"Holy Frijoles Batman I think we are in serious trouble” or Everything I know about Alternate Energy Fuels Part 2

OK so why are we in serious trouble. Well there is a thing called "Peak oil" which is becoming more important every day. "Peak oil" is a concept used to describe the point when we hit the peak of oil production. This was first theorized back in the 70's when the US hit the peak of oil production and after that we had to start importing oil to make up for what we’re not producing domestically. We now import ~58% of our oil needs(this is approximate because it goes up every year). So now we are now impacting the world oil supply which is finite and has a “Peak” also. Well no one knows the exact numbers but, we do know that one of the symptoms of “Peak oil” is that the global price of oil will start to go up when supplies dwindle. And they don’t have to wane much to start a price increase. You know, following the rules of supply and demand. Well I don’t know if anyone noticed, but recently the price of gasoline just shot up a ways and it is not going back down. Plus the world demand for oil is ever increasing. China and India are just starting their industrial revolutions and are each placing huge demands on global energy consumption.

If you believe the hype about big oil finds here in the US then you must be smoking something really good. Some of these big finds reported by the oil companies are from oil shale deposits. These are not just oil pockets like big underground lakes that we found in the 1920's and 30's. These are oil deposits bound tightly in the rocky oil shale. To liberate this oil from the shale will take lots of energy because the oil shale will have to be brought up to the surface, then ground up and then heated (which last time I checked costs energy) to force the oil out of the rock. Now three decades ago it was determined that this was a losing proposition because it takes more energy to get it out of the rock than we get from burning it. So we are in a net negative btu situation when you balance the energy check book. We can’t do this for very long! Check out this informative article if you want to know more about peak oil, and what some of the big brains think will happen when we hit the top of the global oil production curve. Peak Oil

So what are we doing about this? Well for about three decades now we haven't done anything but more exploration here in the US while importing more and more oil every day. I think we Americans don't really think there is a problem, so we aren't doing anything about it. Well I take that back, some people are doing some research, and coming up with innovative ways of producing liquid fuels for cars, but I think the general consensus is: "Well someone is working on this right? So why do I need to do anything."

Americans don’t feel the pain so we don’t react in this area until we are in a crisis. We need to have that crisis mentality now because when we are in real heavy duty trouble, we will not be able to react fast enough. We need to have a 5 year goal, a 10 year goal, a 20 year goal, a 30 year goal, until we are totally self sufficient once again.

Some people are doing ground breaking research with bio-diesel, ethanol, butanol and even hydrogen fuels, but no real strides are being taken like putting together a real plan with real goals and real live dates that something is going to happen by. Or how about putting some real money towards developing alternatives and not just having the federal government throw the alternative fuels camp a bone now and then, just to keep those pesky doomsday prophets quiet.


So what can the average citizen do about this huh? Well there are a couple of things we can do right now:

#1 Stop buying the big SUV’s that get such poor gas mileage. Conserve a little oil for the next generation. Buy something smaller, sportier and more economical. Send a message to the car manufacturers that we want more economical autos.

#2 Vote for people who are pro alternative fuels and who are willing to change the course of history and work towards putting real significant goals together to get us off the oil high. Set some date out in the sand and then back it up with real dollars.

#3 Talk to people you know and raise the awareness about these issues a notch higher. The more people thinking, talking and acting on this problem the more we can get accomplished.

#4 Encourage the oil companies with their recent windfalls to put that money into alternative fuel production. Buy fuels that have ethanol in them and show the oil companies that we want more fuels of this type.

Take a look at this Auto: 70 MPG

This is one techinogically advanced car. It is called the Box fish and before you laugh, it gets 70 MPG. That's right and that is in city traffic. It gets 84 MPG on the highway. Check it out here:

Everything I know about Alternate Energy Fuels Part 1

Well I am going to spill everything I know... about alternate energy fuels. These are the ones to replace gasoline or diesel fuel. Well first of all, why is this even necessary?

We are a nation rapidly becoming totally dependent on foreign fuels. So what... you might say. Why is this important?

Well it is important because when the federal government or the big wall street investors talk about the deficit, they are concerned because these are dollars that we are all earning that are going out of our country possibly never to return. Now lets assume that these dollars leave and the same number come back. Then we have no problem. We have a trade balance and we can go on this way for decades with no drop in our standard of living. But now if the trade balance starts to change, lets say $100.00 leaves the country but only $90.00 returns the some day way out in the future, you will run out of money. But lets say $100.00 leaves the country and only $10.00 returns to us. Then this process is going to happen much sooner. We can never run out of money, because the government prints more to replace what is lost but you have is a dilution effect and the dollar becomes worth less and less each year.

We have plenty of dollars here in the US but buying foreign goods will cost much, much more as time goes by. The other thing that is happening during this process, is that we will find we have less and less buying power, meaning doing big new projects like space exploration, gene research and building processing plants to produce alternative fuels will dwindle. This is precisely the state we are in now. Our buying power is being reduced and our ranking as a major world player is diminishing. There are people concerned about this and they have written some interesting articles about this subject and what things we can do to stop this trend. One solution is to create some incentive in foreign countries to buy more US goods. Warren Buffet of Berkshire Hathaway believes this to be a big problem also so I have quoted the first two paragraphs of his article from Fortune magazine.

“I'm about to deliver a warning regarding the U.S. trade deficit and also suggest a remedy for the problem. But first I need to mention two reasons you might want to be skeptical about what I say. To begin, my forecasting record with respect to macroeconomics is far from inspiring. For example, over the past two decades I was excessively fearful of inflation. More to the point at hand, I started way back in 1987 to publicly worry about our mounting trade deficits -- and, as you know, we've not only survived but also thrived. So on the trade front, score at least one "wolf" for me. Nevertheless, I am crying wolf again and this time backing it with Berkshire Hathaway's money. Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in -- and today holds -- several currencies. I won't give you particulars; in fact, it is largely irrelevant which currencies they are. What does matter is the underlying point: To hold other currencies is to believe that the dollar will decline.
1. Both as an American and as an investor, I actually hope these commitments prove to be a mistake. Any profits Berkshire might make from currency trading would pale against the losses the company and our shareholders, in other aspects of their lives, would incur from a plunging dollar.”
This article really needs to be read to understand everything he has to say about this subject and he proposes a solution to this problem. And I think it is a good one. It is basically creating a credit system where for every dollar of goods we buy from a foreign country, they must purchase the same amount of US goods. So please take a moment and read the article:Squanderville versus Thriftville (Warren Buffet).

So where do alternative fuels come into the picture. Well, it becomes important because if we could become energy self-sufficient then we immediately stop the oil dollars from leaving the country putting us in an energy trade balance. But this is not all. It would also stop those energy dollars from landing in the hands of terrorist and countries that support them.

There are many other benefits to us as a nation, but these are two that are very important. With the cost of two war engagements plus our national security hanging here, then it becomes even more important. So tell your congressman how you feel about this. Vote for energy freedom and independance. Give a future generation a country that is worth inheriting.

Controlled burn at the Grand Canyon North Rim

I was at the grand canyon last week when the North Rim of the grand canyon was closed due to the fire. This was started as a controlled burn that went out of control. It seems kind of silly to me to be doing a controlled burn under those conditions. It was very dry and very hot. Lots of underbrush was piled up and there was nothing stopping the fire from spreading to the tops of the trees. The worst thing was, that signs were up everywhere saying "Controlled burn, do not report." So naturally when it went out of control, no one felt a responsibility to say anything about it. We were at the North Rim on Sunday the 25th in the morning before it was closed. When we left the North Rim, early in the afternoon, there was a slight amount of smoke but later that same day when we pasted the entrance to the site, a huge column of smoke was visible from quite a distance. Everyone in the van made the comment that it looked much bigger and was out of control. Sure enough when we got back to our hotel it was all over the news that the North Rim was closed and the wildfire was consuming a large amount of acreage. It seems that the controlled burn was being conducted at a very bad time of year. As we drove back to our hotel each evening last week, we could see fresh fires burning all around us. The conditions were just perfect for fires, very hot with more than 100 degrees every day and for a long period of time.

The most amazing part of this is that it was raining here in Colorado where we had been experiencing a very dry June. I wonder if the fires have seeded the clouds with nucleating sites and now down wind of the fires we are getting the benefits of rain. Lots and lots of rain. Just a point to ponder.