Posted tagged ‘alternate energy sources’

Already Discounted

April 26, 2010

Headlines in todays papers cry that the “signs” all point to the end of the recession. You might ask, especially if you are unemployed or a public service employee awaiting a pending layoff due to budget shortfalls, what “signs”?

One sign is the stock market which is now above 11,000 and looks like it still has a lot of momentum. The sages say the stock market is always priced at what the near future will bring, they say it has already discounted the recovery and its high price reflects that.  If the market keeps rising, sages predict a stronger economy and more jobs.

More traditional economists point to factory inventory levels and orders placed upon these factories. These indicators, too, are positive because inventories are low and orders are beginning to mount up. Businessmen do not want to lose orders and will react by running their factories more. In short they will hire workers and buy more from others who in turn must hire more workers.

Memories are short. Most workers remember the last boom driven by the housing industry. New homes coupled with the real estate boom combined to both employ a lot of Americans and to create the allure of increased wealth through property appreciation. The lesson that should have been learned is that there are only so many houses that Americans can afford so building more does no one a favor. Another lesson is your house or property is worth only what someone else will pay for it. I wonder whether the market has discounted these realities too?

Balance holds the keys to the future. Our economy needs some value creating engines that will produce earnings and enable workers to buy other goods and services. We can’t all work at Starbucks, and we also cannot all build houses.

Alternative energy projects offer one of the greatest areas of new jobs and new wealth creation. From sequestering carbon dioxide from the burning of coal to the conversion of wind and solar energy into electricity to power our cars, heat our homes, and light our paths, these type of projects can be game changers.

General manufacturing (anything from underwear to toys to furniture to garden equipment) should also be a candidate for new jobs. These jobs probably won’t look like the ones that once existed here before exiting to China and other southeast Asian locations. They will need to have a higher “tech” component that in turn will allow manufacture at quality and productivity levels that can support good pay and competitive prices.

Both of these sources of new jobs will not be overnight happenings. They both require time and patience. They both will require a steady hand to guide the necessary investments with a promise of an adequate return. They both can support an American manufacturing rebirth.

I wonder whether the market has discounted these too?

The Next “National Energy Policy”

September 8, 2008

President Bush chartered an “Energy Committee” shortly after becoming President in 2001.  Our favorite “VP”, Dick Cheney took the chairmanship and produced a document called the “National Energy Policy”.  It covered all the bases in terms of types of energy sources that America should develop but has been very short on any action to realize these new sources.  From reading the document (http://www.whitehouse.gov/energy/National-Energy-Policy.pdf ), one can see a statesmanlike list of chapters.

1. Taking Stock – Energy Challenges Facing the United States

2. Striking Home – The Impacts of High Energy Prices on Families, Communities, and Businesses

3. Protecting America’s Environment – Sustaining the Nation’s Health and Environment

4. Using Energy Wisely – Increasing Energy Conservation and Efficiency

5. Energy for a New Century – Increasing Domestic Energy Supplies

6. Nature’s Power – Increasing America’s Use of Renewable and Alternative Energy

7. America’s Energy Infrastructure – A Comprehensive Delivery System

8. Strengthening Global Alliances – Enhancing National Energy Security and International Relationships

With a list of chapters like these and over 170 pages of written information, what did Cheney and friends miss or what has Bush/Cheney failed to do?  Today all we are hearing from Bush is “drilling off shore” and from McCain it is nuclear plants and drilling off shore.  Drilling off shore and nuclear plants are 5-10+ year events before any meaningful additional energy is realized, so why are they pushing these options?

The first motivation is political.  There is an election weeks away and McCain and the Republicans want to be seen as knowing why gasoline prices are high and that more importantly, they know how to fix it and the Democrats do not.  The second motivation is satisfying “big oil” and keeping the country addicted to current uses of oil.

Like so many of the US’ problems there is a imminent or short term crisis, and there is a much more serious longer term threat.  Politicians and the Bush Administration specifically are prone to dwell on the first and ignore the critical second.  With oil the issue is clear.  The amount of oil reserves is finite and the emerging world demand is growing exponentially.  There simply is not enough to go around and “supply/demand” will continually drive prices higher.

Both political parties needs to hear the wake up call and really address an overall energy policy.  We must set out sights on energy that is “renewable” and “greenhouse gas compatible” and do it as if it were the “man on the moon” project.  Today the only direct by-product of a defunct energy process is higher gasoline and heating fuel prices.  (There is an indirect and significant cost coming from a wrong headed Middle East policy that has brought us the Iraq invasion and occupation.)  Tomorrow the cost will not only be higher prices but there will also be shortages and ever increasing global conflicts as other countries try to compete for the remaining oil reserves.  It is time to act now.

The question voters should consider is which candidate is likely to take a broader and longer term view and develop a comprehensive policy, and then back it with action.  More drilling and even nuclear should be part of any real National Energy Policy but the heart and soul of this policy must be sensible use of energy (like higher gas milage standards) and serious development of the full range of alternate energy sources (wind, water, solar, geothermal, carbon sequestration, bio, as well as oil, nuclear, and natural gas.

Which candidate do you think will see things broadly?

The Oil Puzzle

August 28, 2008

The Republican Party adopted a plank for its platform specifically calling for immediate increase in off shore drilling.  They even debated including a specific reference to the Artic National Wildlife Reserve as one of the places to drill.  The Republicans claim more drilling, more oil, and lower prices.  Sounds too good to be true.

You wonder whether the Republicans have thought about oil in any other terms than a way to make money for their wealthy supporters?  Have they connected oil to George W Bush’s failed Middle East policies?  Have they considered that oil is not renewable and will eventually run out?  Have they considered the value in developing alternate sources of energy?  Have they understood that developing sources such as solar power or carbon sequestration (burning coal but capturing the CO2) takes time and will not come to pass unless we put a serious effort behind it?  Have they considered simply the numbers… China and India combined have 2 1/2 billion people and they will consume exponentially more oil as these countries’ economies develop. 

Republicans like to see themselves as free marketeers.  “Let supply and demand set the price and everything will take care of itself”.  Republicans quickly shout that drilling for more oil will drive down the price of oil (as supply increase) and smile having proven their point.  The simple overlooked fact is that the world’s economy is consuming more oil everyday regardless of what the US does, and the US population has already demonstrated that they will gladly consume ever more oil at lower prices.  This is worse than a “catch 22”.

There is no question that the Government, either Republican or Democratic, must ensure that there is enough oil available for our economy.  I did not say cheap oil, I simply said oil at a world price.  Our Government should ask seriously the question “why is gasoline in Europe so much more expensive than in the US?”  The answer that may come forward is that gasoline is more heavily taxed in order to discourage wasteful usage.  This suggests an unobvious step that could be tied into drilling, even in ANWR.  Drill and tax! 

If the Republicans were really thinking about the future, they should propose drilling along with higher taxes on gasoline.  For example, gasoline could sell at about $ 5 or $ 6 a gallon.  This assumes a world price of oil of $ 120 per barrel which currently translates into about $ 3.50 per gallon of gasoline.  The $1.50 to $ 2.50 surcharge per gallon would be collected and used by the Government to fund alternate energy research and to provide tax credits for early adopters of new source technologies.

That type of bold and insightful policy initiative would certain make the Republicans again “The Grand Old Party” and not the “Make the Rich, Richer Party”.

Dangerous Times Ahead

June 30, 2008

There has never been a time where “regaining the center” is or will be more important than now.  After 8 years of malfeasance and abdication of executive control, the US is sinking into the fruits of its hubris.  The Republican train wreck has left the next Administration, whether John McCain or Barack Obama’s, with a huge hill to climb and a hill with still very slippery slopes.  This situation can not be turned around with more of the same (Bush III) or for that matter with a “Ted Kennedy-like” progressive agenda.  The world is sick and the US is a patient too.

Like a bowl of spaghetti, there are symptoms all around us but it is not clear which ones should be fixed first and which ones, if fixed, will also eliminate other symptoms.  For example

  • Our currency is worth 1/2 its value (versus Euro) and key imports (like oil) cost us more
  • There is a world demand for oil greater than supply, the US has no alternate energy policy, and therefore we are under the gun of those producing oil
  • The American consumer is up to their ears in debt (or for some even higher) and there is no further room to buy our way out of the economic slow down.
  • The US Government has set a horrible example for the rest of the world and especially its own citizens by doubling its debt (now more than $ 9 trillion) in 8 short years.
  • The US infrastructure is continuing to decay having been largely neglected for the past 8 years.
  • The Defense Department budget is bloated at over $ 600 billion but the Department and a great number of hawks (chicken and otherwise) are calling for even greater expendatures.
  • China and India are growing rapidly and inevitably their exports will cost more.  When that happens, the US will experience a new round of inflation that it can not control other than by lower our standard of living.
  • There are about 40 million Americans without health insurance and this number is growing.  It will take a lot of money to fix and that money is now going to wasteful non-productive uses.
  • Balancing the budget or even the attempt to improve our monetary and fiscal management will demand tax increases.  (Not a bad thing if you consider that the problem belongs to everyone.)

I could go on and on.  The point of the matter is that terrorism or North Korea, or Iran are not our main problems.  There are distractions and much better handled with world consensus.  If the US is to fix its own situation and return to honest prosperity, we need Americans to lead and not Republicans or Democrats.  This is a time for pragmatic and visionary leaders who see both the complexity and interconnectivity of the world as well as the need for pracitical policies and programs.  Banks, investment houses, and corporate America better join up and become part of the solution and not part of the problem.

This can only happen if we “regain the center”. 

A Problem Without Worries

June 23, 2008

When Republicans instinctively bring up drilling for more oil as the answer for our energy shortage and especially higher gas prices, you know from experience with the Bush Administration that something is wrong.  It is possible that drilling might be part of a sound plan for the future but there is no way it can be the plan.  We simply must seriously begin (or step up) our actions to find other sources of energy such as geothermal, wind, and solar that are totally without the risks or unintended worries of nuclear and coal/shale/oil sands.  Why do Republicans act this way?

1. Development of alternative forms of energy, especially solar will require further scientific break throughs in solar panel energy production and associated battery storage capacity.  Geothermal and wind require investment to build their networks, and are not the solution for everywhere in America.  On the other hand, the gasoline distribution network is efficient and already established.  The automobile industry is already standardized on the gasoline engine (or diesel fuel) and to change over to some other form including hybrids will take time and create a lot of wasted investment.  The Republicans see what works today and that is their solution.

2.  The oil and auto industries have lobbied long and hard to convince lawmakers that life is best with gasoline engines.  The leap of faith needed to abandon the good old gas engine and jump to an electric one is viewed too risky.  These industry executives have stressed these points with generous donations to any Republican with two hands.

3. Republicans (at least the backers of George W Bush) are not comfortable with science of any type unless it involves expensive anti-missile research with close to zero chance of success.  They are more at home with “intelligent design” and the science the White House spin department can generate.  Investing in science is investing in the future.  Inherently there is risk that success may not come, and in any case success will not come on a definite time line.  Republicans like a sure bet and drilling is that.

I am more inclined to think the drilling preference has to do with campaign financing and big paying jobs for future lobbyist.  The more recent generation of Republican politicians are used to a heavy diet of kick backs and campaign donations.  It is possible that each of these three explanations is partly involved.  But strangely, none of them need to be.

Alternate energy development is a “problem without worries”.  Consider the following

  • A concentrated, government sponsored research effort to develop efficient solar energy for homes and autos with take 10 years or more.  That will provide plenty of room for oil profits and time for industry to efficiently convert.
  • With a national commitment to solar power/battery driven automobiles, the auto industry will have a clear target to shoot for.
  • Geothermal and wind can be encourage today and with a national program behind them, can cut into oil demand within a year.
  • With lower demand for oil from the largest user (the US), prices will drop.  A side benefit of lower gas prices will be lower jet fuel costs and a huge boost to the travel and vacation industries.  Lower jet fuel costs will across the board be good for business travel in general.

So rather than be worried about alternate energy, the next President needs to seize this banner and champion it.  America needs to lead the way and rid itself of dependence on foreign energy sources.  This one move will enable room for healthy debates on all the other issues facing the country.

Energy Blues

June 7, 2008

Today’s newspapers herald another record for the price of oil just days after there were signs that oil price increases had reversed.  Why the run up over the past few days is the food for speculations.  (That is a pun of sorts… because speculators are thought to be behind the spiking oil prices.)  Vice President Dick Cheney must have used a crystal ball back in 2001 when he held his energy summit.  Dick’s study http://www.whitehouse.gov/energy/National-Energy-Policy.pdf recommendations called for both short term and long term actions and in report form look very responsible.  Why the problems today?

Chances are that today’s high oil prices are unrelated to Cheney’s report.  The projected short fall in energy production and consumption cited in the report does not take into account that other economies such as China and India are consuming far more oil than in 2001.  Further, the dollar that is used to price and purchase oil is roughly half the value of 2001.

The shame of this Presidency is that (1) they did not believe what they wrote (that there was a serious problem), and (2) as a result, they did not put sufficient emphasis upon conservation and developing alternate energy sources.  Ironically, the Iraq War indirectly is causing the price of oil to be higher than simple supply and demand would dictate.  The War has caused instability in the Middle East and since Bush elected to put the War on America’s charge account, other nations have effectively paid him back by valuing the US dollar less. 

Consider how things might be today if George W Bush had said (and then put into action) in May of 2001, “I see a great threat to our American way of life if we do not as a nation sharply reduce our reliance on oil.  Beginning today I am instructing the Department of Energy to stimulate the development of alternate, non-polluting energy sources, using our Universities and private investors under the coordination of a national task force.  In addition, I am calling upon the auto industry to increase the average fleet fuel efficiency 30% by 2008 model year.  Lastly, I am placing a temporary 10% per gallon surcharge tax on purchases of gasoline for non-commercial driving.”

There is no chance that we would ever have heard such a speech from George.  Cheney would never have let him say anything like that.  But look at the data in Cheney’s report and ask yourself, “how could drilling for more oil on American soil have solved the energy shortage”