John Ryden is an Engineer with a background in Finance and Economics. Here he will discuss how energy production, energy use, and conservation affect us and the rest of the world with a focus on the economic implications.

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Further Government Cuts in Oil Subsidies Will Help Lower Oil Prices

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June 4, 10:32 AM

by John Ryden, Global Warming Examiner

India and Malaysia announced that they are cutting oil subsidies, which will result in a rise in gasoline and diesel fuel prices in those countries. Indonesia earlier cut fuel subsidies. This will help increase the elasticity of demand and put at least a small amount of downward pressure on oil prices, at least in the short run.

Rapidly growing economies like India account for much of the world’s increase in oil demand. It would be especially helpful if China would decrease their oil subsidies.

Oil subsidies cost the governments a lot of money. India’s state owned oil companies are expected to loose $58 billion for the year through 2009. Malaysia was expecting to spend $14 billion on subsidies.

Oil prices should not be set artificially. Prices that are either to high or too low send the wrong price signals to market driven economies. Prices are high enough now to cause market driven economies to cut demand through better efficiency and through fuel substitution.

It takes time, however, for markets to fully adjust to higher fuel prices. This is indicated by the ‘long term elasticity of demand’. In the short term it is difficult for consumers to change their fuel consumption. For example, you drive your car to work and if gasoline prices rise, you still have to buy gas and drive to work. The short term elasticity of demand is very inelastic. In the long term, you could either buy a more fuel efficient car or even quit you job and find another job closer to home. General Motors announced it is closing 4 truck and SUV plants because of plunging demand for large vehicles and increased demand for small cars. You have more options in the longer term which is why ‘long term elasticity of demand’ for oil is more elastic.

Why, In China, Gas Is $2.49 A Gallon

Topics: oil , gasoline , energy prices , oil subsidies , elasticity of demand

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Renewable Energy needs a healthy economy

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December 1, 2:12 PM

The global recession and credit crisis is having a very profound and negative effect on the development of renewable energy sources. The recession has caused world demand for power to decrease. This has resulted in lower prices for energy. Oil... Read More

Barack Obama proposes large jobs creation program

2 comments

November 24, 4:47 PM

Barack Obama has asked Congress to create a jobs program to create 2.5 million new jobs by 2011. Obama supports infrastructure and green energy spending to create jobs.This is a program that could work. Putting people to work building roads and bridges... Read More
Topics: nuclear , electricity , Obama , Auto Industry

Not all U.S. auto companies are doing poorly

1 comment

November 20, 11:41 AM

The big 3 auto manufacturers have seen their auto sales slump 30 to 45% in recent months. Years of bad designs, questionable quality, high costs, and bad management / labor relations have finally caught up with them. Watching the CEOs of the big 3 and... Read More
Topics: Global Warming , electric car , Tesla

Auto industry needs to be revamped to produce next generation cars

2 comments

November 19, 10:49 AM

One key to Barack Obama’s plan for reducing oil consumption is the production of fuel efficient cars. This means cars that get 60 to 150 or more miles per gallon of gasoline. This can be done with plug-in electric hybrids. But is Detroit able to... Read More
Topics: GM , hybrid electric , Auto Industry

Restructuring the auto industry

1 comment

November 17, 5:15 PM

A healthy and robust auto industry in America is going to be needed to build new fuel efficient cars. This will be important to solving our global warming problem. Gasoline powered cars with fuel efficiency based on existing technology will have to be... Read More
Topics: Global Warming , GM , consumption tax , elections 2008 , Auto Industry

Pollution in Asia a growing threat to global environment

3 comments

November 13, 2:57 PM

With the Olympics over, China is back in business. That means the choking pollution is back from all the coal-fired power plants and industrial companies. The U.N. reported that a huge thick brown cloud of soot, particles and chemicals stretches from... Read More
Topics: Global Warming , Carbon Dioxide , China , International Energy Agency

Reviewing the World Energy Outlook 2008

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November 12, 12:14 PM

The International Energy Agency (IEA) has published its review of the world’s energy situation in their “World Energy Outlook 2008”. I am going to review some of the points made by the IEA.World Energy Outlook 2008“The world’s... Read More
Topics: Global Warming , Climate Change , Coal , Carbon Dioxide , China , oil , energy policy , International Energy Agency

Will Barack Obama resurrect the Auto Industry?

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November 9, 10:12 PM

An important part of Barack Obama’s energy policy is promoting the production of fuel efficient cars. The problem for him is that the American auto industry is suffering from the current recession to the point that all of them might run out of... Read More
Topics: Prius , Obama , Toyota , loan guarantee , Auto Industry , Honda

Barack Obama and John McCain on green energy and global warming

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November 2, 8:50 PM

Who will do more to develop renewable energy in our country and decrease our greenhouse gas emissions? Is it Barack Obama or John McCain?First up Barack Obama! He promises change! He will bring in a new green energy future that will create 5 million... Read More
Topics: Global Warming , Carbon Dioxide , Greenhouse , McCain , Congress , energy policy , Obama , offshore drilling , elections 2008