Page 109 - Bus101FlipBook

CH 6] Business 101 6-27

Cutty Sark under full
sail, traveling the
ocean trade routes,
powered by the winds
of the world.

Painting by J.Spurling,
1924

The United States and other nations already have designed alternative energy
resources such as nuclear power, wind, sun, synthetic fuels, coal, and even processed
garbage along with other waste products being suggested as possible substitutes for oil
and natural gas. While the search for new energy sources generates considerable public
interest, bringing them to the market economically will be resolved when the US
government and OPEC restrictions on supply, and price fixing, which control the price of
a barrel of oil, are removed.
Ethanol. The production cost of synthetic fuels is now considerably higher than the
market price for oil. California already uses about 1.5 billion gallons of ethanol a year, a
fuel additive made from corn—a renewable resource, and has been widely adapted in the
corn producing mid-west states. Supporters of ethanol look to this fuel source to help
refineries stretch gas supplies to keep up with the state’s growing demand. State officials
argue that the use of ethanol will make the cost of gas higher and does not always burn
cleaner. California’s Air Resources Board and the Governor’s office have lobbied to 6
remove federal mandates that ethanol be used in California. However, as President
Biden’s (D) administration restricted the flow of fuel by ending the Keystone pipeline, if
the cost of a gallon of regular gas increases sufficiently it will cause the economics of
ethanol to come into action. Also, remember that for each acre of corn produced ethanol
is one acre of corn not to be used for food.
The second question— “How to coordinate our need for energy resources with
other societal needs?”—is also important. Sometimes national energy needs clash with
ecological and environmental objectives. One such situation arose in the early 1980s
with the proposed construction of a pipeline beneath Puget Sound in Washington state
to carry Alaskan oil to the East. The governor of Washington eventually vetoed the
proposal citing environmental concerns and the pipeline was rerouted. At that time
when the price of oil increased above $50 per barrel, the United States congress
approved the exploration and development of the oil fields in the Arctic National
Wildlife Reserve (ANWR). A factor of supply and demand indicates that when supply
is restricted the price of the commodity increases. Is government being socially
responsible to restrict the use of natural resources that benefit the people, forcing the
price for all goods and services, especially fuels, to increase?
Responsibilities to Customers
Each time you purchase a product, you are casting your vote for the success of that
business and the continued supply of that product. Businesses are interested in the
repeat business, that their goods and services meet with your approval, with the hope
that you will tell your friends. Business requires good relations with their customers
and are interested in how the customers view the firm. Business recognizes that
customers increasing look beyond a firm’s product line and evaluate its policies and
actions within the marketplace.

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