Conservation drills
A not-so-crazy idea occurred to me today - partly in response to the article a:
http://www.startribune.com/stories/1557/5617738.html
Many expect that the shut-in gas will only slowly become available. At the current recovery rate, within a little more than three weeks, the industry's normal "cushion" of gas that's stored for the winter will be exhausted, leaving an undesirably low level of gas stored for the winter home-heating season.
Natural gas is stored in the spring, summer and fall because winter demand exceeds the gas that can be produced on a daily basis. The stored gas normally is withdrawn starting about Nov. 1. If there is not enough stored gas, prices will skyrocket; and more importantly, there might not be enough gas at any price.
...
this winter is warmer than average, like the past three, a crisis will not occur. However, an average or colder-than-average winter combined with below-average supplies of natural gas could be extremely serious.
Scary predictions to say the least. The article seems a flawed call for action since at the end its primary point seems to be to encourage everyone to invest in energy, while the "public good" will benefit the most from a united conservation effort.
So it seemed to me that in times of shortages, we're not particularly prepared for it. We have no government policy for rationing or how to handle price spikes under any shortages.
It seems to me that times of high prices are "good" in the sense of encouraging efficiency and conservation, but at a rather high cost which we all pay to our "providers". SURE, we should all be humble and grateful for the competitive production of nonrenewable energy for cheap prices much of the time, we're under no moral code to reward them with unlimitedly high prices under shortages.
It is funny to see that we do have a great power to affect prices. A 4% shortage of supply can cause a 100% rise in prices. However no one seems to think that also implies unde short supply tha a 4% drop in demand can reverse this unfriendly price increase.
Thus it seems to me that as consumers we ought to make ourselves available for creating a more elastic market under times of shortages.
It might be too late already to seriously face the expected high prices for natural gas this winter, but still I'm sure we can do something. Heating homes wih natural gas is efficient and usually cheap, but when supplies are short, there's not a great deal of immediate response people can make. Still there's more than we might think.
It is interesting that a "perfectly efficient" society has the least tolerance for shortages because it's already done all that it can to reduce demand. However if times of surplus lead to cheap prices which lead to unnecessary demand expansion and wasteful use, then we've got room for reducing demand when things get harder.
So on the one hand, I see a value in increasing energy taxes when prices are low, and a need in rewarding efficiency and conservation in times of high prices. I don't necessarily think high and low are absolutes - next year we might consider our record highs now as low! So obviously taxing nonrenewable energy all the time is useful to encourage conservation.
Getting people to react on the conservation side appears easy under high prices, but we might need some practice in easier times.
I just imagine some sort of "emergency system" of artificial shortages to test our ability to react. For instance, the government might set a ration limit of X total Natural gas usage in a given state or the entire U.S, setting the limit below demand, and letting the market and individuals respond.
Well, just an idea, probably "too early" since there's still a lot of optimism in "the system" to magically provide us with all we need.
Perhaps we'll need some more serious shortage risks to seriously consider such actions as this.
http://www.startribune.com/stories/1557/5617738.html
Many expect that the shut-in gas will only slowly become available. At the current recovery rate, within a little more than three weeks, the industry's normal "cushion" of gas that's stored for the winter will be exhausted, leaving an undesirably low level of gas stored for the winter home-heating season.
Natural gas is stored in the spring, summer and fall because winter demand exceeds the gas that can be produced on a daily basis. The stored gas normally is withdrawn starting about Nov. 1. If there is not enough stored gas, prices will skyrocket; and more importantly, there might not be enough gas at any price.
...
this winter is warmer than average, like the past three, a crisis will not occur. However, an average or colder-than-average winter combined with below-average supplies of natural gas could be extremely serious.
Scary predictions to say the least. The article seems a flawed call for action since at the end its primary point seems to be to encourage everyone to invest in energy, while the "public good" will benefit the most from a united conservation effort.
So it seemed to me that in times of shortages, we're not particularly prepared for it. We have no government policy for rationing or how to handle price spikes under any shortages.
It seems to me that times of high prices are "good" in the sense of encouraging efficiency and conservation, but at a rather high cost which we all pay to our "providers". SURE, we should all be humble and grateful for the competitive production of nonrenewable energy for cheap prices much of the time, we're under no moral code to reward them with unlimitedly high prices under shortages.
It is funny to see that we do have a great power to affect prices. A 4% shortage of supply can cause a 100% rise in prices. However no one seems to think that also implies unde short supply tha a 4% drop in demand can reverse this unfriendly price increase.
Thus it seems to me that as consumers we ought to make ourselves available for creating a more elastic market under times of shortages.
It might be too late already to seriously face the expected high prices for natural gas this winter, but still I'm sure we can do something. Heating homes wih natural gas is efficient and usually cheap, but when supplies are short, there's not a great deal of immediate response people can make. Still there's more than we might think.
It is interesting that a "perfectly efficient" society has the least tolerance for shortages because it's already done all that it can to reduce demand. However if times of surplus lead to cheap prices which lead to unnecessary demand expansion and wasteful use, then we've got room for reducing demand when things get harder.
So on the one hand, I see a value in increasing energy taxes when prices are low, and a need in rewarding efficiency and conservation in times of high prices. I don't necessarily think high and low are absolutes - next year we might consider our record highs now as low! So obviously taxing nonrenewable energy all the time is useful to encourage conservation.
Getting people to react on the conservation side appears easy under high prices, but we might need some practice in easier times.
I just imagine some sort of "emergency system" of artificial shortages to test our ability to react. For instance, the government might set a ration limit of X total Natural gas usage in a given state or the entire U.S, setting the limit below demand, and letting the market and individuals respond.
Well, just an idea, probably "too early" since there's still a lot of optimism in "the system" to magically provide us with all we need.
Perhaps we'll need some more serious shortage risks to seriously consider such actions as this.
posted by Ares Olympus at 4:44 PM
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