The mechanism we have currently sets the price without consideration to the cost of pollution, military intervention being considered and even then it is skewed by tax breaks and government backing (not just in the US). So supply/demand should define the floor with additional taxes to cover the other items as determined by statisics/auditing. My guess is Europe is much closer to this number but still too low.

>What kind of mechanism should decide this 'true cost'?
>
>>I think energy prices should reflect the true cost of development, pollution, war to protect it, etc. Hopefully enough people have been woken up by recent events not to go blindly back to their selfish, gluttonous ways; but the jury is still out on that. For me, the global warming argument is not the driver, even though I applaud efforts to clean up our enviroment and reduce consumption. Solar and wind alternatives will suffer in the short term with lower fuel costs, but will cost us much more in the long term as reality of situation becomes more obvious.
>>
>>Bob
>>
>>>Do you consider low energy price unfortunate? Please, note that there are different kinds of retooling, i.e. forcible and natural. If your concerns are about energy infrastructure itself (i.e. no global warming-like arguments) then natural retooling could be considered as preferential, imo; and low energy prices will not harm then.
>>>
>>>>Unfortunately the drop in Oil prices and the general downturn is working against retooling our energy infastructure, two examples I have seen recently (sorry no links)
>>>>
>>>>1) Toyota is postponing the Mississippi plant that was to make the next generation plugin Prius
>>>>2) In Pennsylvania thay announced Solar and Alternative energy rebates a few months ago, looks like thay might not happen because of trouble peddling the bonds that back them.
>>>>
>>>>But on the plus side, Its crushing the economy of places like Veneseula, Iran, Russia
>>>>
>>>>
>>>>>The Saudis et al have just ordered the biggest cutback in oil production history. I think the poor oil producing folks are addicted to money. Enough is enough! It's time to use the money for Detroit to re-tool the plants for electric cars. Let's turn off the money tap that leads to Arabia.
>>>>>
>>>>>http://www.msnbc.msn.com/id/28274997/