A floor price.
Plenty of energy sources are ready to come onstream right now if the producers could be assured of long-term profits.
Tar sands. Coal. Wind. Geothermal. Solar.
It’s all there for the taking, but only if the producers can be assured of a market.
The problem with oil, as we learned 25 years ago, is that the actual cost to produce it is extremely low. Once it’s found, drilled, and hooked up, the per-barrel cost of oil can undercut any of the supplies just mentioned. And if we don’t do something then, within a few years, it will. And we’ll be right back where we started.
Thus, a floor price. Anything coming in at a price below a set level gets taxed to that level. Excess profits of existing sources are taxed so they come in at that level — that’s how you get out of oil.
How long will this take to effect a massive change in the economy?
Maybe five years, which in the grand scheme of energy markets is not
much time at all.
Right now, markets are on a knife edge. While slightly increased demand
will send prices skyrocketing (yes, from here), slightly lower demand,
or increased supply, could send them plunging.
That’s what we need to prevent, the plunging. It’s as bad as the exploding.
