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 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.

Energized About Energy

Sometimes you can pick out the "hot spot" in U.S. politics with ease. It doesn't mean that anything will be accomplished, but lots of hot air rising can give clues to the perceived point of pain. In this case, the pain is at the pump and is hopefully being passed on to elected representatives in the form of "do something or I might actually vote for someone who will..." threats of action.

So, will anything come out of the rhetoric? Don't count on it. At best, expect a short-term band-aid to hide the "ouch" -- not a long-term fix that goes to the root of the problem. We are such a short-sighted nation that we often treat with aspirin the headache that pains us rather than pulling out the spike that is causing the headache in the first place. If only we could use that "hot air" to turn a turbine we might at least cut the energy bill for D.C. residents....

Escalating Food and Fuel Costs Create Security Concerns

What would happen if escalating fuel and food costs created widespread unrest in China? The first thought is that the government would crack-down in a very harsh manner to stop any political unrest. A second possible scenario is that their eyes would turn elsewhere -- perhaps to the perceived source of their woes. The United States? No. The Middle East. Oil prices are driving the other problems.

With the taste of capitalistic advances in the economy, the Chinese people will not be satisfied with a heavy-handed state policy to force them to "absorb" fuel price increases without some resistance. The size of the Chinese population is such that unrest could quickly grow to a size that would be difficult to handle by the internal police and military. So, the logical approach for the Chinese government is to attempt to redirect that energy. A destabilized China would be a dangerous thing indeed.

Airlines Scheme to Offset Fuel Prices

Some airlines are responding to the higher fuel costs in ways that make no sense to me. I suspect they know exactly the cost of every flight they conduct. The key is to maximize occupancy while maintaining a profitable flight. Fill the seats.

The newest strategy by United is likely to create empty seats. Requiring minimum stays will cause business travelers to purchase tickets in pairs (2 round trip tickets) and then using the first half of one ticket heading to their destination and the first half of the second ticket returning. That means unoccupied seats unless filled with standby passengers. With the discounts they are considering for "required minimum stays" it will often make sense to the business traveler to use this method to circumvent that requirement. It may require using two different airlines to accomplish, but it is doable.

Why not just price the seats at a profitable level based on anticipated usage and be done with it? The airlines have huge databases that provide very reliable traffic flow and seat occupancy statistics. Use them. Don't play games. Instead, the result is likely to be a shift to alternative means of transportation. The private aviation industry may gain more charters.

Jobless Rate and Fuel Prices

Do you think that gasoline prices have anything to do with the increased jobless rate? If your business is dependent on fuel for deliveries, for sales, etc. -- and they all are -- are you going to expand your workforce? If you are part of a family in which one spouse has been able to stay at home, could increased fuel prices spur the look for a job for that spouse? It's time to do something about fuel prices!