Elon Musk’s Private Jet Is Hypocritical But Not Wasteful

Leftist environmentalists have a new target. In a new hit piece on Ars Technica, Megan Geuss attacks Elon Musk for his extensive use of his private jet, saying, “For a CEO who claims to care about carbon emissions, Musk's flight habits are eyebrow-raising.”

The article draws from a Washington Post piece that notes that Musk’s jet “flew more than 150,000 miles last year, or more than six times around the Earth, as he raced between the outposts of his futuristic empire during what he has called ‘the most difficult and painful year’ of his career.” The Post piece details an analysis of flight records for the jet.

In comments that show a clear misunderstanding of corporate aviation, Geuss says that some of Musk’s flights are “frivolous” and complains that Musk’s jet flew too much, noting, “While many billionaires have private jets, Musk's jet stands out in the number of trips it made and miles it logged.” The Post reports that Musk’s jet flew “more than 250 flights,” which Geuss helpfully points out was “100 more flights than the private jet of Jeff Bezos, CEO of Amazon (and owner of The Washington Post).”

“Perhaps most egregious,” Geuss wrote, “the plane logged a number of 20-mile trips, repositioning from the south side of Los Angeles to the north side.” She acknowledges that Musk was not on board for those flights, and that “Instead, the jet would make the 20-mile repositioning flights to meet the CEO at a closer airport.”

In addition to my role as a Resurgent contributor, I also have a full-time job as a corporate pilot. I’ve spent almost 15 years flying private jets and many of Ms. Geuss’ objections to the use of Musk’s private plane are common misconceptions about corporate flying.

First, Geuss complains about how much Musk uses the jet, but heavy use of a jet is actually a good thing. Owning a corporate jet is expensive and there are many fixed costs such as the cost of the airplane, routine maintenance, hangars, insurance, and the crew. If these fixed costs are spread over a higher number of hours, it makes the airplane cheaper to operate on an hourly basis than an airplane that spends a larger portion of its life sitting on the ground. If you aren’t flying your private jet, there is little point in owning it.

Geuss also complains about the short position flights, but she fails to consider that the reason people and companies buy private planes is to save time. Citing her example of moving the airplane from one side of Los Angeles to the other, I looked at Google Maps to see how long it would take to make the drive from Burbank in the north to Long Beach in the south. As I write this at about 7:30 a.m. Pacific time, it would take an estimated one hour six minutes to make the 35-mile drive via I-5 and I-110 in heavy traffic. It simply is not efficient for the CEO of two billion dollar companies to spend an hour in the LA gridlock.

Thank goodness that the United States has one of the best networks of general aviation airports in the world. The LA basin is home to many reliever airports where Musk and other people with access to private planes can have their pilots meet them and turn a long drive across town to catch a flight into a quick trip down the street. This flexibility enables corporate jet passengers to be able to attend meetings that would have been missed otherwise and be home in time for dinner.

The same applies to a trip that the Post singled out in their article in which Musk’s plane, a 2015 Gulfstream 650ER, “burned thousands of pounds of jet fuel flying 300 miles from LA to Oakland so Musk could view a competitive video gaming event.” The Post calls the trip awkward since it came a few days after Musk tweeted about the world running out of “dead dinosaurs,” but the story acknowledges that Musk met a Tesla board member and worked at two Tesla offices before returning home.

https://twitter.com/elonmusk/status/1061367825724522497

Despite his intelligence, however, Musk is wrong about running out of oil, at least within the short term. Only a few years after peak oil was considered a real possibility, the shale oil revolution has led to an increase in oil reserves for both the United States and the world. We won’t be running out of fossil fuels any time soon.

Musk is also wrong about renewable energy. At this point, there is no renewable fuel that could power his Gulfstream efficiently. Bio-jet fuels do exist but are not readily available and are more expensive than traditional jet fuel. Plant-based fuels also compete for agricultural resources with food for both people and animals.

Musk’s environmental rhetoric may be wrong, but the use of his personal airplane is much more efficient than taking an airline. Musk’s private jet can make the flight in about an hour, which is about the same as an airliner, but Musk and his guests would be able to drive to a local airport and walk directly aboard his plane.

If he took an airline, Musk would not only have to use the airline’s schedule rather than his own, he would have to drive to an airport served by the airline, show up early enough to clear security, and make his way to the gate well before the flight departed. The one-hour trip to Oakland would take half a day or more and the time spent traveling would be lost as well. Unlike on his own jet, Musk would not have the privacy to conduct business while he was waiting on the flight or en route.

The Post article reported that Tesla spent about $700,000 on Musk’s corporate jet travel in 2017. While this may seem exorbitant, it represents a tiny fraction of the $7.014 billion that Tesla is expected to earn this quarter. The piece also noted that Tesla and SpaceX do not pay for Musk’s private trips on the plane.

The big problem with Elon Musk is not that he uses his corporate jet a lot, it is his hypocrisy in attacking fossil fuels while he does so. Musk may be able to make his Tesla factory completely solar-powered, but his airplane is going to keep burning “dead dinosaurs” for the foreseeable future unless he wants to trade his Gulfstream for the Solar Impulse, the groundbreaking airplane that circled the world on solar power in 2016. If he makes the trade, he will give up the time advantage of his jet, however. Solar Impulse took 14 months to make the trip.

Originally published on The Resurgent

US Poised To Become Top Oil Producer

Thanks to the fracking and shale oil revolutions the United States is poised to become the world’s largest oil producer. The Energy Information Administration forecasts that US oil production will surpass 11 million barrels per day by 2019. The US is currently the third largest oil producer behind Russia (10.5 million barrels per day) and Saudi Arabia (10 million barrels per day).

“In 2019, EIA forecasts that the United States will average nearly 12 million barrels of crude oil production per day,” Linda Capuano, Administrator of the EIA, said in Bloomberg. “If the forecast holds, that would make the U.S. the world’s leading producer of crude.”

After declining for decades, US oil production began to surge in 2015. By November 2017, the US was producing more than 10 million barrels per day for the first time since 1970. As production rose, Congress repealed the 40-year-old ban on exporting US oil in 2015. Current forecasts show that the US could become a net exporter of oil and gas by 2022.

At the same time, it was producing more oil, the US was also using less. In 2017, US oil consumption fell for the first time in five years per Bloomberg. The decline was attributed to a number of factors that included more efficient vehicles, urban population growth than led to less driving, technology reducing the need for face-to-face meetings and an aging population that is leaving the workforce.

Nevertheless, there are a few speed bumps on the road to energy independence. Limited pipeline capacity from Texas’ Permian Basin means that production may start to slow in the area later this year. American refining capacity has also not increased with the surge in crude oil production. Oilprice.com reported that in June US refineries were running at more than 97 percent capacity.

Despite increasing oil production, the Energy Information Administration does not predict relief at the pumps for US drivers. The agency forecasts gas prices to average near their May 2018 peak for the next two years due to unrest in Venezuela, sanctions on Iran and OPEC production limits.

Published on The Resurgent

Listen live as solar airplane crosses U.S.

The Solar Impulse, a solar powered airplane that Swiss pilots Bertrand Piccard and Andre’ Borschberg hope to fly around the world without using fuel, is crossing the United States. The airplane is flying today from Dallas to St. Louis using only the energy of the sun for propulsion. The flight can be watched live on the internet at the SolarImpulse.com. The team plans to land in St. Louis in the early morning hours of June 4.

The plane was disassembled and transported to Moffet field in Mountain View, Calif. earlier this year. From California, the Solar Impulse began its journey across America on May 4. The first leg consisted of a flight from Moffet field to Phoenix Sky Harbor airport in Arizona, a distance of approximately 550 nautical miles. The Solar Impulse made the trip in 18 hours and 18 minutes for an average speed of about 40 miles per hour. The average altitude was 10,000 feet, but the plane flew as high as 21,000 feet on its trip to Phoenix. The 18 hour 21 minute leg from Phoenix to Dallas took place on May 22.

The Solar Impulse is powered by 12,000 solar cells that are built into the wings. The solar cells power four 10 horsepower electric motors. Because the solar cells also charge the Solar Impulse’s lithium batteries, the airplane can also flight at night or in cloudy weather. To make the Solar Impulse a reality, the team had to make advancements on lightweight solar energy technology, batteries, and decrease the necessary weight of the airplane as well. The Solar Impulse website contains many details about the aircraft itself.

Because of the long and slender structure of the wings and fuselage, the Solar Impulse is very vulnerable to high winds and turbulence. The team typically tries to take off and land and night to minimize exposure to turbulence. The recent severe weather and tornadoes in the Midwest have led the decision to park the airplane in an inflatable hangar during its stay in St. Louis for protection.

The current Solar Impulse, the HB-SIA, will be replaced by the HB-SIB for an attempted flight around the world in 2015. The HB-SIB will have several improvements over the HB-SIA. Performance will be better and there will be a larger cockpit to accommodate the pilot for flights lasting several days. The HB-SIA has already set three world records for maximum altitude (30,298 feet/9,235 meters), gain in altitude (28,687 feet/8,744 meters), and maximum duration (26 hours 10 minutes 19 seconds).

The founders of the Solar Impulse program are Bertrand Piccard and Andre Borschberg. The two Swiss pilots have worked on the program for more than a decade. Piccard is a psychiatrist by profession, while Borschberg is a mechanical engineer.

Originally published on Aviation Examiner

2012 voter guide: Rick Perry

Campaign Website: RickPerry.org
Supporting PAC: makeusgreatagain.com
Ga. Website: Georgians for Rick Perry on Facebook

Rick Perry is the governor of Texas. Read a full biography of Rick Perry by the Atlanta Conservative Examiner here.

Taxes: Perry favors an optional 20 percent flat tax that can be filled out on a postcard. He would eliminate the capital gains and death taxes, as well as the tax on Social Security benefits. He would reduce the corporate tax rate to 20 percent and tax repatriated profits at a reduced rate.

Economy: Perry would help encourage growth by reducing federal regulation and taxes. He believes that his energy plan would create millions of new jobs.

Obamacare: Perry would repeal Obamacare.

Energy: Perry would open up federal lands to exploration and streamline the permitting process for oil drilling. He would eliminate many of the Obama Administration’s EPA regulations and return environmental authority to the states. He would remove federal subsidies and loans for politically favored companies. Perry favors eliminating the Department of Energy.

Life: Rick Perry is pro-life and has a record of passing pro-life legislation.

Iran: Rick Perry believes that a nuclear-armed Iran is threat to the U.S. He believes that the U.S. should act with its allies to revisit the options for dealing with Iran that President Obama has taken off the table, including tougher sanctions and a military strike.

Immigration: Perry supports secure borders and would deploy the National Guard to border areas. He supports expedited construction of border fencing.
National Security: Perry believes that a strong economy is vital to national security. He believes that the proposed Obama Administration cuts to the defense budget are irresponsible. (CBS News)

Spending: Perry would cap federal spending at 18 percent of GDP and reduce non-defense discretionary spending by $100 billion in the first year. He favors a balanced budget amendment that does not raise taxes.

Entitlements: Perry favors the reform of Social Security and Medicare.

Second Amendment: Perry believes that the second amendment is an individual right and supports the right to carry.

Gay Marriage: Perry supports traditional marriage and a federal marriage amendment.

Where possible, the positions of the candidate were taken from the campaign websites cited above. When this was not possible, the source of the information presented is cited in parentheses and linked.


Read this article on Examiner.com:

http://www.examiner.com/elections-2012-in-atlanta/2012-voter-guide-rick-perry

2012 voter guide: Jon Huntsman

Campaign Website: jon2012.com
Supporting PAC: ourdestinypac.com
Ga. Website: Georgia for Jon Huntsman Jr. on Facebook

Jon Huntsman is a former governor of Utah and U.S. ambassador to China. He is an experienced businessman, having served as an officer in his family businesses. Read a full biography of Jon Huntsman by the Atlanta Conservative Examiner here.

Taxes: Huntsman supports a version of the Bowles-Simpson commission’s “zero plan.” He favors a revenue-neutral plan that replaces current individual tax rates with three new rates: 8, 14, and 23 percent. In exchange for lower rates, all tax deductions and credits would be eliminated. Huntsman would reduce the corporate tax rate to 25 percent and eliminate the capital gains and dividends taxes. He would also eliminate taxes on repatriated profits.

Economy: Huntsman proposes regulatory reform that would repeal Obamacare and the Dodd-Frank financial reform law, rein in the EPA, and improve the cost-benefit ratio of future regulation. He supports free trade and would pursue new trade opportunities, especially in the Pacific Rim.

Obamacare: Huntsman favors the repeal of Obamacare.

Energy: Huntsman supports the safe use of fracking and conversion of coal to liquid fuel. He believes that the importation of Canadian oil can help the U.S. reduce its dependency on unfriendly nations. He would remove roadblocks to the development of American natural gas fields. Additionally, Huntsman favors the modernization of the electrical grid with an eye toward the increased use of electric vehicles in the future.

Life: Huntsman is pro-life. He would reinstate the Mexico City policy and veto a budget that funded Planned Parenthood. He opposes most embryonic stem cell research, but would allow the use of discarded embryos. (lifenews.com)

Iran: Huntsman said, “"I cannot live with a nuclear-armed Iran. If you want an example of when I would use American force, it would be that." (Politico)
Immigration: Huntsman supports “a pathway out from the shadows” for illegal immigrants. He personally does not like the idea of a border fence, but says that one is necessary. (the politicalguide.com)

National Security: Huntsman believes that the U.S. has made great accomplishments in the war on terror, but that “mission has evolved into an ill-advised counterinsurgency campaign which continues to carry heavy costs in terms of blood and treasure.” He believes that the core of the military needs to be rebuilt after the wars in Iraq and Afghanistan and continually modernized. He believes that counter-terrorism needs to become more flexible and that preventing WMDs from falling into the hands of terrorists should be a primary goal.

Spending: Huntsman favors spending cuts and is favor of a balanced budget amendment. He believes that the current level of debt is a threat to national security. He believes that some defense cuts are necessary as well.

Entitlements: Huntsman favors entitlement reform along the lines of Rep. Paul Ryan’s proposal for Medicare, which do not cut benefits for current seniors. He believes that nothing is off the table to reform Social Security, including means testing. (Wall St. Journal, thepoliticalguide.com)
Second Amendment: Huntsman supports gun rights and is viewed positively by the NRA. (2012.republican-candidates.org)

Gay Marriage: Huntsman supported civil unions as a governor of Utah, but he does believe that marriage should be reserved for one man and one woman. (thepoliticalguide.com)

Where possible, the positions of the candidate were taken from the campaign websites cited above. When this was not possible, the source of the information presented is cited in parentheses and linked.

Read this article on Examiner.com:
http://www.examiner.com/elections-2012-in-atlanta/2012-voter-guide-jon-huntsman

2012 voter guide: Newt Gingrich

Campaign website: newt.org
Supporting PAC: winningourfuture.com
Ga. website: newt.org/states/georgia

 Biography:  Gingrich is a former Speaker of the House of Representatives from Georgia.  Read his full biography by the Atlanta Conservative Examiner here.

Taxes: Newt Gingrich would make the low Bush-era tax rates permanent. He would also create an optional flat tax with a 15 percent rate. This tax would preserve the home mortgage interest and charitable deductions, as well as establishing a $12,000 standard deduction.
Economy: Gingrich would encourage job creation by repealing cumbersome regulations such as Sarbanes-Oxley, the Dodd-Frank finance law, and the Community Reinvestment Act. He would replace the EPA with an “Environmental Solutions Agency” that works closely with local governments. Gingrich would like to break up Fannie Mae and Freddie Mac to eliminate their implicit government backing.
Obamacare: Newt Gingrich would repeal Obamacare. He favors tax credits, health savings accounts, and the sale of health insurance across state lines. Gingrich would set up a high risk pool to cover sick people who would otherwise be uninsurable. He would prohibit insurance companies from canceling policies or raising rates due to sickness. Gingrich believes that an electronic health records system could prevent fraud. He favors tort reform and government investment in “research for health solutions.” He would reform the FDA to speed new treatments.
Energy: Gingrich favors development of American energy sources including shale oil and offshore drilling. He would finance clean energy research with oil and gas royalties. Gingrich would replace the EPA with an “Environmental Solutions Agency” which would use incentives and cooperation with local governments and industry and consider the economic impact of environmental regulation.
Iran: Gingrich believes that the U.S. should consider a military strike to destroy Iran’s nuclear program “as a last recourse, and only as a step toward replacing the regime." (Wall St. Journal)
Immigration: Gingrich favors secure borders. He would reform the immigration process and give precedence to those adhere to the law, but would also create a path to legalize illegal immigrants who have deep ties to the U.S. He would encourage investment and legal immigration. Gingrich would allow noncitizens to earn U.S. citizenship through military service. He believes that English should be the official language.
National Security: Gingrich says, “Military force must be used judiciously and with clear, obtainable objectives understood by Congress.” He would try to understand our enemies and build a grand, unified strategy to fight the terrorists. He would create a plan to reduce U.S. dependence on foreign oil and incentivize math and science education to ensure that the U.S. remains a leader in technology.
Spending: Gingrich presided over the House of Representatives when Congress balanced the budget in the 1990s. He has signed a pledge to “cut, cap, and balance.” (thepoliticalguide.com)
Entitlements: Gingrich has released a comprehensive plan to reform entitlements. He favors allowing young workers to invest a portion of their Social Security taxes in personal accounts based on a successful program in Chile. He would use block grants to the states to make welfare and Medicaid more efficient. Gingrich’s plan would reduce federal spending by 10 percent GDP when fully implemented. (Forbes)
Second Amendment: Gingrich believes in an individual right to keep and bear arms. He is a Life Member of the NRA and has earned an NRA A+ rating.
Gay Marriage: Gingrich believes that marriage is between a man and a woman and that same-sex marriage is “a temporary aberration that will dissipate.” (Yahoo)
Where possible, the positions of the candidate were taken from the campaign websites cited above. When this was not possible, the source of the information presented is cited in parentheses and linked.

2012 voter guide: Rick Santorum

Rick Santorum recently gained notoriety as the second place winner of the Iowa caucuses. Santorum is a lawyer and former U.S. Senator representing Pennsylvania. Read a full biography of Santorum by the Atlanta Elections Examiner here.

Campaign website: ricksantorum.com

Supporting PAC: Red, White and Blue Fund (rwbfund.com)

Ga. website: fundly.com/georgiaforsantorum

Taxes: Rick Santorum would simplify personal income taxes by establishing two lower rates: 10 and 28 percent. He would reduce corporate taxes to 17.5 percent (from 35 percent) and eliminate the tax on repatriated income. He would eliminate the death tax and the Alternative Minimum Tax. Santorum would also increase a variety of tax credits and deductions.

Economy: Santorum would repeal all Obama-era legislation that costs more than $100 million to implement. He also promises to negotiate five free trade agreements in his first year. Santorum favors tort reform and would approve the Keystone XL pipeline. Santorum also supports an audit of the Federal Reserve and a return to its original charter in which its sole purpose is to manage inflation.

Obamacare: Santorum would repeal Obamacare. He favors health savings accounts and giving Americans the option to purchase low cost, high deductible major medical plans. He would like to increase competition to lower costs, along with allowing health insurance to be sold across state lines. He would give a tax credit for health insurance premiums paid by individuals. Santorum would enact tort reform to cut costs and give Medicare block grants to the states.

Energy: Santorum opposes cap-and-trade and believes that ethanol subsidies should be phased out. He believes that the U.S. needs an “all of the above energy policy that utilizes oil, natural gas, coal, and nuclear energy.” He would remove government roadblocks to domestic oil exploration. (thepoliticalguide.com)

Life: Santorum opposes abortion, euthanasia, assisted suicide and human cloning. He supports stem cell research that uses non-controversial methods and does not destroy human embryos. He supports religious freedom and opposes discrimination on the basis of opposition to abortion.

Iran: Santorum would support the Iranian democracy movement and work with Israel to eliminate the Iranian nuclear threat, using military force if necessary. He would use sanctions and diplomatic pressure against the Iranian regime. He would work to implement a missile defense system and defend against an EMP attack. He would also put pressure on Hamas and Hezbollah and recall the U.S. ambassador to Syria.

Immigration: Santorum supports comprehensive immigration reform including a border fence and eliminating benefits to illegal immigrants. He does believe that immigrants already in the U.S. must be dealt with separately. Santorum would make English the official U.S. language. (thepoliticalguide.com)

National Security: Santorum favors a missile defense system and protection against EMP attacks. He opposes cuts to the defense budget, but would work to eliminate waste. He cites the need to have U.S. bases around the world in order to fight the War on Terror. While in the Senate, Santorum had a pro-military voting record. (ontheissues.org)

Spending: Santorum would cut $5 trillion in five years and immediately cut non-defense discretionary spending to 2008 levels. He favors a balanced budget amendment that would cap spending at 18 percent of GDP. He would cut the federal workforce by 10 percent and freeze non-defense salaries for four years. He would reduce foreign aid and his website specifies a number of government programs and subsidies that he would cut or eliminate.

Entitlements: Santorum favors the Paul Ryan plan to reform Medicare while preserving current benefits for seniors. He would reform Social Security to put the program on a sustainable path. He would use block grants to empower the states to find more efficient Medicare and welfare solutions.

Second Amendment: Santorum is a supporter of the individual right to keep and bear arms and has received high ratings from the NRA and other gun groups.

Gay Marriage: Santorum is a supporter of traditional marriage. He also authored the “Workplace Religious Freedom Act” to ensure individuals of all faiths could not be discriminated against while on the job.

Where possible, the positions of the candidate were taken from the campaign websites cited above. When this was not possible, the source of the information presented is cited in parentheses and linked.

Read this article on Examiner.com:

http://www.examiner.com/elections-2012-in-atlanta/2012-voter-guide-rick-santorum

2012 voter guide: Ron Paul

Ron Paul is a Republican representative from Texas in his third presidential run. He is a medical doctor who has a private practice as an obstetrician. Read a full biography of Ron Paul by the Atlanta Elections Examiner here.

Campaign website: ronpaul2012.com

Supporting PAC: revolutionpac.com

Georgia website: ga4ronpaul.com

Georgia 2008 results: 2.9 percent/fourth place (Real Clear Politics)

Latest 2012 Georgia poll results: 5.0 percent/third place (Real Clear Politics)

Taxes: Paul supports a constitutional amendment to end the income and death taxes. He would also repeal the capital gains tax. He supports a flat tax or the Fair Tax as a replacement for the current tax system. He believes that a zero percent tax rate can be achieved with cuts in spending. Paul would abolish the Federal Reserve and establish a new gold standard.

Obamacare: Ron Paul would repeal Obamacare and enact a tax credit for health insurance premiums and medical expenses. He would allow the sale of health insurance across state lines. Paul favors health savings accounts and tort reform. He opposes a taxpayer-funded national database of health records and the government “interfering with Americans’ knowledge of and access to dietary supplements and alternative treatments.”

Energy: Ron Paul opposes federal interference in the energy markets and cap-and-trade. He would repeal the federal gasoline tax and ease government restrictions on coal and nuclear power. Paul would create tax credits for alternative fuel technologies.

Life: Paul would pass a “We the People Act” to overturn Roe v. Wade and return the issue of abortion to the states. Paul would pass a “Sanctity of Life Act” that would define life as beginning at conception. He opposes taxpayer funding of abortion.

Iran: Ron Paul does not believe that Iran threatens U.S. national security (ABC News).

Immigration: Ron Paul supports secure borders, while opposing amnesty and REAL ID laws. He supports an end to birthright citizenship and opposes government benefits for illegal immigrants.

National Security: Ron Paul opposes the wars in Iraq and Afghanistan and would avoid future nation-building. He opposes the PATRIOT Act and would end all foreign aid. Paul would “revitalize” the military by eliminating waste in the military budget.

Spending: Ron Paul would refuse to raise the debt ceiling, forcing Congress to live within its means. Paul has proposed $1 trillion in spending cuts. He would eliminate the Departments of Commerce, Education, Energy, Interior, and Housing and Urban Development. He would also abolish the TSA, return most spending to 2006 levels, and cut ten percent of the federal workforce. Paul would take a salary equal to that of the average American in lieu of the president’s current salary of $400,000. (Yahoo)

Entitlements: Ron Paul points out that “entitlements are not rights.” (Washington Post)

Second Amendment: Ron Paul believes that the second amendment is the “guardian of every other right.” He would repeal the Brady Bill and the assault weapons ban. He would end U.S. membership in the U.N. “to ensure American tax dollars are not used to fund global gun control schemes like the so-called ‘Small Arms Treaty.’”

Gay marriage: Paul opposes federal efforts to redefine marriage, but opposes a federal marriage amendment. Paul voted to end Don’t Ask-Don’t Tell. (Yahoo)

Where possible, the positions of the candidate were taken from the campaign websites cited above. When this was not possible, the source of the information presented is cited in parentheses and linked.

Read this article on Examiner.com:

http://www.examiner.com/elections-2012-in-atlanta/2012-voter-guide-ron-paul

Obama’s green war on jobs and energy

In spite of acknowledging the need to wean the United States off of Middle Eastern oil, the Obama Administration, prompted by core supporters in the environmental lobby, is waging a job-killing war against two projects that would help the economy, produce jobs for Americans, and, perhaps most importantly, reduce our dependence on oil imported from unfriendly foreign countries.

The first issue is the EPA’s proposed regulation of fracking. “Fracking” is a slang term for hydraulic fracturing, the process of injecting fluids, primarily water, into rocks to create larger fissures. The larger fissures allow more oil or natural gas to flow into the well. The process makes it possible to tap into previously unreachable oil and natural gas reserves. The debate on fracking centers on the Marcellus Shale formation in Pennsylvania and Ohio and the Dakota oil and gas fields. Fracking has also been used safely in Texas since the 1950s.

Opponents of fracking are concerned about the impact on air and water quality. Opponents will likely be heartened by the recent release of an EPA report that suggests that fracking may contaminate groundwater. The Wall Street Journal notes that the report, which has not been peer reviewed, admits that chemicals detected in the water in Pavilion, Wy., where the tests were done, are within acceptable limits. Further, the problematic chemical detected is not used in fracking at all, but is a common fire retardant used in plastic components for drinking water wells. This leads many to believe that the contamination is not from fracking at all.

The decision on whether to allow fracking in the Marcellus Shale is important because of the size of the field. It contains an estimated 500 trillion cubic feet of natural gas. The amount recoverable, estimated at about ten percent of the total, is almost equal to two years of natural gas production for the entire rest of the country. As technology advances, more oil and gas that was previously unreachable can be recovered.

Allowing fracking would not only create jobs in the natural gas and oil industries, it would be a boon to the rest of the economy in the form of cheaper energy costs as well. When energy costs go down, manufacturing costs decrease as well. This makes American products more competitive and helps American businesses grow.

The second project that President Obama’s administration is intentionally delaying is the Keystone oil pipeline. The Keystone pipeline would run from Canada’s Athabasca oil sands in Alberta to American refineries in Texas.

The benefits of the pipeline are easy to see. Most obviously, it would relieve U.S. dependency on Middle Eastern and Venezuelan oil and contribute to national energy security. The additional supplies of oil should also help drive down energy costs. Further, TransCanada, the pipeline’s owner, estimates that construction of the pipeline would create 20,000 construction and manufacturing jobs in the U.S. Other jobs would be created in other industries, such as restaurants and hotels, as well. The effect of lower energy prices would create positive effects across the economy. Total value to the U.S. economy is expected to exceed $20 billion.

The pipeline was proposed in 2008 and approved by Canada’s National Energy Board on March 11, 2010. Since then, the proposal has been winding its way through a labyrinth of state and federal bureaucracies. Almost two years later, no final decision has been made at the federal level.

President Obama had previously announced his intention to delay making a decision on the pipeline until 2013, but a provision in the payroll tax extension bill forces him to make a decision in 60 days, moving up the deadline to late February. Given the enormous economic benefit in a time of economic crisis, why is President Obama delaying the approval of the pipeline?

The answer lies in the makeup of President Obama’s base. Environmental groups that are key supporters of President Obama oppose the pipeline over concerns about global warming, possible groundwater contamination in the event of an oil spill, and basic opposition to any development of the oil sands.

There are problems with this position. One is that if the Keystone pipeline is canceled, the oil sands are still likely to be developed. If the United States does not gain access to this Canadian oil, it will, in all likelihood, go to the Chinese. If the Chinese buy Canadian oil, it will be transported via tankers to China, which is a far less safe mode of transportation than a pipeline.

Even though the United States still imports almost half of the oil that it consumes according to the Energy Information Administration, in 2011 the U.S. became a net exporter of fuel. With additional Canadian oil flowing to U.S. refineries combined with a weakening dollar, U.S. export numbers should continue to improve.

Ironically, Obama’s base is becoming split over the pipeline issue. While environmentalists oppose the project, unions have voiced their support for the pipeline on the grounds that it will create jobs and help the economy. If he decides against the pipeline, President Obama risks losing support to a pro-growth candidate. On the other hand, if he approves the pipeline, environmental activists may support a third party candidate, such as a Green, or stay home.

The interference of President Obama’s EPA with fracking and the president’s long delay in approving the Keystone pipeline are two examples of how President Obama’s commitment to a future green energy system and his environmentalist supporters are hurting the United States today. High energy costs could be somewhat reduced by more oil supplies and more jobs could be created if the president approves these projects.

Read this article on Examiner.com:

http://www.examiner.com/conservative-in-atlanta/obama-s-energy-policies-cost-jobs

Democrats and light bulbs: a cautionary tale

You light up my life... but not with an incandescent bulb!


How many Democrats does it take to screw a light bulb company? Answer: 272, including 44 in the Senate and 228 in the House of Representatives. They were joined by 36 House and 19 Senate Republicans. (http://www.govtrack.us/congress/bill.xpd?bill=h110-6)

In December 2007, Congress passed the Energy Independence and Security Act of 2007, which, among other things, banned most incandescent light bulbs beginning in 2012 (http://www.aboutlightingcontrols.org/education/papers/2008_energy_law.shtml). The act also contained a renewable fuel standard (RFS) which mandated increased ethanol production and led to food shortages in 2008 (http://www.heritage.org/Research/Reports/2008/04/Time-for-Second-Thoughts-on-the-Ethanol-Mandate), as well as several other mandates.

A prime motivation behind the light bulb ban was fears of global warming. The law passed prior to the East Anglia email controversy in 2009, in which pilfered emails purported to show that climate scientists collaborated to cover up inconsistent climate data and stifle dissent (http://www.examiner.com/conservative-in-atlanta/the-climate-conspiracy), so global warming skeptics were relatively powerless. It was also passed prior to the economic crash of 2008, when it seemed that the economy would remain strong regardless of government meddling.

As we now understand, though, government action is subject to the Law of Unintended Consequences. This is the political equivalent of Newton’s Third Law of Motion, which states, “For every action, there is an equal and opposite reaction.” For every government action to correct a perceived problem, a new problem is created elsewhere.

With incandescent bulbs disappearing from the market, the replacement would be compact fluorescent (CFL) bulbs. There are pros and cons to both types of light bulbs (http://greennature.com/article256.html). CFL bulbs produce the same amount of light as incandescent bulbs, but use a fraction of the electricity. CFLs also last up to eleven times longer than incandescent bulbs. These factors contribute to cost savings over the life of the bulb.

On the other hand, CFLs generate consumer complaints in several areas. First, CFLs do not power up immediately. A CFL in a fluorescent light fixture in our kitchen takes noticeably longer to illuminate than the old bulb. Many consumers also dislike the type of light that CFLs produce, although technology is increasing consumer choices in this area.

More noticeable to many consumers is the purchase price of CFL bulbs. Where incandescent bulbs often retail at approximately $1.60 for a four pack (forty cents per bulb) in my local stores, CFLs often cost more than $5 for a two-pack ($2.50 per bulb). Thus, CFLs cost approximately six times more than traditional light bulbs. They may save money in the long run, but that is cold comfort to an apartment tenant struggling to meet a budget or a homeowner facing foreclosure.

Finally, and most disturbing, CFLs contain mercury, a hazardous material that can cause impaired neurological development in children (http://www.epa.gov/mercury/effects.htm). It is hard enough to clean up the broken glass from a traditional light bulb, but CFLs are even worse. The EPA recommends a lengthy procedure for cleaning up a broken CFL (http://www.epa.gov/cfl/cflcleanup.html), beginning with evacuating the room for at least fifteen minutes and shutting off the central heat or air condition. Additionally, you may not be able to throw away the CFL in your normal trash disposal manner, since some states mandate special disposal or recycling techniques even for unbroken CFL bulbs. Georgia does not have any specific regulation that I can find, but Home Depot does offer CFL recycling.

One consumer response is to hoard incandescent bulbs. At my house, we use a combination of incandescent and CFL bulbs. We use CFLs in fixtures that are difficult to reach or where the light is used frequently and for long periods of time. For other fixtures that are not frequently used or where breakage is an issue, such as lamps in children’s rooms, we use incandescent bulbs. By stockpiling incandescent bulbs, we have a supply that will last well beyond the 2014 official sunset of traditional bulbs.

One foreseeable consequence of the law was the loss of jobs. In September 2010, GE closed its last incandescent light bulb factory in the US (http://www.washingtonpost.com/wp-dyn/content/article/2010/09/07/AR2010090706933.html). The 200 workers there lost their jobs. Since CFLs require more labor to produce, the company is replacing the US factory, which was located in Virginia, with a new factory in China, where labor is cheaper. It is unlikely that the US workers, many of whom are in their 40s and 50s and have been with the company for decades, will find new “green” jobs soon.

Ironically, the energy savings that Congress hoped to gain by taking away consumer light bulb choice may prove illusory. In 1987, the city of Traer, Iowa handed out 18,000 CFL bulbs to its citizens in an attempt to reduce energy usage. Residential electricity use actually increased by 8% as people responded to cheaper light by using more of it (http://www.heartland.org/full/28516/GE_Closes_Last_Incandescent_Light_Bulb_Plant_Jobs_Sent_to_China.html). An axiom of economics is that as price decreases, demand increases.

The example of the great light bulb ban is a story that is likely to be repeated as long the Democrats are in power. Obamacare, the finance reform, and other nanny state laws are likely to seem similar unintended consequences. Some goods and services that were previously taken for granted will likely become unavailable. Others might still be available at an increased cost. In any case, the poor are likely to be most adversely affected by changes meant to help them.

Sources:
http://www.govtrack.us/congress/bill.xpd?bill=h110-6
http://www.aboutlightingcontrols.org/education/papers/2008_energy_law.shtml
http://www.heritage.org/Research/Reports/2008/04/Time-for-Second-Thoughts-on-the-Ethanol-Mandate
http://www.examiner.com/conservative-in-atlanta/the-climate-conspiracy
http://www.epa.gov/mercury/effects.htm
http://www.epa.gov/cfl/cflcleanup.html
http://www.heartland.org/full/28516/GE_Closes_Last_Incandescent_Light_Bulb_Plant_Jobs_Sent_to_China.html
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/07/AR2010090706933.html
http://www.heartland.org/full/28516/GE_Closes_Last_Incandescent_Light_Bulb_Plant_Jobs_Sent_to_China.html

Is there an alternative to oil?

In the wake of BP’s disastrous oil spill in the Gulf of Mexico, many politicians and environmentalists are renewing calls for alternate energy and electric cars to relieve the United States from our dependence on foreign oil. Energy independence would have many advantages, from decreasing pollution to depriving terrorist-supporting Arab states of revenue. Even without environmental considerations, the high price of gasoline, especially for summer road trips, gives many car owners the urge for a cheaper alternative, but is a short-term transition to other sources of energy realistic?

The journey away from oil began in earnest a few years ago with the introduction of the Toyota Prius, the first popular hybrid auto. The Prius combines a gasoline-powered engine and two electric motors. The gasoline engine powers the car for highway driving and the electric motors. The car often runs on battery power with the gasoline engine switched off.

Another popular alternative auto is the Smart Car. This two-seater is a product of Daimler and is known for its fuel economy. The tiny car is unique on American streets. Its small size and distinctive round shape make it stand out. One red Smart Car seen around my home town of Villa Rica, Georgia has a vanity license plate that reads “TMATER.” The Smart Car is powered by a traditional gasoline engine.

There are problems with these new cars. One problem is that although they do offer high gas mileage, fuel economy is only marginally better than traditional compact cars. The Prius advertises a fuel economy of 51 mpg in the city and 48 on the highway (http://bit.ly/9Luzbf ). The Smart Car reports 33 mpg in the city and 40 mpg on the highway (http://bit.ly/c0FRsJ ). In contrast, a new traditional compact car such as the Ford Fiesta measures in 29 mpg in the city and 40 on the highway (http://bit.ly/bY0kNs ).

For this marginally better fuel economy, the car buyer must pay a premium. MSRP for the Prius is between $21,000 and $28,000 (http://bit.ly/cOs1Qn ). The Ford Fiesta, a car of equivalent size to the Prius, has an MSRP of $13,000 to $17,000 (http://bit.ly/cjOnQI ), almost $10,000 less. The Smart Car has approximately the same price as the Fiesta (http://bit.ly/ctZ3YR ), but at half the size. It would take years or thousands of miles to pay for the increased cost of the car in fuel savings. Of course, if gas prices increase sharply, the math would shift in favor of the Prius and Smart Car.

These new cars are also clearly not designed with large families in mind. The Prius and the Smart Car are practical for commuters, but not people who travel with children and the assorted paraphernalia necessary for a family trip. There are a variety of hybrid SUVs on the market, but again there is a tradeoff. A premium in price is added to an already expensive vehicle in exchange for modest increases in fuel economy.

The prospect of completely electric cars would face the same problems as well as additional ones. When Chevrolet’s corporate officers came to congress for a bailout, they touted the upcoming release of the Chevy Volt, a totally electric car. One obvious problem with the Volt is that its battery power will only take you 40 miles (http://bit.ly/bPC2l2 ). If you need to go further, a gasoline engine takes over.

For many commuters, such as those driving to Atlanta from outlying suburbs, forty miles is close to a one-way commute. To take full advantage of the Volt, they would have to charge the car at night at home before driving to work. Once at the office, they would have to find an outlet to plug in the car to let it charge for the trip home.

Additionally, people without a garage may have trouble finding a place to plug in their Volt. Although it is capable of charging from a common household 120-volt outlet, outside outlets are not common at many apartments. Even at a house without a garage, it might be difficult to find an outlet that won’t require the use of very long extension cord. The exact price of a Chevy Volt hasn’t been released, but Chevrolet has indicated that the car will cost over $30,000 (http://bit.ly/9AilVS ). This is even after tax credits are taken into account.

Another electric car with better performance is the Tesla Model S. Tesla Motors is partnering with Toyota to produce a high performance electric roadster. The Tesla is a two seat open top sports car that accelerates from 0-60 mph in less than 4 seconds (http://bit.ly/9AnZ2d ). Its estimated 245 mile range is six times that of the Volt. Nevertheless, after 245 miles, plan on a long lunch. It takes three and a half hours to recharge. This is much more inconvenient than pulling into a gas station for a quick fill-up. The Tesla’s price tag is also impressive at $100,000. For those on a budget, you can also lease a Tesla for just over $1,500 per month. (For more information, see www.teslamotors.com.)

The Volt and the Tesla share common disadvantages in price and range, but what makes them really impractical is their small size. Like the Prius and the Smart Car, the Volt and Tesla are meant for commuters. A successful family electric car will must have room for a family. To be widely accepted, electric vehicles will not only have to have the range to run errands around town, they will have to have the seating and cargo capacity of a minivan or an SUV.

Even if such an electric vehicle were available today, it would be years before we could transition completely away from gasoline powered cars. The Bureau of Transportation Statistics estimates that there are more than 135 million passenger autos in the US (http://bit.ly/9fL3uR ). Many, if not most, of the owners of these cars would not want to incur a mortgage-sized car payment for a new electric car. The market for used electric cars is thus far nonexistent.

Consumer demands aren’t the only limits for the growth of the electric car market. At this point, the electrical infrastructure of the US is not prepared to handle the power demands of a transition to electric cars. While electricity is cheaper than oil at this point, increased demand for electricity would drive up its price. This is especially true if congress passes a cap-and-trade energy tax since much of our current electricity is generated by coal, one of the cheapest sources of electricity.

New and alternative sources of electricity such as solar and ocean wave capture are expensive when compared to coal, natural gas, and nuclear generated electricity. The cost of wind energy has decreased in recent years, but these alternative sources of energy face the problem of intermittent wind and sunshine. To be practical, alternative energy sources would have to include a back-up storage system for when the wind is calm or clouds block the sun. At this point, massive batteries or some other technology that can back up large scale alternative energy sources have not been developed.

A final alternative to oil is to use ethanol in gasoline powered autos. There are several problems associated with ethanol use however. For example, when the government increased the mandated amount of ethanol production in 2007, it caused a worldwide spike in food prices the next year (http://n.pr/bbJPHL ). Even if the total US corn crop was used for ethanol production, it would only account for 12% of American gasoline requirements (http://bit.ly/9zhJIE ). Additionally, ethanol can damage engines.

Another newly cost-effective technology converts coal into gasoline. The Germans developed a process to transform coal into gasoline in response to fuel shortages in WWII. Since then, low oil prices have made the process too expensive to compete with oil-based gasoline until recently. Coal-based gasoline does not resolve concerns about pollution and carbon emissions. Similarly, as oil and gasoline prices rise, new advances in biofuels and biomass-based gasoline may become more practical.

Although there is already progress with new technology and even more advances are on the horizon, the United States, along with the rest of the world, remains firmly in the grasp of oil. For the foreseeable future, we will need oil rigs to provide the fuel for our national economy.

Sources:

http://www.toyota.com/compare/?modelCode=prius#h_overview
http://www.greencar.com/articles/smart-car-offers-drivers-new-high-mpg-option-top-crash-rating.php
http://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-allnew-ford-fiesta-delivers-40-mpg-32663
http://consumerguideauto.howstuffworks.com/2010-toyota-prius.htm
http://www.hybridsuv.com/
http://www.chevrolet.com/pages/open/default/future/volt.do?seo=goo_|_2009_Chevy_Awareness_|_IMG_Chevy_Volt_Phase_2_Branded_|_Chevy_Volt_|_chevy_volt
http://www.greencarreports.com/blog/1041733_update-low-thirties-2011-chevrolet-volt-price-is-after-tax-credit
http://www.bts.gov/publications/national_transportation_statistics/html/table_01_11.html
http://en.wikipedia.org/wiki/Relative_cost_of_electricity_generated_by_different_sources
http://en.wikipedia.org/wiki/Electricity_generation
http://e360.yale.edu/content/feature.msp?id=2170
http://www.npr.org/templates/story/story.php?storyId=93293391
http://www.usatoday.com/tech/news/2006-07-10-ethanol-study_x.htm
http://environmental-engineering.suite101.com/article.cfm/coal_gasification
http://en.wikipedia.org/wiki/Biogasoline

Fort Myers, FL
June 19, 2010

Photo Credit:
In the wake of BP’s disastrous oil spill in the Gulf of Mexico, many politicians and environmentalists are renewing calls for alternate energy and electric cars to relieve the United States from our dependence on foreign oil. Energy independence would have many advantages, from decreasing pollution to depriving terrorist-supporting Arab states of revenue. Even without environmental considerations, the high price of gasoline, especially for summer road trips, gives many car owners the urge for a cheaper alternative, but is a short-term transition to other sources of energy realistic?

The journey away from oil began in earnest a few years ago with the introduction of the Toyota Prius, the first popular hybrid auto. The Prius combines a gasoline-powered engine and two electric motors. The gasoline engine powers the car for highway driving and the electric motors. The car often runs on battery power with the gasoline engine switched off.

Another popular alternative auto is the Smart Car. This two-seater is a product of Daimler and is known for its fuel economy. The tiny car is unique on American streets. Its small size and distinctive round shape make it stand out. One red Smart Car seen around my home town of Villa Rica, Georgia has a vanity license plate that reads “TMATER.” The Smart Car is powered by a traditional gasoline engine.

There are problems with these new cars. One problem is that although they do offer high gas mileage, fuel economy is only marginally better than traditional compact cars. The Prius advertises a fuel economy of 51 mpg in the city and 48 on the highway (http://bit.ly/9Luzbf ). The Smart Car reports 33 mpg in the city and 40 mpg on the highway (http://bit.ly/c0FRsJ ). In contrast, a new traditional compact car such as the Ford Fiesta measures in 29 mpg in the city and 40 on the highway (http://bit.ly/bY0kNs ).

For this marginally better fuel economy, the car buyer must pay a premium. MSRP for the Prius is between $21,000 and $28,000 (http://bit.ly/cOs1Qn ). The Ford Fiesta, a car of equivalent size to the Prius, has an MSRP of $13,000 to $17,000 (http://bit.ly/cjOnQI ), almost $10,000 less. The Smart Car has approximately the same price as the Fiesta (http://bit.ly/ctZ3YR ), but at half the size. It would take years or thousands of miles to pay for the increased cost of the car in fuel savings. Of course, if gas prices increase sharply, the math would shift in favor of the Prius and Smart Car.

These new cars are also clearly not designed with large families in mind. The Prius and the Smart Car are practical for commuters, but not people who travel with children and the assorted paraphernalia necessary for a family trip. There are a variety of hybrid SUVs on the market, but again there is a tradeoff. A premium in price is added to an already expensive vehicle in exchange for modest increases in fuel economy.

The prospect of completely electric cars would face the same problems as well as additional ones. When Chevrolet’s corporate officers came to congress for a bailout, they touted the upcoming release of the Chevy Volt, a totally electric car. One obvious problem with the Volt is that its battery power will only take you 40 miles (http://bit.ly/bPC2l2 ). If you need to go further, a gasoline engine takes over.

For many commuters, such as those driving to Atlanta from outlying suburbs, forty miles is close to a one-way commute. To take full advantage of the Volt, they would have to charge the car at night at home before driving to work. Once at the office, they would have to find an outlet to plug in the car to let it charge for the trip home.

Additionally, people without a garage may have trouble finding a place to plug in their Volt. Although it is capable of charging from a common household 120-volt outlet, outside outlets are not common at many apartments. Even at a house without a garage, it might be difficult to find an outlet that won’t require the use of very long extension cord. The exact price of a Chevy Volt hasn’t been released, but Chevrolet has indicated that the car will cost over $30,000 (http://bit.ly/9AilVS ). This is even after tax credits are taken into account.

Another electric car with better performance is the Tesla Model S. Tesla Motors is partnering with Toyota to produce a high performance electric roadster. The Tesla is a two seat open top sports car that accelerates from 0-60 mph in less than 4 seconds (http://bit.ly/9AnZ2d ). Its estimated 245 mile range is six times that of the Volt. Nevertheless, after 245 miles, plan on a long lunch. It takes three and a half hours to recharge. This is much more inconvenient than pulling into a gas station for a quick fill-up. The Tesla’s price tag is also impressive at $100,000. For those on a budget, you can also lease a Tesla for just over $1,500 per month. (For more information, see www.teslamotors.com.)

The Volt and the Tesla share common disadvantages in price and range, but what makes them really impractical is their small size. Like the Prius and the Smart Car, the Volt and Tesla are meant for commuters. A successful family electric car will must have room for a family. To be widely accepted, electric vehicles will not only have to have the range to run errands around town, they will have to have the seating and cargo capacity of a minivan or an SUV.

Even if such an electric vehicle were available today, it would be years before we could transition completely away from gasoline powered cars. The Bureau of Transportation Statistics estimates that there are more than 135 million passenger autos in the US (http://bit.ly/9fL3uR ). Many, if not most, of the owners of these cars would not want to incur a mortgage-sized car payment for a new electric car. The market for used electric cars is thus far nonexistent.

Consumer demands aren’t the only limits for the growth of the electric car market. At this point, the electrical infrastructure of the US is not prepared to handle the power demands of a transition to electric cars. While electricity is cheaper than oil at this point, increased demand for electricity would drive up its price. This is especially true if congress passes a cap-and-trade energy tax since much of our current electricity is generated by coal, one of the cheapest sources of electricity.

New and alternative sources of electricity such as solar and ocean wave capture are expensive when compared to coal, natural gas, and nuclear generated electricity. The cost of wind energy has decreased in recent years, but these alternative sources of energy face the problem of intermittent wind and sunshine. To be practical, alternative energy sources would have to include a back-up storage system for when the wind is calm or clouds block the sun. At this point, massive batteries or some other technology that can back up large scale alternative energy sources have not been developed.

A final alternative to oil is to use ethanol in gasoline powered autos. There are several problems associated with ethanol use however. For example, when the government increased the mandated amount of ethanol production in 2007, it caused a worldwide spike in food prices the next year (http://n.pr/bbJPHL ). Even if the total US corn crop was used for ethanol production, it would only account for 12% of American gasoline requirements (http://bit.ly/9zhJIE ). Additionally, ethanol can damage engines.

Another newly cost-effective technology converts coal into gasoline. The Germans developed a process to transform coal into gasoline in response to fuel shortages in WWII. Since then, low oil prices have made the process too expensive to compete with oil-based gasoline until recently. Coal-based gasoline does not resolve concerns about pollution and carbon emissions. Similarly, as oil and gasoline prices rise, new advances in biofuels and biomass-based gasoline may become more practical.

Although there is already progress with new technology and even more advances are on the horizon, the United States, along with the rest of the world, remains firmly in the grasp of oil. For the foreseeable future, we will need oil rigs to provide the fuel for our national economy.

Sources:

http://www.toyota.com/compare/?modelCode=prius#h_overview
http://www.greencar.com/articles/smart-car-offers-drivers-new-high-mpg-option-top-crash-rating.php
http://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-allnew-ford-fiesta-delivers-40-mpg-32663
http://consumerguideauto.howstuffworks.com/2010-toyota-prius.htm
http://www.hybridsuv.com/
http://www.chevrolet.com/pages/open/default/future/volt.do?seo=goo_|_2009_Chevy_Awareness_|_IMG_Chevy_Volt_Phase_2_Branded_|_Chevy_Volt_|_chevy_volt
http://www.greencarreports.com/blog/1041733_update-low-thirties-2011-chevrolet-volt-price-is-after-tax-credit
http://www.bts.gov/publications/national_transportation_statistics/html/table_01_11.html
http://en.wikipedia.org/wiki/Relative_cost_of_electricity_generated_by_different_sources
http://en.wikipedia.org/wiki/Electricity_generation
http://e360.yale.edu/content/feature.msp?id=2170
http://www.npr.org/templates/story/story.php?storyId=93293391
http://www.usatoday.com/tech/news/2006-07-10-ethanol-study_x.htm
http://environmental-engineering.suite101.com/article.cfm/coal_gasification
http://en.wikipedia.org/wiki/Biogasoline

Fort Myers, FL
June 19,

Photo Credit:
m_bartosch
http://www.freedigitalphotos.net/images/view_photog.php?photogid=681

Investing in the Obama Economy

Whether we voted for him or not, we must realize that Barack Obama is going to change the face of the United States and its economy. Radical changes in numerous areas of our economy are causing upheaval in the stock market and investment portfolios. To make the best investment choices, we should look at what Obama plans to do and the likely effects of his policies.

A big question on the minds of most investors is whether to ride out the crashing market or to try and salvage what remains of their portfolios. Since the financial crisis began in September 2008, the Dow Jones Industrial Average has fallen from a high above 13,000 to below 6,800 in trading today (3/2/09). If you are still in the market, you have probably seen a loss of approximately half the value of your portfolio.

A good strategy depends on the length of time that you have to recoup your losses. Historically, the stock market always shows a profit over time. Even in the stock market crash of 1929, when the Dow fell from 380 to 42 as the US entered the Great Depression, the stocks eventually regained their value. The down side is that this takes time. The market did not recover to its pre-1929 values until the late 1950s.

President Obama is following a set of policies that is very similar to those enacted by President Roosevelt in the 1930s and the government of Japan in the 1990s. In both cases, the increased government spending, higher taxes, and increased regulation led to a deeper recession and a slow recovery that took in excess of ten years. What we can learn from this is that, in all likelihood, we may not recover our past losses until 2030.

President Obama’s stimulus and bailouts have not stopped Wall Street’s freefall. With every new bailout and nationalization, the market falls further. Since there is no end in sight to government dabbling in the economy, there is also no bottom in sight to market losses.

If you are someone who needs your investment money in the short term, up to ten years from now, my recommendation is that you consider cutting your losses and get out of the stock market. Your current losses will become permanent, but you will preserve what you have left.

On the other hand, if you will not need your money for twenty to thirty years and are somewhat risk tolerant, you should consider staying in the market. The economy is cyclical and, in spite of everything that we can throw against it, it will recover in time. If a substantial change in government policy occurs over the next few years, the recovery might be sooner and sharper than anyone imagines.

For investors with a middle range outlook, from ten to twenty years, you should talk with your investment advisor about moving at least part of your portfolio to more conservative, less risky investments. You will lock in some losses, but you will also preserve more of your cash in the event of a long recovery.

The next question is what does constitute a safe and conservative investment in this economic climate. To answer this, we should look at what President Obama has announced as his intentions as well as what he has already done in his first six weeks in office. His banking polices, including government purchases of bank stock, have caused the value of bank stocks to crash. Auto stocks have fallen amid government bailouts and increased government control of the industry. Obama’s cap-and-trade energy tax will likely hurt traditional energy companies as well as the many businesses whose operations require energy to produce and transport their products. Health care is likely to be a target for nationalization or price controls in the near future. All of these sectors are likely to be poor investments for the next few years.

In past recessions, investors were able to invest in foreign markets when the domestic economy slowed. The current crisis, however, is worldwide. In spite of the poor performance of the US economy, it still leads that of most of other nations. Russia, Venezuela, and other oil producers have been hit hard by the collapse of oil prices. European nations have banking problems similar to ours and many are constructing their own bailout plans. Countries that depend heavily on US imports, such as China, are suffering from diminished US consumer demand.

On the other hand, a slowing economy does offer some opportunities. As more Americans make do with less, discount retailers are likely to do well. Family Dollar (FDO) is currently trading near its 52 week high, as is Dollar Tree (DLTR). McDonalds (MCD) is another company that has thus far done well in the crisis as people forgo expensive restaurants for the dollar menu.

Another likely growth sector is green energy. Obama’s energy policy will be to force a change from traditional sources of energy to new ones such as wind and solar. Carbon based energy, such as coal and oil, will be targeted by the federal government. During the campaign, Obama himself predicted that his policies would bankrupt companies that try to operate coal power plants. Similarly, companies that focus on ethanol, fuel cells, and hybrid technologies will be good bets. Even if they are not profitable on their own terms, they will be likely to receive substantial government subsidies and contracts.

To make wise investment choices, we must also consider the likelihood of either deflation or inflation. Currently, with a backlog of production, rising unemployment, and flagging consumer confidence, deflation is a threat. Increased government spending can also cause deflation since the government is competing with the private sector for money and, in effect, reducing the money supply.

Deflation occurs when people stop spending, causing the value of goods and services to decline. This may seem like a good thing when prices start to decline until you realize that the value of your property and your savings is declining as well. As goods pile up, companies cut production and lay off workers. Since consumers have less money to spend, they buy even less and more goods pile up. The cycle is a vicious one that can be hard to break. Deflation plagued both the US under the New Deal and Japan in the 1990s.

If the economy does slide into deflation, the values of almost all investments will decline. In a deflationary economy, real estate, commodities, stocks, and bonds are all poor investments. The best investment choice for a deflationary economy is to hold on to your cash.

On the other hand, inflation occurs when prices rise. Many economists believe that inflation is likely in the long term due to large government spending programs funded by debt. To service the interest on this massive debt, the government is likely to have problems generating enough revenue from the sale of government bonds. Other countries, such as China, that buy our debt have their own financial problems. Likewise, US citizens are also saddled with debt and have little left over to invest. If the government cannot raise cash through the sale of bonds, they will be left with little choice but to print more money or default on their loans.

When the government prints more money, basic economics tells us that as the money supply increases, the price (value) of the dollar will decrease. A dollar will buy less and the price of goods will increase. In our recent history, the 1970s was a time of rising inflation and, due to the high cost of capital, stagnant growth. The combination was referred to as “stagflation.” Inflation and unemployment figures were combined into a “misery index” that topped 20% by the time President Carter left office.

While deflation is likely in the short term, it is likely that we will face inflation in the long term. While an inflated dollar might make it easier to repay loans, it also erodes the value of savings and investments. People on fixed incomes are also hurt because their cash flow stream may not be indexed for the real rate of inflation.

In times of inflation, since prices tend to rise, the best investment strategy is to buy things. This strategy works from household items to real estate and commodities. For example, if you know that prices are going to rise and you know that your children will need new clothes and shoes for school next year, you would be better off to buy now before the price rises. Similarly, buying a house at the onset of an inflationary period will see an increase in the value of the house due to the inflationary decline of the dollar.

Commodities, particularly gold, are a traditional refuge during times of inflation. Gold is touted as a hedge against inflation, but because it is a high profile commodity often carries an extra expense. The price of gold is also sometimes manipulated by governments because it is often seen as a referendum on the economy.

Oil is another commodity that traditionally does well during times of inflation. Oil is currently trading at $44 per barrel, down from a high of nearly $150 per barrel in the summer of 2008. A big part of oil’s collapse was due to declining demand as the world’s economy began grinding to a halt. As the recovery eventually begins, demand will increase and the price of oil will recover. Regardless of Obama’s push for alternate energy, most of the world will run on oil for a long time to come.

One final consideration for investing during Obama’s tenure is taxes. Obama has been open about his plans to raise taxes on upper-income taxpayers and it is extremely likely that middle-income families will soon face an increased tax burden as well. Investors should take this into account. Individual Retirement Accounts (IRAs) offer a common means of deferring taxes. Investors should also keep in mind that there are likely to be drastic changes to the tax code. Many tax shelters and deductions are likely to be eliminated as the government tries to increase revenue.

Regardless of how the economy performs, one smart use of your money is to get yourself out of debt. With fewer monthly obligations to meet, you will have more disposable income with which to handle whatever life throws at you. Instead of paying interest to a lender, you’ll either be able to collect interest on investments or buy goods that will appreciate in value. In a time of uncertainty, preparation and savings is the smartest investment.

Disclaimer: I am not a licensed financial advisor. Consult your professional financial advisor before making changes to your portfolio.

Sources:
www.Inflationdata.com

3/2/09
Newark NJ

The Party of Choice

Since the Supreme Court ruling on Roe v. Wade in 1973, “choice” has become a code word for abortion rights. Politicians and pro-abortion interest groups speak of “a woman’s right to choose” in lieu of naming abortion explicitly. Democrats are the primary supporter of the abortion choice and are quick to label pro-life politicians as “anti-choice.” But when the right to choose is expanded to other issues the Democrats do not necessarily champion the freedom of choice.

A fundamental choice that Americans can make is the choice of how to spend the money that they earn. On this issue, the issue of how much the government takes in taxes, the Democrats are solidly anti-choice. Democratic politicians have repeatedly favored heavier taxes in a variety of forms, including income taxes, gas taxes, as well as taxes on dividends, capital gains, and the estates of deceased people, who, in turn, have paid taxes all of their lives. Democrats almost uniformly reject President Bush’s across-the-board tax cuts as “a tax cut for the rich” and plan to let them expire. By supporting higher taxes, Democrats take the freedom of choice in spending away from ordinary Americans.

A second choice that Americans make is the choice to decide what to do their own property. Private property rights face an assault on two fronts: eminent domain and environmental legislation. Eminent domain means that the government can take private property for public use if the property owner is compensated. This was traditionally held to mean that the government could seize private property to build roads, schools, and other projects that benefit the public at large. This changed in 2005 with the Kelo v. New London decision, which held that public benefit could mean nothing more than increased tax revenues. This means that virtually no private property in the United States is safe from an alliance of developers and tax-hungry local governments. The liberal (activist) wing of the Court voted for the decision, while the conservative (constructionist) dissented.

The second assault on private property is through environmental laws, which allow the government to render private property unusable without compensation. This is commonly accomplished by declaring areas as protected wetlands. In many cases, a small drainage ditch or wet weather stream is designated a wetland. In other cases, protected species, such as the snail darter, are found on private property. In either case, restrictions are placed on the use of the property. Often the property owner can neither use the land nor sell it due to the government restrictions. Of course, the government does not compensate the property owner. The Democratic Party is beholden to the radical environmental groups that support these laws.

Education is another area where choice is limited as a result of Democratic activism. As public schools in many areas decline, many parents would appreciate the opportunity to send their children to private schools where they can receive a better education. In most areas, schools are supported by property taxes. Parents must continue to pay property taxes and support public schools, even if their children attend private schools. In effect, parents must pay twice for their child’s education. This puts private schools out of reach for many families. An answer to this problem is by providing school vouchers that would allow parents credit for tuition at the school of their choice. Unfortunately, teacher’s unions that support the Democratic Party oppose school vouchers.

Additionally, parents have little control over the curriculum that their children are taught in public schools. Many schools teach things that many parents find offensive. These lessons often teach a view of issues such as sexuality, religion, or even American history that is contrary to the beliefs of the family. Parents often find it difficult to know what their children are being taught. If they find that their children are being taught something contrary to their beliefs, it can be even more difficult to prevent their child from being exposed to these lessons.

Gun ownership is another choice that Democrats would take away from Americans. The most restrictive gun laws in the United States are found in Democratic strongholds such as the District of Columbia, Illinois, New York, and California. In 2008, the Supreme Court overturned the gun ban in the District of Columbia. This ban, the most restrictive in the country, was deemed constitutional and sensible by Democratic Presidential nominee Barack Obama. Contrary to the Court’s opinion, many Democrats believe that the second amendment applies to government militias and not individuals.

A telling example of the Democratic Party’s anti-choice attitudes is the belief that the US government should force all Americans to purchase health insurance from the government. Government mandates for coverage have made affordable basic health insurance hard to find in many states. Popular Democratic plans would mandate that all Americans obtain coverage through single-payer government plans. This is regardless of whether an individual believes that they need, want, or can afford health coverage. Under current law, people who cannot afford health insurance do not have to purchase it, but can still receive medical treatment from hospital emergency rooms. Under a single-payer system, mandatory taxes would pay for a national health care system, eliminating the freedom to choose to self-insure.

A final example of Democratic anti-choice is their proposed energy policy. Current high oil prices have convinced a majority of Americans that domestic drilling should be expanded to bring additional supplies of oil into the marketplace. Democratic leaders, however, support an extension of the bans on drilling in ANWR and on the continental shelf. Keeping the bans in place means that states are not allowed to choose to exploit a valuable natural resource.

Instead, the Democrats pursue solutions that remove choice from the marketplace. One example is the Renewable Fuels Standard passed in 2007, which sharply increased the amount of ethanol required in US gasoline. Not only did this legislation do nothing to lower gas prices, by creating an artificial demand for corn, it also caused higher food prices and shortages around the world.

Other Democratic energy proposals are similarly focused on top-down mandates. Ideas include restrictions on investing in commodities futures, requirements for investing in alternative fuels, mandates for increased auto fuel economy, and a complex system of taxes on carbon use. One proposal by the California Energy Commission would even require Californians to place a radio-controlled thermostat in new buildings that would enable the government to remotely control the temperature to save energy!

Democrats may claim to be pro-choice, but on most issues their policies would take choice away from Americans and place it in the hands of the government. Allowing individuals to choose how to spend their money and time means that some people will make poor choices, but most will make the choice that best suits their own life.

How NOT to Lower the Price of Gas

Record fuel prices have Americans, as well as drivers around the world, feeling gas pains at the pump. High oil prices also drive up the cost of many other items due to production and delivery costs. High gas prices are certain to be a major issue in this year’s elections.

Currently, the high price of oil reflects increasing demand around the world, particularly from developing countries such as India and China, as well as constraints on supply. Supply is limited by the high cost of exploration for new oil fields and bureaucratic limitations on opening new refineries.

While the high cost of gasoline is a problem for many, there are a few groups who benefit from high price of oil. Oil producing countries reap huge profits from expensive oil. Environmental groups seeking to reduce oil consumption have sought to artificially drive the price of oil even higher by increasing gas taxes. Alternative energy companies are an attractive investment when the price of oil is high.

For groups who seek to keep the price of oil high, there are several courses of action. First, they should work to keep demand high by discouraging conservation. Drivers should be encouraged to not to carpool or combine trips. Drivers should also be told not to slow down. Driving over 60 mph dramatically increases fuel consumption, especially in gas guzzling SUVs. The effective cost of gasoline increases by about twenty cents per gallon for each five miles per hour over 60 mph. For example, driving 70 mph means that you may as well pay an extra forty cents per gallon to fill up your tank. Not maintaining cars and keeping tires properly inflated also increases fuel consumption.

Keeping demand high is also accomplished by preventing the adoption of practical alternate sources of energy. Many sources of energy that are wildly popular hold little promise for a market the size of the United States.

Brazil has become almost totally energy independent through the use of ethanol-based fuels and many would like for the US to emulate their model. The problem is that Brazilian ethanol is sugar-based while only corn-based ethanol is widely available in the US. Corn ethanol is not as efficient as sugar ethanol. It actually takes more energy to produce and distribute corn ethanol than the ethanol itself provides. Additionally, it would take an area roughly the size of New England to provide enough ethanol to meet American needs. Finally, diverting corn to ethanol drives up food prices, which means that consumers would simply trade expensive gas for expensive food.

Solar and wind power are trendy sources alternate energy, but neither is ready to supplant oil as the primary engine of the world economy. Both require large capital investments in infrastructure and both are subject to changing weather. In the future, better means of storing large quantities of electricity and cheaper solar collectors and windmills may make solar and wind power more attractive, but presently they are not cost-effective or practical.

To keep gas prices high, consumers should also make certain that the supply of oil does not increase. The most effective way of doing this is by continuing to elect politicians who make it difficult to explore and drill for oil domestically in the United States. Current US policies prevent drilling in much of Alaska, the Gulf of Mexico, and federal lands in the continental US. These areas hold 635 trillion cubic feet of natural gas, enough to supply 60 million homes for 100 years, and 112 billion barrels of oil, enough to supply US needs for about 60 years.

Additionally, Congress and state governments are jointly responsible for high taxes on gasoline. Taxes on gasoline make up about 15% of the cost of a gallon, while oil company profits only account for about 4%. A reduction in gasoline taxes would provide relief at the gas pump for American drivers, and some presidential candidates are calling for a gas tax moratorium. Others are calling for increases in the gas tax, however, arguing that higher prices will decrease demand and spur conservation.

Government red tape also contributes to the high cost of gas. Environmental regulations make it a difficult and expensive proposition to build refineries to convert oil into gasoline. The last US refinery was built in the 1970s, although a few new refineries are under construction.

Environmental regulations also require that refineries manufacture expensive blends of gasoline in certain areas and in the summer to decrease pollution. Changing formulas is expensive and requires the refinery to stop production to make the changes. Making fewer types of gasoline would lower the cost and allow more gasoline to be produced.

Government regulations also slow the construction of nuclear power plants, the most practical form of alternate energy currently available. Advances in nuclear plant design allow nuclear power to be safe, clean and cheap. France currently supplies about 80% of its energy needs through nuclear power. Environmental groups and government regulations make it difficult to build nuclear plants in the US, however.

In short, there are two ways to lower the price of gasoline: by either increasing supply or decreasing demand. As long as people around the world continue to use large quantities of oil and limiting oil exploration and drilling, oil prices will continue to stay high.