Monday, April 25, 2011

Energy Infrastructure Required

Welcome to the Collaborative Revolution!

Higher energy prices may be hear to stay.  The blog post linked below cites and analyzes a Financial Times story that needs to be carefully considered. 

The gist of it is the Saudis are "investing" $125 billion - or 30% of the GDP - in programs intended to appease the masses and stave off revolutions of the kind seen in Tunisia, Libya, Yemen, Egypt and elsewhere in the Middle East.  These new "programs" reek of entitlement and socialism just like the failed Ponzi schemes we fund in the US.  To sustain such programs the Saudi Royals will need to see higher oil prices if they intend - and the DO intend - to live in the style and manner to which they have become accustomed. 

Financial Times Story Analyzed

Read the whole thing, but keep the chart below in mind as you do.

When 94% of the oil reserves are controlled by NATIONALIZED OIL COMPANIES and the remaining 6% is controlled by multiple private firms it is farcical to argue, as many do, that private oil companies and "speculators" are controlling the price of oil.  Thus the price of oil is controlled, almost exclusively, by those with a vested interest in feathering their own nests.  For a variety of reasons, the GOVERNMENTS that control 94% of the oil reserves in the world are going to push for higher prices.

Eventually, policy makers in Washington D.C. will clue into these facts and the power of private enterprise will be unleashed to solve this problem.  It will take a few years but the problem can quickly and easily be resolved if the United States will place ITS OIL & GAS RESERVES in play.  The United States has ACESS to more oil and gas reserves than the Saudis and Iran combined, but we have, to date, REFUSED to tap those resources.  If oil prices reach and stay above $150 we should utilize those resources.  While many in the green movement will lament the continued use of fossil fuels they do seem to be the best option at this time.

Nuclear power should, of course, play a bigger role but hysterical voices in the environmental community make that option virtually impossible.  Gas - rather than oil and coal - is a great alternative, but it too is now under attack by environmentalists across the country.  Wind, Solar and other renewables, while promising, are just that and no more at this point.  Even with heavy subsidies Wind and Solar have proven too expensive and too unreliable.  Breakthroughs are being made, but we haven't found the silver bullet yet.

Meanwhile, we need to upgrade our energy infrastructure and embrace the reality that fossil fuels must be used to ensure lower energy costs until renewable technologies become competitive.  Currently, energy prices represent a little more than 6% of the average families budget.  Every major recession in the past century has been accompanied by a rise in energy prices above the 6% threshold.  If we want to drag this economy out of the doldrums we must start producing cheap and reliable energy in the US.  Right now that means oil, coal and gas and we shouldn't be shy about using it. 

If you are concerned about the environment and you want to reduce the worlds carbon footprint you should support efforts to reduce energy costs because China, India and other developing nations are NEVER going to support the restrictions on THEIR energy production that would be required to make a difference.  The US would be better served to tap our own vast resources of oil, coal and gas and leverage those resources in an environmentally responsible way to reduce energy costs and continue to promote and support renewable energy technologies.

In doing so, this country will have to upgrade and improve our existing energy infrastructure.  That would lead to a boom in the commercial building industry, which would benefit the economy as a whole.

James L. Salmon, Esq.
Collaborative Construction
300 Pike Street
Cincinnati, Ohio 45202
Office 513-721-5672
Fax 513-562-4388
Cell 512-630-4446
Collaborative Construction Website
Sustainable Land Development International


plumbing said...

Great article! I had a great time reading this. All of the information given is indeed helpful and concise. Thanks a lot.

Redspect said...

"We support public administration and local governments in driving profitable projects and working with our private partners."

sheila olson said...

I have dealt with a company called parallel infrastructure who is also providing various types of facilities like energy, telecom, real estate etc.