D-Day musings

D-Day. Remembering the day when the Allies stormed the beaches of Normandy, France and began the surge that eventually turned the war in Europe around and defeated Nazi Germany.

Today, 64 years later, many have forgotten the sacrifice, the loss of life, the horror that was D-day. If you wish to honor those brave men who made up that force, find a copy of "Saving Private Ryan" and take the time to watch what many who were there call the most accurate portrayal every of this day.

Most, too, have forgotten, or never heard, the June 6 comments of President Roosevelt, his prayer, for the troops and the nation. If you haven't, click the link below to listen and view some photos of that time and day. If you have never heard this, do so now, it's only about 6 minutes, but time well spent.


I have to wonder, if a President of the United States were to present these words today, what would the response be? Would some rise up and rail against this fusion of "church and state," this attempt at "establishment of religion?"

Would some demand for a prayer calling on the gods of other belief systems to bolster a sense of plurality. A prayer to the gods of Hinduism, Wicca, Islam? A prayer to Buddah?

Surely we in this great nation have forgotten the importance of prayer in the public square. On D-day even those who gave religion scant attention took time, were reverent and focused on, rather than themselves, those troops fighting and dying on those sandy shores for the cause of freedom, their freedom.

Why do we find that such a difficult thing to do today?

"We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty." - G. K. Chesterson

A comprehensive solution needed

Finally, a major factor in the rising cost of crude oil and fuel is the decline of the dollar. Having lost about a third of its value since 2001, this loss of value has weighed heavily on the cost of foreign goods imported into the US. Taken another way, all else being equal, a barrel of oil that sells on the futures market for $133 would, with the dollar returned to its former strength, cost only about $90. That would result in a corresponding drop in the price of gasoline back to about $3.00 - $3.15 per gallon, just on the strength of the dollar.

Of course the question is, “how do we do this?” The short answer is, “we don’t.” The rise and fall of the dollar is a response to US monetary policy. In the US the Federal Reserve, a non-governmental group that wields huge control over the money supply, drives monetary policy.

In it’s attempts to thwart a slowing economy, fight inflation, stabilize the stock market and generally reassure everyone from Wall Street to Main Street, the Fed raises and lowers interest rates and increases and decreases the availability of money.

As it relates to the value of the US Dollar (USD), low interest rates, while good for business and consumers, decrease the investment potential of US currency, increase the investment potential and therefore demand of foreign currencies, and in the process lower the value of the dollar as it relates to the world currency market.

When the Fed increases the money supply, and the US Treasury increases the amount of dollars in the economy, the value of the dollar is diminished as well. The value of the dollar in your pocket is not fixed. It is based in the perceived value of that dollar as relates to the integrity of the US government to back it.

Many think the basis of the value of the dollar is the US Gold Reserves. They couldn’t be more wrong. The US total Gold Reserves is reported to be 8,133.5 tonnes valued at $256 billion, the largest in the world but a mere fraction of the total gold ever mined.

At the same time, the US M2 money supply as measured by the Federal Reserve is $7676.1 billion, or 30 times the total of US Gold Reserves. In practice this means that faith in the US government and economy are by far the driving factors in the value of this fiat currency called the US Dollar, not the objective value of an underlying treasury reserve.

Why does the value of gold go up in terms of US Dollars? In short it’s because the USD is seen as having less value. The same goes for the price of crude oil. Supply and demand being as they are, they affect the day-to-day price fluctuation of this commodity. The longer-term price is impacted by the value of the USD in the world.

The lower it goes, the less it buys and more of it is required to purchase a particular item of value.

To increase the value of the USD the Federal Reserve and US monetary policy should begin to take steps to normalize interest rates and money supply. While that may have a negative effect in the short term on the US economy, the short term pain would result in longer term gain.

Secondly, the US policy towards business should be less restrictive in terms of tax policy. As noted before, businesses do not pay taxes but merely collect them from consumers embedded in the cost of goods and services, from investors in lowered investment value and passes it on to government.

Corporate income taxes and such issues as the Lieberman-Warner “Cap and Trade” scheme currently before the US Senate saddle business with costs and expenses that strangle it in the world economy, often driving business and the attending jobs away from US shores to nation with more friendly tax policies.

Voters must demand that politicians get control of government spending, cutting back budgets and reducing spending to minimal levels and enact a transparent and balanced budget. The US has over $9 trillion in Public Debt having a devastating effect on the national economy, interest rates and exposure to the whims of overseas investors.

The Fair Tax put forth by Congressman John Warner would create a transparent US tax policy, replacing all federal taxes, Income, Social Security, Medicare ad infinitum, with a single sales tax. While there is plenty of discussion over this proposal, and it’s attendant misrepresentation, there remains difficulty in gaining traction in Washington.

So in summation, the problems facing the energy crisis are multifaceted in nature and require a comprehensive response. There is no one “magic bullet” solution. Rather, in the interests of long term solutions and national security, answers must be long thought out, deeply researched, span a variety of technologies and energy sources to protect against vulnerability to single source attacks like we’ve seen on crude oil.

As a nation we should:

Immediately begin using those resources and technologies we currently have including opening blocked areas for oil exploration and drilling and rapidly expand the use of nuclear power.

We should focus effort into development of proven resources and technologies like Hybrid cars, CSP and Shale Oil to bring these rapidly on line in providing diverse energy to the nation.

Third, we should encourage private research in a variety of way to expand research into new, exciting technologies needing further development. Wave power, wind power, battery technologies, fuel cell technologies and many others perhaps not even thought of should be fully vetted as to their feasibility and contribution to the energy needs of this nation without unintended consequences elsewhere.

Finally, we need to close down those technologies that, while begun with good intentions, have proven to have disastrous consequences. Ethanol is one of these.

It’s not a matter of finding answers to the current pain nor is it simple environmental, economic or security in nature. In the long term it’s a matter of providing a sustainable future for the nation and our children and grand children. To think less is nothing more than selfish.

This series:
1. Gas prices, taxes and politics
2. Crude, profits and big government
3. Dealing with petroleum production
4. Optimizing petroleum
5. Is there a single solution?
6. Monetary policy and energy

"We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty." - G. K. Chesterson

Lieberman Carbon Tax a Dangerous Idea

The Lieberman-Warner carbon tax scheme before the Senate is a dangerous grab for power, tax dollars and control.

It's put forth as a marketplace to help business deal with carbon emissions. What it will end up being is another tax on the consumer. Don't be fooled. A tax on business is a tax on the consumer. In all business the cost of doing business is passed on to the consumer.

There are no corporate taxes, only corporations that collect for government taxes embedded in the price of their product or service.

"The EPA has estimated what the McCain energy tax would mean to consumers. Since the bill’s provisions are phased in, the full cost of the tax would not be felt for a number of years. But in a letter to Senator McCain dated July 2007, the EPA estimated that the tax will be about $.26 cents in current dollars per gallon of gasoline by 2030 and $.68 cents per gallon by 2050. For electricity, the EPA estimates that the McCain energy tax would increase individual’s electric bills by 22 percent in 2030 and 25 percent in 2050." Roy Cordato-NRO

More power will be vested in Congress and the Lobbyists will have a field day working your Senator and Congressman for perks, loopholes, and breaks on the tax.

The loser will be the consumer, again. Anytime Washington comes up with a "great idea" its the taxpayer, the consumer, the citizens who pay. Make no mistake, this is a bad idea.

Even Canadians are concerned about carbon taxes and "cap-and-trade", and they have data to back it up. Never forget, government will never miss an opportunity to remove income from the pockets of it citizens.

The question is, will the citizens allow it to continue or will they rise up and say "NO MORE!"

We better decide quick or there won't be anything left to keep.

"We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty." - G. K. Chesterson

Is there a single solution?

In my previous post on this topic I talked about the need to expand the development of petroleum-based answers to the energy problems facing America. Today I want to take a look at alternative solutions.

Certainly alternative fuel vehicles, including hybrid, electric and fuel cell, are important resources to develop. But transportation only accounts for about 28% of US energy consumption. A comprehensive plan will address energy consumption in industry (33%), residential housing (21%) and commercial buildings (18%) as well.

The greatest hurdle to overcome in electric car technology has to do with the batteries. For decades auto manufacturers have used the tried and true lead-acid battery. It’s rechargeable, relatively long lasting and inexpensive to produce. But the greatest downfall of lead-acid batteries is their weight.

One of the latest technologies on this front is the zinc-air battery. These use oxygen in the air to react with cathodes to produce electricity. They have a high power to weight ratio, are safe and environmentally responsible. Several companies are working on moving the technology to the automobile arena.

Fuel cell technology is rapidly improving. Used for some time in a variety of exotic, static and military applications, in recent years researchers have working hard to develop technologies for automotive application. The intent is to either fully replace the petroleum fueled vehicle or to replace batteries in hybrid vehicles.

Hybrid vehicles are coming on strong and while they are relatively new, the technology is rapidly improving. Combining improved battery technology with small, efficient gas engines and powerful electric motors, hybrid vehicles look to have great prospects for long range, fuel-efficient vehicles.

Just about everyone has heard of solar power or wind power. Both seem to have great potential for generating large amounts of electricity using the right technologies.

When we hear "solar," most of us think of solar cells, i.e. photovoltaic, energy production. The technology with the greatest potential for producing electricity though is in Concentrating Solar Power (CSP). This technology produces electricity by concentrating the suns heat to generate huge amounts of steam that in turn is used to power electricity generating plants.

It’s estimated that arrays of these concentrating plants covering a combined area of only 100 by 100 miles square could generate enough electricity to supply the electrical power needs of the whole United States (Listen to an NPR story on this). One company, Arusa, is building a 177 megawatt plant in southern California to power 120,000 homes while Abengoa is building similar plants in Europe and South America.

Tidal generators are another up and coming technology using the action of waves and tides to generate electricity. While most of these have no direct application to transportation, they can relieve some of the environmental burden and produce electricity to charge electric vehicles.

Nuclear energy has been used around the world to produce electricity for decades. France, for one, has 59 nuclear plants producing 75% of its electricity, exporting much of that.

On the other hand, the US’s 100 nuclear plants produce only 20% of total electricity generated. After the Three Mile Island incident in 1979 plant construction came to a screeching halt. Now, nearly 30 years later, we are beginning to revisit nuclear energy. But the environmental lobby continues to roadblock plans along with the need to overcome lingering public fears whipped up by the media.

The technology has improved way beyond TMI and the US has never build any plants using the same technology as those in Chernobyl. Another recent development is the change in some of the leadership of the environmental lobby. Patrick Moore, a founder of Greenpeace, is now promoting nuclear power as an important part of solving the climate problem.

These are only some of the better-known technologies under research and development. Anyone of them has potential to impact the US energy need, working together they can provide a comprehensive solution to our current and future energy needs. But they require time for further development and to explore their potential affects on our economy and society, both pro an con. When we rush new technologies out too often the impact of unintended consequences is missed. By taking time to fully vet the technology we can hopefully anticipate and discover ways to diminish those negatives.

The greatest asset we have as a nation is our ability to innovate and develop new answers to the problems that trouble us. Our greatest enemy is jumping to quickly to a quick fix without dealing with the root problem. That is the nature of politics and while it didn’t used to be, is becoming the cry of the American people.

As a society we must begin to again take the long view to the challenges that face us. The “microwave mentality” works fine for cooking, but for serious problems we need to put it in the oven and let it “slow cook.” We must find full, comprehensive solutions that use every asset and resource available to us. The stakes are too high to do otherwise.

My next and final post in this series will discuss the impact of economic policy on the price of crude oil fuel at the pump.

Further reading: A Blind Man's Guide to Energy Policy

Interested in holding your politicians "feet to the fire?" Follow the link below to American Solutions where you can join others petitioning Congress to act now to expand use of our domestic resources.


"We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty." - G. K. Chesterson