Saturday, June 10, 2006

Response to Comment on 90 Years of progress post

One of my friends made an interesting comment on my "90 years of progress" post. I thought he had some good things to say, and of course, I had some more good things to say in response. Here is the discussion, thus far, for your enjoyment:

Bigchinko said...

Production costs of alcohol have always been substantially higher then the costs of surveying and subsequent drilling for oil. When oil was 10$ a barrel, no one was going to go out and refine corn into ethynol for 50$ a barrel. Right now the only reason theres such a tumult about oil is because of the political climate--oh, we rely on unstable countries to fulfill a vital part of our economic supply chain. In other words, blah blah blah. There will always be that.

Once Oil goes below 30$ a barrel, you'll see your oil stocks take a real hit in the groin, and your green companies phase out into another 90 year hibernation. Just this past week oil went sub 70$, whose to say what it will be in three years?

Hind sight is 20/20, if you were to bring up that henry ford quote only 8 years ago, people would have thought you were mildly retarded. All it comes down to is that trends are unpredictable, and when you try to ride them you're doomed to get in too late and leave after they've crumbled. Of course now green is trendy, and your right, that it should have been trendy a while ago--but it wasn't and you shouldn't be surprised. Theres always greed and industrial momentum, no one will change anything if the current system is profitable and works.

5:12 AM


Jordan said...

All good and valid points. Producing ethanol is not exactly a very low-cost alternative, however again it does reduce our dependence upon what is a very finite resource which we procure from unstable areas. The adoption of ethanol/gasoline hybrid fuel is not so much an attempt to reduce the cost to consumers, but to decrease our dependence on foreign oil. As far as that goes, only time will tell, but I highly doubt the price of oil will ever dip below $40/barrel. New technologies are constantly improving the oil companies' ability to find, extract, and refine black gold, but it is extremely unlikely that global demand will wane anytime soon. At the same time, economies of scale and technological innovations are likely to also reduce the cost of producing ethanol, making it more of an economically viable additive to gasoline.

The real monemaker/driver of change will be the development and widespread adoption of the hydrogen fuel cell for vehicles. Actually the real important piece`of the puzzle is figuring out how to efficiently and cost-effectively produce and distribute hydrogen fuel. Currently we lack the infrastructure and capability to profitably produce the quantities of hydrogen necessary to lessen our dependence on oil.

0 Comments:

Post a Comment

Subscribe to Post Comments [Atom]

<< Home