Posts Tagged ‘Keystone’

Gas prices go up and down, driven in part by speculation, part by supply and demand (the two are tied together).  Gas is a refined product made from oil, and as such, the price of oil drives the price of gas.  The current administration is steadfastly focused on green energy, and currently, for green energy to be commercially viable as a mainstream source, oil prices need to remain relatively high.  With oil and gas prices high, the need to look towards alternate energy sources becomes viable – but from a market perspective, they will only be viable if the costs are similar.  America has been dabbling in alternative energy for decades upon decades.  Hydro, solar, nuclear, wind, battery.  Where it made sense, economically, each of these methods has been a viable solution to generate electricity in lieu of fossil fuels, coal and oil.  But as vast as America is, we need to consider our energy needs are a complex mix of ALL sources, including fossil fuels.

Back to supply and demand – oil is a global commodity, and thus the demand is global.  Emerging economies such as China and India are driving up demand, so it is important to push more oil on the market to meet this demand and stabilize and even drive down speculative prices.  America has significant untapped oil reserves that can be added to the global supply – oil in ANWR, the Gulf and East Coast shelf will all add to the supply to reduce speculative pricing, even with unrest in the Middle East.  New technologies and recovery methods have helped tap into additional oil unrecoverable just a decade ago.  This oil can be recovered with minimal impact on the environment.  So what’s the hold up?  Good people with different views, concerns, and visions are putting unrealistic expectations on the speed of market acceptance of “green” technologies.  The realities are the US economy’s successful growth is dependent on a range of fuel costs much lower than the $4-$5 gallon level at this time.  High fuel costs are a serious growth killer, as it takes energy to produce everything, AND, it takes fuel to deliver everything – so higher costs drive prices up across the board.  This is much more of an issue with moderate to low-income citizens – much like a regressive tax.  There is too much political fodder going on today – and this needs to stop.  Embrace Keystone (responsibly routed), accelerate permits for drilling (responsibly), Utilize clean coal technologies, and educate on conservation.  Oh, be careful of what numbers are being bantered about 2% of the world’s oil reserves, 25% consumption…hmmm, not so sure on that 2% number (check this out).

We will eventually move away from fossil fuels, eventually, the global economy will rise such that gas prices will rise to a level that makes alternatives much more viable and marketable.  However, today, in the year 2012, America needs to utilize all the resources at its disposal to drive economic growth which in turn will spur the kinds of innovations required to take us in to the next decade and beyond.  Having the government force a change in market behavior is a waste of our hard-earned dollars (ie. Solyndra).  I just don’t think the people in this administration get it (comparing technological advances in cell phone technology to high power mechanical engines is ludicrous – read here).  For now, we need to focus on conservation,  increased supply,  and alternative energy solutions that make sense.

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Breaking news – Unemployment is down to 8.6% – Awesome!!  But wait – what about those 315,000 people who stopped looking?  That is a significant number and contributes to the drop from above 9%.  Don’t go off running and say wow – things are finally turning the corner.  With the government in gridlock, and absolutely no one willing to actually get to work in DC reducing the deficit, reforming taxes, fixing our entitlements, improving government efficiency – this is just another warning sign that America is sliding down the proverbial slope.  Two major factors contributed to the 0.4% decrease – removing from that number people who have given up looking, and a natural seasonal uptick due to the holidays.  Yes, there is some glimmer of hope in this news, but the fundamental problem is still not being addressed.  We need leadership in Washington that will take the bold steps to get the economy moving. But there is more deception in this number – check back in three weeks when the government revises this number upwards.  Adding 120,000 jobs does not reflect a 0.4% drop in the number – someone is playing with these numbers!

What about the Keystone pipeline?  Why is this being delayed?  If there are issues – why can’t they be addressed quickly and get it moving forward?  Why has Obama pushed this off until after the election?  Here’s a major job producing project which requires no money from the government, and yet it’s stalled – due to the political poison in DC.  It is unfortunate that we are faced with about 11 more months of this baloney before we will get any real action.  Unemployment will hover near 9% at least through the winter – hopefully, some movement will start kicking in as Q2 arrives?!



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