- Joined
- Oct 22, 2010
- Messages
- 21,713
FThe "cheapest" fuel source is decided by policy. How much do you tax an oil well, how much duty do you put on imported solar panels, what is your R&D spending on wind energy, how much oil does the Gulf want to pump this year, is there a pipeline for gas, do you want to sanction Russia, should there be a tax or ban based on negative externalities like there is for DDT or CFCs, etc.Its not like people want to use the cheapest fuel source possible.
And secondary factors, do you build a massive highway network or focus on trains, is nuclear energy acceptable,....
There is no "natural" price of fuel (or any other commodity). The govt sets up a stable market (by enforcing certain property rights and imposing taxes) and thus determines what is and isn't "cheap".