Energy Cost Part I

One of the greatest thing about our market driven economy is the ability to solve problems. If there is a demand for a good or service, the market place will provide what is needed if a profit can be made in the process. Another type of economy is when the government decides by legislation to change the market place.

In the case of gasoline the oil company makes 8 cent, the gas station makes 8 cents, and the government makes 32 to 48 cents a gallon. The ability to refine crude oil has been restricted for environmental reasons, and drilling for news sources in continental U.S. has been restricted for environmental reasons.

To supplement the need for fuel, the government has decided to subsidizes a more expensive alternative. Since ethanol is made from corn the price of commodities have forced the cost of meat, milk, cereal, eggs and other groceries to new highs. The fuel cost has increased the price of all item hauled by truck. The price of natural gas has increased because it is used to refine ethanol, and fire power plants to conform to environmental restrictions.

What price must be reached before we get back to a market economy?

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