New Fuel Prices Show Gov Doesn’t Know Future

Recent fuel prices are spoiling the government’s plans for getting us all into alternative energy and other technologies they have been pushing on us.

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In every case, the government’s apologists and spokespersons claim, in the most condescending and pretentious manner possible, that the government has the experts and the resources to tell us all how to best move into the future. We don’t have “five-year-plans” in the U.S. but that isn’t because the people who rule us don’t wish for such plans. They completely believe that they are in position to give us economic direction.

But it is all a delusion. There are many experts making prognostications about the future. Many are wrong and some are right, but the government has no advantage among them. For example, we all are supposed to be moving to alternative energy and alternative-powered vehicles because oil is about to run out. But now NPR admits,

Despite growing violence in the Middle East, oil supplies just keep rising.

At the same time, the growth rate for demand has been shrinking. This week, the International Energy Agency cut its forecast for oil-demand growth for this year and next. Turns out, oil demand growth — not production — is what appears to have peaked.

Now prices are plunging, down around 25 percent since June.

What did the forecasters get so wrong? In large measure, their mistake was in failing to appreciate the impact of a relatively new technology, hydraulic fracturing, or fracking.

Because of fracking, oil is being extracted from shale formations in Texas and North Dakota. Production has shot up so quickly in those areas that the United States is now the world’s largest source of oil and natural gas liquids, overtaking Saudi Arabia and Russia.

This new competition has shocked OPEC. Members say they want to maintain their current market share, so they are keeping up production and even boosting it.

The article attempts to rescue the “peak oil” theory, but the bottom line is that no one can predict our energy needs or our future energy discoveries.

And so the results of the government pushing us to anticipate the future they foresee can be economically painful. Thus, NPR again: “As Gas Prices Drop, Hybrid Sales Shift Into Low Gear.”

The recent drop in gas prices may be good for consumers, but it’s not such good news for hybrid car sales.

Even before gas prices started to slide, hybrid sales were falling — all while sales of trucks, SUVs and luxury sedans have been on the rise.

That relationship between gas prices and sales is “rather remarkable,” says John Krafcik, president of the website TrueCar. “During months when gas prices are low, less fuel-efficient cars tend to take a greater share of the market and vice versa. It’s a fairly one-to-one relationship.”

Consumers, Krafcik says, just seem to have short-term memories. “I think it’s fairly interesting from a cultural memory standpoint, that American car buyers, for the most part, don’t seem to have memory of gas prices two, three or six months ago,” he says.

Sales of what the industry calls advanced-drive vehicles — traditional hybrids, plug-ins and all-electric cars — are down about 5 percent this year. At the same time, trucks are up by 17 percent and SUV sales have grown by 20 percent.

Consumers have short-term memories? Maybe “experts” have short-term memories because they forget all the predictions they made about ever-higher oil prices. Perhaps they wish consumers had short-term memories so that the consumers wouldn’t remember how unreliable they are.

Yet the government pushes, subsidizes, and otherwise manipulates the economy into alternative energy investments that usually end up as total failures. They force us to use damaging and less powerful substitutes for better fuel.

People should be permitted to make their own guesses about the future, allowing diversity of plans and predictions. We should not be all pushed in a single direction by a central planner.