Democratic Convention’s Tribute to Ted Kennedy

From Caroline Kennedy’s glowing words to Ted Kennedy’s “humble” acceptance of the recognition he received, a nagging bad taste lingered in my mouth.

Caroline referred to the hope that her father John bestowed on the American people. The first thing that came to mind was a recollection of a lunch my family had with our representative in Congress in 1962. I recalled very vividly Representative Forrester of the Third Congressional District of Georgia telling my father that the Kennedy brothers hated every Southerner by birth.

I also recall the impressions of military trains passing behind my home on their way south to Florida as well as mobile ICBM’s positioned in remote areas on railway cars during the Cuban Missile Crisis. Someday it may be referred to as Kennedy’s Folly … after all the Kennedy sycophants are gone.

While Caroline described Ted Kennedy’s love for sailing, I recalled the report of the crew on his sailboat pumping out the bilge of his boat into Nantucket Sound oblivious to the objection of onlookers. Senator Kennedy is, after all, a leading advocate for environmental issues.

As she talked about all he has done for the American people, I recalled him blocking the construction of a wind farm in Nantucket Sound, a project which would eventually do much to relieve the dependency on fuel oil by the citizens of Massachusetts. Senator Kennedy’s view from his home in Martha’s Vineyard is infinitely more important.

Senator Kennedy certainly does deserve a tribute from the Democratic Party because he represents much of what they stand for.

Pickens Plan Presentation Before Senate Committee

On 22 July 2008 Boone Pickens presented his energy plan before the Senate Homeland Security Committee chaired by Senator Joe Lieberman (I) of Connecticut. The hearing was requested by Senator Susan Collins (R) of Maine and telecast on C-Span with a rebroadcast late night 22 July or early morning on 23 July.

I caught the rebroadcast early Wednesday morning missing the first part of Mr. Pickens presentation but heard about 20 or 30 minutes of it. To me, the essence of Mr Pickens’ initiative is to convert the mass of U.S. transportation from gasoline to natural gas, especially heavy transportation, and the development of wind power throughout the heartland, from Texas into the Dakotas, with the potential of developing as much as 400 gigawats of electrical energy. In addition to these proposals, he had a plan for developing the infrastructure to carry the newly developed energy source. Of note, he pointed out that natural gas provides power that alcohol based fuels cannot, i.e., horsepower. His natural gas proposal seemed to me most realistically aimed at the current non-rail freight transport system in the country today … aimed at decreasing our dependency on foreign oil in the transportation sector, primarily commercial, by 38%. When asked, he estimated that the cost for developing this wind power would be about $500 billion with an additional $100 billion for infrastructure. He pointed out that this was still less than the current estimate ($700 billion) of the cost of oil imports for one year at the current price of crude oil. Mr. Pickens pointed out that known natural gas reserves within the United States have doubled in the last 10 years.

The second speaker was Gal Luft of the Institute for Analysis of Global Security. He pointed out that 2008 would be the first year that the United States will pay to foreign countries more than we pay our military to protect us. He challenged Mr. Pickens plan which is based partially on natural gas, stating that the United States is currently a minor producer of natural gas with only (?) 4% of the known natural gas reserves in the world. He stated that several natural gas producing nations with most of the known reserves are currently forming a natural gas cartel and that the United States would only be substituting an oil based problem for a natural gas based one. I don’t know if he’s taken into account the increase in known natural gas reserves that Mr. Pickens alluded to. Mr. Luft also pointed out that OPEC is essentially producing the same amount of oil that it was producing 35 years ago, that the 65% increase in oil production in the past 35 years has been accomplished by non-OPEC nations. He stated that OPEC has historically decreased its production as the United States has increased its production.

Mr. Luft’s proposed solution was the implementation of flex-fuel cars, able to use gasoline, ethanol and methanol (GEM). He further stated that the cost of adding the flex-fuel capacity to American autos would be about $100. Apparently, there is currently a bill before Congress that would make the flex-fuel requirement law with 50% of autos sold in the U. S. being required to have the flex-fuel capacity and 80% by 2015. He stressed that this was part of an “open fuel standard” which would allow market forces to lower and dictate the cost of fuel through competitive pricing.

The third speaker was Geoffrey Anderson of Smart Growth America. His presentation was on the future development of “walkable communities” as opposed to “drive only communities”. Basically, what he was referring to was the fact that the past century’s residential development had been geared to the development and widespread use of the automible as the primary means of transportation … to the point that most residential developments were based on the necessity of the automobile to reach required services. One fact he presented was that currently only 11% of school children walked to school as compared to 50% in 1960. He discussed a “walkable community which had been developed in Atlanta, GA. It was anticipated that the residents in that community would only drive an average of 27 miles per day compared to the typical (?) 34 miles per day that the average Atlantan drove. They found that the average resident of that community actually drove only 9 miles per day, 1/3 of their estimate. A “walkable community is one where nearly all essential services and many nonessential services are within walking distance of the resident’s home. He envisioned “walkable communities” interconnected by convenient forms of mass transportation.

The last speaker was Dr. Habib Dagher, the director of the Advanced Structure and Composites Laboratory at the University of Maine. He spoke on the development of offshore wind power and stressed the acute need for that development by the residents of Maine because of the dramatically increasing cost of fuel oil which has been paralleling the cost of crude oil. He stated that the average cost of fuel oil for the average Maine household was projected to be about $5,000 this coming winter accounting for about 25% of that household’s annual budget. He presented a map that showed three primary areas where offshore wind power could be developed … off the northern Atlantic coast, in the Great Lakes region and off most of the Pacific coast. He addressed some considerations regarding wind variability and power storage. He did admit that it would probably take five to seven years to actually begin deployment of this power source. The potential energy production for each of these regions ranged from 150 to 400 gigawatts, similar to as well as complimentary to Mr. Pickens proposal, but, as he pointed out, closer to population densities with less infrastructure requirements. He did state that all of their proposed wind generators would be located greater than 20 miles offshore … over the horizon … out of sight, Senator Kennedy … and at greater cost. I did find it interesting that he completely avoided referring to the Cape Cod area as well as the mountains in southeastern Maine as well as those in New Hampshire Vermont and western North Carolina. But he was talking only about offshore, wasn’t he?

As both Senator Collins and Senator Lieberman pointed out, all of these proposals seemed to be complimentary.

Watching nearly all of the proceedings, I was acutely aware of the similarities ( sans wind power) of the “walkable community” proposal to the small community where I grew up in middle Georgia. There were four small towns in the county ranging in size from 500 to 3500. Practically all essential services were to be found within each community or within the county. The longest distance between the towns was about 19 miles and all were interconnected by rail as well as highway. It was actually possible to travel from one town to another by rail although, by the time I came along in the 1950’s, commuter rail was already being killed by a pro-union Democratic congress more interested in subsidizing automobile use with the development of the Interstate Highway System under the guise of national defense as well as its obvious subsidization of air travel through federal control and support of airports and air traffic control.

One thing that did strike me about the hearing was the total lack of even one Democratic senator’s presence during the nearly one and one half hours that I viewed. Another thing that stuck me was that the “Massachusetts Situation” was alluded to or tiptoed around. Nantucket Sound was specifically mentioned and, therefore, Senator Ted Kennedy’s obstruction of that project was alluded to.

Frankly, it sounds like we need to back up at least 50 years … or more like 100 years … in the transportation realm … and try again. I once read that modernization didn’t always equate to progress … or something like that.

Postscript: It’s now 4:53 am and I’m watching the beginning of the third broadcast of T. Boone Pickens’ presentation. As I suspected, there doesn’t appear to be even one Democratic senator who has shown Mr. Pickens the courtesy of listening to his presentation. And least I forget, as well as to be fair, only three Republican members were present. What a bunch of … buttheads!

Roll Call:

Present:

Joseph Lieberman (I), chairman

Susan Collins (R), co-chairman

George V. Voinovich (R), OH

Pete V. Domineci (R), NM

———-

Absent: (The Roll Call of Shame) …

Carl Levin (D), MI

Ted Stevens (R), AK

Daniel K. Akaka, (D), HI

Thomas R. Carper (D), DE

Norm Coleman (R), MN

Mark L. Pryor (D), AR

Tom Coleman (R), OK

Mary L. Landrieu (D), LA

Barack Obama (D), IL

John Warner (R), VA

Claire McCaskill (D), MO

John E. Sununu (R), NH

Jon Tester (D), MT

Barack Obama, Wind Power and Ted Kennedy

Barack Obama is the candidate of change. How do I know? Because he says so, right? Who would question anything that Barack says. While viewing a recent Obama speech, I saw “CHANGE” in large letters on the front of the podium as well as in three places positioned like the points of the fleur de lys on a screen behind him, presumably symbolic of the heir apparent to the presidency … simply waiting for the coronation.

Obama says he is going to make the United States energy independent by pursuing wind and solar energy. How is he going to do this and bring about change while hanging his star on the likes of Ted Kennedy who is the epitome of back room politics, special interests and, probably worst of all, unbridled self interest.

Ted Kennedy has been the one person who has blocked the development of a wind farm in Nantucket Sound … so he won’t have to view it from his Cape Cod home, reiterating that well worn environmentalist cliche, to preserve a pristine area in our country. If I hear one more politician, including John McCain use that phrase, I’m going to puke. Ted Kennedy wasn’t concerned about anything pristine or environmental or even sanitary when he order his boat crew to pump out the bilge of his sailboat in Nantucket Sound … just one more fat, fat cat politician who will do whatever he can get away with such as running his car into the marshes and destroying natural habitat, not to mention killing people.

Unfortunately, even brain surgery can’t apparently provide Senator Kennedy the epiphany that quite possibly function is beauty. What can be more pristine or beautiful than a wind farm, preferrably the first of many in the Cape Cod area, which can make this country less dependent on fossil fuels and foreign oil.

Wind will power our future

Energy experts are predicting that as much as 20% of the U.S. energy requirements can be met by wind power by 2030. Because of powerful individuals like Senator Kennedy I was careful to use the word, “can”, in the previous sentence.

Upon reviewing a wind resource map of the contiguous United States, it becomes very apparent that there are only three primary areas in the eastern United States that are most suitable for the most cost effective, efficient and reliable energy production. They include a very narrow stip of mountain ridges in New Hampshire and Maine, A very short strip of mountain ridges in the extreme western part of Northe Carolina in the Great Smoky Mountains … and the Cape Cod area. Of these, the Cape Cod area has the most reliable sustained winds with the greatest average wind speeds.

The following is a map of the continental United States showing average annual wind resource estimates. The blue areas have the highest estimates with the estimates increasing from light to dark.

Map 2-6 Annual average wind resource estimates in the contiguous United States

Wind resource estimates are rated on a scale from 1 to 7. With current technology it takes a sustained wind speed greater than 6 miles per hour for wind turbines to have enough speed to produce electricity. This wind speed has to be sustainable for the turbine to be cost effective and efficient. It, therefore, requires an area to have a wind resource estimate of 3 or greater for that area to be minimally efficient.

The following map of the Massachusetts area reveals that in the Nantucket Sound/ Cape Cod area the wind resource estimates range from 3 to 6 with the sound randing from 4 to 6 and the Cape Cod peninsula having a rating exclusively of 6.

3-21 Connecticut, Massachusetts, and Rhode Island annual average wind power

By comparison, the Cape Hatteras area of North Carolina has ratings which range from 2 to 3 with the Outer Banks only meeting the absolute minimum requirements. This map also shows that the only area in North Carolina that truly meets the requirements for efficient and cost effective wind power production is in the Great Smoky Mountains section of the Appalachian Mountains on the North Carolina/ Tennessee border. This is the only area in the Southeast that actually exceeds minimum requirements.

3-30 North Carolina annual average wind power

The other section of the eastern United States is in the mountains in Vermont, New Hampshire and Maine with the coastal area of Maine having a rating of 4.

3-23 New Hampshire and Vermont annual average wind power

3-22 Maine annual average wind power

All of these areas are “pristine”. To reach the goal of having 20% of national energy requirements being met by wind energy by 2030, there are going to have to be some concessions made and a little adjustment in what people consider pristine.

People need to start seeing beauty in function. What could be more beautiful that a machine that produces electrical energy from the wind, reducing our country’s dependence on imported oil or reducing our need to burn fossil fuels to produce that same electricity?

One might ask, “Why not just put the wind farms in the less populated West and build power lines to bring the electricity back to the East? The West has many larger areas with adequate wind resources.”

Today, I heard that the electrical infrastructure of the United States is going to require trillions of dollars in new investment to upgrade it to handle future requirements. People need to consider where all of that electricity to power their electric cars is going to come from. Various power grids in this country are already interconnected to shift electricity through high voltage lines among the grids to handle changes in energy requirements among the various grids. Everyone should know the results when this function fails.

Each section of the country should be willing to shoulder its share of the responsibility of maximizing its capacity to utilize wind power rather than throwing that responsibility onto someone else’s shoulders. Senator Kennedy is a good example of what a person shouldn’t be like, selfish and hedonistic.

If Senator Kennedy were truly dedicated to the betterment of the nation and the interests of his constituency, he would introduce a bill in the Senate condemning all the property on Cape Cod under eminent domain and raze all the homes on that peninsula. The federal government could then lease the land to power companies to build wind farms on the peninsula with areas such as beaches set aside for public use and enjoyment not simply the playground of the idle rich. It’s easy enough for the government to condemn the property of the poor or less fortunate to provide land for a real estate developer to exploit the commercial value of property for the developer’s personal benefit in the name of eminent domain. Why shouldn’t the government do the same to rich people when it truly and actually does benefit the common good?

Can Barack Obama actually add some meat to his populist message rather than some vague hypothetical lip service? If Barack Obama were truly a candidate of change, he would make the above recommendation one of his highest priorities. It’s time for less empty rhetoric and some definitive action. It’s easy to talk a populist message about windfall profit taxes for oil companies which are perceived to be impersonal behemoths rather than the employers of tens of thousands of Americans and the property of millions of stock holders whether they be individual investors or have an interest in the oil companies through their pensions or retirement plans. How will the candidate of change handle the national interest in the face of a relatively few fat cat politicians who happen to be his political cronies and supporters? Obama definitely doesn’t need the added burden of lobbyists. He has enough millstones hanging around his neck in the form of political endorsements from the likes of Ted Kennedy and other political hacks.

The Oil Company Windfall Profit Myth

While Rome burned, Nero fiddled. Sound familiar. A popular story is that Nero actually started the fires in Rome to clear ground to build his new and improved Rome. The citizenry of Rome were outraged and a scapegoat, the Christians, were conveniently on hand to be given the blame.

Today, with oil prices soaring over $133 a barrel, Congress fiddles and the two Democratic presidential candidates as well as many of the party leaders in Washington have found their convenient scapegoats, American oil companies.

Look at the massive profits they made in the first quarter of 2008. Well, I did look. Everyone should look and see exactly what the Democrats are crying out about. Let’s look at Exxon Mobil as an example:

XOM: Income Statement for EXXON MOBIL CP – Yahoo! Finance

Wait a minute. Where’s that tremendous jump in money that congressional leaders and presidential candidates are crying about? In the first quarter of 2008, Exxon’s total gross revenues are only up by $200 million from fourth quarter 2007 while gross profit is actually down by over $500 million. Since last summer, they’re operating income is up by a little over $2 billion, slightly better than 10% … a respectable increase but not necessarily anything to be upset about or even jubilant about if you own their stock. Since the end of the second quarter of last year their cost of revenue has increased by more than 25% from approximately $55 billion to $70 billion while their total revenue has gone up a little less than 16% from $102 billion to $116 billion.

Exxon Mobile is a BIG corporation:

XOM: Balance Sheet for EXXON MOBIL CP – Yahoo! Finance

It’s total assets at the end of first quarter this year were more than $258 billion. That’s a little over a quarter of a trillion dollars of which nearly half is physical, property and equipment.

Their liabilities or debt is $135 billion leaving net assets of stock holder equity at $123 billion.

The cash flow statement is where Congress plays “gotcha”.

XOM: Cash Flow for EXXON MOBIL CP – Yahoo! Finance

Even though net income has marginally improved from $10, 260,000 at the end of the second quarter last year to $10, 890,000 at the end of first quarter this year, through changes in operating, investing and financing activities, their change in cash and cash equivalents has gone from a loss of over $1 billion to a gain of more than $6.9 billion with it nearly tripling since fourth quarter 2007.

Sure, they’ve increased their stock buy back program from $7 billion to more than $9 billion a quarter … but that’s less than 5% of their total assets. Their change in total cash flow from operating activities seems to have doubled in the past quarter but a close look and removing all of the negatives will reveal that it’s only increased by about $1billion or 5% since the end of fourth quarter of 2007.

Looking back at the Income Statement, on a net income in 2007 of about $70 billion, Exxon Mobil paid income taxes of nearly $30 billion, or about 43% of their net income. What does Congress think is a fair rate for them to pay … 100% … or more?

It’s a fact that these are gargantuan numbers. Exxon Mobil is a gargantuan corporation. Their cash flow and assets are enormous. So are their expenses.

American oil companies are becoming smaller and smaller players in on the world oil scene when it’s looked at in its totality. With the United States being the world’s largest oil products consumer, it’s their job to see that the needs of the American public are met. In doing this, they have to cater to the rules and regulations of the foreign governments that they deal with as well as our own. They have to stay competitive.

OPEC controls the supply of oil from it’s member nations. Couldn’t it be construed as just a little ironic and frankly two-faced that our Congress wants to sue these nations to try to force them to increase their oil output while at the same time, denying access to our own reserves?

Construed nothing … it’s insanity!!!

Barack Obama woos his supporters with promises of solar and wind energy. Where are those solar and wind powered cars and trucks? Solar collecting farms have to be put where there is abundant year round sunlight … yet environmentalists in the 1990’s blocked the connection of a large solar farm in the Arizona desert to southern California power grids to protect the migrating habits of a desert tortoise. The Kennedys don’t want a wind farm in the potentially highly productive area of Nantucket sound.

You can’t put cost effective solar farms in areas where there’s frequent heavy cloud cover and you can’t put cost effective wind farms where there aren’t predictable and sustainable winds.

I’ve written previously that crude oil prices react to news. Yesterday, Boone Pickens said oil would go to $150 a barrel and predictably it’s gone from $128 a barrel yesterday to over $133 a barrel today.

The only predictable thing Congress has done is … nothing!!!

I still believe that some CONSTRUCTIVE action on Congress’ part would have a profound effect on oil prices … and that’s not sticking the oil companies with so-called windfall profit taxes or ludicrously threatening to sue OPEC. That’s about as stupid and juvenile as the snitch threatening, “I’m going to tell your mother!!” Get real!

It’s time for Congress and our presidential candidates to do a reality check … take a look in the mirror … and see where the problem really lies.

The Crude Oil Crisis

I just turned to CNBC to see what the market is doing today. Why was I not astounded to see the price of crude oil up $2.21 to over $119 a barrel?

Over the past several years, I have closely followed numerous oil stocks and traded in them on occasion. One thing that I have noticed is that crude oil prices fluctuate wildly based on “news” … whether it be Nigerian rebels in Africa or the threat of hurricanes in the gulf. Weekly U.S. stockpile reports of crude oil and distillates add a predictable weekly gamble to investing in these stocks and any stocks which have been indexed by the investing public to the price of crude oil such as Fluor.

Appreciating the intricacies of how the investing public perceives the effects of how each news item will impact a particular stock in a subsector of the energy sector is essential to successful investing.

The simple fact that emerging and developing nations such as China and India are demanding more oil and competing with our economy for these resources will ensure that crude oil prices will never return to previous lows but it doesn’t mean that oil prices don’t have the potential for being much lower in the short term.

As I said previously, crude oil prices react to news. It’s apparent that recently there has been no news to drive the price of oil down to more realistic levels.

The U.S. Congress could provide the news and incentive to drive the price of oil down dramatically and drastically … if it had the political will. Unfortunately, we are in the midst of an election year and the possibility or probability of Congress doing anything productive and beneficial for the American economy and the American public other than self serving political posturing is simply nil.

First of all, Congress could pass legislation to provide incentives and tax credits for people to use alternative energy sources such as wind and solar power. In addition they need to force the individual states to do likewise. Many states including the one that I live in simply don’t have any incentives for people to invest in these alternate sources. The federal government is good at threatening to withhold funds from states to achieve expressed agendas such as lowering speed limits and legal alcohol levels. It could do the same regarding alternate energy sources which are now available.

Congress could also provide incentives for power companies to build nuclear power plants. It’s ridiculous that think that France can have an accident free nuclear power program for more than 50 years and we can’t.

Congress should also override the roadblocks presented by special interest groups or individuals such as Senator Ted Kennedy to expedite the development of wind and solar farms wherever they may be the most efficient. The needs of the many should outweigh the selfishness of the few. Senator Kennedy should be able to look out from his Cape Cod home at a wind farm in Nantucket Sound and feel proud that he is doing something for his state and nation … but it simply isn’t in his nature.

I saw an episode on television recently where a person was developing and installing wind turbines at airports, using the backwash of jet airplanes taking off to generate electricity. What a simple idea. Embracing innovation is critical.

Drilling for oil in all offshore locations where practical and where oil is available should be approved. Simply approving the drilling of oil would probably have a dramatic and long term effect on crude oil prices. This was temporarily exemplified by the discovery of oil in deep areas of the Gulf last year.

Roadblocks to increasing our oil refining capacity need to be removed. There is no rational reason for this country to import refined products such as gasoline.

Environmentalists and other special interest groups need to make short term concessions to achieve long term goals of energy independence and moving our country away from such a great dependency on fossil fuels.

Using grains as biofuels is not the answer. The pending world food crisis is in part a result of the increased price of grains both as a primary source of human nutrition and as the feedstock for livestock. Using carbon based substrates from the forestry industry makes more sense since our cars will be competing with pine beetles and termites and not other humans or ourselves. I, for one, vote for eating over driving down the road.

This country has, for at least the past 50 years, been dismantling its mass transportation infrastructure while spending billions of dollars to accommodate the luxury of individual transportation. For nearly 100 years, roads, bridges, urban, suburban and commercial development has been geared toward the wasteful and inefficient use of automobiles and costly domestic air travel while rail and more efficient means of urban transportation have, for the most part, been neglected.

Urban and suburban planning needs to be regeared to be more friendly to pedestrian travel and access as well as mass transportation. The “old time concept” of neighborhood access to shopping and services needs to seriously be reconsidered. Mass transportation to jobs needs to go further than “carpools”. Walking or cycling to the nearby grocery store or pharmacy without the fear of being run over needs to be a realistic expectation.

Global warming is a long term reality … a historical fact. I’m not convinced that a human produced greenhouse gas crisis is a reality, though. There’s too much conflicting data and a fat ex-politician demagogue ridiculing people who question him doesn’t make it so. Buying “carbon credits” is a cop out for business as usual.

The crisis being created by the price of oil and food grains is real and palpable. It’s immediate and calls for immediate action.

Creating “news” and eliminating subsidies for producing biofuels could go a long way toward alleviating the immediate crises. Then some immediate steps toward serious and productive long term planning are essential.

If our government wants to decrease or eliminate our dependency on foreign oil and markedly reduce our dependency on fossil fuels specifically, it isn’t a unrealistic goal and doesn’t necessarily have to diminish our quality of life. In fact, it would most likely greatly increase our quality of life as well as our health.

It won’t happen overnight, but positive steps can be taken immediately if the will and courage exists. Unfortunately, we’re in an election year. And, nothing productive is going to happen other than politicians fulfilling self serving agendas with a lot of rhetoric and no action.