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Transforming Waste Plastic Into $10/Barrel Fuel
Mike writes "Today Washington DC-based company Envion opened a $5 million dollar facility that they claim will be able to efficiently transform plastic waste into a source of oil-like fuel. The technology uses infra-red energy to remove hydrocarbons from plastic without the use of a catalyst, transforming 82% of the original plastic material into fuel. According to Envion, the resulting fuel can then be blended with other components, providing a source for gasoline or diesel at as low as $10 per barrel."
We will be mining the great pacific garbage patch to get fuel for our SUVs.
It doesn't matter. If they can produce this stuff in any volume, it will drive the price of oil down for everyone. If they can do it in enough volume to supply the entire United States (not likely), then other companies will spring up doing the same thing, which will also drive the price down to just above the cost of production. That's how a free marketplace is supposed to work.
That's how economics works for elastic priced goods, in a free market. Neither of which exist here.
1. Oil is inelastically priced. People will pay whatever the price is. When oil hit $130 a barrel, no one stopped consuming oil. More importantly, $70 a barrel is considered a deal, when it was priced at $40 a barrel not that long ago.
2. There is not a free market for oil. The oil is dominated by an international cartel (OPEC) that literally sets the price of oil. Oil comes on to the market to move prices down. Oil comes off of the market to drive prices up. If this technology would begin to impact prices by increasing supply, OPEC will cut production to keep the supply low. Perhaps not before driving the price down to unprofitability.
Your faith in The Market(tm) is misguided, because as you examine how the largest players in the national international economies work, one can only come to the inescapable conclusion, that they quite literally, don't play by the same rules as you.
They delude you into thinking that you and them are on the same side, but you are not one of them. You are their resource, to manipulate and exploit.
Class war? Forget it. That war is over. The middle class lost.