The Prime Indicator

Energy consumption is the number 1 indicator of economic activity.

China Passes U.S. as World's Biggest Energy Consumer

Some interesting quotes from the article:

"Highlighting how quickly its energy demand has increased, China's total energy consumption was just half the size of the U.S. 10 years ago."

"The U.S. is still by far the biggest energy consumer per capita, with the average American burning five times as much energy annually as the average Chinese citizen...."

"...said China requires total energy investments of some $4 trillion over the next 20 years to keep feeding its economy and to avoid power blackouts and fuel shortages."

"...China is expected to build over the next 15 years some 1,000 gigawatts of new power-generation capacity. That is about the total amount of electricity-generation capacity in the U.S. currently...."

And this just in (updated 7-20-10)....

China denies IEA label as world's top energy user

I guess that want us to think they are making huge leaps in energy conservation measures.

A Blob of Contention

I realize that the meandering post below is not as cohesive as was desired when I first began the ramble, but, perhaps there are a few things within that make sense.

Somewhere between "Drill Baby, Drill" and "The TreeHuggers Lament" is a balance that should define our approach to energy.  We are responsible for being good stewards of the resources of this planet.  That includes our environment and all of the things encompassed by that word -- plants, animals, water, soil, air, etc.

Stewardship implies use.  It does not mean that we "preserve" something at the cost of humanity.

The basic issue upon which the dichotomous views toward energy development turn is that of a human-centric view of the world versus one in which humanity has no value greater than any other thing -- at least on the surface.  In reality, it is a much more elitist view.  Those who would have you think that humanity has no greater value than anything else hold themselves at a much higher value than others.  In other words, it is a purely self-centric view.  It is a view that one group, those who worship the earth, are of greater value than those who do not.

Among those who value humanity above other things, there is also a division in views.  There is a split between those whose view is very near-term (usually no greater than a few days at the least or their own lifetime at the most) and those who take a generational view -- one that includes a responsible attitude that extends beyond their own lifetime.  Again, it is a difference between those who are self-centered and those who look beyond personal self-interests.

Ultimately, the division is between those who are purely self-seeking and those who feel a responsibility beyond self.

In the end, an attitude that is purely centered on self will result in destruction because there is no building for the future.  The extension of this philosophy of life would logically indicate that self-serving attitudes result in the destruction of the family, the country and ultimately, humanity.

The instinct for self-preservation, should at some point, trigger a cooperative effort.  For the individual whose view is of long periods of time, this point is reached quickly.  For those whose focus is in the immediate, this view is not reached until faced with chaotic, destructive forces beyond their control.

Applying this train of thought to our national situation we should become aware of a couple of things.  First, the focus on immediate gratification in our society would imply that, as a nation, we have a very short-term view.  Second, the acquisitive nature of our society would imply a highly self-centered attitude is the norm.  When taken together, these two factors alone indicate the source of our headlong rush to destruction.

So, how does this apply to energy policy?

At both ends of the spectrum we see self-interest as the driving force, although among the "treehuggers" it is disguised in the rhetoric of something else.  Each of these interests are pulling in opposite directions.  Normally, when you have forces pulling in opposite direction it is accompanied by a ripping sound.

On the one hand is the drive to "preserve" and on the other the desire to develop.  In the end, the balance would be responsible development with an extended view that looks to future generations.

I am a firm believer in the free market.  I think that if allowed to work without interference, the market will ultimately achieve balance.  We do not have a free market.  We have energy subsidies on the one hand and we have burdensome "environmental" regulations on the other.

Subsidies can be a useful policy tool.  When used properly with a view to national security interests, they can drive behavior in a manner that protects the interests of the nation.  When used improperly, they can lead to corruption.

"Environmental" regulations also can be a useful tool.  They should protect the interests of the whole so that "bad" individual behavior is corrected.  Clean air, clean water and safe products are in the best interests of the nation.  There is a tremendous "health cost" burden when such are not available.  This "health cost" is both direct (medical bills) and indirect (lost productivity or individual impairment).

Nation-states were formed when individuals of common interest banded together for protection.  Always, there was a cost to personal freedom and a gain to personal preservation.  It was a balance between individuals of competing interests.  The same balance applied between different nation-states.

Energy production must achieve a balance between competing interests (the present versus the future) that maximizes the benefit for all -- both today and in future generations.  The answer is not wind or solar.  The answer is not in fossil fuels alone.  The answer is probably not nuclear.  The answer will be in new technologies.  In the interim however, we will cross the bridge that is composed of all of the available technologies into a future that we would not recognize if we were suddenly transported in time to that far off day -- given of course that there are still humans left alive to experience it.

Meanwhile, the "Blob of Contention" between current and future needs drifts aimlessly in the Gulf of Mexico.

The Carbon Straw That Broke the Camel's Back

Regulating/controlling/reducing pollutants into the environment is something with which most people agree. However, schemes for carbon-caps and carbon credits trading make very little sense.

Texas has long been dependent on the oil and gas industry for the strength of its economy. It is the U.S. leader in most areas of energy production -- including renewable sources such as wind energy. Its cities also are among the leaders in developing plans for reducing pollutants in the atmosphere.

Good science should be applied to pollution, not schemes designed to line the pockets of a small group of people who would create a "carbon credit" market. The individuals promoting such schemes are positioned to capitalize on the trading of such credits while placing an increasing burden on the consumers in this country. IT IS THE CONSUMER who will pay for it all -- not the so-called "bad" industries such as oil & gas production or chemical manufacture.

We are already facing a horrendous deficit in our country due to the profligate spending of the last few years. That deficit promises to grow dramatically under the current bailout schemes. The burden eventually will fall on the shoulders of the taxpayers -- of this generation and the next and the next. The debt of our nation is already held largely by foreign governments. We have sold our country to the highest bidder while sucking the life out of the people who made this country great.

Adding the burden of a carbon cap-and-trade scheme to our economy could very well be the last straw that breaks the camel's back. Perhaps that is what our national leadership desires. We've been hearing of a conspiracy to create a one-world government for years. I never really bought into that conspiracy theory but I'm beginning to wonder.

The article linked below discusses the potential burden to the Texas economy of carbon regulations being proposed. It's amazing isn't it? One of the few bright spots in the U.S. economy is now threatened by this lunacy.

Carbon regulation could "cripple" Texas: Perry

Another article below:

Perry concerned by plans to limit greenhouse gases

And another article:

Perry says emission rules would cripple Texas economy

Consumer Price Increase Is Energy Surcharge

The rise in U.S. consumer prices being reported around the world is not unexpected. I find it interesting how most reports include statistics "stripped" of energy and food price increases. What they don't tell you is that nearly all of the increase is energy driven. Energy affects transportation prices for goods and services. It impacts input costs into goods and services. It affects direct operating costs of businesses. It is built into every item manufactured and every service offered.

My point is this: It isn't inflation that we are seeing, it is a fuel surcharge. If we want to see inflation controlled, we must cut our energy costs.

Some Random Thoughts, Links and Observations

I see that Candidate Obama took a Hawaiian vacation -- probably to check in with Pelosi and Reid -- while McCain stepped up his attacks. Senator McCain on the other hand is working with his speech writers on what is expected to be a brief address to the RNC.

Not all of the Democrats are getting a vacation though, it seems that Senator Edwards is busy dodging bullets about his admitted affair.

The Republican Congressional Leadership on the other hand, is spending its vacation speaking to an empty House in Washington. Ah, well, at least CSPAN is listening -- I think -- I haven't checked. Other Republicans are pressing their war to lower gasoline prices in a more practical manner -- by taking it on the stump and to the people. Senator Cornyn (R-Tx) has not let up on his efforts on behalf of energy consumers for several months now. He also expressed his disappointment with the EPA's rejection of Governor Perry's request for relief on the RFS mandates.

The President is in China for the Olympics while the U.S. government is condemning Russia for attacking Georgia, a U.S. ally. This brings to mind thoughts of the Soviet invasion of Czechoslovakia in the not-so-distant past. How far will we go on behalf of our allies? Senator McCain seems ready to go a little farther than the President. Perhaps he just isn't encumbered by the trappings of diplomacy yet.

The President and Putin have been discussing the situation in Georgia while grazing the munchies in China. I wonder how their little chat went?

Meanwhile, Paris Hilton is gaining ground in her newly announced bid for the Presidency. She is receiving important endorsements for her Energy Plan. She will have a difficult time getting it through Congress if she's elected. They don't know what an Energy Plan is apparently.

That's the days political news -- at least as much of it as I want to mention.

Democrats Walk Out on the American Public

It has been awhile since I posted here. It seems that not much has changed in politics other than the Republicans speaking to an empty house and C-SPAM (slip intended) since the Democrats pulled their usual "don't give a rip what the American public thinks" act and went to Aspen or wherever for vacation. We need an energy bill. It won't happen on Pelosi and Reid's watch. Pelosi is so busy "trying to save the planet" that she may not save her job -- we can only hope.

Energy Fuels Political Games

While Washington plays politics with our energy future, the U.S. consumers continue to pick up the check. The bill to curb energy speculation appears to be merely a political move designed to fool the electorate into believing that Democrats really care about our cost of fuel. It is really an attack on free enterprise which fails to address the true issue -- supply and demand. The price of fuel is set where the quantity supplied equals the quantity demanded. We either need a greater supply or a lower demand. The economic growth of China and India make it difficult to lower demand even though we are burning less fuel in the U.S. Therefore, we must work on the supply side of the equation. We must produce more oil.

From all appearances, Harry Reid and Nancy Pelosi do not care about the American people. They only care about their power and the narrow interest groups that keep them there. Until Republicans control both the Senate and the House, there is little chance of meaningful energy legislation. That control means more than a simple majority of seats. It must be at least 60% to be truly effective.

Senator Cornyn: Fighting the Energy Fight

Senator Cornyn is continuing to fight for the American people on the subject of energy and high fuel prices. He pulls very few punches in his condemnation of Senator Reid and Speaker Pelosi as well as other prominent Democrats over their political stonewalling on this critical issue. I applaud his continued efforts. Read what he is doing here and here.

We Can Do Better

We frequently see the debate between “environmentalists” and the rest of us as framed in an “us” vs. “them” manner. Business people feel that the environmental movement is nothing but a roadblock to progress. People in developing countries see environmental groups preventing them from experiencing the luxuries of the west because they hinder the utilization of the natural resources at hand.

Environmental groups often carry names like “Friends of the Earth” or “Save the Wildlife.” Those types of names carry with them a stigma that immediately sets on edge the typical businessman.

What if the debate became a completely economic one?

There is within the economic community the idea that when external costs are internalized into the price of a good or service, the decision to allocate resources to that good or service often changes. An example of internalizing these externalities would be the impact of a uranium mine on the Navajo Reservation. In order to avoid the potential complexities of the decision, let’s limit it to one possible issue – or, external cost -- the impact of the mining activity on the water supply of a community.

Suppose that the mine is located within the watershed of a Navajo community. To fully understand the cost to develop the mine, the potential pollution of the community’s water supply must be examined. Such examination would need to include preventative measures and possible remediation in the event of contamination. It also would need to look at long-term effects to wildlife residing in the watershed. Wildlife might provide hunting lease income to the reservation. It might also be of significant cultural value that would be difficult to price. It might affect tourist income from photography or viewing. It might impact local artisans who utilize specific clays located within the watershed.

With the exception of preventing and remediating potential contamination, none of the impacts mentioned are direct costs to the mine owner/operator. They are however, external costs to the community of locating the mine in their watershed.

How does one determine the value of natural resources? We can estimate the value of mineral deposits. We can value land based on the transactional market for similar properties. But, how do we value the less obvious things such as: filtering the water supply, tourism, hunting and fishing, recreation, moderating effects on climate, flood protection, erosion control and other items about which we don’t currently understand?

Hopefully in the near future, we will see attention paid to such values. Such things must be part of an overall land use plan before disruptive activities are begun. We need oil, natural gas, wind energy, solar energy, coal and we need minerals that can only be obtained through extractive activities. Surely we have learned enough of the complex interactions of the environment to begin to make sound evaluations of our activities in a broader sense. We must learn to utilize our resources without destroying our surroundings. Let’s drill – but let’s do so in an environmentally informed manner. Let’s build windmills for electrical generation – but let’s situate them in a manner that retains the benefits of our wild lands. Let’s learn from the unintended consequences of our past mistakes – such as ruined lakes and streams from coal mining or oil and gas extraction. We can do better.

Energy: All of the Above

Senator Cornyn once again weighs in on the issue of Energy. The present gains on energy legislation are a result of the Democrats caving slowly to the building pressure from the electorate. Watch out though, come this fall if they retain their control of the House and Senate and possibly add the Presidency, the consumers in this country don't stand a chance. Energy prices will go through the roof. Why? Because they (the Democrats, er, Socialist Elite) don't want us using it! They want to be the elite (as in the Politburo) controlling the masses -- subjugating us to be their servants. It is eliteism at its worst. It is reminiscent of the rebellion of the working classes that resulted in the Communist Dictatorships of Stalin and Lenin. Sigh. Why are people so blind?

Infrastructure as Economic Stimulus

Infrastructure is an issue that merits attention. We must re-vamp our electrical distribution infrastructure to accommodate wind and solar power generation. We must establish infrastructure for ethanol -- pipelines, rail cars and truck transport. With hydrogen fuel for automobiles on the horizon, we need to look at establishing an infrastructure to distribute and retail that fuel. Natural gas powered vehicles also need filling stations. Our highways are in need of attention -- especially many of our bridges which are aged. The extreme growth of metropolitan areas such as Austin, Texas, have left a gap in the road system of those cities. We need port terminals for LNG offloading and for receiving oil that hopefully will soon be pumped on the outer continental shelf. We need new rail and high-speed transit facilities. And the list goes on.

Texas currently has a budget surplus created by the growth in the economy and from high oil prices. It needs to go into some form of revolving fund for infrastructure. Now, even some Democrats are "getting it" as far as infrastructure goes. Construction requires workers. Workers spend money. That stimulates business. Business works more efficiently when infrastructure is in place to move energy to where it is needed. It all works together to fuel our economy which generates more taxes -- even at lower rates. Let's stimulate the economy by spending money on infrastructure.

Energy -- Let It Flow

While Congress continues to do battle over the energy crisis, private industry is stepping up with projects that will help more than anything Congress can do. The best place to start is to get oil into our refineries and to turn it into gasoline. Canadian oil is a good potential source. Too bad the refineries are a long way south of there.

When will the Democrats learn that a free market is the best solution to our energy woes? Instead, they want to penalize investors who see energy as an opportunity. Go figure....

What we really need is a plan to get off of high center and become Energy Independent.

Subsidies, Trade, Agriculture and Security

Rising global food prices have created some interesting dynamics in recent trade discussions. In the past, agricultural subsidies and import/export tariffs have been a sticking point in any negotiations. One reason for this is that many countries wish to protect their agriculture industry due to security concerns. If world agricultural product prices are low, many industrialized countries cannot compete on the world market. Their producers are threatened with failure. So, the governments of those highly developed economies typically subsidize their farmers in some fashion so that they can remain in business and thus keep agriculture viable.

With high food prices, the subsidies are not as necessary to maintain viability for famers in advanced economies. They can compete with low-cost producers such as Brazil. This provides the opportunity for those governments to offer a cut in farm subsidies in exchange for things like reduced import tariffs for manufactured goods in countries that have erected barriers to protect their industry for reasons similar to industrialized countries protecting agriculture.

Ultimately, the most efficient way to allocate the world's resources is with a completely open, free market. This of course would necessitate that the world's governments all feel safe enough from their neighbors to believe that dropping protective barriers is prudent. Those barriers are like an economic stockade or fort. Just as a country seeks to protect itself militarily, it must protect itself economically.

In the last 30 years, the U.S. has exposed itself economically, yet has maintained its world preeminence in some respects, by its military power. Countries fear to take economic retaliation on the U.S. because of the potential for an overwhelming military response. Our dependence on foreign oil has weakened our position. We now are at extreme risk due to our high dependence on foreign sources of petroleum. Have we stretched our military capacity to the point that the military threat is less likely to offset that economic threat?

We must achieve energy self-sufficiency. We also must remain vigilant to maintain our food security. The greatest strength of our country is our economic system. It is also our greatest point of vulnerability. If we are hostage to foreign sources of energy -- or, through exposing our agricultural sector to extreme market vulnerability by eliminating a system of price subsidies -- we offer ourselves to the mercy of our enemies.

Inflation or Fuel Surcharge?

Inflation? We don't have inflation. What we have is a fuel cost surcharge rippling through our economy. It affects the price of everything.

What can be done about it? Produce more energy -- quickly. The law of supply and demand are immutable in spite of what the Democrats tell you. We can work on both sides of the equation -- for that's what it is. Price is set based on the equilibrium point of supply and demand. Taxes and regulations artificially raise that point. The most efficient mechanism for determining price is a free market.

We need to learn to conserve and we need to produce more energy. The quickest way to drive down energy prices is to glut the market with an abundant supply of energy. All forms of energy are affected but the one on every one's mind right now is the price of gasoline. We need more oil and we need it quickly.

Most of the oil rigs available are being used currently. We need more rigs and we need them working now -- on the Outer Continental Shelf, in ANWR and anywhere else where there are untapped reserves.

Let's wean ourselves from foreign oil. Let's establish our Energy Independence. Join Senator John Cornyn in his efforts.

Related: U.S. Senator John Cornyn has posted a guest post at RedState.

More on Energy Independence Days

Powerline Blog has a guest post from U.S. Senator John Cornyn in which the Senator blasts the leadership of Nancy Pelosi and her Democrat co-horts on the energy issues that we face. Head over there and read what he says and then drop by the Energy Independence Days posts on the Senator's blog. The next few days promise to be interesting with posts from former Speaker Newt Gingrich and Alaska Governor Sarah Palin.

Energy Independence Days

U.S. Senator John Cornyn has declared war on our dependence on foreign oil. He has created a special emphasis on his website called “Energy Independence Days” in which there will be a series of posts including videos from Senator Cornyn on the subject of how we might achieve our Energy Independence.

I am thankful that the Senator has taken the best interests of the American people to heart and created this opportunity for the people of this state and nation to have input, as he helps through his leadership, to set our lawmakers on course to address this critical issue. I pray that solutions can be developed through the private and public initiatives that are a hallmark of this great nation. I am humbled to have the opportunity to provide a guest post on the Senator’s website. Thank you Senator Cornyn for all that you do for our state and our country.

Pelosi's "Strategic" Solution to Fuel Prices

Maybe I'm confused in my understanding of the word "strategic," but it seems to me that if there was ever a time to have the strategic petroleum reserve (SPR) full it is now. When we look at the turmoil in the Middle East, the surging demand for petroleum by China and the potential for supply disruptions throughout the world by terrorists -- not to mention the roadblocks to increased production that are being erected by the Democrats in Congress, this is the time to be certain we have a supply of oil to meet critical needs in the event of a major catastrophe. Yet Nancy Pelosi in all her wisdom wants to draw down the SPR to alleviate gasoline prices but is unwilling to support increased production domestically. Whose side is she on anyway?

Opportunities for Doing the Right Thing Abound

In a post earlier today, I referred to the Lesser Prairie Chicken (LPC) as a possible reason for Mr. Pickens' need for a $10 million media blitz on his new energy plan. Upon further research, I find that he has the opportunity to do something that could have the potential for aiding the Lesser Prairie Chicken while furthering his plans for wind energy development and heading off potential future challenges if the LPC were to eventually be declared endangered.

The Texas Parks & Wildlife Department offers a program called the "Candidate Conservation Agreement with Assurances (CCAA)" which can provide protection for both the Lesser Prairie Chicken and Mr. Pickens in the event of a change in status for the LPC. The CCAA is an agreement whereby the landowner can enter into a voluntary program for developing and maintaining habitat for the LPC through a wildlife management plan developed in coordination with a Parks & Wildlife biologist. The agreement provides assurances that the landowner will not be subject to further use restrictions or conditions should the LPC be declared endangered. This could truly be a benefit to Boone and to the LPC.

The issue of Wildlife and Wind Development is something that is critically important as we move forward with alternative energy development. An conference regarding those issues will be held August 8 - 9 in Amarillo, Texas. The Panhandle Wind and Wildlife Conference will be an opportunity for education as well as a venue for discussing the various issues regarding wind energy development and wildlife interactions. Information about the conference can be found here.

Pickens Energy Plan and Media Blitz

Why would Boone Pickens spend $10 million on an ad campaign to boost his energy plans? His newest "big" project is the development of a mega wind-generation field in the Texas Panhandle. I wonder if it could be that his site is located in one of the last remaining habitats for the Lesser Prairie Chicken? I don't know, but based on the map and my knowlege of the area, it could be a factor.

The Lesser Prairie Chicken is on the list to be considered for Endangered Status. It is far enough down the list that it hasn't yet received much attention but it could. There hasn't been a public outcry yet, so why is Boone spending so much on his media blitz? I wonder....

Senator Cornyn Pushes Gas Price Reduction Act of 2008

As our nation struggles with the impact of high fuel prices we see little concrete action from our elected officials. It is frustrating that the wheels of government do not seem to be moving on this critical issue.

One exception to this inertia is the continued push by Senator John Cornyn for comprehensive legislation that would not only provide near-term relief for consumers but would pave the way for future energy independence. I pray that he will continue to take the fight to the Democrat controlled Senate on behalf of the U.S. consumer.