An Idea to Stabilize Oil Prices by Juan Enriquez

Just watched a Juan Enriquez talk at TED. It’s a bit old, from 2007, but the good thing about great talks is that they keep making sense after being given.

Most of the presentation is about making a transition in how we deal with energy. He says we have to start applying biology to energy, just like it was done in agriculture in the 20th century. The terms he uses is going from brute force to biology. If we truly understand what happens with our energy sources we’ll be able to do things better. All this is very interesting and you should watch the video.

But the thing that most caught my attention is his final thought. He shows a graphic of oil prices, with all it’s ups and downs, and explains that that instability makes it impossible to look for new energy sources/procedures because when the price goes down the companies researching go out of business. Then the price goes up again.

He proposes a tax on oil in the US. It would set a minimum price per barrel of oil. If the price goes below that level, the difference is taxed. If it goes over that minimum, the tax disappears. This would give some certainties to companies researching because if they can produce energy below that cost limit, they have a business.

I usually don’t like taxes to solve problems because I think that they create new problems. Although I don’t agree, I must admit that he’s got me thinking.

Posted: June 15th, 2011 | Author: | Filed under: Economy and Business | Tags: , | 14,559 Comments »