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April 5, 2017 | Environmental Policy | By admin | 0 Comments

By Gerald Garvey (auth.)

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Sample text

Oil occurs in minute voids in porous or permeable rock, not in free-flowing underground caverns. Viscous oil trapped at low pressures in dense rock may be locked in place, regardless of thermal potential or reservoir size. Dissolved natural gas reduces oil viscosity, helping it to flow toward a well. A gas cap, exerting pressure in the reservoir, often further assists as a lifting agent. Early oilmen, with neither a market for gas nor means to transport it if buyers were available, flared off their natural lifting agent.

Every consumer is rational. Each consumer keeps diverting money from lesser to higher-benefit uses until he has an optimum mix of purchases. But the price mechanism succeeds as an optimal allocator of resources only if the consumer recognizes what costs he really has to pay in order to have more of one good than another. Hence there must be a close link between the market prices-the pecuniary prices-of physical goods and the benefits, burdens, and side effects which are actually entailed by the purchase of the goods.

Moreover, growing demand for electrical power compounds physical wastage of primary fuels per unit of useful output, multiplying depletive waste. Although these categories of waste do not yield to pecuniary appraisal, the energetic costs run to millions of billions of Btu's every year. These costs represent a substantial past investment by nature to produce the fossil fuels. Though this investment may be irrelevant in the buyer-seller market, it is of high consequence for the long-term interests-and cost-accounts-of society.

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