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.