Wednesday, January 16, 2008
Economic stimulus
Oil is below $90 the barrel, a 10% slide off its peak earlier this month. Americans are conserving for lots of reasons, including to save money, because the economy is softening so less is going on (fewer people commuting to work, fewer trucks driving around, and so forth), and (presumably) because at least some people want to reduce their carbon footprint.
Whatever the reason, a decline in the price of oil stimulates the economy. Indeed, oil is something of an automatic stabilizer, delivering lower prices just when we need them most and well ahead of any legislative solution.
2 Comments:
By 
amr, at
Wed Jan 16, 12:15:00 PM:
Maybe the GM announcement that they would partner with bio-fuel developer Coskata in hopes it will result in the production of cost-effective E85 by 2011 had something to do with the oil price decline. Coskata’s process addresses many of the issues associated with grain-based ethanol production, including environmental, transportation and land use concerns.
Using patented microorganisms and transformative bioreactor designs, Coskata ethanol is produced via a unique three-step conversion process that turns virtually any carbon-based feedstock—including biomass, municipal solid waste, and a variety of agricultural waste—into ethanol, making production a possibility in almost any geography. The technology is ethanol-specific and enzyme independent, requiring no additional chemicals or pre-treatments. Supposedly for $1.00/gallon.
We could build an atomic bomb from scratch in 4 years, why not a crash program on this to utilize the environmentally sound switch grass and at the same time rid us of the agricultural payments to not plant crops.
By 
, at
Wed Jan 16, 01:00:00 PM:
Speculation finally connected with reality.
Benazir Bhutto was assasinated but Pakistan hasn't blown up (yet).
So in a lower driving season (winter), supply is catching up with demand and the price drops a bit.
Watch for the Iranians to do something provocative in the next fortnight to goose the speculators again. There is a method to their madness.
-David
