From: gary@ke4zv.uucp (Gary Coffman)
Subject: Re: NEWS: True Costs of Commercial Nuclear Power
Reply-To: gary@ke4zv.UUCP (Gary Coffman)
Organization: Destructive Testing Systems
Date: Fri, 22 Jan 1993 01:53:18 GMT

In article <51888@seismo.CSS.GOV> stead@skadi.CSS.GOV (Richard Stead) writes:
>In article <hb#sz4c@dixie.com>, jgd@dixie.com (John De Armond) writes:
>> 
>> Why is that?  You seem to think energy is some kind of luxury to be metered
>> out by the government.  After all, the government has to oppose anything
>> that might imply pleasure.  Energy is what drives this country and 
>> is what enables the quality of life we all expect.  
>
>Wrong.
>Take the example of railroads - who builds and maintains those?  The rail
>companies.  But somehow we are now expected to believe the roads for
>joy riding individuals and for the trucker's union are to be built
>with my taxes.  This is as clear a market distortion as any in economics -
>railroads have to pay for their infrastructure yet are expected to compete
>against truckers who get a fat government subsidy in that the government
>hands them their infrastructure on a silver platter.  This has little

You don't know the history of railroading very well. The railroads were
*granted* right of way, along with alternating 1 square mile blocks of
land on either side of the right of way, by the government in order to
get the railroads built. They could use or sell this land as they saw
fit. They were also granted *monopoly* rights to certain service territories. 
They also get to depreciate track and rolling stock, and get direct writeoffs 
on operating expenses. Their total subsidy has been much higher than highway 
users. Highway users don't get to depreciate their "track", instead they have 
to pay taxes in the form of fuel and "axle" taxes to use the roadway. Highway 
users other than commercial haulers don't get to depreciate their rolling
stock. Highway users don't have *monopoly* access to the roadways
for commercial purposes. Many different competing haulers operate
over the same routes. It's the railroads who have the biggest government
subsidy, and without it they would largely be bankrupt and gone because
highway transport is so much more competitive and efficient (in a business
sense).

>to do with luxury, but let's talk about that, too.  You want the luxury
>of driving willy-nilly over mile after mile of quality road, without
>any purpose at all if you so choose, but you expect the rest of the country
>to pay for the road under your manicured driving toes.  They have that
>kind of tax in Britain, where heavy taxes are loaded on the average Joe,
>just so some royalty can have some nice castles to play in.

This is just bizarre. According to the census, there are 180 million
licensed vehicles on the roadway. That's more than one per household
average. They *all* get the benefit of the road system. And they *all*
pay for it through various taxes, mostly fuel taxes. This isn't some 
subsidy of the "elite" by the masses. It's the masses who use, and pay 
for, the roadways. The entire economy benefits from low cost transport.
Whether an individual drives or not, he gets benefits from this general
economic stimulus.

>> >Second, gas price increase will only increase recoverable reserves
>> >(which are defined as oil that can be recovered economically at the
>> >current price of oil).  
>> 
>> Except that the gas price increase would NOT mean more money to
>> producers.  it would instead simply fund more bureaucracy.  The only
>> money producers would get would be that they manage to suck out
>> of the government tit.  
>
>Read the post a little more carefully John.  The original poster was arguing
>that gas prices would rise as reserves shrank until other energy sources
>where competitive.  He implied this would happen over a relatively short
>time scale and all problems would solve themselves.  I merely pointed out
>that the time scale was very long, because as the price rises the amount
>of recoverable reserves increases exponentially.  Thus the price rises
>very slowly and there is lots of gas for a long time.  This point had
>nothing to do with increasing the price of gas with a gas tax.  The economics
>of that clearly indicate much less money to the producer.

No, it's you, Richard, who misunderstands. I implied that as reserves
shrank, over a 100-200 year period, the price of oil would gradually
rise to the break points that make alternatives competitive. What John
is saying is that a gas tax raises money only for the government. The
consumer pays immediate, and much higher prices, but the producer doesn't 
see any of that. Therefore, the producer has no incentive to develop higher 
cost reserves. Making *gasoline* $5 a gallon by taxes doesn't increase the 
price paid for *oil* to the producers, so they don't develop more expensive 
reserves. You have to "follow the money" to understand supply and demand. 
In the case of a gas tax, the effect is that the government demands money 
and the consumer is forced to supply it. The government isn't in the oil 
recovery business, so any money that goes to them is money that can't be 
spent developing new reserves. The effect of a gas tax is to *reduce*
oil exploration and development which *reduces* reserves.

Gary
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