Energy Thoughts to Begin 2009

January/02/2009 23:18PM
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Why are there no congressional hearings on why Big Oil let the gasoline price get so low in these tough economic times? Does congress think we believe congress got the price back down? There has not been a price run up in the past 30 years without congressional hearings. There has never been a word from Washington where there has been a big drop like we have experienced in the past few months. Why does demand explain drops, but all increases are manipulation?

But, today congress leaked the idea that they are thinking about a fifty percent increase in Federal gasoline taxes to offset lost revenue. Did we not believe that high energy prices caused some of the recession? When times are tough, the working man and unemployed looking for work, need low gasoline prices. But, our congress sees the low price as a chance to grab some tax dollars. Are we not about to have a trillion dollar stimulus package to improve the infrastructure? Do gasoline taxes not go to the highway fund to upgrade the infrastructure? Will a gas tax increase cut the trillion dollar plan? Of course not, it will be additive. Amazing how this works. Big oil is bad for gas price increases, big government is given a pass when they run the price up.  

In addition to the trillion dollar stimulus package, the new administration plans a windfall profits tax on big oil to fund a renewable energy effort. Is this on top of the proposed gas tax hike? Will this not just be tacked on at the pump? Of course it will. How will this be spent?

In a previous entry we looked at the billions that have been wasted by the government for clean coal. Let’s look at another government effort in the renewable fuels area. For the past ten years the government has been mandated to buy government vehicles that burn alternative fuels. These run the whole range from CNG, ethanol, propane, etc. These were both Federal and state mandates. Every year the percentage went up. Bush raised the escalators as part of his energy package. These cars still burn gasoline,but they also burn some type of alternative fuel. Billions of you taxpayer dollars have been spent for this dual capacity. 

Guess what, a recent study shows that the entire fleet, Federal and State, are using 93% gasoline. That’s 100% of the dual fuel fleet using 7% alternative fuel.

So the government gets to say they are making this huge effort to go green. But, the people who drive the fleet are making zero effort to buy alternative fuels. When they can find a place to buy, the price is too high. Doesn’t matter, next year the alternative fuel cars will still be purchased at significant cost above single use cars, and ,you, the taxpayer, will keep paying for something that is just a publicity stunt. 

Want another not-energy related reason to see why it’s better if the government stays out of the private sector. Ford did not ask for a bail out. So, the government gives GMAC $5 billion. Now, GM is advertising 0% interest using your tax dollars to dismantle Ford and the foreign car companies in the U.S. that didn’t need help. And they are approving marginal credit scores for the financing. Guess where this is going?Can you say sub-prime auto loans?

Once again, I will make my case that the billions in government funding for renewable fuels will be wasted and we will lose 5 years, when we could be pursuing known ways to improve our flagging energy problem. So the hole will just get deeper. Let’s mortage our future for more pie in the sky ideas. 

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Comments (3)

  1. Ted says:


    When counting the electoral votes, either Congress finds by 1/8/09 that Obama, not being an Article II “natural born citizen”, fails to qualify as President whereupon Biden becomes the full fledged President under 3 USC 19 (free to pick his own VP such as Hillary) or thereafter defers to the Supreme Court to enjoin Obama’s inauguration with Biden becoming only Acting President under the 20th Amendment until a new President is duly determined.

    The preferable choice, at least for the Democrats, should seem obvious.

  2. Chris Johnson says:

    OK… in order to try and bring Bill’s blog back to the realm of the coherent, I offer this commentary by Ted Turner… published in Sunday’s Chicago Tribune. I hope it spurs some serious discussion.

    Invest in clean energy
    Making the case for significant investments for our future
    By Ted Turner
    January 4, 2009
    As someone who has financially invested in solar power, I have been asked a lot lately whether the country’s economic troubles will imperil our nation’s transition to cleaner, low-carbon energy sources. The assumption behind the question, of course, is that clean energy is a luxury we can no longer afford. Further, it suggests that investment in clean energy, and the technologies needed to deliver it, only makes sense when oil and gas prices are high.

    Nothing could be further from the truth. In fact, it’s this misconception that for the past three decades has given us a reactive energy policy and left us more dependent on foreign oil. Moving away from dirty and inefficient power sources is utterly essential to U.S. economic competitiveness and to the security and health of the planet. It will also be the business opportunity of the 21st Century.

    Barack Obama and John McCain took up this theme in their presidential campaigns. Achim Steiner, head of the United Nations Environment Program, recently proposed a global "Green New Deal." UN Secretary General Ban Ki-moon argues that it can be a solution for world poverty as well as climate change.

    But is now the time? Americans are hurting financially as real estate values and stock prices fall, credit tightens and layoffs mount.

    The simple fact is that the United States needs a massive new investment package to get our economy out of the ditch. And where better to invest but in our future?

    In my career, when confronted with an obstacle, I always looked for an unconventional angle or approach—some way to turn the issue on its head and shift the advantage toward our side.

    It is a scientific certainty that if we are to survive as a species, we will have to live in a carbon-constrained world. If we don’t change our behavior, we will increase global temperatures by 10 degrees Fahrenheit, according to the most recent report from the International Energy Agency. That is three times the level of temperature gain that scientists say will trigger abrupt and irreversible changes in our climate.

    The IEA also projects that worldwide investment in energy will total $27 trillion between now and 2030. Are we going to invest all that money in smart things, or keep on doing the dumb things that got us into this mess?

    President-elect Obama should make investment in clean energy—and the infrastructure to support it—his top economic priority. His decision to create a new post in the White House to coordinate energy and climate policy across all government agencies is an important step in that direction.

    If we’re going to help out Detroit, let’s make sure the automakers commit to invest in manufacturing the plug-in hybrid vehicles that will get American cars off oil.

    If we’re going to help out the construction industry, let’s put it to work retrofitting America’s energy-wasting homes and businesses. The Chicago Climate Action Plan set the right kind of ambitious goal—40 percent of the city’s building stock by 2020.

    Perhaps the most important thing we could do for our new energy future is modernize the electric-power grid with digital equipment. Such an upgrade will prevent blackouts and power disturbances that cost the economy $100 billion a year and create renewable-energy transmission corridors to bring wind and solar energy to market.

    In this new energy investment package, we need to invest much more boldly in research, development and deployment of the low-carbon technologies of the future, and we need to create the market signal that will enable them to compete economically by capping our emissions and putting a price on carbon. That will provide a powerful incentive for investment in alternatives and will put the U.S. in position to reach agreement on a new UN-led climate change compact.

    Making these investments is a smart bet on technologies that will remake the world in the 21st Century. If I were a young person starting out in business today, that is where I’d be working.

    We owe it to the 3 million years that our ancestors have been here to make sure we protect our future for the next 3 million years. We have it within us to succeed, but we have to work together, and we need to get going—right now.

    Ted Turner, the founder of CNN, is chairman of the United Nations Foundation and recently published an autobiography, "Call Me Ted."

  3. Bill Robertson says:

    Recently when I’ve seen Ted Turner on TV he looks like he burned out way too many brain cells in his years with Hanoi Jane. Sure, it make sense to put top priority on somethng that may or may not be a problem 50 years from now. And, it sure makes sense to trust the government to do it. If my doctor tells me I have a tumor and a wart what will make me worry? We have a tumor and it’s going to kill us, it’s called no energy. Global warming is a wart. People like Ted Turner can make it seem like a tumor, but when you have Ted’s money, why worry. Remember, it’s easier to get a camel through the eye of a needle than a rich man into heaven. Ted, it’s too late, don’t take the country down with you.

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