The Energy Puzzle, solve it for the energyanswer

America uses 7 billion barrels of oil a year. The price of oil for the foreseeable future will be at or above $100/ barrel. So Uncle Sam’s oil bill is $700 billion annually. Right now we are on the verge of a double dip recession. To stimulate demand the president has proposed a package of tax cuts and new spending worth $450 billion. However, for every 10% we cut our oil consumption we save $70 billion! For every $10 decline in the price of a barrel of oil we save $70 billion!

If we could cut our oil consumption by 20% and drive down the price of oil to $50/barrel we could save $420 billion dollars essentially the equivalent of the president’s proposal every year. If we could do it without raising taxes or spending, that is it was revenue neutral, it be like found money!

So let’s see if you can come up with a plan that would cut consumption by 20%, drive down the price by 50% and be revenue neutral.

Before you start you will need to understand the laws of supply and demand but these are pretty simple. There are two.

The first says that Price is proportional to demand and inversely proportional to supply.
P ~ D/S
This just says the more people want something the more you can charge.
The more of it there is around the less people will have to pay for it.

The second say demand is inversely proportional to price.
D ~ 1/P
The cheaper something is the more people will want to buy it.
The more expensive it is the less people will buy it.

Using these simple principles see if you can come up with one or more solutions and literally save the country.