Monday, August 07, 2006

Attempt at discussion

So, BP and friends (Exxon etc.) can't maintain their pipeline (probably because it is too hard to shift all those billions of dollars of windfall profits up to Alaska to pay for upkeep). This means they shut down, and the market freaks out. I, like you, will probably have to go to the pump in the next week, and pay 10 to 15 cents more per gallon. That, in aggregate, will translate into hopefully enough money for BP to maintain the pipeline. Then, prices will go down. Make sense? Not to me.

Sure consolidation brings greater efficiency in distributing and marketing oil and gas, but as we are starting to see, the consumer really has no short-term say here. I feel as though the consumer is becoming more susceptible to the volatility in the market. Is there a trend of more volatility in the markets, or is it mass-media creating buzz and suppliers taking up the "phantom" slack?

As fuel prices went up last summer, my company elected to give all its employees a special "fuel price" bonus which was well received. It was a short term pressure release on us lowly consumers, and a noble gesture, but not a fair and sustainable solution.

So here's the question. In 30 to 40 years, when fresh water becomes a scarce resource, will we be facing the same situation with massive water-companies (think selling off Canada's lakes via pipelines)? Obviously water needs to be distributed to homes, farms and businesses, but how can we, as consumers, learn to deal with limited resources better?

Are there collective bargaining methods or consumer related game theories that apply here?

Keep in mind that I believe government control is the wrong approach. How can consumers become more sophisticated (which is a great challenge due to the fact that we are on-average uninformed participants in the free market)?
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