President Bush’s energy proposals to Congress include the right solutions to free the US from energy dependence. We need more domestic oil production, natural gas, pipelines, nuclear power, solar, grass based ethanol and to better technology to clean coal for our independence. There will be few jobs in the future without energy infrastructure, and the political risk from oil producing countries cutting our supply is substantial.
Our dollar is falling in value for because of oil imports. Oil imports were 4.9 billion barrels in 2007. Estimate $75 per barrel is $367.5 billion, or 50% of the $711.6 billion US trade deficit. We need to expand drilling off all coasts and domestic refining.
Corn based ethanol is not efficient and is causing food shortages. We need to develop cellulous (grass) base ethanol.
France generates 90% of their electricity with nuclear power. Our nuclear plants are decades old and need to be replaced for safety. Solar power will contribute in the next decade, but we need electricity at night for non polluting electric cars.
We need to balance fiscal, political and environmental responsibility in our energy policies. The US can not surrender our children’s future to imports. We need to meet our own needs domestically.
Showing posts with label Solar. Show all posts
Showing posts with label Solar. Show all posts
May 10, 2008
April 22, 2008
Invest in Productivity and Innovation
The economy is in a mild recession. The housing bubble has burst and is reverting to mean (normal) values. The super leverage of the 2000’s is being unwound as the investors who took the risk are paying the price of risk. There is a lot of speculation about how bad the economy will be.
We will not have a great depression. This is just a normal business cycle, unless political protectionism makes the situation worse. This cycle is predictable and expected by mature investors. There are challenges coming, but nothing to panic over.
Consumers will not be able to use their homes to use like an ATM to keep spending. Increased energy and food costs further will reduce consumer spending power. Consumers will change their spending towards different priorities for the next few years until incomes increase again. Job outsourcing globally will keep salaries low.
Consumer spending is the driver of two thirds of spending. Fortunately the world is now more successful everywhere, and increased demand is now coming from Eastern Europe, Asia, India and the Middle East. So consumer spending will recover internationally first.
So how will the economy recover? Productivity and innovation has always driven economic growth.
Invest in businesses, products or services that increase productivity. Can you lower shipping costs, use energy more efficiently, use less material in products, service clients quicker at less cost, or reduce overheads? These are the drivers of productivity. And the companies that do this are the ones to own.
Innovation and market changers are the companies that will thrive in the future. Look at Apple’s success in changing the music market. There are kids who have never bought a CDs nor albums. They buy music through iTunes. Television and movies are the next to be changed. Low cost hardware and better software has made an explosion of producing content available. With so many choices for customers, how can major studios or networks hold on to viewers? Look for distribution over the web to grow.
Computer grow exponentially more powerful, and programs now do the leg work of thousands of technicians or clerks. CAD changed how we design products, test ideas, and do research. Better quality and lower prices have come with these innovations. In fact, as the price gets lower more people have access to the power of software. Look at the success of new medical products that are improving medical care. CAD has speed up development tremendously. Furthermore the web will be replaced by cloud computing which will increase the amount of data available faster.
Invest in energy businesses that increase productivity of creating energy or conserving energy. One caveat, they must be profitable at a much lower oil prices. Energy will be the next bubble to break. $100 to 120 per barrel is not sustainable.
Oil was stuck in the $15 to $20 per barrel range for two decades. A price of $30 dollars per barrel would be reasonable today with normal inflation. The value of the dollar fell about 30% over the last two years, so $20 to $30 per barrel is now $30 to $45 per barrel. Demand will fall at the current high prices, and alternative production methods are cost effective above $30 per barrel. Both will reduce future demand for oil and lower prices. Invest only in energy processes that are cost effective at $30 - $45 per barrel. I expect oil to fall to $60 – $70 per barrel in 2009.
In summary, the future economic growth will be from productivity and innovation. Productivity and Innovation will overcome a few years of low growth or recession. This is where we need to invest for future profits.
We will not have a great depression. This is just a normal business cycle, unless political protectionism makes the situation worse. This cycle is predictable and expected by mature investors. There are challenges coming, but nothing to panic over.
Consumers will not be able to use their homes to use like an ATM to keep spending. Increased energy and food costs further will reduce consumer spending power. Consumers will change their spending towards different priorities for the next few years until incomes increase again. Job outsourcing globally will keep salaries low.
Consumer spending is the driver of two thirds of spending. Fortunately the world is now more successful everywhere, and increased demand is now coming from Eastern Europe, Asia, India and the Middle East. So consumer spending will recover internationally first.
So how will the economy recover? Productivity and innovation has always driven economic growth.
Invest in businesses, products or services that increase productivity. Can you lower shipping costs, use energy more efficiently, use less material in products, service clients quicker at less cost, or reduce overheads? These are the drivers of productivity. And the companies that do this are the ones to own.
Innovation and market changers are the companies that will thrive in the future. Look at Apple’s success in changing the music market. There are kids who have never bought a CDs nor albums. They buy music through iTunes. Television and movies are the next to be changed. Low cost hardware and better software has made an explosion of producing content available. With so many choices for customers, how can major studios or networks hold on to viewers? Look for distribution over the web to grow.
Computer grow exponentially more powerful, and programs now do the leg work of thousands of technicians or clerks. CAD changed how we design products, test ideas, and do research. Better quality and lower prices have come with these innovations. In fact, as the price gets lower more people have access to the power of software. Look at the success of new medical products that are improving medical care. CAD has speed up development tremendously. Furthermore the web will be replaced by cloud computing which will increase the amount of data available faster.
Invest in energy businesses that increase productivity of creating energy or conserving energy. One caveat, they must be profitable at a much lower oil prices. Energy will be the next bubble to break. $100 to 120 per barrel is not sustainable.
Oil was stuck in the $15 to $20 per barrel range for two decades. A price of $30 dollars per barrel would be reasonable today with normal inflation. The value of the dollar fell about 30% over the last two years, so $20 to $30 per barrel is now $30 to $45 per barrel. Demand will fall at the current high prices, and alternative production methods are cost effective above $30 per barrel. Both will reduce future demand for oil and lower prices. Invest only in energy processes that are cost effective at $30 - $45 per barrel. I expect oil to fall to $60 – $70 per barrel in 2009.
In summary, the future economic growth will be from productivity and innovation. Productivity and Innovation will overcome a few years of low growth or recession. This is where we need to invest for future profits.
February 13, 2008
Solving the Energy Problem
Why do we want to solve the energy problem? Look at the risks of doing nothing. How much of our trade imbalance is based on oil? Oil is a significant threat to our economy and world peace.
Hugo Chavez in Venezuela has threatened to cut off oil to the US? Vladimir Putin and Russia has the power for using natural gas and oil over Europe. Iranian President Mahmoud Ahmadinejad is using oil wealth to threaten destroying Israel and potentially starting a world war against the West?
Think about the war in Iraq? The fight between the Shiites, Sunnis and Kurds is over religion, power and oil wealth. Iran, Syria and the terrorists are all interested in Iraq’s power and wealth.
How about a potential overthrow of the pro US government in Saudi Arabia? Al Qaeda was spawned under the House of Saud, and a large number of their citizens hate their government. What happens if they lose power?
Why should we continue to give money, political power, and an economic weapon to people who hate us? The current risk of supply problems is significant, and would damage our economy.
How much of our trade deficit is based on oil? The 12 months through November 2007 the US imported 3,647,889 barrels. Assuming the average price over 2007 was approximately $75 (Current prices are in the low $90’s), oil imported was approximately $273.5 billion in 2007. Our trade deficit in 2007 was $711.6 billion, making oil imports about 38% of the deficit.
To solve the oil problem, we need plans for the long term as well as the short term. This is a series of solvable projects that needs a long term vision to happen.
Short term actions:
Drill more domestic oil off all the coasts and in Alaska to cover the next decade. Everyone points to the potential for pollution. Oil drilling and transportation processes have improved dramatically over the last 50 years. The rare accidents are cleaned up quickly. Oil will always be needed for premium energy, plastics and products. The US needs to increase production.
Locate more natural gas reserves and develop pipelines to heat buildings and homes. Our infrastructure is reaching its limits, and needs expansion.
Find better ways to clean pollution from coal emissions, and require the whole world to use the technology (including China, India, Russia and developing countries) for a level playing field. China and India are causing three to ten times the pollution than the US. Why should we be held to higher unfair standards like the Kyoto protocol than the rest of the world?
About global warming:
Human caused global warming is not scientifically proved beyond a doubt. Global warming is a natural cycle with a little human contribution since the industrial revolution.
Why is a 1 degree Fahrenheit (0.5 degree Celsius) increase over 100 years traumatic? History shows a normal range of variation around 3 degrees Fahrenheit (1.7 degrees Celsius) in the last 2,000 years. Go back millions of years and the natural temperature variation is larger. The biggest factor related to global warming is the natural variation in the output from the Sun.
The fanatics are talking CO2 will destroy the world. People and animal exhale CO2. Are we talking about people and animals breathing CO2 being the main cause of a pending future natural disaster? I don’t think the world is that fragile.
If human kind is contributing less than 1% to 5% maximum of global warming, why are some panicking? Most of the research is based on computer models that are simpler than reality. These models do not work well when compared with current data. Look at the hurricane predictions from 2006 & 2007. The results missed reality going the wrong way from the faulty models. Most global warming models are based on faulty logic. The lack of good science is why I do not take global warming seriously as a panic.
Long term actions:
Generate more electricity using solar and nuclear. Solar electrical generation is finally becoming efficient enough to be cost effective. It could generate 10% of future needs as well as being pollution free. Tax incentives and private industries should be the source of solar products.
Nuclear energy is the choice of many countries including Canada, Britain, Spain and France. France generates 90% of their electricity from nuclear power. The plants in the US are aging, and need to be replaced with new, safer designs that are also more energy efficient soon. The older nuclear plants need to be retired for safety. Legal battles with environmental extremist have prevented new nuclear energy plants. We need to make nuclear power politically possible and economically feasible.
Convert hybrid cars to plug in hybrids to use less oil. This requires more electric generation from solar, coal and nuclear. Hybrids work because of the expanded range for practical transportation. Pure electric cars are too limited in distance for average commuting, and public transportation takes too much time for busy Americans to use. Most of us do not live near transportation that goes near our offices without doubling our commuting time. Time is our most valuable resource. This is why less than 3% ride public transit to work.
Create fuel cells to replace the gas engine generating electricity for hybrids. Fuel cells are getting close to being more economical for gasoline and alternative fuels like ethanol, natural gas and hydrogen.
Grow and develop grass based ethanol since corn based ethanol is too energy inefficient. Grass based ethanol generates much more energy than corn at a lower cost. We also need a pipeline system that carries ethanol. Transporting ethanol in trucks is too expensive and unreliable for extensive use.
The Results of Energy Independence Program:
A ten year program for energy independence will bring world oil back to $30 - $50 per barrel when the US stops importing oil. Dictators will have loss their income and a threat to use against the West. The possibility of war would be reduced. The American economy would improve with less trade imbalance.
The technology is there for everything proposed here. It takes a leader, political commitment, private and governmental investment, and the will to get it done. We are ready for the leadership to step up.
Hugo Chavez in Venezuela has threatened to cut off oil to the US? Vladimir Putin and Russia has the power for using natural gas and oil over Europe. Iranian President Mahmoud Ahmadinejad is using oil wealth to threaten destroying Israel and potentially starting a world war against the West?
Think about the war in Iraq? The fight between the Shiites, Sunnis and Kurds is over religion, power and oil wealth. Iran, Syria and the terrorists are all interested in Iraq’s power and wealth.
How about a potential overthrow of the pro US government in Saudi Arabia? Al Qaeda was spawned under the House of Saud, and a large number of their citizens hate their government. What happens if they lose power?
Why should we continue to give money, political power, and an economic weapon to people who hate us? The current risk of supply problems is significant, and would damage our economy.
How much of our trade deficit is based on oil? The 12 months through November 2007 the US imported 3,647,889 barrels. Assuming the average price over 2007 was approximately $75 (Current prices are in the low $90’s), oil imported was approximately $273.5 billion in 2007. Our trade deficit in 2007 was $711.6 billion, making oil imports about 38% of the deficit.
To solve the oil problem, we need plans for the long term as well as the short term. This is a series of solvable projects that needs a long term vision to happen.
Short term actions:
Drill more domestic oil off all the coasts and in Alaska to cover the next decade. Everyone points to the potential for pollution. Oil drilling and transportation processes have improved dramatically over the last 50 years. The rare accidents are cleaned up quickly. Oil will always be needed for premium energy, plastics and products. The US needs to increase production.
Locate more natural gas reserves and develop pipelines to heat buildings and homes. Our infrastructure is reaching its limits, and needs expansion.
Find better ways to clean pollution from coal emissions, and require the whole world to use the technology (including China, India, Russia and developing countries) for a level playing field. China and India are causing three to ten times the pollution than the US. Why should we be held to higher unfair standards like the Kyoto protocol than the rest of the world?
About global warming:
Human caused global warming is not scientifically proved beyond a doubt. Global warming is a natural cycle with a little human contribution since the industrial revolution.
Why is a 1 degree Fahrenheit (0.5 degree Celsius) increase over 100 years traumatic? History shows a normal range of variation around 3 degrees Fahrenheit (1.7 degrees Celsius) in the last 2,000 years. Go back millions of years and the natural temperature variation is larger. The biggest factor related to global warming is the natural variation in the output from the Sun.
The fanatics are talking CO2 will destroy the world. People and animal exhale CO2. Are we talking about people and animals breathing CO2 being the main cause of a pending future natural disaster? I don’t think the world is that fragile.
If human kind is contributing less than 1% to 5% maximum of global warming, why are some panicking? Most of the research is based on computer models that are simpler than reality. These models do not work well when compared with current data. Look at the hurricane predictions from 2006 & 2007. The results missed reality going the wrong way from the faulty models. Most global warming models are based on faulty logic. The lack of good science is why I do not take global warming seriously as a panic.
Long term actions:
Generate more electricity using solar and nuclear. Solar electrical generation is finally becoming efficient enough to be cost effective. It could generate 10% of future needs as well as being pollution free. Tax incentives and private industries should be the source of solar products.
Nuclear energy is the choice of many countries including Canada, Britain, Spain and France. France generates 90% of their electricity from nuclear power. The plants in the US are aging, and need to be replaced with new, safer designs that are also more energy efficient soon. The older nuclear plants need to be retired for safety. Legal battles with environmental extremist have prevented new nuclear energy plants. We need to make nuclear power politically possible and economically feasible.
Convert hybrid cars to plug in hybrids to use less oil. This requires more electric generation from solar, coal and nuclear. Hybrids work because of the expanded range for practical transportation. Pure electric cars are too limited in distance for average commuting, and public transportation takes too much time for busy Americans to use. Most of us do not live near transportation that goes near our offices without doubling our commuting time. Time is our most valuable resource. This is why less than 3% ride public transit to work.
Create fuel cells to replace the gas engine generating electricity for hybrids. Fuel cells are getting close to being more economical for gasoline and alternative fuels like ethanol, natural gas and hydrogen.
Grow and develop grass based ethanol since corn based ethanol is too energy inefficient. Grass based ethanol generates much more energy than corn at a lower cost. We also need a pipeline system that carries ethanol. Transporting ethanol in trucks is too expensive and unreliable for extensive use.
The Results of Energy Independence Program:
A ten year program for energy independence will bring world oil back to $30 - $50 per barrel when the US stops importing oil. Dictators will have loss their income and a threat to use against the West. The possibility of war would be reduced. The American economy would improve with less trade imbalance.
The technology is there for everything proposed here. It takes a leader, political commitment, private and governmental investment, and the will to get it done. We are ready for the leadership to step up.
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