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It’s Not That Complicated!

Mike Hoy
April 21, 2006

There are many things going on in the USA today that leave me speechless. It does not take a rocket scientist to figure out that the financial system of this Country has been used and abused to the full extent of its nature for decades. Even a rubber band has only so much elasticity before it snaps. As each of us know; when that rubber band snaps the results can be very painful. The exact same thing will hold true for our economy and Country when past abuses have pushed it to the point where there is no more elasticity and the result is a total financial collapse.

I plan on writing several articles dealing with the abuses I see that, unless successfully addressed, will inevitably bring our system to its knees. This is the first article and it deals with a subject I feel has held not only the Americans, but every foreign citizen of every country in the world hostage to their dependency on foreign sources of oil to meet their domestic energy needs.

Every year, billions upon billions of dollars are spent, over seas, in our quest to acquire our “fix” in meeting the demands our “addiction to foreign oil” has placed on our nation.

To me the most disgusting points to this dependency are twofold.

1. Vital financial resources; which are so desperately needed within this country are siphoned away to pay for this oil; depriving our financial system the use of these funds and the jobs these funds could create.

2. Several countries who, directly or indirectly, receive these funds are our enemies who have sworn to destroy our way of life. These countries are free to use these funds in any way they choose. There is very little doubt that we are directly funding our own demise.

Does either one of these two points make any sense at all?

SUPPOSEDLY NO OPTIONS?

It has been an accepted “fact of life” that our country has no choice but to enter the open market and buy the oil necessary to supply our countries needs. I have never heard an elected official question the truth of whether we actually have no option but to purchase this foreign oil; UNTIL NOW!

For year’s scientists have advanced the theory of “peak oil.” In a nutshell; peak oil is the period in time when the world’s supply of oil has peaked. I am not about to get into the debate of whether the world’s supply of oil is in jeopardy in this article. I do believe the escalating price of oil is telling the consumers of the world that demand is outstripping the supply and our days of cheap oil have gone the way of the dinosaur.

In other words, the day of reckoning is rapidly approaching when the price of oil may go ballistic.

COMMON SENSE

For years our elected officials have been fully versed on the consequences that await our country and the world as a result of the escalating price of energy. The “addiction to oil” is no different than an addiction to drugs. Both addictions, in the end, lead to bankruptcy and death.

There is absolutely no good that can come from rising energy prices; unless you are an oil company looking to use those funds for the good of mankind. To date this thought is just wishful thinking. Rising oil prices are in the best financial interest of the oil companies so do you really believe that they would decide, on their own accord, to develop alternate sources of energy which in turn would bring the price of oil and the profits they make down?

I would like to believe the inherent responsibility of our elected officials is to act in the best interest of their constituents and the nation as a whole. I would also like to believe that developing a permanent source of energy that dramatically lowers the cost of energy while making our country totally dependent upon our own natural resources to meet our energy needs would be at the top of their list of priorities. This would also create huge numbers of jobs while taking great strides in improving our balance of trade deficits while dramatically improving our Country’s financial position. I keep asking myself how our leaders can continue to avoid the necessity to develop viable alternatives while they continue to pursue policies which sell the financial futures and lives of our children and grandchildren to those who would do anything to bring our once great nation to its knees.

THE REAL QUESTION AND ANSWER!

The real question that every citizen in this country should be asking themselves is; does a viable alternative exist to the traditional usage of oil?

The answer to this question is very simple and the answer is YES! Not only does an alternative exist but it has existed for decades. Not only has it existed for decades but the fuel burns practically pollution free. Not only does it burn practically pollution free but the cost is a roughly half of what we pay today. Not only does it cost about half of what we are paying today but the supply of this energy will last for at least three centuries.

You read it right;

1. Total independence on our own sources of energy;
2. Three centuries worth of reserves;
3. Half the cost;
4. Burns practically pollution free;
5. Billions upon billions of dollars staying at home;
6. Job creation;
7. Possible solution to easing of tensions amongst world powers as a result of easing the demand pressure on the supply of oil making it more affordable in greater quantities to those countries who have no alternative but to continue using the traditional source of energy;

The list of positives can go on and on.

WHY?

Is there any doubt that the reason we have not weaned ourselves off the dependency of our enemies is the fact that greed and profit have blinded our leaders into a false sense of security. A security that leads them to believe the public will stay in the dark about the alternatives that already exist and are economically viable. I find it incomprehensible to believe that viable alternatives exist and our elected officials have done everything they can to postpone making these alternatives a reality.

THE FUTURE

The purpose of this article is not to confront the shortcomings of the past but to draw attention to the future. We as a nation cannot afford to waste any more time in developing this alternative source of energy. The very survival of our nation depends upon the American public being made aware that alternatives exist. Once the public understands that there is an alternative that will save money as well as clean up the air we breathe then the public will rise up and demand that changes be made as soon as possible.

WHERE TO START

COAL LIQUIFACTION!

For decades the technology has existed to clean the impurities out of coal leaving a clear liquid that will burn practically pollution free for roughly half the cost of today’s energy prices. The Governor of Montana was on Sixty Minutes a few weeks ago doing his best to introduce the public to the future of the coal industry. I have also heard the Governor of West Virginia on TV saying the same things. These two states are willing to bend over backwards to work with anyone looking to fund these projects. There is a developmental timeline of 7-10 years before this process actually becomes a reality to fuel our homes and automobiles. This lag time is the reason that we as American Citizens must learn and educate ourselves to the truth of alternatives so that this process can begin as soon as possible. Where do you think oil prices will be in 5-10 years? This is a horrible situation that will only get worse with time. People, this is a no brainier and our nation should do everything it can to promote and develop this alternative as quickly as possible.

I also suggest that any individual who has a desire, and I will never understand why, to enter the political arena, educate themselves on the alternatives that exist for making this Country independent again. I believe a platform built on making the US totally dependent upon our own sources of energy would make for a highly successful campaign platform. I believe the “cash strapped” public would “stand in line” to vote for anyone who offers a viable alternative that would save them thousands of dollars while cleaning up the environment!

SOURCES OF FUNDING!

I have read and heard all kinds of talk and debate about levying additional taxes on the oil companies due to the exorbitant profits they have earned as a result of the rising cost of crude oil. As most people know; increased taxes on the oil companies is definitely not the answer.

In order for the oil companies to develop alternative sources of energy they have to confront the fact that their days of rising oil prices and exorbitant profits are coming to an end. We must recognize that oil companies want to see rising prices because these revenues go directly to their bottom line. We must also recognize that it has not been in their best interest to develop competition that will lessen the usage of oil because if this were to happen the price of oil would stabilize or fall; hurting their bottom line. If peak oil is a reality then there is no doubt that the future for oil is limited to the supply that will be available for sale. Eventually the supply of oil will fall to a level that the powers of the world will do anything to acquire ownership of this dwindling resource. Unless alternatives are developed the powers that be will go to war to secure these assets. This is not an acceptable future under any circumstances.

A possible solution in this case would be to give the oil companies incentives to develop these alternatives. Allowing tax credits for the development of these alternatives is one means of stimulating oil companies giving them the incentive they need to develop the world’s supply of energy for the 21st century and beyond.

Another option would be turning to very wealthy individuals and extending to them the same tax advantages of developing these alternatives. I would think the personal satisfaction that building new alternative supplies of energy for the good and economic welfare of our nation would be incentives for individual investors like Warren Buffett and Bill Gates to become involved. I would very much like to be in a position where I could do something for the good of mankind. It would be very satisfying to leave this world knowing that I made a difference and solved a worldwide problem that would last for centuries, for the good of my fellow man.

I also believe the ownership of coal liquifaction facilities will be a very profitable venture. I believe ownership of facilities of this nature offer the perfect hedge against inflation. How many utility companies receive regular rate increases based upon their costs and inflation? Seems to me this would be a super business to be in with positive cash flow that extends for decades!

There is one other source of funds that I could see materializing. If I were selling oil to the US; receiving billions in yearly revenue from the US and I knew that my days were numbered as a result of alternative development I think that I would consider paying for the development of this alternative source of energy as a guarantee of future revenue and income when the oil that I have been selling on the open market is depleted and obsolete due to the development of more economic alternatives.

I believe that the oil producing nations of the world have the cash to develop these alternatives and I think they would be well ahead of the curve if they stepped up and started doing what we in this Country should already have completed. In other words, the potential exists for our enemies to gain control of our energy structure for centuries to come.

CONCLUSION:

The Citizens of the United States need to become aware of the viable and economic alternatives that currently exist to supply our future energy needs. Once the public learns the truth they need to demand that our leaders begin to take the appropriate actions to wean us off our addiction and lead us into the 21st Century. Until we educate ourselves and then demand changes be made we have only ourselves to blame for the rising cost of energy and the bankruptcy of the “American Way of Life!”

Mike Hoy
tel: 402 483-4484
email: mhoy@neb.rr.com

As always; these are just my opinions and not to be construed as investment advice.