Trevor Smith says:
August 18 2022 at 2:31 pm
Mean cost would mean the more expensive producers stop producing gas (which would be at a loss), reducing supply and hence increasing prices.Richard Murphy says:
August 18 2022 at 4:07 pm
No they wouldn’t because Ofgem could aggregate supply sources to pay marginal cost to each to create a mean aggregate totalIt really is not hard to work out unless you really are stupid
So Ofgem has to calculate the production cost of everything, in real time, so as to be able to pay people their production cost plus acceptable margin, do they?
It’s close enough to nationalisation that they might as well nationalise the whole industry, StatOil style (67% owned by the Norwegian government). The new entity would indeed know how much each particular oilfield costs to exploit.
Living in one’s head where scarcity and trade offs do not factor must be a very pleasant place to reside – no wonder pants shitters like Spud do not venture out.
I always laugh the peecubed calls someone stupid, a phrase he can most often use truthfully when looking in a mirror. Although his famed lack of self awareness ensures that doesn’t happen.
Grist, I would guess that when the P3 looks in the mirror, he sees Brad Pitt or George Clooney looking back.
BF: Judge Dredd?
I’m amused he thinks that would be a proper role for Ofgem, though Ofgem should have kicked up more of a fuss about shutting down Rough.
Tuber-logic: “It really is not hard to work out unless you really are stupid.”
Yes, yes you are (& ignorant, entitled, arrogant and rude).
The system he has in mind would, of course, be impossible to game.
Let’s assume they can do that.
Then there goes the incentive for the cheaper producers to be cheaper. If nothing else, pay your people more because production costs + margin are now guaranteed by the government.
When I look in the mirror I see a podgy grey-haired stranger looking back. We’d he come from?
Even worse, it means you need to pay your execs even more because there are no profit related bonuses, only “performance” related bonuses which can be fudged to whatever you like.
Some of us old fogeys remember this from the “great” nationalised industries of the past like British Leyland, British Rail and ICI.
“It really is not hard to work out unless you really are stupid.”
HL Mencken said, “For every complex problem, there is an answer that is clear, simple, and wrong”. Spud’s an absolute genius at finding them.
Is he really advocating a return to cost – plus for supplying stuff? I thought everyone knew better. If the Govt will pay marginal cost, then won’t people pad it with all the overheads imaginable?