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Surprise: Oil Does Not Defy Law of Economics or of Substitutes

Independent Sources believes that technology ultimately solves the problems that it creates. There is just a lag between the two. Nonbelievers will point out that when it comes to a finite resource like oil there just isn’t much technology can do.

We also believe the basic law of close substitutes which states in so many words that as the price of product A rises close substitute B becomes more attractive. Nonbelievers will say that there is no close substitute for oil. It is unique and alternative fuels are far in the future and too expensive anyway.

Think so? Read this:

And how long until this is put to use? Independent Sources does not know but the following picture is reportedly a Ford hydrogen engine. As oil sits near $70 a barrel, how much development do you think is going into its commercialization?

(Source and story by Moon)

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6 Responses to “Surprise: Oil Does Not Defy Law of Economics or of Substitutes”

  1. 1
    Mudville Gazette Says:

    Posted by Greyhawk at 11:57 PM | Permalink | Comments (3) | Trackbacks (29) View From Tonka linked with Cindy Sheehan to protest against Blue Angels air s Independent Sources linked with Surprise: Oil Does Not Defy Law of Economics or of Substitutes Point Five linked with Commuters Turn To Starbucks On Rising Gas Prices Kadnine linked with Christopher Hitchens is the most valuable asset we war-mongering, death-merchant defenders of Iraq could possibly hope for

  2. 2
    Tony Kunowski Says:

    All the reading I’ve done on the “hydrogen” economy suggests that it is largely a myth - hydrogen is just a carrier and requires production which requires electricity which requires oil and natural gas to produce even in hydro rich per capita countries such as New Zealand. Then there’s the storage issues, transportation issues all requiring HUGE investment. Many of the optimists out there naively asume that one can simply pump the hydrogen down lines previously used for gas!

  3. 3
    Moon Says:

    Sorry for the delay. Kid wound up with strep throat and then I lost my connection due to issues on the Gulf. Still am for that matter, so I’ll try to keep it short.

    The state of Florida is currently starting a demo project using hydrogen busses. As I showed in the link, Ford is already producing a limited run of hydrogen vehicles. The reason these things are being done is because the 2005 Energy Act included something like $1.2 billion to get people started. No company is going to take the leap of faith and spend the money it takes to chance hydrogen, there has to be a carrot. As that carrot proves, it will be expensive, and it will take a long time. But, as New Orleans is proving right now, our dependence solely on imported oil, regardless of where it comes from, puts the US economy at risk. Secondly, I don’t know what lines people are using for gas, most of it is shipped via trucks in this neck of the woods. Hydrogen I assume will be proved likewise. There is no huge technological hurdle there. Thirdly, although it does take energy to produce hydrogen, that energy does not have to be from petroleum at all. By totally limiting the parameters of hydrogen, sure it looks like a myth. I’ll put it in this perspective, none of our electricity in my community is generated by petroleum. Just imagine that concept on a larger scale. Make sense? Does it still have to be a myth?

  4. 4
    Tony Kunowski Says:

    The myth is not so much that hydrogen technology eg fuel cell (it’s been around a long time) is feasible, but that it can ever become a sutainable subsitute for oil as a major transport energy source, due to the sheer scale of energy losses in its production. As Ulf Bossil has pointed out in his “shipping electrons” perspective, a power plant (of any kind) delivering elcetrons via lines direct to homes achieves 100% efficiency, whereas use of hydrogen to do the same involves a loss of 75%, ie only 25% efficient. At the end of the day we cannot escape a rapidly declining net energy gain from all know substitutes and the swapping of one constraint for another, eg the much touted 500 years of coal supply which reduces to 50 years when it is called upon to “subsitute” for other depleting fossil fuels. All this ignores the real and huge environmental and financial costs involved in developing these “alternatives”

  5. 5
    Moon Says:

    I think it can be argued that oil is not a terribly efficient means of generating energy either. We’re in the infancy of hydrogen. When we were in the infancy of petroleum, cars went 10 mph and got about 5 mpg. I really don’t see hydrogen being the permanent solution. In my vision, things will be electric 100% in the not too distant future. But, until this country commits to generating massive amounts of electricity, we’ll have to figure some other way to get by. Hydrogen may not be the most sustainable resource there is, or the most efficient. But, since it’s the most abundant resource in the universe, I think we’ll find a way to get by with a lower efficiency for the time being. Don’t try to hang all this on one concept of keeping things just exactly as they are now with a little modification ( piping hydrogen for example ). When we start weening ourselves from the concept of burning fossil fuels, all aspects will change. But, they won’t change if we keep digging ourselves deeper in the same hole. You keep stating reasons why hydrogen will not work. Ford, Toyota, Exxon, Shell, the Federal Government, and the states of Florida and California are already figuring ways to make it work. I’m on their side. I’d rather make the Saudis nervous than our kids.

  6. 6
    Tracy W Says:

    Where does the hydrogen come from?

    Unless I am completely misremebering high school chemistry, hydrogen is a very friendly element, taking any chance of doing with other elements the chemical equivalent of exchanging friendship bracelets and pledging ever-lasting devotion. So, you need energy to separate hydrogen from its mates before you can use the energy in hydrogen.

    Incidentally, electricity does not transmit at 100% efficiency. You lose about 97% per transformer, a few percent more through transmission lines, which get higher the longer the line is. OTOH, I have heard figures of 15% energy losses transforming hydrogen into electricity, so hydrogen is less efficient that way.