One of the largest drains on the GDP growth in the U.S. is the amount of oil and petrol that we import. Each month, the drain equals $12 billion or more in a U.S. trade deficit to OPEC. With the rapid gentrification of the world's largest populations -- China and India -- and an already gluttonous worldwide appetite for the crude, the scales of supply and demand will surely tip into ever more obese pricing -- no matter how fast we tap reserves a mile beneath the ocean floor in the Gulf. That's a recipe for keeping our enemies rich, and US at their mercy.
And imports are not the only way that oil is killing economic growth. We pay a very high price in reduced consumer and business spending, solder's lives and health care as a result of this liquid gold, too, which I'll outline in greater detail below.
Conservatives have gathered around the firing words of exploration, energy independence (meaning let's produce our own oil) and Solyndra to kill clean energy funding and loan programs and expand drilling domestically. However, just how reasonable is the idea that, in the words of one Wall Street banker, "The most productive new energy technology is related to developing old energy sources?"
Whether you consider future sales, American lives, the planet, GDP growth, the joy of swimming on white sandy beaches, or just the thrill of eating out on occasion, an investment in clean energy trumps old technology hands down. And here's why...
6 Ways the Oil Economy is Draining the U.S. Dry
1. Consumer Spending
2. Imports Kill GDP Growth
3. Soldier's Lives
4. Health Care Costs
5. Military Operations
6. The BP Oil Spill
With details and data...
1. Consumer Spending
My dad went to riding a bike when gasoline prices spiked this year. He couldn't afford to gas up his fuel-efficient car that gets almost 30 miles to the gallon. What did you cut out of the budget? When consumers can't buy, businesses suffer. And that stalls the economy.
2. Imports Kill GDP Growth
Imports are subtracted from exports to determine GDP growth. OPEC is the #2 line item expense for the U.S., with a current monthly trade deficit of over $12 billion a month. If every American drove a Tesla (or other electric vehicle) and powered it with sunlight, this imbalance shifts overnight... (Source: Bureau of Economic Analysis)
3. Soldier's Lives
According to Thomas Hicks, the deputy assistant secretary of energy for the U.S. Navy, who spoke to me at the Clinton Global Initiative "For every 50 fuel convoys, we have one American killed or wounded. For us, that's just too high a price to pay for fuel." Bringing fuel into "the theatre" means sending regular convoys from Pakistani ports through insurgents and IEDs (Improvised Explosive Devices) to Afghanistan.
You can see my complete interview with Thomas Hicks on YouTube.com/NataliePaceDotCom.
4. Health Care Costs
War-related death and injury cost a lot. The Congressional Budget Office estimates that "the total real resources (in 2010 dollars) necessary to provide health care services to all veterans who seek treatment at VA would range from $69 billion to $85 billion in 2020." Though there is a "fast-growing share of enrollments" in the VA program from the Iraq and Afghanistan wars, the CBO is not predicting that these veterans will use the service because " they are younger and healthier than other veterans served by VA." Hmmm... Not unless we stop trucking fuel into the theater...
5. Military Operations
The spike in oil prices during the Arab Spring sank the average American's budget, but it had a similar affect on our defense budgets (and any business involved in transportation as well). Based on June oil prices, fuel costs will increase by a billion dollars to the Navy this year, according to Hicks. "That impacts our flying hours, our steaming hours, our ability to sail our ships and to fly our planes," Hicks warns, which is why the Navy is aggressive about developing and adopting alternative fuels and energy.
You can learn more about the Navy's five energy goals in my article, "The High Cost of Gas in Lives," from the October 2011 ezine, volume 8, issue 10.
6. The BP Oil Spill
BP took $40 billion in losses in 2010 with respect to Gulf of Mexico spill -- something only a $135 billion company can survive. Many of the small businesses in the Gulf didn't make it. And although President Obama and our First Lady made it a point of eating oysters, crawdads, trout and shrimp on December 1, 2010, during "America's Night Out for Gulf Seafood," to highlight just how safe and delicious Gulf seafood still is, sales of food from that region are still depressed. The cost to wildlife, vegetation, plankton and other essential elements of our life/food cycle may never be known. However, we do know that the toxicity of oil makes gambling with our oceans a high-risk venture.
Clean or Dirty: Innovation or Degradation
As Paul Woods, the managing director of Summit Wealth Management says, "Solar panels are becoming so cheap that they're close to making economic sense without subsidies for people who live in sunny places." The 100 percent electric Tesla S sedan, when you consider the gas savings, is cheaper than the Chevy Volt and every other luxury sedan in production. So, the tipping point of powering your electric car with sunshine is within reach. Now is the time to double down on the future, and lead the world into a cleaner energy grid, and reap the benefits of selling the best clean energy products to other countries.
Hammer the point home with your conservative friends. Turn on the LED lights in their thinking... And fuel US to stay on the right track for energy independence -- EVs, solar, wind, geothermal and other clean technologies.
About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and Put Your Money Where Your Heart Is, and the founder and CEO of the Women's Investment Network, LLC. She is a blogger on HuffingtonPost.com and a repeat guest on national television and radio shows such as Good Morning America, Fox News, CNBC, ABC-TV, Forbes.com, NPR and more. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on Facebook.com/NWPace. For more information please visit NataliePace.com.
Follow Natalie Pace on Twitter: www.twitter.com/NataliePace
Also, she ignores the recent economic history in the EU where retail pump prices are exponentially higher than in the US, principally because of taxes. Economic growth occurs there despite higher fuel costs to consumers.
Being involved in the renewable energy business, I salute the attempt by Ms. Pace to promote our business, but she's divorced from reality if she thinks electric cars are affordable to the average consumer and a viable alternative.
Then, once people become familiar with benefits of roof mount solar, naturally they would want electric cars, and then there would be no further need for oil -- major solution to ending CO2 productionÂ.
The industrial revolution (and thus movement of masses of people into the middle class) occurred for many reasons, but one of the primary ones is that energy(fossil fuel) was abundant and cheap. I am in the renewable energy business, but I am realistic enough to understand that until the time comes when renewable technologies can compete on their own in the marketplace, widespread adoption will be very, very difficult.
While it will take time to transition out of the oil economy, solar panels are becoming affordable for anyone who lives in a sunny state, and with tax incentives and fuel savings, the Leaf is already one of the cheapest cars on the road. The Tesla S sedan will be competitive with other luxury sedans for the same reason.
While energy spending does consume one's own limited resources, it also generates revenue and employs people. There are countless people who work in the industries that produce energy and others that deal in energy transportation and sales.
If everyone drove a $100,000 automobile and powered it with sunlight? And what is the cost of that? I would also have to question the effect on trade balance when hundreds of millions of very expensive batteries and other components are imported. There are about 250 million passenger vehicles currently. That is a lot of imported components.
Society is already transitioning off of oil. The big problem is that the vast majority of the energy used is derived from petroleum. That is where problems come in. The US has the capacity to produce all of energy used--~30pWh--through renewable sources, but it is not going to happen overnight. There is a huge cost--literally trillions of dollars--to create the necessary infrastructure and more money required to convert existing systems to alternate power systems or replace them with new ones.
In the end the shift will occur around the time the increasing cost of petroleum based energy intersects the falling cost of oil alternatives.
Remember the "blood diamonds" campaign? Well, oil from friendly countries like Canada is not blood oil, it's ethical oil.
1. Consumer Spending – if retail gas sales increase it doesn’t necessarily correlate to the economy because large corporations don’t spend the lion’s share of profit here in the US and they are offshoring, terminating and downsizing every division except their overseas orgs.
2. Imported oil – unavoidable until we corner the market on biofuel or a highly technological rare resource of energy. Fossil fuel is a key element in geopolitical national security. It’s not about business its about American safety. We intend to use all of the foreign available resources before we touch ours. Whoever has the most usually wins.
3. Soldier’s lives – despite the immorality of this operation soldiers take an oath to protect America and fight for our interests foreign and domestic.
4. Healthcare costs – no argument this has an evil twin that’s attached at the hip, the Medical and Pharmaceutical industry.
5. Military gas – The government is it’s biggest customer. They need more fuel so they promote military action that drives the need for more fuel and the cycle repeats. As the available quantity falls worldwide the price (speculation) rises. It would considerably higher should we not influence oil markets in the middle east.
6. BP spill – isn’t just the cost of fossil fuel it’s the result of corruption in our government and deregulation
One issue that might get lost in the whole fossil fuel to green energy debate is, as you point out, we send American dollars to Middle-East nations yet we continue to fall behind China and its renewable energy push into markets we should be competing in and leading. So, as I see it when we make the transition from fossil fuels to renewable energy, we will slow the pace of money to OPEC and begin to buy renewables from China. Technology we should be developing and selling to other countries. The question is do we keep the status quo and do nothing to advance green and clean energy or do we demand of our elected "leaders" a change in perspective so we can be the nation others look to for their renewable products?
Written by Brian Westenhaus
Maine is driven by circumstances, a lot of wood, some 6 million green tons of additional available biomass, according to a 2008 Maine Forest Service Assessment of Sustainable Biomass Availability. The new process suggests the biomass could yield 120 million gallons per year of gasoline, diesel, heating oil and kerosene mixtures while providing all the steam and power needs of the processing plants.
The whole of the U.S. transportation industry, which is dependent on hydrocarbon fuels because of their high energy density, could benefit from the revolutionary finding.
The process creating the oil is known as thermal deoxygenation (TDO) is relatively simple, Wheeler says, and will work on the cellulose found in wood or other substances that contain cellulose or carbohydrates and the process requires no catalysts or hydrogen, and is “a spin on chemistry used to make acetone back in the 1800s.â€
Wheeler says, “The process is unique. No one else in the world is doing this.â€
http://oilprice.com/Alternative-Energy/Renewable-Energy/Revolutionary-New-Process-Turns-Biomass-Waste-into-Fuel-Oil.html
http://www.brasschecktv.com/videos/suppressed-technologies/home-made-electricity-.html
The truth is that the domestic supply of natural gas and associated oil is growing so fast, that it is more likely that this is the real solution to our problem
Well, it is for me. I charge my electric car with solar panels, so no oil imports for me.
Here's what one of the major players in the wind industry had to say about how economic their business is without explicit subsidies.
http://www.bloomberg.com/news/2011-11-09/u-s-wind-market-may-fall-off-a-cliff-in-2013-vestas-ceo-says.html?cmpid=yhoo
Wen we fight a war for sunlight or wind, please be sure to let me know.
When the price of gas goes up, I pay it with cash. The "indirect costs" you mention are paid for by taxpayers, the top 50% of Americans and not the bottom 50%.
And what "subsidies" for oil companies are you referring to? This is a test.
Refiners are being paid cash to blend ethanol into gasoline. Windpower is being given a cash credit to keep it economical, because on its own economics it is not. And the real problem with wind, as any utility will tell you, is that it tends to blow when you don't need it and doesn't blow when you do need it.
1) The coal and natural gas are here, in this country, so we don't have to import them
2) There are alternatives to using coal and natural gas to make electricity. Hydro, nuclear, solar, wind, geothermal, or tidal for instance. There is only one source for gasoline: oil.
3) The refineries that produce the gasoline use a lot of electricity. They use so much that on a per mile basis a gasoline car uses about as much electricity as an electric car, and then burns gasoline on top of that.
A.) Oil
B.) Solar
C.) Nuclear
D.) Wind
E.) All of the above
I'm picking E. And that means some oil drilling.