Re: Way OT: free CFL bulbs (fwd)

----- Original Message -----
From: "Mark Bigland-Pritchard" <mark@lowenergydesign.com>
To: <linux@slg.org>
Sent: Wednesday, March 28, 2007 10:30 PM
Subject: Re: Way OT: free CFL bulbs (fwd)

> But maybe most investors don't understand that... Certainly the price of
> natural gas seems to follow that of crude oil despite being mostly used
> for quite different purposes. I asked an economics professor to explain
> it and basically he couldn't do so in any way that made sense in terms of
> the actual facts of energy use.

Many people in the world (especially in the US) still heat with heating oil,
which is derived from crude oil. As heating oil prices go up (commensurate
with crude oil), there is a financial pressure to convert to natural gas
heating. This creates higher demand and thus higher prices.

Also, demand for both is pretty inelastic - we don't tend to use that much
less oil or natural gas when prices are high, at least in the short run (we
may in the long run try to attain higher energy efficiency but that takes
time and money). This supports higher prices.

Jim
Received on Thu Mar 29 08:58:20 2007