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Comment Don't fill your tank just yet... (Score 1) 723

If this article is about how Hydrogen will "save" our /economy/, then it's a little out of place...

There's no question that getting off of fossil fuels will help reduce pollution, greenhouse gasses, reduce our political / military entanglements, etc. etc. .

The economy is another thing altogether. If a company were somehow able to create an amazing hydrogen-rich fuel for only $0.01 per gallon, and special hydrogen vehicles could drive 100 miles on each gallon, market forces would push the /cost/ of hydrogen fuel to be similar to gasoline (say 20 MPG average for gas @ $2.50 per gallon => 12.5 cents per mile). So, each gallon of hydro-fuel would have a market value of $12.50 per gallon. That makes the profit for the firm $12.49 per gallon.

Even if some extra competition lowered fuel costs by a whopping 10% (11.25 cents per mile), that still means the hydro-fuel will cost consumers $11.25 per gallon.

Now, /eventually/, this incredible profit will draw enough hydro-producers to the market to drive fuel prices down in general (firm vs. firm competition). However, you can also imagine international coalitions come together similar to OPEC, causing artificial shortages and keeping prices up.

OPEC is already thinking of cutting production to buoy prices back up, as well as switching off the falling US dollar because of currency markets.

Ironically, it's the transformation of political and military tension that can have the biggest influence on the /economy/. It means the US will most likely shift its attention away from military operations in the Middle East and concentrate more on competition with China.

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