Energy independence... so they said then

"[In 1973] we were lined up at the gas station - turned our thermostats down as Washington announced 'Project Independence.' We were going to become self-sufficient, able to provide for our own energy needs. At that time, we were only importing a small percentage of our oil. Yet, the Arab boycott caused half a million Americans to lose their jobs when plants closed down for lack of fuel…. [T]hree years later… 'Project Independence' [had] become "Project Dependence." Congress [had] adopted an energy bill so bad we were led to believe Mr. Ford would veto it. Instead, he signed it. And, almost instantly, drilling rigs all over our land started shutting down. [So], for the first time in our history [in 1976] we [were] importing more oil than we [were producing]." -- Ronald Reagan (1976)

My Opposition to Obama's Proposed $1 Trillion Tax Hike

Here's a message I just sent to Minnesota Senators:

I am strongly opposed to any form of energy tax, like cap-and-trade, that will, in President Obama's own words, cause electricity prices to skyrocket.  During a time of economic distress, hitting families with such a burden of rising prices would be a mistake and can't be justified.

Even if you disagree on the cap-and-trade issue, however, I hope you'll agree that such an enormous substantive policy change has no place in the reconciliation process, which would amount to a procedural trick to enact the plan without proper debate and the usual rules that encourage bipartisan cooperation and consensus-building.

I urge you to join the growing number of senators who have taken a strong stand against including cap-and-trade in reconciliation.  Whenever cap-and-trade does advance as legislation, I urge you to consider the interests of regular American taxpayers and consumers and oppose it.

What are YOU going to tell them?

No Founding Father He

From ThePatriotPost

Why Make Our Machines Competitors for Our Food Supply?

Here's a letter I just sent to Governor Pawlenty of Minnesota:

Dear Governor Pawlenty:

While I have appreciated many of the stands you have taken over your term as governor of Minnesota, I have been disturbed by others -- especially those that I believe to be concessions to political expediency at the expense of principle. Chief among those matters that confound me is your support for ethanol.

With the email version of this letter, I am attaching a PDF study regarding ethanol. Below I am passing along some of the misconceptions regarding ethanol.

However, if you cannot answer any other detail, please reply to this ONE matter: Why would any sensible civilization make their MACHINES competitors for their FOOD SUPPLY? The ideal fuel for machines would be one that is not of value as a consumable in the food chain.

Untruths and misconceptions about ethanol include:

Ethanol will lead to energy independence. If all the corn produced in America last year were dedicated to ethanol production (14.3 percent of it was), U.S. gasoline consumption would drop by 12 percent. For corn ethanol to completely displace gasoline consumption in this country, we would need to appropriate all U.S. cropland, turn it completely over to corn-ethanol production, and then find 20 percent more land for cultivation on top of that.

The U.S. Energy Information Administration believes that the practical limit for domestic ethanol production is about 700,000 barrels per day, a figure they don't think is realistic until 2030. That translates to about 6 percent of the U.S. transportation fuels market in 2030.

Ethanol is economically competitive now. According to a 2005 report issued by the Agriculture Department, corn ethanol costs an average of $2.53 to produce, or several times what it costs to produce a gallon of gasoline. Without the subsidies, costs would be higher still. A study last fall from the International Institute for Sustainable Development found that ethanol subsidies amount to $1.05-$1.38 per gallon, or 42 percent to 55 percent of ethanol's wholesale market price.

Ethanol reduces gasoline prices. If you lived in California and other areas that used reformulated gasoline last summer – that's the environmentally "clean" gasoline required for areas with air pollution problems, and that's where most of that ethanol went – you might have paid up to 60 cents a gallon more for gasoline than you would have otherwise. That's because the federal government required oil refineries to use 4 billion gallons of ethanol in 2006 regardless of price, and gasoline pump prices last summer reflected the fact that ethanol was twice as expensive as wholesale conventional gasoline.

Ethanol is a renewable fuel. According to a group of academics from UC Berkeley who published in Science magazine last year, 5 percent to 26 percent of the energy content of ethanol is "renewable." The balance of ethanol's energy actually comes from the staggering amount of coal, natural gas and nuclear power necessary to produce corn and process it into ethanol.

Ethanol reduces air pollution. A review of the literature by Australian academic Robert Niven found that, when evaporative emissions are taken into account, E10 (fuel that's 10 percent ethanol and 90 percent gasoline, the standard mix) increases emissions of total hydrocarbons, nonmethane organic compounds, and air toxics compared to conventional gasoline. The result is greater concentrations of photochemical smog and toxic compounds.

Ethanol reduces greenhouse gas emissions. At best, E10 reduces greenhouse gas emissions by from zero to 5 percent; pure ethanol by 12 percent. The International Energy Agency, however, estimates that it costs about $250 to reduce a ton of greenhouse gases this way, or more than 10 times what Yale economist William Nordhaus thinks is economically sensible given the economics of climate change. Ethanol as an anti-warming policy is what academics refer to as "crazy talk."

Ethanol subsidies are necessary to "level the playing field." Petroleum subsidies are something less than $1 billion a year – six to eight times less than ethanol subsidies – and work out to about 0.3 cents per gallon.

Switchgrass (aka, "cellulosic ethanol") will set us free. Guy Caruso, the head of the EIA, noted in a speech last December that the capital costs associated with cellulosic ethanol production were five times greater than those associated with conventional corn ethanol production. Estimates like that are a bit soft, however, because there is no cellulosic ethanol industry in existence at present, so data is hard to come by. Betting the farm on an industry that doesn't yet exist to produce a product that is known to be staggeringly expensive isn't the best use of tax dollars.

IF ETHANOL HAS COMMERCIAL MERIT, THEN IT DOESN'T NEED A SUBSIDY OR OTHER GOVERNMENT PROPS. If it has NOT, no amount of subsidy will make commercially viable in the end. And that's the truth.

I await your response. Thank you.

What do you think?

Going "Green" Means Going "Red"?

Cato Institute's "techknowledge" newsletter reminds us that the whole "going green" approach by the federal (and state) governments will likely lead to more "going red" in two ways:

1. Increasingly socialist political manipulation of the economy, and
   
   
2. Increasing government debt (and taxes) as the politicians push agendas that are counter to growth, productivity and private investment.

One of the problems with the government throwing money at "green" initiatives is that some businesses will be incented to participate simply because they will benefit from the federal monies in the program. They will do this for short-term gain, even though the net and long-term effect on the general economy may be negative.

Take for example the foolishness of making our machines competitors for our food supply via the government-back ethanol subsidy programs. The corn supply -- a staple in the food chain -- is being diverted to provide fuel while there is a severe shortage of corn for food products such as livestock feed (leading to increased prices for meats), corn meal, corn syrup, and more.

Despite this craziness, major players like ADM and others are participating in the ethanol market simply because it is presently beneficial for them to do so. The problem is, on the one side, ADM's willingness to sacrifice the larger marketplace "good" for short-term gain. However, if the governments (state and federal) were not throwing non-market-driven money into the arena and distorting the market value, this foolishness would be entirely unsustainable.

Think about it.

An Excuse to Do Anything or Everything

Rahm Emanuel, Barak Obama's new Chief of Staff declare, “You don’t ever want a crisis to go to waste; it’s an opportunity to do important things that you would otherwise avoid.”

Throughout history, those who wished to take despotic actions that the citizens would otherwise reject have moved rapidly to take those actions in times of crises. Almost any crisis will do as an excuse for those bent on moving government in directions counter to the long-term interests of the people. In recent history we have seen Hitler was one such opportunist, leveraging Germany's post-World War I economic failures as grounds for taking drastic Socialist actions.

Rarely, however, are despots so candid as President-elect Obama's emerging administration. Rahm Emanuel (quoted above) enunciates this crisis-based opportunism precisely.

The present Democrat-controlled Congress, brazenly encouraged by its recent victories at the polls and the most radically left-wing President-elect in the history of our nation, is poised to take just such actions. Using the current economic crisis as its excuse, the left-wing radicals presently sitting at the helm of our national legislature are prepared to take control -- one way or the other -- of the U.S. automakers in order to "remake" them according to their leftist and eco-Nazi agenda.

Under the euphemistic term "retooling," the Democrat leftists intend to force Ford, Chrysler, and GM to produce cars for "the green economy." As in the former Soviet Union, the only cars that will be available from U.S. factories will be those that meet approved "government designs." You can be sure that if these leftists have their way, protectionist measures will be put in place to assure that foreign auto manufactures will be priced out of the market, as well.

Next on their list of "crisis" measures will be steps to assure that gasoline prices are pushed higher again. And, of course, a grasp at another huge portion of the U.S. private economy -- the "nationalization" of healthcare.

Please take action now to stand against these kinds of actions by the current (and future) Congress and the Obama administration. Write and call your Senators and Representatives.

(c)2008 Richard D. Cushing

Bailout for the U.S. Automakers?

An announcement was made today that Congress is presently preparing legislation to bail out the U.S. automakers. Like the bailout of the mortgage industry, the act is both senseless and needless.

Also, similar to the mortgage industry bailout, this proposed bailout is not really for the U.S. automakers, it is a bailout for the United Auto Workers union. The same union that has driven the U.S. automakers to the brink of collapse now wants their Democrat friends to throw taxpayer money at the problem so the union leadership -- or unions, in general -- will not suffer the consequences of their years of wrong-headed thinking.

Participants in unions should wake up to realize that unions only benefit two groups of people:

1. The union executives -- those who draw a salary predicated solely on having established a monopoly on labor in some factory or industry.
   
2. The below-average workers -- because above-average workers could, in the absence of the union, most likely negotiate a better wage and benefits package for themselves individually.
   

As we are seeing, however, in the real long-term, unions benefit no one!

• Unions do not benefit the consumer because they cause prices to rise faster than the rate of inflation in almost every instance.
  
• Unions do not benefit the worker because they ultimately make the businesses and industries they dominate to become less and less competitive, ultimately reducing the workers' wages to zero as increasing numbers fall victim to unavoidable layoffs.
  
• Unions do not even benefit the union executives in the end -- although they will bleed the union workers and their captive industries for as long as possible -- because when all the workers have finally lost their jobs, then the union executives will also finally lose their jobs.

Do not take me wrong. I am not opposed to groups of workers organizing to strike or negotiate for better working conditions. However, each worker should be able to negotiate their own agreement with the employer as to wages, benefits, working conditions and work practices. They should not be coerced to pay some worthless executives to come around to aid in making the workers' employers less competitive and less successful in the marketplace.

Now, back to the bailout.

Three Steps the Government Could Take to Save the U.S. Auto Industry Without a Bail Out

1. Reduce corporate and personal income taxes immediately to give the U.S. consumers more money in their pockets to spend on durable goods. Note: The U.S. consumer pays both the corporate income taxes and the individual income taxes. Don't let political tom-foolery trick you into believing anything different than that.
   
2. Lift needless federal regulations that cost U.S. automakers millions of dollars while providing absolutely zero value-add to the consumer. The CAFE standards, for example, are absolutely without justification. U.S. automakers should be able to make cars and trucks that consumers want to buy. If the politicians and environmental groups can hoodwink enough consumers into believing they are "saving the planet" by buying a hybrid or some other fuel-efficient automobile, then the automakers will manufacture such vehicles in response to that consumer demand. We do not need the government to tell us what kind of vehicles we ought to buy.
   
3. By executive order, liberate the U.S. automakers from the ridiculous union contracts to which they are presently bound. Allow the automakers to hire and fire at will and to negotiate compensation plans with each worker individually.

These three simple steps:

• Do not require the U.S. taxpayer to be burdened with additional bail-out debt;
  
• Would stimulate the economy; and
  
• Will not lead to the nationalization of private industry.

This approach is safe, sane and reasonable -- all of which are reasons that the Democrat leadership and Republicans that have lost their bearings will reject them.

(c)2008 Richard D. Cushing

On scarcity versus plenty

In one of his speeches, president John F. Kennedy once said that we "now" have the technology to feed the world, as though this ability was something new and amazing. The truth of the matter is that we have always had the technology and ability to feed all the inhabitants of the world. As the world's population has grown, even so have technologies -- driven by market demand -- arisen to assure that there was sufficient food to feed everyone.

Of course, localized famines or disasters have sometimes caused reductions in the food supplies in various regions -- even to the point of starvation. But these localized incidents do not overthrow the fact that, as a general rule, there has always been a sufficient food supply to feed all of this globe's inhabitants.

Whenever and wherever scarcity of food has been an ongoing problem, the factors causing the lingering shortages have always been political -- not technological.

• When people were starving in Bangladesh, food supplies sent by relief organizations from around the world were rotting on the docks and being eaten by rats because politics kept them from being distributed.
• When the October Revolution led to collapse of Russia into a communist state, the politics of communism managed to take the world's largest wheat exporter and turn it into the world's largest wheat importer in the matter of a few short years.
• On the reverse side, as the Soviet Union was emerging from the darkness of Soviet control, new glastnos policies allowed the collective farm workers to keep the profits for themselves from the produce grown on five percent of the land. Within one growing season, more than 80% of the produce reaching Soviet markets was being grown on five percent of the land -- and the produce was of higher quality.
• When Ethiopia fell to the Communists in the late 1970s, the Workers' Party of Ethiopia excelled even the Soviets in their ability to destroy capital and markets. They managed to turn one of the wealthiest nations on the African continent into the poorest nation on the African continent in about 17 years.
• As recently as 2009, the ruling junta in Myanmar first refused aid from the outside world, then later recanted and allowed the aid to be delivered to its shores. However, the junta reportedly relabel the aid products with the names of their military leaders before distribution in order to take credit for "saving" its people.

I use these examples of scarcity of food because that seems to be the one shortage that strikes home the strongest; however, many, many shortages of other kinds are caused by wrong-headed policies.
Take for example the current energy shortage in the United States. Why are we shipping (now) about $600 billion a year off to other nations to purchase petroleum?
The answer is simple: The wrong-headed policies of our federal government have placed most of our known oil reserves off-limits for further exploration and drilling.
Known petroleum reserves in the U.S. and Canada (our friendly neighbor to the north) could meet all of our petroleum-based energy needs (at current rates) for an estimated 160 years. If we were to adopt the plan presented by T. Boone Pickens to convert all of our truck transportation equipment to compressed natural gas, that would free up considerably more capacity. The conversion of truck transportation equipment could begin immediately and be essentially 100% complete within three years, according to Pickens' estimates.
There is no shortage of oil in North America. It's just that simple!
The scarcity of petroleum-based energy products is purely the product of politics and not based on any actual shortage of reserves. Unfortunately, Barack Obama and most of the Democrat party is sold-out to the wrong-headed policies that have led us to our current condition. Therefore, if Obama is elected, there will be no relief in site and energy costs will likely continue to rise.
After all, Obama wasn't unhappy that gasoline prices approached $4 a gallon, he just wished it wouldn't have happened "so quickly." I suppose he has "the frog in the boiling water" concept in mind: If the rise happens slowly enough, maybe Americans won't realize that their economy is being "cooked" by bad politics.
-- Richard