Quote Originally Posted by Gawain of Orkeny
I never said that. I know theres only so much oil and I said we need to develope alternative enrgy. My point is leave it to the market and science and not to the government. Have a little faith in humanity.
Rather than actively do something to address the problem, you want me to pray? Wish for the best? Hope folks realize what is happening before it actually occurs...like the most recent run up? I can't find any basis for having such faith in humanity at the moment.

This is the sort of problem where the role of government can be very positive in priming the market and development. Government is there to deal with the bigger issues that we can't prepare for with out it (defense, infrastructure, etc.) Govt has been the key component behind the build out of infrastructure. What we are talking about is not a welfare system for energy, but instead a strategic shift in investment and research. It depends on market and business, but the govt needs to help along the process so that we have things as they are needed, rather than later. With energy, the economic cost of responding late is huge because of the relative inelasticity. Especially when you already run a massive trade deficit...

The result of what you suggest is that we suffer the consequences of being behind, and that would work as your market driver. As I've pointed out, business will *respond*...later, not by being there waiting for us to catch up to them. They want the market clearly established and there before they invest. Government doesn't have to act that way. Even if we start to behave pro-actively, it won't help shift fleet fuel efficiency all that much for about 5 years. Ditto for major industry fuel efficiency--efficiency improvement in the short term usually comes from folks actually shutting down, becasue they can't afford to operate anymore. My approach differs in that I would prefer that we try to keep up or get in front of the problem, rather than chasing it.

The inelasticity of energy demand is largely absent from the "oil supply is not a problem" articles. Instead the articles say: demand will decline if prices rise, therefore producing self correction. They simply ignore the well known inelasticty of energy demand. I can't take such articles seriously.

What really happens when oil prices rise dramatically? From what I've seen looking at global growth and contraction is that *growth* in demand halts, but not so much the base usage. The base usage doesn't tend to shrink, at least not on the short scale of a year or two...despite doubling or tripling or more of prices.