Thanks Again Ben,

Rgards

My answer is that market distortion is rarely a good thing.

Although in this case I would say that markets are anyway not working effectively, otherwise we wouldn’t have constructed an economy that is wholy dependant on a limited and polluting resource.

As for your doubts about the fact that we are running out of oil – how much evidence do you need?

People have a right to charge what they want for their goods and services, that is true. What’s not good is when cartels are formed (such as OPEC) which distort markets, meaning that goods are not traded at a price that represents their true value, demand and level of supply.

Firstly, “The current owner of RECO, a Texan billionaire, took control of the company earlier this year with a pledge to increase the use of renewable energy” yet it is clear from your own article that he has not done nothing of the sort – hence the protests.

Secondly “The new owner wanted to invest significant amounts of his own personal wealth in bringing Roatan’s electrical supply up to today’s standards, with a focus on renewable options”, Yes – that’s why he bought it but if this is the case, then why hasn’t he brought Roatan’s electrical supply up to today’s standards? On a side note – and who’s standards are you making measurements by – Honduras is one of, if not the poorest nations in South America – Poland’s electricity supply is not on a par with the U.S. for example.

Thirdly “Unfortunately there have been rumo(u)rs that the owner is having second thoughts,why should he stay and pour his own money into improving the island for everyone else?” He should stay and pour his own money into improving the island for the sole purpose of securing his investment and commiting to it as he may have intended to do when he decided to invest in the first place. A benefit to everyone else is a benefit to his own investment.

Fourthly, “costing the island an estimated $450,000 a day.” Is this not a reason for investing in the island in the first place? One wants a slice of the pie. This figure could be dramatically increased if investors made a concerted commitment and effort to building Roatan’s reputation into one of a place of security, quality facilities and stability.

Finally, for those who have criticisms towards OPEC. OPEC has every right to charge as much as it wants to supply those who require it’s resources. If a product is in demand, and thus, there is a market for it, why shouldn’t they over charge? These countries do not exist for you, and you do not exist for them. They need grain, you need oil, because one is more expensive than another does not justify unwarrented criticism of their economic policies.

“As a recent purchaser of one of these “Luxury Condominiums” I have to agree that the electrical needs of my new home would exceed the needs of a modest typical Roatanian home and it would be unfair for both to be charged the same amount per kilowatt used” – if you are being charged the same amount per kilowatt used then if you are using more kilowatts then you are paying more! How can this be unreasonable? Just because someone else on the island doesn’t use their fan as often as you – why should you pay more per kilowatt than them? The energy produced needs to be consumed otherwise it just becomes ‘wasted’. By purchasing a luxury home you are contributing to the local economy and consuming more energy thus boosting the local economy, I fail to see why you should be further punished for this.

The Roatan Electric Co. (RECO) is exploring the use of renewable energy sources and will use them when they are available and economically feasible. RECO’s management told me that the delivery lead time on an adequate wind system here is five years and that solar is even further out. And this is for a small 10-12 megawatt system. In the meantime they must continue to improve the efficiency of the current fossil fuel system to contain costs.

The wild fluctuations in the oil market recently forced RECO to increase their billing rates to recover operating costs. This resulted in the social unrest that was responsible for the demonstrations that disrupted business here.

Los Angeles is another example of what the practicalities of converting to renewable energy sources are. The Mayor is sponsoring a solar system that will deliver 10% (1.2 gigawatts) of the power requirements of the city. If that figure is accurate it means that Los Angeles consumes 1000 times the energy required for all of Roatan. The estimated delivery date of this system is 2020, and that’s for just 10% of the city. Additonally, although the city is signing up for 33% of the cost of installing the system the source of the additional 66% is unknown.

The conversion of energy systems to new technologies will be a long, costly but vitally necessary effort. The world economy cannot continue to be held hostage by OPEC and other oil producing nations for their economic and political purposes. While this conversion is in progress we should continue to develop and improve fossil fuel and nuclear sources and systems. Failure to do so will result in repetitions of the chaotic events of this year in the future.