Holy Crap! Obama Speech Rocks My World

The much-heralded stimulus package serves as a convenient and relatively inexpensive distraction from the $3.2 trillion of indebtedness, and at the same time it conforms to the spending priorities of banker’s logic. Apart from some one-off tax cuts, and some one-off gifts to Social Security recipients, very little of the money gets down the people. Those one-offs will get temporary hurrahs from households everywhere for Obama, but that money will soon be spent and be gone, the final crumbs to be offered from the banker’s grasping hand.

We’re to have lots of funding for medical research, enriching pharmaceutical companies and providing investment opportunities in expensive new medical systems. This in a nation that already has the most modern medical facilities, and where the real need is for affordable access and preventive services, not more research. We’re to have infrastructure projects, with an emphasis on the private sector, which amounts to the standard formula of profit through privatization. We’re to get school modernization, providing more investment opportunities and most likely privatization of education, while the real problems in our schools come from large class sizes, inappropriate teacher training, and the lack of jobs after graduation, not from a lack of the latest computers, expensive laboratories, and high-speed Internet access.

The flagship of the stimulus package is of course the pursuit of alternative energy sources and energy independence. This appeals strongly to environmental sentiment, and it seems superficially like it could reduce our trade deficit, by reducing energy imports. What this agenda does for sure is open up all kinds of investment opportunities, producing and selling biofuels, wind farms, solar cells, high-capacity batteries, hydrogen engines, or whatever, to fulfill government-mandated requirements, such as a 20% biofuel content in all auto fuel. By merely mandating such a requirement, the government creates billions in profits for private investors. But are these program really going to solve any of the problems they are supposed to solve?

Consider biofuels. There are some ways of producing biofuels, such as from garbage and other waste products, that do make sense. But when it comes to mass production, to satisfy an existing mandated biofuel market, we must turn to the mass growing of crops, like corn or sugar cane, that can be converted into fuel. This requires fuel for the tractors and petroleum-based pesticides and fertilizers. By the time the crops are harvested, converted to useable fuel, and delivered to market, more energy resources have been used than the fuel itself provides in the tank.

For the same reasons, the total carbon footprint is greater with biofuels than from using gasoline directly, and the price is higher because the production costs are greater. Not only that, but biofuels take land out of food production, greatly increasing food prices and global starvation. In addition, importing biofuels from Brazil is not energy independence. Net value of biofuels: all negative by every measure, apart from investment profits generated.

Other alternatives, such as wind farms, nuclear, and solar cells, even with massive investments, can contribute only marginally to our total energy usage. Unless we dramatically reduce our energy consumption, by something closer to 80% than 20%, we will still be using lots of petroleum. Perhaps there are enough reserves in North America to keep us going for a while, but how does it help our independence to use up our own supply? Don’t we get more independence by buying cheap foreign oil now, and saving our reserves for when peak oil really kicks in? In the absence of a plan to massively reduce our consumption, the pursuit of energy independence is both futile and economically counter-productive. But lots of profits can be made in the process of trying.

That brings us to Obama’s plans for energy savings, and the promotion of energy-efficient cars. By mandating insulation standards for buildings, and mileage standards for cars, we get some marginal energy savings and we get lots more investment opportunities. But in terms of long-term energy usage, or energy independence, an emphasis on energy-efficient cars represents a very misguided choice of priorities.

With peak oil looming on the horizon, any rational energy agenda, particularly if it is willing to consider change and hard choices, needs to be aimed toward achieving sustainability. Marginally reducing our energy consumption, while continuing to depend on highways and jet planes for most of our transport, and petroleum-intensive agriculture for our food, will never make us sustainable.

We’ve been riding on an energy bubble for the past century, based on plentiful and cheap oil, and that bubble must burst, just as our economic bubble has burst. If we aren’t prepared, we’ll experience an even bigger collapse than we are experiencing at this time. And it will be a collapse that the financial wizards can’t do anything about. We may be able to print money, but we can’t print energy. If the trucks don’t roll, the cities starve. Obama’s energy strategy, and his emphasis on ‘building for future growth’, are attempts to keep the energy bubble going by means other than oil. It can’t be done. The oil-bonanza is a one-off. There’s no comparable substitute, nothing even close.

2 thoughts on “Holy Crap! Obama Speech Rocks My World”

John says:

February 26, 2009 at 5:22 am

The much-heralded stimulus package serves as a convenient and relatively inexpensive distraction from the $3.2 trillion of indebtedness, and at the same time it conforms to the spending priorities of banker’s logic. Apart from some one-off tax cuts, and some one-off gifts to Social Security recipients, very little of the money gets down the people. Those one-offs will get temporary hurrahs from households everywhere for Obama, but that money will soon be spent and be gone, the final crumbs to be offered from the banker’s grasping hand.

We’re to have lots of funding for medical research, enriching pharmaceutical companies and providing investment opportunities in expensive new medical systems. This in a nation that already has the most modern medical facilities, and where the real need is for affordable access and preventive services, not more research. We’re to have infrastructure projects, with an emphasis on the private sector, which amounts to the standard formula of profit through privatization. We’re to get school modernization, providing more investment opportunities and most likely privatization of education, while the real problems in our schools come from large class sizes, inappropriate teacher training, and the lack of jobs after graduation, not from a lack of the latest computers, expensive laboratories, and high-speed Internet access.

The flagship of the stimulus package is of course the pursuit of alternative energy sources and energy independence. This appeals strongly to environmental sentiment, and it seems superficially like it could reduce our trade deficit, by reducing energy imports. What this agenda does for sure is open up all kinds of investment opportunities, producing and selling biofuels, wind farms, solar cells, high-capacity batteries, hydrogen engines, or whatever, to fulfill government-mandated requirements, such as a 20% biofuel content in all auto fuel. By merely mandating such a requirement, the government creates billions in profits for private investors. But are these program really going to solve any of the problems they are supposed to solve?

Consider biofuels. There are some ways of producing biofuels, such as from garbage and other waste products, that do make sense. But when it comes to mass production, to satisfy an existing mandated biofuel market, we must turn to the mass growing of crops, like corn or sugar cane, that can be converted into fuel. This requires fuel for the tractors and petroleum-based pesticides and fertilizers. By the time the crops are harvested, converted to useable fuel, and delivered to market, more energy resources have been used than the fuel itself provides in the tank.

For the same reasons, the total carbon footprint is greater with biofuels than from using gasoline directly, and the price is higher because the production costs are greater. Not only that, but biofuels take land out of food production, greatly increasing food prices and global starvation. In addition, importing biofuels from Brazil is not energy independence. Net value of biofuels: all negative by every measure, apart from investment profits generated.

Other alternatives, such as wind farms, nuclear, and solar cells, even with massive investments, can contribute only marginally to our total energy usage. Unless we dramatically reduce our energy consumption, by something closer to 80% than 20%, we will still be using lots of petroleum. Perhaps there are enough reserves in North America to keep us going for a while, but how does it help our independence to use up our own supply? Don’t we get more independence by buying cheap foreign oil now, and saving our reserves for when peak oil really kicks in? In the absence of a plan to massively reduce our consumption, the pursuit of energy independence is both futile and economically counter-productive. But lots of profits can be made in the process of trying.

That brings us to Obama’s plans for energy savings, and the promotion of energy-efficient cars. By mandating insulation standards for buildings, and mileage standards for cars, we get some marginal energy savings and we get lots more investment opportunities. But in terms of long-term energy usage, or energy independence, an emphasis on energy-efficient cars represents a very misguided choice of priorities.

With peak oil looming on the horizon, any rational energy agenda, particularly if it is willing to consider change and hard choices, needs to be aimed toward achieving sustainability. Marginally reducing our energy consumption, while continuing to depend on highways and jet planes for most of our transport, and petroleum-intensive agriculture for our food, will never make us sustainable.

We’ve been riding on an energy bubble for the past century, based on plentiful and cheap oil, and that bubble must burst, just as our economic bubble has burst. If we aren’t prepared, we’ll experience an even bigger collapse than we are experiencing at this time. And it will be a collapse that the financial wizards can’t do anything about. We may be able to print money, but we can’t print energy. If the trucks don’t roll, the cities starve. Obama’s energy strategy, and his emphasis on ‘building for future growth’, are attempts to keep the energy bubble going by means other than oil. It can’t be done. The oil-bonanza is a one-off. There’s no comparable substitute, nothing even close.
kevim says:

March 20, 2009 at 12:34 pm

thank you sir

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Holy Crap! Obama Speech Rocks My World

2 thoughts on “Holy Crap! Obama Speech Rocks My World”

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