Part I

2009 – The Perfect Storm for All Things Energy Reform

Depending on who you ask, the energy crisis is many things. For the suburban commuter, the energy crisis is the rising cost of gas. For the policy wonk, it’s over-reliance on foreign oil. For the environmentalist, it’s the specter of climate change due to anthropogenic greenhouse gas emissions. For still others, it’s the so-called “Nuclear Renaissance”. Ultimately, all of these complex issues are interconnected and no solution to any of them can exist in a vacuum. These problems require a fundamental restructuring of our energy infrastructure…

On January 20, 2009, Barack Obama will ascend to the White House amidst an unprecedented popular desire for change in America. Unfortunately for the Obama Administration, this demand for the all-encompassing notion of “change” is not without a commensurately staggering number of unique interpretations and expected manifestations for what precisely is to be changed in America. For some, Obama has already succeeded in bringing the change they desired, that being the symbolic changing of the guard, but the majority of Americans remain apprehensively optimistic that he can bring about fundamental improvements in worrisome areas such as the U.S. economy, foreign policy, energy independence and the environment.

Indeed, even the most liberal pundits are fearful that Obama will be too financially constrained to make good on many of his promises made throughout his presidential campaign, but what if I told you that it were possible that in one grand, sweeping plan for change Obama could set in motion a plan to drastically improve America’s future outlook in all four of the aforementioned critical arenas – the economy, foreign policy, energy independence, and the environment. Well, upon first reaction to such a claim you would probably say something to the affect of, “Listen here you zealot you, if there were any practical solutions to fix the economy, and improve foreign relations, and solve our energy dependence all at the same time, even the Bush Administration would already be on top of it.” Even the short answer to such skepticism (the long answer to come in later installments) is somewhat complex.

On one side, the Bush Administration, having committed the U.S. to the reconstruction of Iraq, is far too invested in oil and its politics to change directions at this time. After all, why invest so much in Iraq, Saudi Arabia and the rest of the Middle East if not under the full impression that oil is and will be the cheapest and best solution for transportation and the American economy now and in the foreseeable future? Even if Dick Cheney himself invented a working fusion engine, it would still be difficult for the Administration to let go of the ever growing sunk cost that is our oil-motivated foreign policy agenda.

Another barrier to consider is that until recently the economics associated with oil-based fuel have been far superior to the possible alternatives, and with, as of yet, no tangible price tag placed on environment impact oil continues to be among the most affordable fuels available. This is reflected by the fact that 96% of all U.S. transportation sector energy is derived from petroleum products, which, by the way, also accounts for 70% of all U.S. petroleum consumption.

This is so, quite simply, because for many decades oil remained the most efficient and effective fuel available in massive bulk. As such, it is predictable that a large cross-section of the American GDP has come to be dependent on the substance. Thus, even as our continued investment in oil becomes less and less profitable, we find ourselves so entrenched in the medium of oil that to now shift away would require a down-payment so immense that it could only be justified by incontrovertible proof of long-term benefit for American financial and political interests.

While I do not portend to supply such incontrovertible proof, what follows now and in the weekly installments to come is nothing if not a persuasive argument for change, and I’m not the first person, or organization, to think so.

There is no Time like the Present

While U.S. policymakers deliberate on potential solutions to solve the energy crisis, the American economy continues to stagnate; losing its dynamism and comparative advantage. Many of our largest corporations post record-breaking losses and consumers survive with wallets full of credit cards. The longer we proceed with business as usual, the harder it will be to change.

In order to understand what to expect out of the Obama Administration, it is wise to look not only at the problems they face, but to also consider any precedents the Administration has presented that can illuminate how they, rather than we, might go about addressing these concerns. Before we can consider the ins and outs of the U.S. energy platform, both present and future, one must start by acknowledging the fundamental relationship existing between our economy, foreign policy, and energy consumption that has pervaded American politics since the the WWII era - the time when the U.S. found it could no longer nationally supply its growing oil demands.

This relationship can be best described as an investment feedback loop: First, the U.S. invests in its military to ensure ongoing access to oil abroad, then that oil security guarantees ongoing access to cheap fuel the transportation industry, which increases the speed and growth-rate of American businesses, thus propping up the economy and allowing for more investment all-around…Wash, rinse, and repeat, and its not difficult to see how the United States has maintained its stranglehold over the Middle East and the global economy for decades.

While America’s oil-based economy fueled tremendous growth in the post-war period, the benefits have largely vanished. The U.S. has become increasingly reliant on foreign sources of oil; funneling money out of the domestic economy and tying U.S. national security interests to unstable regimes. Furthermore, The Big Three automobile manufacturers were built on an antiquated energy paradigm, mainly stable supplies of cheap oil. As a result, they have failed to compete effectively in the global auto market (SUVs anyone?). All of this hinges on the increasingly volatile supplies of oil, prone to supply disruptions and wild price fluctuations.

Obama has said that his first priority upon taking office in January, 2009 will be to jump-start the U.S economy. Although mortgage devaluation and credit contraction are not directly related to energy, these markets might only be the tip of the iceberg if immediate action is not extended to the energy sector as well. Needless to say, the long-term health of the economy requires new energy policies. Obama himself has acknowledged this, and has laid out a new energy plan that he claims will create five million new jobs. If we take Obama on his word, change is coming. However, aside from campaign promises, there is reason to believe that action will be taken.

Reducing the price of energy strengthens the middle class; a key element of Obamanomics. Furthermore, because the auto industry is such a key player in the economy as a whole, making them competitive again will be a significant catalyst to more effective energy policies. What shape should these energy policies take? And how can they be implemented?

*What will follow in the weeks to come is a holistic discussion of the entire U.S. energy economy. Later we will explore various energy policy proposals, from both the private and public sectors, and examine their feasibility. Stay tuned as next week I will begin by exploring (and scrutinizing) the production, distribution, and consumption of energy in the United States.*

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Do you think the government should bailout Ford, GM...etc., if they agree to drastically improve the efficiency of their vehicles?

I'll say this again. Tesla has plans of putting out a hybrid family car that will get 220 mpg with the new Lithium-Ion Batteries. A non profit group retrofitted a first generation Prius with plug in electrical power and got 180 mpg. There is no real excuse that in 2008 going on 2009, something along these lines isn't being mass produced. Part of that problem is sheer resistance from the big three automakers toward real change.

They will need to be FORCED in the direction of change.

And I keep thinking what if the big three a bailed out and continue to demonstrate the arrogance of flying private jets to congress to beg for a bail out and just keep going in the same old, same old, same old, same old gas guzzling direction.

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National Debt =

So, how exactly does electricity get miles per gallon?

Why should they change if there isn't enough of their market asking for the change?

Like the way the Big 3 has essentially told the consumer "You'll buy what we make and you'll like it"?

So what if they flew to Washington in private jets? Why do you resent rich people doing what rich people do? Are you jealous? Do you think that rich people should stop acting like rich people just because their corporations are failing? You're arguing the same old class warfare crap that is so typical and unamerican of you people on the left. This is America: we don't have different classes of people - that's why we specifically wrote language in the Constitution that prohibited titles of nobility.

The Big 3 should be allowed to fail but notice that it's you people on the left that are wanting to bail them out. It only proves that the Democrats and other leftists are as much in the pocket of the corporations as the Republicans and right wingers.

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A panda walks into a cafe. He orders a sandwich, eats it, then draws a gun and fires two shots in the air.

"Why?" asks the confused waiter, as the panda makes toward the exit. The panda produces a badly punctuated wildlife manual and tosses it over his shoulder.

"I'm a panda," he says at the door. "Look it up."

The waiter turns to the relevant entry and, sure enough, finds an explanation.

"Panda. Large black-and-white bear-like mammal, native to China. Eats, shoots and leaves."

Rsponse to Chan:

HYBRID = Prius. The Green Cars Project at University of California at Davis has estimated the equivalent cost per gallon of gas going onto your electricity bill would be 24 cents a gallon.

Chan : Why should they change if there isn't enough of their market asking for the change?

And the idea here is to avoid another economic crisis like the one we are going through. If you want gas guzzler vehicles then at least back cellulosic ethanol, which gives you more power than gasoline. If you go that route, then we need to manufacture flexible fuel vehicles that can run on high percentage ethanol fuel (E 85 or E 95).

So what if they flew to Washington in private jets? Why do you resent rich people doing what rich people do? Are you jealous? Do you think that rich people should stop acting like rich people just because their corporations are failing? You're arguing the same old class warfare crap that is so typical and unamerican of you people on the left. This is America: we don't have different classes of people - that's why we specifically wrote language in the Constitution that prohibited titles of nobility.

Taking the low personal attack road again. Most of America and Congress had a negative response to the personal jets. Why? It is out of synch with trying to get a bail out from Congress. "Class warfare" is usually what I hear from hardcore ultra hard core Republicans, as if I am communist. This isn't the Joe McCarthy 1950's commie witch hunt era, and that is a complete strawman tactic.

Just because their corporations are failing??? Good grief. Like they are the innocents being victimized. I can't bypass the fact that THEY are the ones the mismanaged the big three automaking corporations in America into bankruptcy. And all they had to do is study the 1970's gas shortage and Toyota and Honda invading the US markets and kicking our auto industry's butts with fuel efficient compact cars.

I have nothing against the type of business person that Adam Smith spoke of that became wealthy through hardwork and resourcefulness. Like Smith, I DO NOT SUPPORT "MERCHANT CARTELS" or translated into current terms, our near monopolies and their bought and paid for legislators.

"UnAmerican"? Joe McCarthy's favorite phrase. As if a special group of hardcore conservatives have a monopoly on being real Americans. They don't. That theory crashes and burns along with the theory that the GOP is the party of family values with the factual track record of sexual scandals and taking bribes. Read AngelofMercy's thread.

You people on the left? Back into the same old, same old comic book good guys and bad guys thinking.

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National Debt =

I tihnk it's perfectly reasonable to conditionalize this bailout loan to mandate easily attainable fuel standards that the Big Three have been resistant to.

We are getting roughly the same overall fuel economy as we did fifty years ago. I reject the idea that with all the amazing advancements in ceramics and lightweight materials that we can't acheive significantly better, even with gas. I hear rumors of 200+ mpg engines.

This isn't any different than Grumman or Northrop building aircraft to suit military specifications. They still remain private companies, but simply build according to standards, and nobody screeches that it's "socialism". In this case of the Three, they will not only continue to respond to market pressure, but also to another authority.

This, in my mind, is leadership. The government needs to pick up the slack where the market has failed, and look beyond simplistic supply/demand metrics, to do what the Big Three have consistently failed to do: serve the greater good, not just the narrow interests of profit.

Now, whether it'll actually happen is another question.

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"Oh, bother", said Pooh, as he chambered another round...

But the Prius that was retrofitted was no longer a hybrid but an electric car. Even so, I asked how an electric car gets miles per gallon, not cost per gallon.

Quote:

Chan : Why should they change if there isn't enough of their market asking for the change?

You (stupidly, in my opinion but you're not alone since Congress and the Bush Administration are doing the same thing) wrongly assume that we must avoid the crisis instead of letting the crisis run its course and lead people to make the kinds of changes in their lives that they need to make to break away from the unsustainable credit-based consumerist economy. My point, of course, is that there really isn't enough of a market for "green" vehicles to force the Big 3 to change their wasteful ways. Besides, since the "green" vehicles are not ones that ordinary working stiffs can afford, and since most places don't have adequate public transportation, you're telling a large portion of the American public that they're going to have to do without any viable mode of transportation.

Quote:

So what if they flew to Washington in private jets? Why do you resent rich people doing what rich people do? Are you jealous? Do you think that rich people should stop acting like rich people just because their corporations are failing? You're arguing the same old class warfare crap that is so typical and unamerican of you people on the left. This is America: we don't have different classes of people - that's why we specifically wrote language in the Constitution that prohibited titles of nobility

Statement of fact does not constitute personal attack. You are engaged in typical leftist class warfare crap since your comment about the private jets was really irrelevant to the discussion. And I don't give a rat's behind if Congress did react negatively (though it was just a show) - especially since Congress is in the pocket of the corporations anyway.

Not at all. I'm in favor of their corporations failing - as the rightful consequence of bad business decisions. But what the hell do you really expect these corporate executives to do? Trade in their mansions for efficiency apartments in the worst part of Detroit? Trade in their limousines for some broken down piece of crap car that can't make it out of the driveway without smoking up the neighborhood? Trade in their private jets and start flying coach?

And instead of your leftist buddies in Congress pushing to bail them out they should be allowed to fail.

I agree but the solution is not to bail out these companies, the solution is to let them crash and burn.

Since I'm not a conservative, your statement is dismissed out of hand. REAL Americans don't play the class warfare game. REAL Americans don't go around whining because someone else is rich and they're not.

And you have your feet planted firmly in mid-air with all your relativism crap!

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A panda walks into a cafe. He orders a sandwich, eats it, then draws a gun and fires two shots in the air.

"Why?" asks the confused waiter, as the panda makes toward the exit. The panda produces a badly punctuated wildlife manual and tosses it over his shoulder.

"I'm a panda," he says at the door. "Look it up."

The waiter turns to the relevant entry and, sure enough, finds an explanation.

"Panda. Large black-and-white bear-like mammal, native to China. Eats, shoots and leaves."

I don't want the federal government loaning these guys so much as a single penny: I don't care how many conditions you put on it.

Think planned obsolescence: it's what keeps factory workers and automobile mechanics employed.

No, there's a difference. The aircraft is being built for a particular customer by the customer's standards. As for the Big 3, they're not responding to market pressure and that's part of the reason they're on their way to bankruptcy.

No! The government needs to keep its nose out of it. Let these damned companies fail.

No, it isn't going to happen. Congress will give in to the Big 3 and then the Big 3 will be back again in about 20 years asking for another bail out.

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A panda walks into a cafe. He orders a sandwich, eats it, then draws a gun and fires two shots in the air.

"Why?" asks the confused waiter, as the panda makes toward the exit. The panda produces a badly punctuated wildlife manual and tosses it over his shoulder.

"I'm a panda," he says at the door. "Look it up."

The waiter turns to the relevant entry and, sure enough, finds an explanation.

"Panda. Large black-and-white bear-like mammal, native to China. Eats, shoots and leaves."

So when you're flying to Washington in your private jet and the family next door just had to declare bankruptcy to pay their medical bills for Daddy's operation, it makes you look like a total douchebag. That's so what.

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"Moreover, I am cognizant of the interrelatedness of all communities and states...Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly. Never again can we afford to live with the narrow, provincial "outside agitator" idea. Anyone who lives inside the United States can never be considered an outsider anywhere within its bounds."



~Dr. Martin Luther King, Jr.

When the Big Three need that bailout, and they will, the Obama Administration would be foolish not to take the opportunity to force new standards on the Big Three. What would be the point of bailing out businesses that clearly have demonstrated their failure to compete in the marketplace? The only justification would be to do so in order to bring about change to the auto industry in such a way as could only be accomplished with some socialized help (massive initial technology investment).

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