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alis's avatar

I get all the stats and the insanity part of this Report, but you said the reason why to end fossil fuel subsidies at the beginning---it's the right thing to do.

That's the message we must send to the youth fighting for their future. We owe it to them to show our solidarity and sincere concern for what we have done. It's "adulting", it's being a good example, and it's putting our money where our mouth is. If we want a legacy in the form of a livable planet, we should try to save the world alongside these kids and the scientists.

No more blah blah blah. We have to do this work, because Greta can't be everywhere.

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Stabilizer's avatar

The fact is clear that Thom doesn't know oil that well. He gets a lot right, but a lot more wrong.

I spent 35 years in oil, mostly consulting outside the USA. I've consulted witt pretty much every major oil company. There is not one oil company on earth that I know of that thinks they can force people to buy oil by increasing the supply. Not one.

I'm frankly surprised that Thom thinks supply side economics works. Supply side economics is also known as "trickle down" or "reaganomics" or the term most actual economists use "Total Bullshirt".

Markets are demand driven. Oil companies supply oil, and NEVER drill until there is a large enough gap between supply and demand to drive up price.

If you want people to quit burning fossil fuels, which is MY goal, increasing the price of oil will do it, but Americans will scream about how they are being "ripped off". OK, so we decrease the price of oil, as 85% of Americans want, and the Democrats. There is only one possible way for the oil industry to decrease the price, increase supply. The oil industry can't do ANYTHING to make customers demand less oil.

So, how do we solve this?

Reaching back into my MBA training, the answer is obvious. In the MBA we learn a valuable - but totally obvious fact - incentives drive actions. So, CHANGE THE INCENTIVES.

Removing the corporate welfare going to oil won't do anything but increase cost. We need to reduce demand.

Here is one solution,

1. Implement a federal tax credit to allow the deduction of the ENTIRE COST of solar cells from taxes, and allow home owners to carry anything unused forward. That way installation is free.

2, Implement a federal tax credit to reimburse power companies for purchasing power from rooftop solar for the first 7 years. Since the solar is free to the owner, the power company doesn't need to lose money on this, our goal is to make fossil fuel power plants unprofitable so they get shut down.

3. Implement a federal tax credit on the purchase of electric cars, make it 100% of the price of the cheapest electric car.

5. Fully support the offer made by US oil companies a year ago to produce clean renewable fuels and substitute them for gasoline and diesel. They can do it right now, and the only reason they aren't [doing it] is because they need a federal law to standardize on the clean renewable fuel so they all sell fuel that any vehicle can use.

In very few years, nobody will be burning fossil oil.

I'll tell you what CANNOT work. If we tax the crap out of oil companies, the price of gasoline will go UP and all of us consumers will be sending more of our income to the federal government. That is silly. If we stop exporting US oil, pretty much nothing will change, a tiny few contracts will be rearranged to buy elsewhere, but again, oil is a demand driven market, supply side economics are bullshirt, and reducing supply won't reduce demand unless it increases price, and even then most demand is inelastic so it will just make everyone poorer without reducing oil demand. If we get the KSA to increase oil extraction, first we will find out THEY CAN'T, but also it will just rearrange supply because - ONE LAST TIME - oil is a demand driven market, supply side economics DO NOT WORK, and reducing supply won't reduce demand unless it increases price, and even then most demand is inelastic so it will just make everyone poorer without reducing oil demand.

Again, if you want people to do something, incentivize it. Only 2% of us and really only 2% with plenty of income, can increase our transportation cost without having to slash elsewhere.

You have to offer a CHEAPER alternative, and you can't tell an illiterate family of laborers to just run out and buy a Tesla.

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