Reply To: T-shirt designers unite and take over

[Lerner]

You guys want to debate global warming, you should do it on another thread. In fact this one has gone pretty far afield, so probably another one should be started.

Aeronaut, I did like your last version better. I doubt the Dems are going to be that much better on energy, but we shall see soon. I think the picks to be funded from the ARPA-E will be something of an indication of policy. (not the ones picked to submit full proposals, which is what will be announced in August, but who actually gets the money in the fall or winter.) Also, people don’t like to be shouted at, so lower key is better, I think.

Brian, if you think FF will be adopted automatically because it is cheaper, think about what happened 50 years ago in gem diamonds. GE developed a way to make industrial diamonds artificially. Then they did some more research and found they could make pretty good gem diamonds as well—much cheaper than the current price DeBeers was getting with its monopoly power. DeBeers got very upset when they heard about this and threatened GE with all sorts of lawsuits about the patent. It all ended amicably with GE selling the patent to DeBeers for an undisclosed sum. DeBeers of course then could use the patent to shut down any further research. Result: diamonds are still sold at prices that are both far above the cost to manufacture gem diamonds artificially, and also far above the cost of mining them. (The Soviets later developed technology to produce excellent yellow diamonds, but never exploited it themselves because, after all, the USSR then and Russia now is a major exporter of diamonds.)

The analogy is very close with oil and gas today, except the market involved is far huger. (And, of course, we won’t sell the patent.) Oil is sold way above its cost of extraction because of monopoly power. Those benefiting include not just oil and gas companies, but the banks that have lent them money and own their shares, many governments, many other corporations. FF being on the market would threaten tens of trillions of dollars in investments. And, just as for industrial diamonds, the profits to be made from a MUCH cheaper product could never make up for those lost by the collapse of monopoly pricing. So very powerful interests will have to be fought in order to bring FF into the market, even once proven. This requires that eventually lots of people need to know how much the average person will benefit from FF, so that it becomes politically impossible to suppress it.