BobK

Gee, they’re coming fast and furious. The New York Times laments that “U.S. Freezes Solar Energy Projects.”  In truth, we’ve done no such thing.  But the Bureau of Land Management has placed a moratorium on large-scale solar deployments in public lands until further study of the impact is conducted.  As I warned in the first post of this series, people are preparing to pave the desert with solar panels in the name of protecting the environment.  And they’re shocked, shocked, that they’re being subjected to environmental scrutiny.

It may not make sense to Ms. Gordon, but it makes perfect sense to me.

Another illustration of the value of land vs. the value of energy.  U.S. Sugar has agreed to go out of business and sell nearly 300 square miles of land in central Florida for Everglades restoration.  Wait a minute… I thought sugar was a valuable source of ethanol?  I mean, it’s great to make new Everglades, but why aren’t the greens upset about the loss of this valuable source of renewable alternative energy?

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I see that the federal government has agreed to open 24 million acres of protected land for agriculture. Of course, the demand for that land has been created, at least in part, by the policies that favor ethanol production, but that’s somewhat beside the point. More important is that it reminds us that land is a limited resource. But unlike oil, there’s no substitute for land.

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If the rising price of oil puts you in a fright, you can take some solace from the falling prices of flash memory. I was just going through the web sites of some vendors where I’ve been shopping for a few years, so they have a pretty good history of my orders. It shows how quickly memory prices have fallen.

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Okay, so how high will the price of oil go? The answer is pretty simple, the price will rise until Americans start driving less. Much less. Then the price will back off some. Market prices are generally capped by the marginal buyer… the buyer who will cut back consumption the most when prices rise. In the case of oil, the marginal consumer is the American motorist.

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By now, pretty much everybody is staring to realize the folly of making ethanol from corn. Most obvious, of course, it the pressure that it puts on food prices, as crops are diverted from the dinner plate to gas tanks. As the public is starting to catch on, the ethanol pimps have a new pitch, that we should make biofuels from “something outside the food chain.”

Here’s the problem…. farmland is part of the food chain. Soil and water are part of the food chain. Fertilizer is part of the food chain. Farmers are part of the food chain. Simply changing from corn seeds to some other seed won’t take crops out of the food chain. Even if they developed a magic seed that grew into petroleum plants, it would still impact food prices, if that’s where farmers directed their efforts and resources. As long as farmland and farmers are producing more fuel and less food, then food will become more expensive compared to fuel.  It’s really as simple as that.

We keep hearing about the “housing bubble,” and how rampant speculation has caused turmoil on Wall Street. But was the housing bubble a result of excess speculation, or an excess aversion to speculation?

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Seems like lots of people are upset about the idea of providing relief to homeowners who are in a difficult mortgage situation. And on the face of it, it’s wrong. Of course, we should not rescue people who overextended themselves, who bought homes they couldn’t afford. Right? Why should taxpayers bear the burden, even indirectly?

Unfortunately, it’s not so simple.

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