Midweek Thoughts
In recent memory, the people of the United States can point to boom-bust cycles that (depending where you were on the curve) helped or hurt their economic well-being. The Internet bubble of the late 1990s and the Housing bubble of the 2000s and the subsequent Banking Crisis of 2008 created many millionaires before leading to the carnage of those entering the party late and resulted in the loss of many a life savings. Along the way, the federal tax coffer was filled with inflated revenue from capital gains and high incomes.
The U.S. is now at a time when we are in desperate need of a new boom to spur job growth and restore our gross national product to the 4% or more annual range we so desperately need to lift our economy out of the malaise. On the flip side, we do not need another devastating bust to signal the end of the cycle, even if it would more than likely transpire six to eight years down the road.
What type of boom could be the answer to our economic ills both in the short and long term?
Drill Baby Drill, Fracking, Black Gold, Texas Tea, ANWR, Drilling Permits, Bakken Play, Marcellus Shale, Keystone Pipeline, Saudi Arabia of Coal, Liquified Natural Gas, Energy Independent.
Get the picture. I am a person who believes the United States can (it has definitely started already) create the perfect boom cycle benefiting a multitude of industries with very little bust downside by exploiting our vast energy reserves. Yes, we would still have to import oil, but at a far lower rate. We have more than a 200 year supply of the best quality coal in the world held underground in over half of our states. We should be focusing on ways to reduce regulation and enhancing technology to burn coal more efficiently. Over the past ten years, there has also been a revolution in the natural gas industry and the United States has trillion of economically viable cubic feet of gas in all areas of the country. Correlated to the natural gas boom has been the discovery of billions of barrels of oil in the Dakotas. The natural gas and oil revolution would not have been possible without the significant enhancements in all types of drilling technologies.
We should be doing everything in our power to lower oil prices to below $80/barrel. High oil prices benefit oil companies (but they can still make a lot of money and will be encouraged to improve efficiency at sub-$80 oil) and radical Middle East regimes dependent on the high price of the commodity so they can keep their people happy and to also fund terrorist activity.
The benefits to our society are too numerous to mention in full if oil prices could decline by 25%. All industries and individuals would benefit by the lower fixed cost of their utility and transportation expenditures and consumer confidence would improve. In addition, while I would not support this, with energy prices under control the American people may even be amenable to a potential federal tax income tax increase because many of their other fixed expenses have declined and their cash flow would be relatively healthy. (The democrats clearly do not think this far out of their box).
In my opinion, the green energy extremists should be all for drilling the energy reserves of our country as fast as possible. Think about it, by drilling and depleting at an accelerated rate fossil fuel reserves would potentially be eliminated at a much quicker pace than through conservation. Conservation would simply prolong the “greenie” nirvana of a world without fossil fuels. After all, aren’t they in this for the long term and would want the ozone layer to repair. They should be all for unlimited drilling and consumption of oil, gas and coal. Then, when the finite supplies are gone the world would have no other choice than to face the reality of solar, wind, hydro, etc. as the perfect answer to our energy needs. Why wait till the year 2150 for this to happen, let’s drill it all up now and totally deplete the fossil fuel reserves in fifty or sixty years.
It is funny that the “green energy yahoos” are really out to fatten the wallets of the energy companies. Oil prices remaining above $100/barrell help Exxon, Anadarko Petroleum, BP, Halliburton, etc. the most. These companies would continue to make gobs of money in that pricing environment. At the same time, with the government providing the research and development and taking the risk for all types of future energy sources the established fossil fuel energy companies could take a wait and see approach and not commit their own private capital to the development of new sources of energy. Once a viable green energy technology emerges, then the cash rich established energy companies would hire their Wall Street investment banker to acquire the green energy start-up. In turn, the established energy company would have a new revenue stream to diversify their oil and gas assets. The Wall Street banker would also take their commission. In the meantime, the United States taxpayer would not benefit from this in any way. The taxpayer is taking the venture capital investment risk without the upside of the monetary reward instead of a company like Bain Capital. This is not how capitalism works.
For some reason, the Obama administration is out to punish the fossil fuel industries with broader regulation and restrictive policy mandates. Some examples are the Keystone oil pipeline not being approved, coal emission regulations tightening, permits to drill for energy reserves on federal lands have been reduced and gas fracking has been vilified. All of these impediments have already begun to make their way into the market. Earlier this week, Alpha Natural Resources (coal company) announced it would be laying off 1,200 workers and closing eight coal mines.
I am all for green energy. I would love to see the green energy sources at 10%-15% of the energy grid. However, because of the dynamic nature of the development and success of any new technology it is impossible to pick expected winners and losers. Let the bright minds and fat wallets of the private equity and energy worlds take the risk instead of the federal government and taxpayers.
More can be read via my two novels, Cameron Nation: Going All-in To Save His Country and Columbus Avenue Boys: Avenging the Scalamarri Massacre. www.cameronnation.com.
The U.S. is now at a time when we are in desperate need of a new boom to spur job growth and restore our gross national product to the 4% or more annual range we so desperately need to lift our economy out of the malaise. On the flip side, we do not need another devastating bust to signal the end of the cycle, even if it would more than likely transpire six to eight years down the road.
What type of boom could be the answer to our economic ills both in the short and long term?
Drill Baby Drill, Fracking, Black Gold, Texas Tea, ANWR, Drilling Permits, Bakken Play, Marcellus Shale, Keystone Pipeline, Saudi Arabia of Coal, Liquified Natural Gas, Energy Independent.
Get the picture. I am a person who believes the United States can (it has definitely started already) create the perfect boom cycle benefiting a multitude of industries with very little bust downside by exploiting our vast energy reserves. Yes, we would still have to import oil, but at a far lower rate. We have more than a 200 year supply of the best quality coal in the world held underground in over half of our states. We should be focusing on ways to reduce regulation and enhancing technology to burn coal more efficiently. Over the past ten years, there has also been a revolution in the natural gas industry and the United States has trillion of economically viable cubic feet of gas in all areas of the country. Correlated to the natural gas boom has been the discovery of billions of barrels of oil in the Dakotas. The natural gas and oil revolution would not have been possible without the significant enhancements in all types of drilling technologies.
We should be doing everything in our power to lower oil prices to below $80/barrel. High oil prices benefit oil companies (but they can still make a lot of money and will be encouraged to improve efficiency at sub-$80 oil) and radical Middle East regimes dependent on the high price of the commodity so they can keep their people happy and to also fund terrorist activity.
The benefits to our society are too numerous to mention in full if oil prices could decline by 25%. All industries and individuals would benefit by the lower fixed cost of their utility and transportation expenditures and consumer confidence would improve. In addition, while I would not support this, with energy prices under control the American people may even be amenable to a potential federal tax income tax increase because many of their other fixed expenses have declined and their cash flow would be relatively healthy. (The democrats clearly do not think this far out of their box).
In my opinion, the green energy extremists should be all for drilling the energy reserves of our country as fast as possible. Think about it, by drilling and depleting at an accelerated rate fossil fuel reserves would potentially be eliminated at a much quicker pace than through conservation. Conservation would simply prolong the “greenie” nirvana of a world without fossil fuels. After all, aren’t they in this for the long term and would want the ozone layer to repair. They should be all for unlimited drilling and consumption of oil, gas and coal. Then, when the finite supplies are gone the world would have no other choice than to face the reality of solar, wind, hydro, etc. as the perfect answer to our energy needs. Why wait till the year 2150 for this to happen, let’s drill it all up now and totally deplete the fossil fuel reserves in fifty or sixty years.
It is funny that the “green energy yahoos” are really out to fatten the wallets of the energy companies. Oil prices remaining above $100/barrell help Exxon, Anadarko Petroleum, BP, Halliburton, etc. the most. These companies would continue to make gobs of money in that pricing environment. At the same time, with the government providing the research and development and taking the risk for all types of future energy sources the established fossil fuel energy companies could take a wait and see approach and not commit their own private capital to the development of new sources of energy. Once a viable green energy technology emerges, then the cash rich established energy companies would hire their Wall Street investment banker to acquire the green energy start-up. In turn, the established energy company would have a new revenue stream to diversify their oil and gas assets. The Wall Street banker would also take their commission. In the meantime, the United States taxpayer would not benefit from this in any way. The taxpayer is taking the venture capital investment risk without the upside of the monetary reward instead of a company like Bain Capital. This is not how capitalism works.
For some reason, the Obama administration is out to punish the fossil fuel industries with broader regulation and restrictive policy mandates. Some examples are the Keystone oil pipeline not being approved, coal emission regulations tightening, permits to drill for energy reserves on federal lands have been reduced and gas fracking has been vilified. All of these impediments have already begun to make their way into the market. Earlier this week, Alpha Natural Resources (coal company) announced it would be laying off 1,200 workers and closing eight coal mines.
I am all for green energy. I would love to see the green energy sources at 10%-15% of the energy grid. However, because of the dynamic nature of the development and success of any new technology it is impossible to pick expected winners and losers. Let the bright minds and fat wallets of the private equity and energy worlds take the risk instead of the federal government and taxpayers.
More can be read via my two novels, Cameron Nation: Going All-in To Save His Country and Columbus Avenue Boys: Avenging the Scalamarri Massacre. www.cameronnation.com.
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