Thursday, November 01, 2007

Pros and Cons of a sharp shift in supply.

In Norway, negotiations have begun on the assigning of drilling rights for oil off of the Norweigian continental shelf.

Environmental groups, however are opposed to this drilling, they would be opposed to any damaging of the environment. They are veheimently opposed to any drilling there whatsoever.

Perhaps these environmentalists prohibitions of new oil production can bring about change moe quickly.

As more and more of the world is the developed and drilled,the amount of untainted land lessens and lessens. Presumably, as this happens, the nvironmentalists will be more and more passionate in their efforts to stop further drilling and development. Put in Economic terms, of the law of demand, as the quantity of natural, untouched land decreases, price (or the lenghths to which enironmentalists would go) for this land increases. If environmentalists increasing efforts hamper and slow the finding of oil, then supply in oil will drop more and more rapidly, raising costs. This will lower the opportunity cost of finding new forms of non-oil energy, potentially quickening the process.

So as tree-huggers increase the implicit cost of oil, production of new fuels may speed.

I say: Hug on, Treehuggers!

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