than it contains. These two studies make painfully clear what opponents of ethanol have been saying for a long time: corn ethanol is an outrageously inefficient substitute for gasoline.The ethanol boondoggle began in the 1970s as an attempt to cut back American reliance upon foreign oil. More than thirty years later, after billions and billions spent in research and development, ethanol remains commercially unsustainable, depending on taxpayer handouts and government mandates to survive – and it’s still not a viable substitute for gasoline. It's time to wean ethanol off the federal bottle and give taxpayers relief.Someone should tell the president about this fiasco!

QuoteOriginally posted by: MarsdenQuoteOriginally posted by: farmerQuoteBetween the ethanol mandate, the 51-cent per gallon tax incentive, and the huge host of handouts and tax breaks for producers, the ethanol industry is riding high. Ethanol producers don’t need to compete with gasoline to take in huge profits; they can still haul home truckloads of cash so long as Congress remains their sugar daddy. But while corporate agriculture is getting drunk off of ethanol subsidies, taxpayers are getting stuck with a nasty hangover. Sky-high gasoline prices and the energy bill have given lawmakers an opportunity to pile on even more giveaways for ethanol. The energy bill that the Senate passed on Tuesday pours more than $2 billion in loan guarantees, demonstration projects, and downright handouts to ethanol interests. All this is just good old-fashioned pork dressed up as energy policy. But while Congress is busy giving big agribusiness the keys to the Treasury, scientists are increasingly finding that corn ethanol is no solution to America’s energy woes. Dr. Tad Patzek, a geoengineer at UC Berkeley, examined the full process of corn-based ethanol production, from seed to tank, and found in a recent report that every unit of energy created through corn ethanol takes six units of energy to produce. Dr. David Pimentel, a professor at Cornell University engaged in similar research, has also demonstrated that corn-based ethanol demands significantly more energy to create than it contains. These two studies make painfully clear what opponents of ethanol have been saying for a long time: corn ethanol is an outrageously inefficient substitute for gasoline.The ethanol boondoggle began in the 1970s as an attempt to cut back American reliance upon foreign oil. More than thirty years later, after billions and billions spent in research and development, ethanol remains commercially unsustainable, depending on taxpayer handouts and government mandates to survive – and it’s still not a viable substitute for gasoline. It's time to wean ethanol off the federal bottle and give taxpayers relief.Someone should tell the president about this fiasco!I doubt that he really cares. Given his father's contacts within the Mid East oil industry, he's probably profiting.

... plus, he really likes to say, "switch grass."

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