Saturday, April 29, 2006

Could We Stop Screaming Long Enough to Fix the Problem?

Everyone is all up in arms about the gas prices. I keep hearing about price gouging and profit taking. You can’t catch a news break without someone pointing out the huge profits being reeled in by the various oil giants.
Does anyone happen to remember that these are publicly traded companies that are obligated to return a profit to their investors? Does anyone happen to mention that this “Huge” profit is only about 8-9% and about 75% of that will return to the stock holders as dividends? These stock holders will only end up with about a 5% return on their investment. These returns are pretty meager when compared against some of the software giants and their 15-20% returns. I recently saw a sign up at the local bank offering CDs at just below this rate, no risk.
We have many talking heads simply looking at the bigness of the number and not penciling out the actual earnings. They keep shouting about record numbers and such. How can these learned individual overlook something so obvious. Once again we have a case of being caught up in the emotion of something. I know when I go to the gas station I have a bit of an emotional reaction myself. The point is, I get past that and look at the reality of the situation. I know none of this makes you feel any better, but we need to get at the real problem.
The real reason for our high gas prices need to be dealt with. The first is our environmental laws. We have let environmental fever run amuck and destroy our own ability to meet our needs. We have the “Not in my backyard” syndrome as well as good plans being “What if’d“ to death. One thing that can be said about us here in the USA is that we are scientifically advanced. We have come up with all sorts of ways to both avoid and deal with problems. Yet to hear many of these groups speak you would think that the only purpose is to destroy and pollute the landscape. Many of these companies are excellent neighbors and should be welcomed into our communities. They offer quality jobs and return big benefits to the communities they are in.
Next we need to look at capacity. I am sure that many of you have read or heard that we haven’t built any new refineries in almost thirty years. Many of you may even have seen stories about refineries removed over this same time line. Much of this falls on the environmental groups. Not only have they kept us from building they often devoted themselves to having what we have, removed. This needs to be turned around right away. Many communities have mandated boutique blends of gas that deal with various environmental issues, further incapacitating what few refineries we have. We need to build more refineries to deal with demand, while we also work toward limiting these special blends in an effort to maximize output. When we do decide to build, we also need to take into account the location. Most of our current refineries are along the gulf coast. Hurricanes constrict our capacity to produce every year. Katrina is still holding back production in several facilities.
Finally, the biggest issue is access to crude oil. We have limited ourselves to such a degree our only choice is to buy from outside our nation. Notice that does not suggest we don’t have enough to meet our needs it simply points to the fact that we won’t let ourselves access it. We instead buy it from nations who are often hostile to us. We have placed ourselves at the whims of those who don’t have our best interests as heart. Our poor management of our energy needs has funded those who stand against us today. Our lack of future planning has also failed to account for the demand placed on these same resources by India and China. The supply and demand curve has quite a few more players, hence the price shift.

Let me address some of these issues. We need to stop strangling ourselves and start utilizing our resources. We have the talent, no how and resources to solve what is causing the problem. We need to start drilling in our own backyard. Look, Cuba is planning to drill only about 50 miles off the Florida coast. We should already be there. The Pacific coast has got vast oil reserves, but once again we need to untie our hands.
Next we need another refinery. The east coast is pretty tapped out as far as buildable land and deep water access to bring in tankers of oil. The Gulf and its frequent weather problems have got more then enough. That leaves the Pacific coast. There is one port under utilized and ideally suited. That port is Coos Bay Oregon. Former logging and milling has left much of its ports empty. The bay offers deep water access as well as immediate available land for building a refinery. The opening of our west coast and ANWR for oil drilling will give it plenty to do. Railroad access is even there to help distribute products all across America.

We need solutions people. We may not be able to fix the here and now, but what about tomorrow. Does anyone offer a plan to deal with our future needs? Alternative energy sources will be our distant future but in the mean time, can we do something about the problem.

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2 Comments:

Blogger The Liberal Lie The Conservative Truth said...

Excellent points that needs to be said and in which I totally agree! Thanks for visiting my site. Every Sunday I select a Blog of the Week to spotlight and am spotlighting and linking to your sight today. Keep up the good work.

Ken Taylor

5:58 AM, April 30, 2006  
Blogger A Jacksonian said...

Woke up this morning and gave my Party a stop gap energy policy to help build an energy independent America. Never let it be said that *better* ideas were not offered to the Republic! Now talked about and enacted... *sigh*...

1:31 PM, April 30, 2006  

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