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I promised yesterday that we would discuss fracking a little more this week. Do you remember a few years ago when Hugo Chavez (yes, THAT Hugo Chavez) came to the rescue of Americans by sending something like 40 million gallons of free-home heating oil to needy Americans during the Winter of 2008?

The United States has its own program of course. It is called the Low-Income Energy Assistance Program. The program began in 1981 and was approved by President Reagan (I know, yet another one of those government-choking, poor trampling austerity, deregulatory measures he hammered the Americans with) – and now is about a $5 billion block grant program from the federal government to the states (UPDATE: I am pretty sure he signed on for this as some sort of compromise to cut the budget elsewhere). The states determine eligibility based on family/household income levels, and applicants must present evidence of what their income and utility bills are and I think in many states must show proof that the utility company is going to shut down their service.

Now, think about the intention of that program as it stands against the opposition by folks all over the Northeast and really the Snowbelt states against fracking. The shale-gas boom has already led to a major decrease in the price of natural gas, such that the nominal price is the same today as it was 15 years ago, and in real terms is considerably lower. Signs point to natural gas prices staying low, with the prospect of lowering American heating bills by a considerable degree.

So, what’s it gonna be? Cheap fuel for the poor? Or expensive fuel for the poor? You cannot have both of course. Just because we don’t vote directly for one against another does not mean that this tradeoff is not real. It is no less real than the fact that when I am sitting here charging up my laptop right now, and not allowing that energy to be used by someone else, and not donating the money I am using to charge my laptop to a poor person, means that I am letting some poor person be a little bit colder today than they otherwise could be. Just because I don’t like thinking about that reality does not make it any less real.

4 Responses to “Hugo the Heart(h)-Warmer”

  1. cmprostreet says:

    This ties in nicely with the Friday the 13th post- once we push up fuel prices by meddling in the energy/fracking market, we then have a greater reason to expand the assistance for low income people to afford the now expensive fuel. It’s masturbatory statism all over again.

  2. Harry says:

    Talk about hockey stick graphs. The DOE was created in 1977 and by 1979 the price of “new” natural gas (this is from memory, but I think I am close) rose from around $1.50/mcf to above $8 in 1979. Residents of Chicago, which is almost entirely by natural gas, faced sharply higher heating bills. (Here Wintercow would discuss elasticities, and how costly it would be to retrofit the south side of Chicago to electric heat.)

    Then Reagan came along and deregulated energy, and the price of oil and gas fell like a stone. The Synfuels program went pffftt. Gas lines in Maryland disappeared.

    Now, this is post hoc ergo propter hoc reasoning, that the government getting out of the way caused the drop in worldwide energy prices. Worldwide, there was a boom in exploration in response to higher prices, including in the North Sea and Venezuela, not to mention North America.

    Then as now , we have two hockey stick graphs, one with the blade pointed backward, the other blade forward. Maybe the poor in New York State will benefit from lower natural gas prices.

  3. chuck martel says:

    Has anyone noticed the graph that shows production of hockey sticks assuming the shape of a thermometer?

  4. Rod says:

    Hugo is apparently doing well after cancer treatments at the famous El Presidente Cancer Center in Havana. He was considering flying to the Pat Robertson 700 Club Hospital in Branson, but they use lead to treat any possible brain tumors there.

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