From: ems@michael.apple.com (E. Michael Smith)
Newsgroups: sci.energy
Subject: Re: NEWS: True Costs of Commercial Nuclear Power
Date: 22 Jan 93 19:55:54 GMT
Organization: Circle 'C' Shellfish Ranch, Shores-of-the-Pacific, California

In article <1993Jan22.015318.11900@ke4zv.uucp> gary@ke4zv.UUCP (Gary Coffman) writes:

A remarkably lucid and clear statement of economic reality!  Keep it up!

>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
>-- 
>Gary Coffman KE4ZV          |    You make it,     | gatech!wa4mei!ke4zv!gary
>Destructive Testing Systems |    we break it.     | uunet!rsiatl!ke4zv!gary
>534 Shannon Way             |    Guaranteed!      | emory!kd4nc!ke4zv!gary      
>Lawrenceville, GA 30244     |                     | 


-- 

E. Michael Smith  ems@apple.COM

'Whatever you can do, or dream you can, begin it.  Boldness has
 genius, power and magic in it.'  -  Goethe

I am not responsible nor is anyone else.  Everything is disclaimed.
Xref: sparky sci.energy:7218 talk.environment:5717