Energy: The Market

This is the first in a small series on energy in the US, focusing on energy independence and renewables.

There is nothing more fundamental to the health of economy than energy costs, particularly the price of gasoline.  There are more important things in life, especially food, but that cost does not rise and fall as rapidly and unpredictably as the cost of the gasoline that keeps our whole system running.

The cost of gasoline is determined by a very open market that is functioning about as well as it can.  A critical analysis of this market shows that there are key trends that will constantly drive up the price in narrow bands.  The largest problems with this market are barriers to entry, in particular the available refineries, and the single source of raw material in the form of crude.  Opening up this system to new technologies and sources of energy is the only way it can be improved to produce more stable, reliable costs.

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