Thursday, December 31, 2009

Patriot Act debate on the horizon

From the 04 January 2010 Greater Niagara Newspapers

By Bob Confer

On December 14 the Speaker of the House, Nancy Pelosi, struck down a Senate plan to extend until 2013 provisions of the Patriot Act that were set to expire last Thursday. The extension clause would have been an add-on to the $636 billion defense spending bill agreed upon by the House and Senate. Understanding that a good many Americans do not relish having their rights to privacy trampled upon, she did not want the extensions forced through without satisfactory debate. So, Congress instead approved a 60-day extension, signaling a lengthy debate ahead regarding controversial records procurement methods and roving wiretaps.

The records rule is one of the most onerous of the Patriot Act, granting officials court orders that can force private enterprises (such a businesses, hospitals, and libraries) to turn over “any tangible thing” (such as business records and medical histories) that could be considered relevant to a terrorism investigation. Through this rule, once private and personal records of all citizens – both good and bad – are fair game to government inspection.

The equally-disturbing roving (or warrantless) wiretaps provision allows the government to eavesdrop on or intercept communications without the court orders traditionally necessary for identifying the target and the specific means and lines of communication. Under its scope, the government can freely use any method and tactic to observe and listen in on anyone considered a terror suspect (which, as we learned in 2009, could be almost anyone).

In theory, both rules face a rocky road ahead now that the Democrats – long the critics of the Bush Administration and its abuses of the Patriot Act – are in power. But, theory and reality are two entirely different things.

The reality of the moment, which is almost serendipitous to the cause of Patriot Act supporters, is that many elected officials and citizens who once decried the Act may find themselves supporting the renewal of the provisions with the attempted Christmas Day airline bombing so fresh in their minds. For many people, security trumps liberty especially with the horror of death in the sky so close to being realized. They will sell-out in order to guarantee their safety and the safety of their families (although there is nothing truly guaranteed in that regard).

There is also the reality of political force to contend with. Pelosi’s power is nothing in comparison to the power of President Obama, the media darling and rock star president who can alter a goodly portion of public sentiment at will. As a senator and presidential candidate Obama was strongly opposed to the Patriot Act. In 2005, when these same provisions came up for renewal, he was dead set against them, citing the government’s newfound power as being a threat to our rights and freedoms. But, since taking office, he has made a complete 180, throwing his support behind the reauthorization of the wire taps and records searches, something he has pursued in earnest since September, both publicly and behind closed doors. December’s scare will only make him more brazen.

Because of Obama’s powerful and popular influence, Speaker Pelosi and her alleged majority may end up being a minority, losing out in the end, showing how truly similar and nearly indistinguishable our country’s two main parties really are: Democrats are guilty of the behaviors of Republicans and vice versa.

In preparation for a prolonged standoff over the Patriot Act, if you value personal liberty you must make it a point to contact your Congressperson and Senators and ask that the nefarious rules face the sunset they deserve and do not get renewed. If they are allowed to continue it won’t be a victory against terrorism. It will be a victory for terrorism. The terrorists despise the American Way and our freedoms and want to see our personal rights squashed. The Patriot Act and its intrusiveness virtually assure that the terrorists’ goals are achieved. We can’t let that happen.

Monday, December 28, 2009

Developing answers to the oil shortage

From the 28 December 2009 Greater Niagara Newspapers

By Bob Confer

For the past month this column has focused on the limited supplies of and unlimited demand for oil. The future looks bleak with an oil shortage that we as a nation seem ill prepared to handle. But, given that our public and private sectors can gain a sense of urgency and take a more dedicated approach than we have in the development of new technologies and new energy sources, we can overcome what could be a significant obstacle to the betterment of our standard of living for years to come.

To put this complex issue into simple terms, here are 4 ways in which we can guarantee a brighter future for America by limiting the impact that oil has on our personal, corporate and national finances while ensuring that we have access to transportation, something that is instrumental to the pursuits of a free people…

Develop young minds: In America we do a very poor job of rewarding our brightest students who in turn have the potential to reward our society. Instead, we invest as much time and money in the most under-performing schools and students as we do in the cream of the crop. The next great scientist is more often than not lost in the shuffle as we teach him or her at the same level and with the same techniques as the lost causes who are in the same classroom. We need to do as other nations – both developed and developing – do and devote a greater amount of our resources to the gifted students. Investing in their minds is an investment in our tomorrow. The oil shortage is just one of many problems that need to be addressed in the coming decades and the best way to handle them is by making sure we have the keenest scientific minds prepared to work their magic.

Develop alternative oils: Mention alternative energy to the average motorist and the first thing that comes to mind is corn-based ethanol. That’s because at this time it’s basically the only alt oil available in volume. But, if there’s anything we’ve learned over the past 4 years it’s that corn ethanol is one of the federal government’s worst investments in recent memory: Who in their right mind would promote a fuel that is created from crucial foodstuff in a process that is as un-green as the crude it is supposed to replace? As a nation we are better off focusing on the continued evolution of processes that create ethanols from algae and cellulosic biomass, processes that are close to fruition but still a handful of years away from practicality.

Develop alternative technologies:
There’s a reason why the Big Three – and especially General Motors - suffered so greatly before and during the Great Recession. They weren’t innovative enough. When the oil crisis came on strong in 2007 the products offered (inefficient large cars and SUVs) did not meet the needs of their customers who found themselves strapped for cash as gasoline consumed their paychecks. Had the companies had the forethought during and after the oil crises of the 1970s they would have designed cars capable of 60 to 80 miles per gallon of gasoline. But, they stuck with the status quo and some even say they suppressed new technologies (if that’s the case, the federal government, who owns about 60% of GM, should do society a huge favor and unearth those top-secret innovations from the bowels of the organization). The automakers need to think bigger than they have and put more money and mind towards the development of super-fuel-efficient cars and those that are powered by natural gas, hydrogen fuel cells or electricity.

Develop more nuclear plants: In order to make the electric automobile a sustainable option we need an unlimited supply of electricity on the cheap (as does our economy as a whole in order to keep up with population and economic growth). The most-efficient and cheapest way to meet our needs is with nuclear energy. And, despite general American sentiment to the contrary, nuclear energy is clean and safe. There’s a reason why a green-conscious country like France gets so much of its electricity from nuclear power (79 percent).

Through these and other tactics we can survive the oil shortage. Let’s not stop at ending our dependence on foreign oil as many in the political class say we should; let’s end our dependence on oil, both foreign and domestic. Solving problems as significant as this is old hat to America. We’ve been faced with threats of various sorts before and we’ve beaten them using the work ethic and ingenuity that has set us apart from all other societies both past and present.

Friday, December 18, 2009

The upcoming oil shortage: part three

From the 21 December 2009 Greater Niagara Newspapers

By Bob Confer

Americans have been led to believe that the supply of oil is nearly limitless and for the next half century we will have more than enough crude to meet the growing needs of the global economy. The Republican Party’s national platform touts the availability of untapped reserves in Alaska and along our shores while the party currently in charge (the Democrats) seems genuinely unconcerned with future supplies.

But, as we go about our lives, guzzling gas at amazing rates and taking its presence for granted, the rest of the world is concerned about the long-term prospects for oil as the world’s preeminent energy source. Along those lines, in early November the United Kingdom newspaper, the Guardian, dropped a bombshell, quoting two unnamed oil industry executives who said that the International Energy Agency was willingly overstating oil supplies.

The IEA has, in recent years, said that oil production will rise from its current level of 83 million barrels per day to 105 million barrels per day by 2030, a growth of 27 percent. The whistleblowers said that many within the IEA know that this is impossible and maintaining oil supplies at even 90 to 95 million barrels per day is not achievable. They noted that back in 2005 the IEA was openly saying that 120 million barrels per day by 2030 was realistic but has since then tempered those proclamations to 105 million, an indicator of considerable disagreement within the organization. The whistleblowers said that some key IEA personnel believe that the oil peak is upon us, signaling certain disaster for sustainable economic growth.

That news caught the attention of the rest of the world but went almost unmentioned by the mainstream media in North America. That may be because it wasn’t sexy enough amongst other timely issues like health care or global warming or it may have been the fact that the report painted the US in an unfavorable light. The IEA sources said that senior officials have downplayed the rate of decline in oil reserves while overplaying the potential for new reserves because the US government and Wall Street have exerted considerable pressure on the organization because they did not want a more truthful report to trigger a buying panic that would cause a sudden spike in gasoline prices in turn tempering our nation’s recovery from the Great Recession.

If that’s true – which it very much could be - it’s a very poor way by which to manage a nation: The long-term health of our economy has been abandoned for short-term benefit. That’s a poor economic model that sets the stage for considerable, almost unfathomable, struggles by Generations X and Y and today’s youth when they encounter this disaster unprepared.

Although the fears for an oil shortage may be old hat to the rest of the world (this is not the first time that the concept of Peak Oil has reared its head in a trusted international news outlet) it remains as an underreported, almost conspiratorial, theory in the States. Fortunately, more voices are speaking up on the issue in the US, including the smart money. One of the more trusted names in personal investing, Raymond James, has noted the impending oil shortage. The company’s director of energy research Marshall Adkins was recently quoted as saying that the peak occurred in 2008 and, sometime in the next decade, $6 to $8 gasoline will be the norm. Tom Petrie, vice-chairman of Bank of America Merrill Lynch, agrees, saying that we have already hit Peak Oil and we are in a terminal decline of supply at the same time demand is on the rise courtesy of China who, by 2030, will account for 43% of demand (It should be noted that China clearly understands the reality of the oil shortage. They are aggressively buying up reserves and foreign assets while at the same time developing new technologies).

We can only hope that in 2010 we see more news outlets covering the reality of oil’s future. Then and only then, after being educated on an issue of grave importance, will our elected officials and businessmen develop the sense of urgency necessary to quickly address our untapped reserves and develop alternative energy sources, ensuring the economic vibrancy of future generations of Americans.

Friday, December 11, 2009

The upcoming oil shortage: part two

From the 14 December 2009 Greater Niagara Newspapers

By Bob Confer

Last week’s column focused on the global demand for oil and how the supply constraints of the precious substance brought about significant price volatility during the second half of the decade. I made the claim that high oil prices were just as responsible for the Great Recession as were the mass of foreclosures.

One would think that a problem of such a scale (and one that we had already experienced twice before during the 1970s) would have initiated some action on behalf of the powers-that-be in Washington DC and other government thrones the world over considering that the situation is bound to repeat itself sometime very soon, maybe in 2010 and definitely in 2011, as the world’s most-populous economies continue to grow.

But, alas, we live in a world led by short-term memory and short-term planning. Just as our government never enabled the free enterprise system to pursue new oil reserves following the oil crises of the 70s, our leaders (and even most citizens) have so easily forgotten that the pain at the pump in 2007 and 2008 caused significant financial hardship. It seems that the issue has taken a backseat amongst bigger issues of the moment both real (the stagnant job market) and perceived (global warming) as promoted by Congress and its followers. Subterfuges such as this focus (if not waste) our nation’s intellectual and financial resources – and citizenry’s thoughts and hopes - on things that may not need immediate attention. When the oil problem does resurface, that same leadership will do as they have with anything of importance and use a short-term fix destined for long-term failure, but one with immediate rewards (though small) that captivate the voters at a time most advantageous for the polls. That cycle repeats itself and that is why, since the 1800s, we’re always revisiting the same real crises every few years be it oil, health care, immigration, national security or education.

Had the issue been addressed before or when it came to a head we wouldn’t be treading into an all-out oil shortage that is destined to prolong the recession on American soil. If, when the economy was in good health and moving full steam ahead, the private sector was equipped, allowed and encouraged to invest in and develop new technologies that either minimized or negated the need for oil we would be further ahead than we are now and the future might no look so bleak.

But, an oversized federal government has stymied progress, be it through oppressive taxes and regulations, the enabling of the status quo in the automotive technologies or the provision to our children science-deficient secondary educations. Those are some of the reasons why you see the world’s sharpest young minds now being Indians and Chinese who come to the US to be further educated in the sciences and engineering in our very best universities, only to go back home to once-oppressive governments that now pursue and promote innovation and intelligence with the same vigor that ours used to.

Sure, we still have far and away the most innovative and advanced people and processes on the planet, but we seem to have hit a plateau in that regard at the same time that those other nations are trying to catch up to us. Therefore, they may be far more equipped and flexible than we to quickly roll out a plan to adjust to the oil shortage, ensuring the continued vibrancy of their economies.

But enough of what got us there and will get us there again. You may be wondering about the specifics of this shortage I speak of. Just how big is it? What will it mean to the world? That, dear reader, I will discuss in next week’s column. You will be aghast at the wool that has been pulled over our eyes.

Friday, December 4, 2009

The upcoming oil shortage: part one

From the 07 December 2009 Greater Niagara Newspapers

By Bob Confer

In last week’s column it was discussed that the primary reason for the strength and depth of the Great Recession was the sub-prime mortgage crisis. It should be noted, though, that there would have been a recession regardless – though considerably smaller and less damaging – due to incredibly high oil prices.

Economic output, as measured in units and not revenues (which were actually higher because of heightened energy input costs), tanked at the end of 2007 and in the first nine months of 2008 because the cost to recover natural resources, convert them into materials and finished goods, and get them into consumers’ hands increased considerably, making for higher prices at grocery and department stores. The consumers could not or would not buy as many of those goods because their spending power decreased in that same period, the result of gasoline prices reaching – even exceeding - $4 per gallon in the United States.

This energy-driven economic crisis (dwarfed by the financial crisis) was a result of the laws of supply and demand. In the years that led up to that peak Americans consumed oil at unfathomable levels thanks to multi-car households outfitted with so-called “gas guzzlers”. As they did that, they continued to buy astronomical amounts of non-durable and disposable goods that could be made affordably in China and India where peoples’ burgeoning personal wealth – a result of the nearly endless production jobs – caused them to develop the consumptive tendencies of Americans. They bought goods. They bought cars. They used oil. This put a serious strain on oil supplies as the world’s largest economy and its two most-populous nations devoured oil produced from a system that was not made to satisfy such impressive needs. Consequently, high demand for a limited supply made for higher prices. After breaking the $100 per barrel barrier in February of 2008 oil made steady gains to just over $145 per barrel during the summer months.

Since then, oil prices have ridden a roller coaster. In September of that year, ‘round about the time the financial markets started their free-fall, prices fell below $100 per barrel for the first time in 7 months. At the end of 2008 and into February of 2009 oil traded in the $30 to $40 range, a direct result of the breakage of the aforementioned supply constraints: Demand (real or anticipated) decreased as a result of consumers and businesses the world over cutting back (somewhat drastically) on their energy use.

But, as 2009 went on prices rose, reflecting an up tick in demand. The world outside of the USA has begun a slow recovery and China, quickly becoming the force to reckon with in regard to international politics and trade, has seemed almost impervious to the global recession. Its air of invincibility has equated to a growth in GDP that is expected to finish above 7 percent in 2009 and 8.5 percent in 2010. India has been just as productive, with its growth estimated to top 6 percent this year and 7 percent next year. Because of this return to economic development globally, oil prices have risen to around $80 per barrel.

When America’s economy gets back on track and the 7 million recently unemployed become employed again – thus commuting our roadways and buying things – it will burden the oil supply chain as it did prior to the escalation of the recession. But, by then, which is some years down the road, supply will be further strained by the newfound demand of millions of new consumers around the globe.

In 2007 and 2008 it was evident that the oil markets were ill-prepared to satisfy the needs of the world and the world suffered for it. And, as we’ll see in next week’s column, little has been done to address that situation, foretelling an inability to maintain a productive and sustainable economic recovery at home and abroad.