I see, but that's if the alternative energy business is already well established. A big drop in oil could easily put alternative energy out of business, especially while still in infancy. Consequently SA cuts production and oil prices skyrocket again... back to square one. Lots of economists are now proposing an oil price floor for this reason.

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2004 VW Jetta TDI (manual)

Past MB's: '96 E300D, '83 240D, '82 300D, '87 300D, '87 420SEL

Let's say KSA acts as you say and we go through repeated cycles of high and moderate oil prices. Let's say we want to moderate the impact of a single-source producer dramatically impacting the market.

How about -- develop alternative sources of energy? Like ... drilling for oil. developing nuke power. Wind. No single source will do it. But a broad-response might do it. Who knows?

If there are a large number of alternative sources such that KSA no longer controls market price then the market returns to supply/demand rather than cartel-based pricing.

None of it requires a national response other than getting the f**k out of the way of entrepreneurs and financial risk-takers. You know who they are, right? Speculators! Demon Spawn!

That's where capital comes from. No capital, no entrepreneur. No entrepreneur, no innovation. Maybe someday the government will figure it out.

B

What alternative energy entrepreneurs need most is an oil price floor or at least the same tax privileges that the oil industry enjoys. Their biggest fear is investing all this money only to see it disappear when oil prices crash. The government can be much more useful than simply getting out of the way. It can actually play a constructive role. It's the oil lobby that needs to get the f**k out of the way.

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2004 VW Jetta TDI (manual)

Past MB's: '96 E300D, '83 240D, '82 300D, '87 300D, '87 420SEL

Do you honestly see that as a likely event? IOW, OPEC suddenly flooding the market? Not talking about a $10 a barrel drop. Maybe if the price of oil crashed tomorrow to say $50 a barrel, I might worry about investing in this company.

You understand the difference between "can" and "will", right? What have they done lately that convinces you that they "will" be more useful in the project than out? Sure, the govt "can" be more useful than just getting out of the way. If you think it is likely to happen, you might consider grafting wings on a pig and see if it "can" fly. Probably as much chance of it happening. You seem so optimistic that the govt can do this and can do that. Maybe in Europe under different circumcisions. What have they done HERE that convinces you that they are more likely to help than hinder? The gas tax where 46 cents on the dollar is spent on non-road related projects (something that wasn't supposed to happen)? The Tobacco Settlement that is spent on who knows what besides Tobacco Cessation Programs? The raiding of caches of money for other pet projects?

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01 Ford Excursion Powerstroke
99 E300 Turbodiesel
91 Vette with 383 motor
05 Polaris Sportsman 800 EFI
06 Polaris Sportsman 500 EFI
03 SeaDoo GTX SC Red
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04 Tailgator 21 ft Toy Hauler
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Oil prices can crash for a variety of reasons. I don't think SA has enough capacity to cut oil prices in half just on its own, but say if they max out their production after the world starts going into a recession because of high oil prices, I can see oil prices dropping by half. This would wreck havoc on the entire alternative energy industry which is still in its infancy.

You seem to cite some failures or shortcomings of the govt to convince me that govt is always useless and we'd be better without it. It doesn't work that way. I can easily see them passing a bill calling for an oil price floor or tax incentives for alternative energy, just like what the oil industry receives. That's really all they need to do to play a constructive role and they've done this sort of thing many times before and successfully. It's the various lobbies and special interests that are the real problem.

__________________
2004 VW Jetta TDI (manual)

Past MB's: '96 E300D, '83 240D, '82 300D, '87 300D, '87 420SEL

Need greater refinery capacity to meet the expanded production rate.

Sorry, NIMBY.

Hydroelectric power? No thanks, those damn dams will flood the natural habitat of the rare double-breasted veeblefester.

Plant-based fuels? No thanks, they too require processing plants. See answer #1.

Nuclear? Well, Three-Mile Island and Chernobyl have not enveloped nuclear power in a rosy glow. Plus the French are doing it. Next.

Windmills? And spoil those beautiful mountain views? Cad.

Solar? I just shelled out a small fortune for my beautiful dream house. NFW am I going to bastardize my roof with those tacky solar panels. Let my neighbor use them.

Wait! I've got it! Let's import our energy from far-away places!

What you say is possible but I'm not so sure it is going to happen. In any case, I wouldn't worry about it. Ideas have come about and scrapped because of this that or the other. If it is strong, when the time comes again, it will grow.

Govt to me is like cytotoxic drugs. Best to stay away from it. Use it if you are having cancer and will die without it. In any case, do realize that sometimes, those drugs have so severe an effect that the cure might be worse than the disease. The difference in our opinion is that you look at the potential and stop there. If I were to do that, I would agree with you. OTOH, I look at recent history and somehow, maybe I am wrong, but somehow, I see a less optimistic picture. Yes, in theory, the govt can do marvelous things. I could lend you money for a project and you might make us both rich. OTOH, if you have bounced checks before with me, do you expect me to have faith in you again? Tell you what. You show me that the govt can balance it's checkbook on an ACCRUAL BASIS and I will start to have some faith. Cash Basis is meaningless and you know that. You don't run your household on a Cash Basis, do you? That a simple enough test?

I wouldn't turn to vices like hookers, drugs and booze if it weren't there too. Sorry, can't remove the temptations of the world. If you are too weak to stand up to it, you are too weak. So why should I trust you after you have shafted me so many times? Because you blame it on others?

__________________
01 Ford Excursion Powerstroke
99 E300 Turbodiesel
91 Vette with 383 motor
05 Polaris Sportsman 800 EFI
06 Polaris Sportsman 500 EFI
03 SeaDoo GTX SC Red
03 SeaDoo GTX SC Yellow
04 Tailgator 21 ft Toy Hauler
11 Harley Davidson 883 SuperLow