Beam me to Planet Gore !
Posted on 04/14/2009 11:28:15 AM PDT by reaganaut1
It dropped below $2 for a while here in Houston but that’s ove....
The $1.50 is about average wholesale lately...
You'd be surprised at the assumptions made to justify a flawed business plan. The "it's cool and makes me feel good" factor should never be underestimated!
Look at the bankruptcies of Iridium and Globalstar satellite systems, for example. They were among several companies (including similar satellite systems that never got off the ground) who assumed that they'd be able to tap that huge untapped customer base in the equatorial regions, where most of the world's population lives (in abject poverty, for the most part).
The rational business mind says that if they don't have land-lines now, they don't have the money to buy into an expensive satellite system. Another rational business mind might have pointed out that cell phone systems are a lot cheaper to build and maintain than a big constellation of satellites. Either way, a little sustained thought would have told those folks that the idea wouldn't make any money.
But, just as with bio-fuels, the touchy-feely aspects of "serving the under-served" was a huge factor in those companies' thinking.
They got billions of dollars in investment capital, and of course it all evaporated. But it sounded cool at the time.
It isn't the original numbers but the escalation that happens when they run feed stock demand up...
I can imagine how fun it would be driving/flying in formation with a bunch of other folks who are fighting the cross-wind....
“They run the numbers... A buddy was in on an Ethanol Plant. With the federal grants and subsidies it would have been a go until corn went threw the roof. It isn’t the original numbers but the escalation that happens when they run feed stock demand up...”
The original numbers were based on assumptions that were clearly and predictably wrong. An impartial and responsible evaluation takes that into account. Just because the feedstock is cheap today doesnt mean it will be cheap tomorrow. Prices are not constant. Likewise the cost of competing fuels might drop. This is what happened in the 70’s. Oil prices went sky high and govts invested billions in alternative fuels. Then OPEC lowered the oil price and crushed their competition, just like today. It is almost impossible to synthesize an alternative fuel that is cost competitive with something you just pump out of the ground and heat.
WA ping
It means buying in big time bulk and before taxes.
New York Harbor No 2 Diesel Low Sulfur Spot Price
The rail system has no real alternative and it survives while ethanol and bio-diesel have competition and are faltering...
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