THE MORALITY OF SUBSIDIZED OIL PRODUCTION

Here in another corner of the world it is sometimes difficult to make sense of US policies on oil.

President Obama has seized on one aspect of the puzzle by pointing out that just as fuel is hitting the unpalatable $US 4 per gallon, Exxon is announcing record profits for its shareholders and yet the US government is continuing to pay a staggering $US 4 billion a year subsidies to the oil companies. If this was the only fact we might simply wonder at the curious double phenomenon of the diversion of hard won tax dollars to supplement the bulging wallets of the rich coupled with a system whereby powerful are permitted to lobby Congress and the Senate to a point where the government is powerless to do that which is in the best interests of the voters they are supposed to  represent.

Then we have the inverse relationship between alternative fuel and food supply and pricing. Taking land and crops that might otherwise have boosted urgently needed food production for the world’s increasing population and using it to provide supplementary fuel production – eg corn and soy bean for ethanol and taking land in third world counties for palm oil production may well increase fuel production and in an ideal world even reduce fuel prices – yet if at the same time it drives up food prices it is hard to see how the wage earner wins. If the alternatives were made plain – ie I will help your fuel bill by making you pay more for your food, the voter might not be quite as accepting. Putting this pressure on third world countries is not a saving if those countries become more unstable as a consequence.

While there is good sense in the Obama administration wishing to encourage the use of more efficient car engines more care still needs to work out the implications of the electric alternative. In any economy where electric power production is already over-stretched, electricity needed for the charging of car batteries will be taken from the part of the extra National electricity production ie the burning of fossil fuels. While electric cars are a minority novelty there is no problem, since many cars would require much extra electricity from the National Grid – more fossil fuel is burned in the power stations than is saved in the cars. (cf. the calculations done on the electrification of cars in the UK). What a strange world we live in.

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2 Responses to THE MORALITY OF SUBSIDIZED OIL PRODUCTION

  1. katargeo says:

    ISRAEL’S IDF MEDICAL CLINIC STARTS WORK IN TSUNAMI-STRICKEN MIYAGI PREFECTURE OF JAPAN

    http://www.jta.org/news/article/2011/03/13/3086376/israeli-team-leaves-for-japan

    “Israel is first to set up Surgical Unit in Japan”

    The Israeli clinic includes orthopedics,
    surgical and intensive care units as well as a
    delivery room and pharmacy.

    The delegation includes 50 doctors.

    They brought with them:
    32 tons of equipment
    18 tons of humanitarian aid
    10,000 coats, 6,000 gloves and 150 portable toilets
    With all their billions of “petro-dollars”, where is the humanitarian relief from the Arab countries?

    I often wonder about our left wing media if they will ever say anything positive about Israel. I guess not! The UCLA study shows how left wing American media is,

    http://newsroom.ucla.edu/portal/ucla/Media-Bias-Is-Real-Finds-UCLA-6664.aspx

    Amazing with all their zillions of dollars in Oil money Arab/Moslem countries can’t seem to find it in their hearts to send aid like Israel did.

  2. peddiebill says:

    Ah well – your view is posted on my site so at least visitors will be able to say that at last they have found something in favour of Israel in print – and not a Jewish site either!
    In fact your post is a little unfair because the Arab sponsored Red Crescent is virtually indistinguishable from the Red Cross in the way they offer aid. I guess the national interests rule anyway because as far as I know neither Israel or the Arab countries sent assistance to New Zealand to help after the Christchurch earthquake earlier this year. Unlike Japan I guess we cant offer significant trade in return. Sigh……..

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