Spiking Gasoline Prices Hammer Economic Recovery

January 16, 2011

Rising gasoline prices are hammering the U.S. economic recovery.  Gasoline prices have been steadily climbing over the last few weeks, wreaking havoc with the U.S. economy.  CNN (WWW.cnnmoney.com), Fox news (www.foxnews.com) and Consumer Reports (www.consumerreports.org) all report a substantial increase in the cost of a gallon of unleaded regular for the week of January 10, 2011.  Nationwide the average price has spiraled to a whopping $3.09, up 19 cents since the first of the year, and an increase of 34 percent compared to last year.   This is the highest average gasoline price since October 2008. 

The price of oil continues to hover above the $90 level.  Oil closed at $91.54 on Friday, Jan 14, 2011.  The Wall Street Journal (www.wsj.com) reports that for every $15 increase in the price of oil there is a 1 percent decrease in U.S. GDP.

Energy analysts are somewhat baffled by this spike.  Historically, we don’t see this type of spike until later in spring when people start driving more and thinking about spring break or summer vacations.  Normally, at this time of year, consumers are driving less, paying off credit cards from holiday usage and trying to survive.  Gas supply is still strong; refineries are operating at peak levels, and there are no unusual outside factors driving the current spike.  Economists have noted the unusually warm fall weather, followed by a substantial snow storm across much of the countryside, have influenced the overall price.  Overall, consumers are driving less, some caused by rising gasoline prices, but also the large number of unemployed workers and uncertainty about the U.S. economy.  

It is way too early to develop accurate forecasts for 2011 and beyond, there is no indication that 2011 will be anything different that 2010.  Although future trends are extremely risky to predict, there are some prognosticators who have put forth a number of interesting hypotheses:

• John Hofmeister, the former president of Shell USA and the author of “Why we Hate the Oil Companies,” and founder of Citizens for Affordable Energy (www.citizensforaffordableenergy.org) predicts Americans will pay $5 per gallon of gasoline by 2012.
• Gasoline expert Fred Rozell predicts that 15 states, including Hawaii and Alaska, will see gasoline prices top $4 by Memorial Day 2011.
• The Energy Information Administration’s (www.eia.doe.gov) latest gasoline price forecast estimates that regular-grade motor gasoline’s retail prices will average $3.17 a gallon this year, 39 cents per gallon higher than last year.

 

What’s causing the spike?  Experts really don’t know.  Rising crude oil prices surely have an impact; but beyond that, the experts can only speculate.  Some economists have blamed the increase on China’s rising energy demand; while investors blame the spike on lack of confidence in the U.S. economic recovery and world financial crisis. 

What remains clear is that rising energy prices will negatively impact the U.S. economic recovery in 2011 and beyond.

No Love for Big Oil – Part 2

No Love for Big Oil-Part 2

September 2, 2010

Recently I posted an article entitled “No Love for Big Oil” (http://fredkesinger.spaces.live.com/default.aspx?sa=516170775) which elaborated on why we hate Big Oil. Most of the feedback I received was positive and otherwise supportive.  But the one response I remember the most—and found the most helpful—was from a colleague who suggested I read Antonia Juhasz’s The Tyranny of Oil.

The Tyranny of Oil is an riveting expose of how Big Oil has manipulated the market, poured money into lobbyists and elections, operated with a  lack of regulatory oversight and generally impacted not only the American public but rippled throughout the world.  The author provides a bold new look at the many facets of worldwide oil and delivers cold, hard facts about how the world‘s most powerful industry has been charged with collusion, corruption, price gouging, uncompetitive behavior and unbridled greed. 

Take for example:

1. How Big Oil squeezes the refiners and the gas station owner/operator and allows him to make up to 6 cents a gallon regardless of price.  At that margin, you have to sell 100,000 gallons of gasoline to make $6,000/month.  The only people getting rich off of $4.00 gasoline is…drum roll, please, yes you guessed it…BIG OIL!

2.  Proposition 87 in California in November 2006-Proposition 87(if approved) would have implemented a small fee per barrel of oil and directed the investment in clean, renewable energy.  On the outset, this seemed like a logical thing to do.  California is one of the nation’s leaders in renewable energy. 

Unfortunately, it didn’t work out that way.  For every dollar the supporters put in, Big Oil contributed three, four and five dollars.  No where did you see Big Oil’s name on any of the multitude of signs, TV ads, websites or interviews by Big Oil executives.  Nondescript organizations like Californians Against Higher Taxes and LECG were funded by Big Oil to increase awareness and opposition to Prop 87.    In total Big Oil spent over 87 million dollars; Chevron itself contributed $37 million.

 3.  Lobbyists in Washington D.C.-According to the Center for Responsive Politics, oil and gas companies spent $154 million in 2009 on lobbying, up 16 percent from $132 million in 2008, including ExxonMobil at $27.4 million and Chevron at $20.8 million.  Money buys influence.

Author Juhasz is not without suggestions and recommendations on what we must do to turn this situation around:

                1.  Break up Big Oil similar to the trust busting of Standard Oil in the   early 1900’s.

                2.  End billions of dollars of local, state and federal taxes, tax breaks, subsidies, royalty relief and loopholes for Big Oil.  There is no reason why mature, successful Big Oil companies (ExxonMobil, Chevron, ConocoPhillips, BP and Shell) should be reaping these unearned benefits, all at the expense of the American taxpayer.  Need I remind readers of Big Oil’s record breaking earnings?

                3.  Consumption-drive less, raise MPG requirements, use public transportation, live closer to work(assuming you still have a job), live in smaller houses, reduce the number of electronic gadgets in your household, to name a few.  Espouse an energy-efficient lifestyle.

                4.  End wars for oil.  No more assurances for the House of Saud.  No more invading foreign countries (with the most oil reserves) under the guise of terrorism.  Nuff said!

 We are running out of time.  We must act now to level the playing field so that the Man on the Street has a fair chance of paying his bills, a decent standard of living and relief from fearing gasoline prices are going to quadruple in the next quarter.  It’s time to take the initial steps in moving away from the throes of fossil fuels and begin a more balanced attack on providing clean, affordable and readily available energy.

To quote the author, “To break the lock of the largest corporations on the planet is equally challenging. We must think radically, challenge ourselves in new ways, and believe in our own capacity to stop wars, protect our climate, communities, and workers, and build a more secure, stable, sustainable and peaceful future”.

Energy Independence

Energy Independence

Is this an oxymoron, fallacy or just plain ignorance?

July 27, 2010

Some energy analysts think energy independence is an oxymoron.  Some people have defined energy independence as zero imports. Energy experts generally describe “energy independence” as a strategy aimed at reducing our reliance on foreign petroleum by increasing the exploitation of our domestic resources, such as oil in protected areas, coal, nuclear power, and alternatives like wind, solar, hydrogen, etc. 

The U.S. currently uses approx 20 mbpd(according to the Energy Information Agency).  That’s about 10,000 gallons per second for you detail aficionados.  Of that, about 62 percent in 2009 is imported from neighboring countries like Canada and Mexico.    The rest is imported from countries around the world including the Middle East. See chart below.

Crude Oil Imports (Top 15 Countries) (Thousand Barrels per Day)
Country	May-10	Apr-10	YTD 2010	May-09	YTD 2009
CANADA	1,997	1,883	1,937	1,746	1,860
MEXICO	1,290	1,134	1,110	1,088	1,174
SAUDI ARABIA	1,093	1,245	1,068	996	1,079
VENEZUELA	1,011	851	918	1,228	1,025
NIGERIA	1,004	1,092	986	552	608
ANGOLA	423	508	401	493	555
IRAQ	394	490	480	254	487
RUSSIA	358	288	250	416	266
ALGERIA	352	292	306	126	249
BRAZIL	312	289	274	380	349
COLOMBIA	295	364	306	227	250
KUWAIT	219	278	201	93	170
ECUADOR	160	179	177	187	229
CONGO (BRAZZAVILLE)	89	116	90	74	49
NORWAY	78	88	39	92	70

Source: Energy Information Agency

The first call for energy independence came some 35 years ago right after the oil embargo of 1973. The U.S. was importing about 6 million barrels of oil a day. Then President Richard Nixon proclaimed our country was being held hostage by the oil producing countries and issued a proclamation that we would be energy independent within the decade.    Here we are some three and a half decades later, and we are using twice as much oil per day.  Say it ain’t so, Joe! So much for energy independence.

Why oil imports are not necessarily in our best interests.

1.  Financial: given the U.S. imports 20 mm bb/day, at $70/bbls, that’s $980 million dollars a day leaving the U.S.  each and every day. This is a huge drain on the U.S. financial institutions and is threatening our economy.   No wonder the deficit continues to balloon. Kinda frightening isn’t?

2. The second reason this is a bad idea is national security.    Some of these countries (except Canada and Mexico) are not necessary the best U.S. friends.  Relying heavily on crude oil imports from unstable and unreliable countries such as Argentina, Nigeria, Angola and Iraq does not build a great degree of confidence in the American consumer.  The U.S. economy and our military run on petroleum.  It is the engine for our entire manufacturing, culture, lifestyle and general well being.

3.  In looking at the proven reserves, the bulk of the known remaining reserves are found in the Middle East.  Government stability in this area is not sure thing and future U.S. imports will become more unreliable and unavailable as China and India all clamor for more petroleum imports.

What to do?

1.  Maximize all existing energy sources.  And yes, that means fossil fuels, nuclear, renewable energy, biofuels, geothermal, ocean and hydro.

2.  Incentivize U.S. consumers to practice conservation, energy efficiency and generally reduce consumption.  Hard to do with SUVs, more gas guzzling vehicles on the road to add to the 250 million already clogging America highways and byways.  3500 sq ft homes, big screen TVs etc, more U.S. citizens and more electronic gizmos like Blackberry, cell phones, game boys, etc. Encourage mass transit.  Convert large fleets of light duty vehicles to natural gas.  

3. Invest (public and private) in research and development to generate new energy sources, improve the efficiency of current technology by orders of magnitude.

4.  Continue to increase the communication plan to American consumers of why this is important.  Such topics as creating new clean jobs, buying energy efficient appliances, trading in the SUVs, improving mileage reqs., gas lines, oil embargo, price spikes, etc., ought to get the attention of many consumers.

5. Understand this is a major shift for the American public.  In spite of the current economic crisis, Americans are still in love with the auto.  It is a paradigm shift for the American consumer. It will take time and money to covert from an oil import environment to and energy independent economy.

This strategy will enable the U.S. to meet our basic energy requirements as well as develop new and more efficient energy sources.  We are at the crossroads.  Continuing status quo is no longer an option.  Our economic security and our sovereignty may well depend on our moving away from continued dependence upon foreign oil.  The way is clear; but we must act now!

No Love for Big Oil

No Love for Big Oil

 
July 23, 2010
Americans and the rest of the world aren’t feeling necessarily lovey dovey with Big Oil these days. In a recent poll, Big Oil rated dead last out of 24 industries. And with Big Oil getting ready to report record profits next week, nobody in Big Oil is feeling the love. Who can forget ExxonMobil’s 2008 revenues of $442B (more than a $1B a day USD)? BP’s 2010 first quarter revenues were $18B.
John Hofmeister doesn’t let up on Big Oil in his new book Why We Hate Big Oil Companies. He should know; he used to be president of Shell Oil Company USA. Hofmeister left Shell oil in 2008 and currently heads up a consumer information firm, Citizens for Affordable Energy based in Houston.
The first eleven chapters tell us in strikingly candid details about how were got here in the first place, the fallacy of energy independence, the foibles in the free market, the parochial oil industry, energy and politics don’t mix. Finally in Chapter 12 we get to Hofmeister’s recommendation: Establish a new all powerful regulatory agency called the Federal Energy Resources Board. Citing examples of the current Obama administration (and those that precede him) failed to improve the energy crisis in the U.S. The Federal Energy Resource Board would replicate part of the Environmental Protection Agency (he wants to depoliticize the EPA-and yet base the new agency in Washington DC). And there is no mention of the Department of Energy or the Department of Interior.
Take for example:
• Right from the start on page 34, he says: “What we (Americans) are short on is a coherent, pragmatic energy policy.”
• Page 46-the section on The Issue of Subsidies(one of my favorite topics)
• “Our future economy, well-being and security are increasingly at risk by the day, month, and year that we fail to educate the (American) people about all aspects of energy and the environment.” On page 93.
Even with the recent announcement of Chevron, ExxonMobil, ConocoPhillips and Royal Dutch Shell creating a one billion dollar joint venture to provide emergency funding for offshore disasters. This isn’t likely to earn many points with Mr. and Mrs. America.
Hofmeister does have some good ideas. His impassioned call to action to the American public is well defined, timely and on target. His analysis from inside the “oil patch” provides new (to most of us) information on how we got into this energy crisis in the first place.
The final point being: wake up America! Now is the time for action. Ten years from now is too late. Our children and our grand children deserve better. It’s time to stick our oar in the water and start paddling. That playful little wave you see in the distance will soon turn out to be the energy tsunami of the 21st century.

Sailing the High Seas of Leadership in Troublesome Times

Sailing the High Seas of Leadership in Turbulent Times

June 20, 2010

Leadership in prosperous times is difficult enough. Leadership in recession, recovering economy or whatever you want to call the 2009 thru 2010(and 2011? 2012?) period is even more challenging and stressful. To some, the present offers untested opportunities and challenges in leading companies, work units, churches, schools or just about every other body, organization or group of people. Although the challenges may look different, feel different and act differently than before, leadership is needed more now than ever. The leadership of our fathers is different than the leadership today in some aspects. In other areas, leadership practices of yesterday, tried and true, and yes even tired, are just as much a key part of the economic recovery in the U.S. as they have ever been—perhaps even more so.

The five things that leadership experts revert to during challenging times

1. Planning and preparation-critical analysis of where you are today. Identify strengths and weaknesses. Followed by a gut-wrenching decision about where you want to be in a year, two years and so on, and how to get there. Do you have the right players on your team?

2. Strategy-Once you have determined a new direction and the strategy you and your team need to be successful, it is incumbent of successful leaders of today to articulate this in detail to every member of your team, your providers, your suppliers, inside and outside the company. They all must know where you are going and why, and what it takes to get there and how will you know when you get there? Each must understand his/her role and their relationship to other team members.

3. Execution-Some call this the execution phase. Put the right players in the right roles, incent them, complete with real and visible metrics—and stand back, get out of the way and let your team lead the way. Hold team mates accountable. Expect bumps and bruises, road blocks, obstacles (either real or perceived), naysayers and neer- do-wells. Excise non players and find something else for them-either inside or outside the team. Help others when they are down. Create an “I’ve got your back” environment. Build trust inside the team and outside. Walk the talk. Nobody wants to follow a leader if he/she doesn’t “walk a mile in my moccasins”. Mentor and delegate ferociously.

4. Recognition-celebrate success often-big and small. Report key success factors religiously. Post key metrics visibly and regularly. Remember: 1001 ways to reward your team.

While the U.S. is in the worst recession we have known for decades, there are a thousand and one points of light. Taking the leadership challenge by the horns and following the afore-mentioned actions will help ensure your continued success. You’ll feel better for it; and your team will have lifelong memories of the “battle that was”.

Surprise: Gasoline Prices are Dropping!

Surprise: Gasoline Prices are Dropping!

May 13, 2010

At least there is some good news in the headlines. Gasoline prices are dropping as motorists prepare to move into the Memorial Day weekend. This is contrary to what normally happens this time every year as traditionally gasoline prices start inching up every spring. Analysts had forecast a national average of $3.00 gasoline by this time. Most motorists have gotten in the habit of seeing gasoline process rise this time every year, thus eating into their summer vacation funds. Rising supplies and concern about the global economy have helped send prices from a national average of $2.91 for regular gasoline, dropping a whopping 20 cents a gallon to $2.71 in just a few short weeks.

This is a welcome change as most Americans are having substantial difficulty with the U.S. economic woes.

Phil Flynn of PFGBest in Chicago says “Gasoline prices are about as good as they’ve ever been going into the summer months.”

Tom Kloza, Oil Price Information Service, predicts a summer low of about $2.70. This compared to a peak of $4.11 in July 2008.

Economists don’t think this drop is going to have a significant effect on consumer spending this summer. Most likely consumers will feel comfortable with the extra few pennies in their pocketbook.

What happened?

• The European debt crisis escalated and traders were less likely to be bullish on the global market. Energy analysts lowered the forecasts on global demand. Investors were summarily pushed toward the dollar as safe haven.

 • Supply has risen steadily. Consumption is down. Output from remaining refineries has increased as refinery operation is now at 82 percent, up from 77 in March 2010. At the end of April 2010 the U.S. had 225 million barrels of gasoline in storage. This is about 5 percent greater than 2009 levels.

• Political upheaval in oil producing countries such as Nigeria and tensions in the Middle East has been very minor so far. This could change on a moment’s notice.

No one thinks the market is going to stay at this level very long. War in the Middle East, more political upheaval in Europe because of the debt crisis and demand will likely change these prices. Energy Information Agency’s Tancred Lidderdale says that resolution of the European debt issue, and a decline in the dollar and fresh signs of global economic growth most likely will trigger some sort of movement. “The market is very volatile”.

In any case the American consumer should enjoy this phenomenon for as long as it lasts. One thing for sure: it won’t last long. Fred Kesinger

U.S. Economic recovery: New Job Numbers Look Promising

U.S. Economic Recovery: New Job Numbers Look Promising

May 8, 2010

The U.S. economy took a big leap in April as new jobs were added at the fastest pace in four years.  Some analysts believe this is a harbinger of things to come.  Other experts warn us not to get too excited about the new numbers.

On Friday, the Department of Labor reported that nonfarm payrolls rose by a higher than expected 290,000 last month.  This is the largest increase since March 2006. April’s increase follows an increase in March of this year of 230,000 jobs in March.  The U.S. has now added jobs in four consecutive months.

In Dow Jones Newswire’s latest poll, economists were expecting payrolls to rise by 180,000.  The March number was originally reported as 162,000 increase.   After revisions, the economy added an average of 143,000 jobs per month since January 2010.    

The private sector added 231,000 jobs while the professional services rose by 80,000.  Manufacturing was up 44,000.  Manufacturing has been the star performer, adding 101,000 jobs since December.  Construction added 14,000 jobs in April.  The addition of part time census worker helped the government (which includes federal and state) to add 59,000 jobs.

President Obama called April’s job report “particularly heartening.” He noted that “this week’s job numbers come as a relief to Americans who’ve found a job, but it offers, obviously, little comfort to those who are still out of work.”

In spite of this encouraging news, most experts believe it will be some months, if not years before the U.S. economy will return to previous levels of employment. 

The latest April numbers, including upward revision to prior months, may be the initial evidence that more and more companies now feel confident in hiring new employees.  

Paul Ashworth, economist at Capital Economics says “It’s a strong signal that the economic recovery is becoming self-sustaining.  In short, it could be a Gamechanger”.

Fred Kesinger

U.S. Economic Recovery

Economic Recovery: A status Report

May 1, 2010

Most financial analysts and economic forecasters all agree that there are a few positive signs the U.S. is making small, slow steps in recovering from the financial crisis of the last 18 months.  Even President Obama has hit the road to brag about the recent improvements.  Last week the president was in Ottumwa, Iowa, where his presidential campaign got a big boost in 2008.  He admitted that the economic recovery hasn’t reached everyone, but he went on to say “Times are still tough in towns like Fort Madison.  And times are still tough for a lot of middle class Americans, who had been swimming against the current before the economic tidal wave hit”.    Agriculture Secretary Tom Vilsack, a former Iowa governor, travelling with the president told reporters “There is a silent crisis occurring in rural America that’s been ongoing for decades. “

The latest economic report shows some signs of progress: The nation added some jobs at the fastest pace in three years last month, the manufacturing industry is growing at a steady pace, and new claims for jobless benefits have declined.    

In other good omens, The U.S. Department of Commerce reported spending by consumers rose at the fastest pace in three years.  That helped the economy to grow at 3.2 percent pace from January to March 2010.    This was the third straight quarterly gain in gross domestic product.

The economic crisis in Greece and Spain has slowly crept across the entire expanse of Europe and was felt worldwide as the U.S. stock market pulled back 159 points as investors took a more cautious approach, thus breaking a hot three month run of the Dow Jones. 

First quarter earnings from public companies generally have been positive.  Eighty-five percent of the 98 S&P 500 companies that have reported so far have beaten estimates, well above the 61 percent in a typical quarter, according to Thomson Reuters.

While there multiple positive signs the economic recovery is alive and well, there are also other signs that indicate a more gradual recovery.

Unfortunately the unemployment rate has held steady at 9.7 percent for the last three months, and 15 million Americans are still out of work.  The White House (and other experts) estimates that that rate isn’t expected to fluctuate more than a few tenths of a percentage point in 2010. 

Most analysts agree: until we put 15 million Americans back to work, economic recovery is an oxymoron.

The Silver Lining

The Silver Lining

Highway deaths fall to lowest level since 1950s

March 13, 2010

The headlines chronicle the economic recovery, unemployment and the war in Iraq and Afghanistan.   Gasoline prices continue to inch up every day while oil prices stay in the $70 to $80 range. The health care battles on in the Congress. 

But there is some good news (you may have missed it)!

The Transportation Department said that the number of traffic deaths in 2009 is down 9 percent to 33,963.  This is the lowest total since 1954. In 2008, 37261 people died on the roadways. These numbers continue the downward trend starting 2005 when 43,510 people died on the road. 

The National Highway Traffic Safety Administration credits the decline on more people wearing seat belts (92.2 percent in Texas), programs to discourage drunken driving and safer cars.    Safety features such as side airbags and electronic stability control (helps motorists avoid rollovers) are more common in newer models. 

Anne McCartt, senior vice president for the Insurance institute for Highway Safety says “Vehicles are built to protect people better in crashes now”.

Seat belts, and the associated enforcement by public police officers, have also contributed to the downward trend in roadway fatalities.   States have also cracked down on drunken driving. 

In spite of the progress, Transportation Secretary Ray LaHood says “There are still far too many people dying in traffic accidents”.   He goes on to say, “Drivers need to keep their hands on the wheel and their eyes on the road”. 

The federal government has also focused on reducing distractions while driving.  Texting and talking on the cell phone are being vigoruosly pursued by most states. 

Part of the decrease in fatalities is due to the economic recession and the unemployment rate, which has fewer people on the road as many people cut back on the number of discretionary miles.

Benefits of $3 Gasoline

Benefits of $3 Gasoline: The Silver Lining

2/24/2010

People all over the world—and especially the United States—are feeling the strain of higher gasoline and oil prices.  Businesses are going under, or laying off employees, unemployment at a record level, families are struggling to get by; costs seemed to be increasing on just about everything. We see it in the grocery store as prices in our energy rich society continue to spiral upward.  The transportation industry is feeling the pinch as airlines cut the number of flights because of escalating jet fuel costs.  Trucking companies are experiencing unparallel cost as diesel fuel continues to move up.  There are fewer transoceanic vessels on the water today as compared to this time one year ago.  Individual lifestyles are being modified drastically as Americans continue to cope with higher energy costs.

Although most of us are feeling the pinch in a number of ways, there are some positive changes as a result of this energy crisis. 

Consumption:

U.S. highway miles declined in December 2009, but overall mileage for 2009 is up 0.2 percent or about 6.6 million miles according to the Dept. of Transportation.  Although total annual mileage is up, the percent increase is much lower than anticipated.  December mileage was reduced as two major snow storms hit Mid-Atlantic States in December.  The U.S recession kept the number of miles in check as unemployment continues to hamper economic recovery.  New and higher MPG guidelines are also being implemented.

Conservation

Mass transit ridership levels are at a 50-year level.  Many families are discontinuing summer vacation plans altogether, or are reducing their plans and staying closer to home. Staycations have become quite numerous as more and more consumers alter their lifestyles.  The American Automobile Association reported a 1 percent decline in people planning to travel this summer.

Research and Development

More money is being invested in alternative energy such as wind, solar and ocean wave as the economics tip in a more favorable direction. Higher gasoline prices have led to increased investment by auto manufacturers in hybrids and renewable energy fueled vehicles (solar, electric and hydrogen).  Toyota is not the only auto company that is capitalizing on this energy-conscious trend.  For once the Big Three auto manufacturers are jockeying for position in the search for more fuel-efficient autos.  Auto manufacturers are spending over $75 billion on research and development of higher efficiency autos.

Public Safety 

Traffic deaths in 2009 (37313 from the Department of Transportation) are at the lowest level since 1961. This could mean 15,000 fewer people will die in traffic related accidents in 2010.  Less miles-fewer traffic jams.   Less time spent commuting.  More cops on foot patrol as cities and municipalities cut back on expenses.

Transportation

Cambridge Energy Research Associates say sales of new pickups, minivans and SUVs have fallen below 50 percent for the first time since 2001. Delivery trucks are looking for more optimal routes. Southwest Airlines eliminated a number of flights from their schedule.  Company leaders say that more reductions are being considered.  Many cities, particularly in the South and West are rapidly expanding their light rail systems-Denver, Phoenix, Salt Lake City, Charlotte, Houston, Austin and Norfolk are investing billions, often with no federal aid. Many companies like AT&T, UPS and Frito-Lay are converting their fleet vehicles to natural gas.  Most states now have (in addition to federal mandates) higher vehicle mileage standards in place.

Lifestyle

People are leaving their car in the garage and walking more.  Exercise leads to healthier lives, more energetic people and fewer sick days. Healthier lifestyles mean lower medical bills.  We’re combining our family errands to maximize our time and our gas budget.  No more separate trips in Mom and Dad’s vehicles.    Online shopping at retailers like JC Penney, Gap and Macy’s have seen a double digit increase in online shopping since 2008.  More companies are allowing employees to work from home while other companies are encouraging flex time.  A growing number of companies are moving toward a 4-day workweek.  The state of Utah has mandated a 4-day workweek for all of its employees.  Most employees have readily adjusted to this change.  Van pool, car pools and company sponsored funding of mass transit passes are flourishing.  Sales of suburban dream homes are declining as more people choose to live closer to their job and family.  Many unemployed Americans have started home-based businesses.

Environment

Less air pollution could prevent 2,200 respiratory-related deaths in the last year according to UC Davis economics professor J. Paul Leigh.  Tom Brokaw, noted anchorman and author, estimates that if the 75 million baby boomers reduced their carbon footprint just 5 percent, we wouldn’t have an energy crisis in 2020.

Oil Imports

The U.S. uses approx. 21 MM bbls per day.  We import almost two thirds of the oil we use.  With oil at $70 barrel, we send $910 million a day to foreign countries.  Every one-cent increase in gasoline prices means Americans pay $1.42 billion more a year for gas, according to Steve Brown, economist at the Federal Reserve Bank.  Staggering isn’t?

Summary

All of us can use this energy crisis to improve our lifestyle.  As difficult as it is for us to trade our SUV in for a more economical mode of transportation­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­, we can use this as incentive to mount a nationwide campaign to eliminate our energy crisis. 

America, our go forward position must:

• Maximize existing energy sources, e.g. oil, natural gas, clean coal, nuclear, hydro and geothermal
• Promulgate conservation and energy efficiency broadly
• Develop cost effective alternative energy sources e.g. solar, wind, ocean, biofuels
• Reduce our dependence on foreign oil
• Drastically reduce carbon emissions

 

All of us-Grandpa and Grandma, sister, brother, daughter, son and their respective families- must become proactive in our energy consumption. Even though the U.S. has about 4 percent of the world’s population, we use approx. 25 percent of the world’s energy.  Status quo is unsustainable.  All U.S. consumers must alter their energy-rich appetites and begin to improve the environment, support our economic recovery and return our country back to the America we have known in the past.  We deserve better and so do our children and grandchildren!