The Prices, They Are A-Changin!

Bob Dylan said it in his song, “The Times, They Are A-Changin.” And when it comes to energy, the times have changed. We have found that the times have changed from an abundance of available energy reserves to seemingly that of teetering on the brink of shortages.

Now, a new tune might be better titled “Prices, They Are A-Changin.” The hard undeniable fact is that cheap and abundant energy, the very stuff that helped make this nation great are no longer either cheap or seemingly abundant.

The history of this country has been one of having and using vast energy resources. It’s that availability and the development of technologies to develop the resources that has helped make this country great.

When the first Europeans arrived they found vast forests which supplied them a seemingly infinite amount of wood to heat their homes and to stoke their forges.

Through the 1600’s and into the 1700’s the colonies grew and prospered. One reason for their growth and prosperity was the abundance of water to power their grain and saw mills.

Then, what should be awaiting the industrial revolution when it came to this young nation in the 1800’s? Coal. Coal was plentiful. Throughout the nineteenth century coal driven steam engines powered the boats, the trains, and the factories that through the decades drove the engines of commerce.

When the internal combustion engine made its entrance, again, as if by magic the United States was blessed with an abundant resource. This time it was petroleum that could be refined into gasoline and diesel fuel. And again the economy grew and prospered as a direct consequence of the combination of ample petroleum resources and the internal combustion engine’s proliferation across the landscape.

Now, a very serious question confronts us. What happens when a society faces the prospect of continuously increasing energy prices and energy shortages? Answer: Inflation, unemployment, and worse; a spiraling decrease in the standard of living of its citizens.

The irony is the United States really doesn’t have an energy resource shortage. The nation faces a shortage of the will to act in becoming energy independent. Coal, oil shale, hydrogen, biofuels, solar, wind and other alternative sources all hold the promise for both short term solutions and long term solutions.

There is even a possibility of the discovery and development of an energy source that is not even currently perceived as existing. Does that prospect seem far fetched? Think about this. Who knew about gasoline in the 1850’s? Few if any visionaries in the mid 19th century could imagine the impact of gasoline, the internal combustion engine and the network of highways that tied this nation together in the 20th century.

The predictable technological future of those 19th century experts was steam engine driven technology. They could not foresee the amazing changes in energy resources and technology that propelled us through the 20th century. It just may be that there is a great and wonderful and unexpected technological energy surprise awaiting us. Even if there isn’t there are many options near at hand that can provide us USA Energy Independence,

However, unless we act… Unless our leaders forge a Declaration of USA Energy Independence policy that attacks our dependency on offshore oil, you, and I, our children and grandchildren will pay the consequences. Instead of continuing to be a nation built on a combination of abundant energy resources that are utilized to continually raise the standard of living, we will decline to a second rate power, faced with not only food shortages, but shortages of almost everything.


Keith Sanderson is co-founder USA-EI

Without Energy, We Will Be Extinct.

As the most powerful nation in the history of the world, the U.S. faces today its most critical challenge. It’s not from a foreign foe, from Iranian threats of $200/barrel oil, from war between Israel and Hezbollah, but from our own appetite for energy, primarily oil.

We are on tender hooks. An interruption of the Alaskan oil field supply leading to a loss of daily production of nearly 400,000 barrels is what has confronted us just this morning. That loss will take days, weeks, perhaps months to fix according to BP, the oil field owner/operator. The production loss may trigger the draw down of our Strategic Petroleum Reserve for the first time since the Clinton Administration.

That loss alone could send gasoline prices up another $1.00/ gallon over the next several weeks according to my commodity broker friends. But WAIT THAT’S AN EASY PROJECTION. It doesn’t stop there. T. Boone Pickens, the hedge fund oilman and billionaire geologist, said last week that annual worldwide consumption is 86 million barrels/day and production is 80 million barrels/day. You do the math: $4.00/gallon gasoline is an almost surety even before this Alaskan production shortfall.

And it’s not going away this time. No energy cycle from expensive to cheap. I spent the first 10 years of my career in the mining business, riding the energy-induced mining equipment boom (and bust) following the Arab Oil Embargo. By the mid ‘80s cheap oil was again in front of us and it fueled anew our dependence on unstable sources of supply.

Are we in la la land or what? This country lives on oil. We consume most of the world’s energy, our transportation network feeds our lifestyle “oil- habitation” and sprawl… we’ve all seen this coming.

USA Energy Independence needs an emergency, a national call to action. I’ve heard just in the last few weeks (sound bites all) John Kerry, George Bush, Howard Dean, Joe Lieberman and Hillary call for USA Energy Independence. Some of them actually have a plan. But the plans involve Ethanol or Oil Sands Or Coal or BioDiesel or Hydrogen, singularly or in some loose concert. It needs cohesiveness and greater immediacy, a central non-partisan focus, with statesmen not politicians, to pull us together.

We already have a national energy emergency, so we need a 911 energy-independence mentality, a Cabinet level position on Energy National Security, a daily review in the Oval Office of Energy Self Reliance initiatives, a Press Corps asking for daily Energy briefings, and more, for us to finally turn the corner on this Oil-Induced Hard Reality and Pain-at-the-Pump.

Join with us. Send a message to our leadership. Give us your email address and your zipcode (we’ll never share it) at http://www.usaenergyindependence.com. Maybe together we can bring the President from Crawford to the White House now to address this issue. He can even bring Cindy Sheehan and her Press entourage.


Bill Wolski is co-founder USA-EI.

To plan or not to plan for USA energy independence

In the late 1990’s a barrel of oil cost $10 on the world market. Today’s cost is over $70 per barrel, and some analysts are predicting it to go to $100 per barrel within the next couple of years.
In 2003 over 30,000 people died in France as a result of a heat wave, which appear with greater frequency and ferocity than at any time since weather records have been kept. Glaciers are receding. As a group, scientists have accepted global warming as a reality, and many of those same scientists place the blame squarely on our burning of fossil fuels.
Over the past 50 years, everything’s changed, yet nothing’s changed. Simply stated, there are human beings and more human beings using fossil fuels for personal transportation than ever before. There is more air conditioning, more refrigeration, and more lighting. All of which require greater amounts of electricity. Those are major changes.
Yet for all the significant changes that have occurred, there has been little change in the types of energy consumed, or – or more importance – our approach to solving any of our long-term energy issues. And, of more immediate importance to Americans, over the past 50 years we are less energy independent, not more.
If energy independence is the objective, is it better to have a plan, or is it better to let market forces determine who purchases the energy resources, and for how much? I put this question to Arnold Baker, Chief Economist for Sandia National Laboratories and former president of the International Association for Energy Economics (IAEE).
Baker indicated that having a comprehensive plan for energy independence is important, noting “it does make sense for the government to have an integrated policy for energy independence, because it is not just energy we are talking about, but economics and the environment as well. An integrated policy would balance our need for energy with our need for a clean environment and a strong economy. Additionally, it would provide a road map for others to follow.”
When asked why the U.S. has failed to put together a long-term, strategic plan for energy independence, Baker pointed out that “every individual and interest / advocacy group is affected by energy. The Sierra Club has its agenda, as does a congressional representative from Alaska or Texas or Oklahoma, as do so many other groups. You cannot find one person or organization in our society that isn’t directly affected by energy cost or energy availability. All have a voice and all influence in the debate. As a result, it’s been nearly impossible for politicians to reconcile competing interests. But it’s important to try and do so.”
According to Baker, the primary benefits to having a comprehensive energy policy geared toward independence include improved economic growth, economic and physical security, and a cleaner and healthier environment.
Improved economic growth results from being free of world oil markets and their resulting price fluctuations. Improved economic and physical security will result from, among other things, eliminating the need to be entangled in Middle Eastern politics. And a cleaner and healthier environment results from using advancements in technology to reduce emissions and find alternate methods of delivering and consuming energy.

Glenn Lewin, President, Newberry Research
Nationally, Lewin is best known for the 2002 book he authored THE BUSINESS REPORTER’S HANDBOOK, and the 2005 book COVERING BUSINESS he co-authored with Robert Reed. He has also worked on various projects for nationally known businesses such as Illinois based Caterpillar, McGraw-Hill Publishing of New York, and many other leading corporations.

Mr. Lewin holds an MA in Industrial Counseling and Psychology, with honors, from Northeastern Illinois University, with an undergraduate degree from Monmouth College, IL. In addition Mr. Lewin earned a certificate in Applied Statistics and Data Analysis from The Bradford-Gibson Institute of Management. He also completed the Harvard Graduate School of Management’s executive program in Competition and Strategy.

Middleclass Families Deserve Better

The low cost of energy is fast coming to an end and that means much more than the real possibility of $4.00 a gallon gasoline.

There are many reasons for this, pick one. Political instability in the middle east, global oil production that seems to have peaked while demand continues to rise, no new refineries coming online, hurricanes and more. All of these reasons conspire to drive up not only the price of a gallon of gasoline or diesel fuel, but also the price of natural gas.

As the price of these important energy sources climbs so will virtually the cost of all goods that are dependent on transport, and/or that are made from petroleum, or manufactured in facilities that use natural gas or oil to heat or manufacture products.

If you have concluded that means the price of everything from lettuce to jock straps will be impacted, you are right.

Yet, things seem to roll on as usual on capital hill. This is despite the fact that in the already seriously squeezed American Middle Class, families are going to take some serious hits in their budgets. But why should congress worry about what Middle America thinks when mom and dad are working to hard to have time to express their opinions.

The irony is that during the Arab Oil Embargo we had a taste of how drastically the soaring cost of energy impacted almost everything. Those who are old enough can recall interests rates climbing to 17 percent or greater, high unemployment, no economic growth, and inflation were the consequences. All of these nasty economic jolts were created by a relatively short blip to oil stream.

Now, more than thirty years later, even though we use less imported energy, the price of our oil and natural gas is set at a global price. That means America is at the mercy of all the factors that can and do increase oil and natural gas prices.

There is a ground swell of technological development of alternative energy resources as well as more traditional sources. However, changing from our current energy diet to a diet of alternative energy sources will mean setting priorities, the allocation of resources, and the processing and transportation of energy.

Congress is beginning to slowly awaken to the oncoming problem. As usual our representatives are quick to blame everyone but themselves and are going through their finger pointing exercises. Next will come the patronizing sound bites meant to assure voters that our leaders are concerned. Both parties have already made their inane suggestions about what to do, and cynics believe there will be many more lethargic energy gestures to come.

Soon, hastily conceived bills that are mostly sizzle and of little substance will be debated and voted upon. Lastly, our leaders will assure us all will be good and the nasty energy problem will go away.

Don’t let Congress lead us down the road of flim and flam. Let them know you want and expect a USA Declaration of Energy Independence policy to be forged. A policy that provides both short term and long term solutions to a problem that is as sure as taxes to affect our way of life and disposable income.

Tell your congressperson how you feel. Cast your vote and let your voice be heard favoring the development of a USA Energy Declaration of Independence.