Just One Man's Opinion - 19 July 2005
by JMac
These are the "dog days of summer". Not much to talk about in the market, so how about an essay ?
THE ENERGY "CRISIS"
Congress loves its rituals. In the 70's and 80's in every session there was a "Civil Rights" bill introduced. Finding no new wrongs to redress they then switched to energy in the 90's, with the "Energy Bill of [fill in the year]".
Politicians from both sides of the aisle rush to the podium with proposed legislation that would "make America energy independant". Every year congressmen/women are plugging their pet energy projest (usually one that is being promoted by one of their contributors). Bureaucrats, lobbyists and Hollywood know-nothings wring their hands before sub-committees and committees foretelling the impending doom of civilization as we know it. Soon, they wail, we will be returning to the caves lit only by candle light.
Fear not, it is all poppycock. In 1927 a well respected British engineer and economist conducted extensive research and concluded that the world's supply of oil would be exhausted by 1980. In that same year (1980), Jimmy Carter proposed legislation that would deregulate the price of oil and gas. Senator Howard Metzenbaum, D-Ohio, (the "D" stands for demagogue) railed against his president and said that it would lead to Americans paying $2 for a gallon of gas! Immediately upon his inauguaration, Ronald Reagan took off price controls through an executive order. In 1982 the price of a barrel of oil plunged to $10. Howard's prediction did eventually come to pass, BUT it was not for another twenty years.
Today, respected oil analysts estimate that there are perhaps seven TRILLION barrrels of oil on our planet. That is more than all the oil consumed in history. The wells in Saudia Arabia and Alaska will run dry someday, but replacement discoveries and new refining technologies have kept up with demand. The Western Canadian tar sands, for instance, contain a potential as large as OPEC's current reserves. One tiny nation (Qatar) has proven natural gas reserves sufficient to supply the US for forty years. In the US we have coal reserves for the next four hundred years (we are the OPEC of coal).
However, someday fossils fuels will be depleted. What the Luddites and scare-mongers forget is Einstien's proven theory : E=MC2. No, I do not mean nuclear power. I mean the earth can NEVER run out of energy. ALL MATTER IS ENERGY in another form! The paper clip on the desk in front of you and the dust bunny under your bed contain potential energy.
SOLAR - Everyday the sun drenches our planet with more energy than we could hope to use.
GEOTHERMAL - The earth is a machine. Below the crust is a gigantic furnace producing heat (energy) that is clean and reliable.
COAL - We have the technology to produce oil and gas from coal. The Germans practicaly ran their entire war machine on synthetic oil.
HYDROGEN - It is the most abundant element on earth. The oceans are full of hydrogen. We can, and will, extract hydrogen fron sea water and return the water to the oceans, or desalinize it for drinking water.
BIOMASS - There is abundant, easy to recover, methane gas in the thousands of landfills throughout the US. In addition the garbage itself is potential fuel. Then there is ethanol; we are the OPEC of corn, also.
TIRES - There are over 250 million discarded tires in the US and over 20 miillion are added annually. Each tire contains the equivilent of four gallons of oil; that is one BILLION gallons of oil.
We have the know-how to utilize all these sources today, but they cannot compete with $60 oil ...yet.
Your great-great-great grandchildren will travel in cars, trains and planes fueled by hydrogen/solar power plants. Electricity will be generated by synthetic oil, clean burning coal, geothermal wells and garbage.
Today's price of gaoline is not driven by a supply shortage, rather it is being pushed up by a spike in demand in China and India and the fact that no new refinery has been built in the US for twenty-five years!
What we really need is for Congress to take a year off, go to their local community college, take Economics 101 then read Adam Smith's "Wealth of Nations", published in 1776... and then take another year off.
P.S. -
Want to get oil to $20 a barrel and put the Department of Homeland Security out of business? Pull all US combat troops out of the Persian Gulf.
These are the "dog days of summer". Not much to talk about in the market, so how about an essay ?
THE ENERGY "CRISIS"
Congress loves its rituals. In the 70's and 80's in every session there was a "Civil Rights" bill introduced. Finding no new wrongs to redress they then switched to energy in the 90's, with the "Energy Bill of [fill in the year]".
Politicians from both sides of the aisle rush to the podium with proposed legislation that would "make America energy independant". Every year congressmen/women are plugging their pet energy projest (usually one that is being promoted by one of their contributors). Bureaucrats, lobbyists and Hollywood know-nothings wring their hands before sub-committees and committees foretelling the impending doom of civilization as we know it. Soon, they wail, we will be returning to the caves lit only by candle light.
Fear not, it is all poppycock. In 1927 a well respected British engineer and economist conducted extensive research and concluded that the world's supply of oil would be exhausted by 1980. In that same year (1980), Jimmy Carter proposed legislation that would deregulate the price of oil and gas. Senator Howard Metzenbaum, D-Ohio, (the "D" stands for demagogue) railed against his president and said that it would lead to Americans paying $2 for a gallon of gas! Immediately upon his inauguaration, Ronald Reagan took off price controls through an executive order. In 1982 the price of a barrel of oil plunged to $10. Howard's prediction did eventually come to pass, BUT it was not for another twenty years.
Today, respected oil analysts estimate that there are perhaps seven TRILLION barrrels of oil on our planet. That is more than all the oil consumed in history. The wells in Saudia Arabia and Alaska will run dry someday, but replacement discoveries and new refining technologies have kept up with demand. The Western Canadian tar sands, for instance, contain a potential as large as OPEC's current reserves. One tiny nation (Qatar) has proven natural gas reserves sufficient to supply the US for forty years. In the US we have coal reserves for the next four hundred years (we are the OPEC of coal).
However, someday fossils fuels will be depleted. What the Luddites and scare-mongers forget is Einstien's proven theory : E=MC2. No, I do not mean nuclear power. I mean the earth can NEVER run out of energy. ALL MATTER IS ENERGY in another form! The paper clip on the desk in front of you and the dust bunny under your bed contain potential energy.
SOLAR - Everyday the sun drenches our planet with more energy than we could hope to use.
GEOTHERMAL - The earth is a machine. Below the crust is a gigantic furnace producing heat (energy) that is clean and reliable.
COAL - We have the technology to produce oil and gas from coal. The Germans practicaly ran their entire war machine on synthetic oil.
HYDROGEN - It is the most abundant element on earth. The oceans are full of hydrogen. We can, and will, extract hydrogen fron sea water and return the water to the oceans, or desalinize it for drinking water.
BIOMASS - There is abundant, easy to recover, methane gas in the thousands of landfills throughout the US. In addition the garbage itself is potential fuel. Then there is ethanol; we are the OPEC of corn, also.
TIRES - There are over 250 million discarded tires in the US and over 20 miillion are added annually. Each tire contains the equivilent of four gallons of oil; that is one BILLION gallons of oil.
We have the know-how to utilize all these sources today, but they cannot compete with $60 oil ...yet.
Your great-great-great grandchildren will travel in cars, trains and planes fueled by hydrogen/solar power plants. Electricity will be generated by synthetic oil, clean burning coal, geothermal wells and garbage.
Today's price of gaoline is not driven by a supply shortage, rather it is being pushed up by a spike in demand in China and India and the fact that no new refinery has been built in the US for twenty-five years!
What we really need is for Congress to take a year off, go to their local community college, take Economics 101 then read Adam Smith's "Wealth of Nations", published in 1776... and then take another year off.
P.S. -
Want to get oil to $20 a barrel and put the Department of Homeland Security out of business? Pull all US combat troops out of the Persian Gulf.
posted by TandaPundit at 20.7.05
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