Archive for the ‘Energy’ Category

The Electric Vehicle Scam

Sunday, October 30th, 2022

Warped Perception?

“It’s easier to fool people than to convince them that they have been fooled.” – Mark Twain

If you have a degree in the hard sciences, you already know what I’m about to discuss. There’s no such thing as a free lunch, and there’s no such thing as perpetual motion machines.  If you want to do work of any kind, it requires energy.  One must create that energy, or at least convert it from another form, in order to do that work.  Most forms of energy production we do are chemical transformations of some sort.  When you eat food, your body chemically decomposes the meal into a form it can use to drive your muscles, and keep circulating your blood, and so on.  When you pour gasoline into your fuel tank, and it goes forward into your engine, where it’s ignited and turned into a forceful combustion, to push pistons that reciprocate, turning your crankshaft and so on, you’re also doing a chemical transformation.  When you store energy in a battery cell, then retrieving it to drive your electric motor(s), you’re again doing a chemical transformation, in reverse of the sort of chemical transformation that occurred when you charged the batteries.  Before you could charge the battery, however, the current with which you charged it had to be generated somewhere, and in a few cases, that was accomplished by nuclear reactions, or thermal, wind, solar and hydroelectric power generation, but throughout the world, the main source is through the burning of some sort of fuel in another chemical transformation into power to generate electricity.  This is reality, and even(and especially) Elon Musk knows it.  This poses a serious problem for the scam artists.  They can fool you on the front end, but in the long run, you’ll eventually convince yourself that you’ve been fooled.  Electric vehicles, as they’re being proposed to consumers, are a complete, utter scam, and every serious scientist knows it, and every engineer understands it.

I want you to watch the video below.  It’s just less than sixteen minutes, but it’s worth it.  I don’t know whether he’s exposing insanity or possibly suffering from it.  There are important lessons to be garnered here, but most importantly, you can finally put to rest the insanity of the electric vehicle scam.

The gentleman who made this video seems earnest enough.  My point here is not to criticize him, personally, but to confront what this video lays bare about electric vehicles.  His chief complaint with his Tesla EV seems to be that he doesn’t like the lengthy charging sessions, or the lack of availability of charging stations, but he also mentions his dislike of stopping to refuel a gasoline car.  i suppose he wants a forever-mobile, a kind of perpetual motion machine, that requires no charging, no refueling, and presumably, no maintenance or much of anything else.  He wants to be able to get in and drive until he’s ready to stop, to re-commence his travels at any time he pleases.  Who wouldn’t like that?

Obviously, he’s noticed that his Tesla requires recharging ‒ lots and lots of recharging.  If he only drove a few miles per day, he might well be able to subsist with his Tesla, at least until the very large, very expensive battery inevitably dies permanently, no longer able to be re-charged.  His solution here is to take a generator, driven by a 13HP gasoline engine, install it under the hatch of his car, in the area usually called “the trunk.”  Along with this, he’s also installed a gasoline tank, and all the plumbing and wiring to make this work.  He removed his rear window, created a weather-exposed zone in his trunk, hooking it all up so that the generator will charge his Tesla’s batteries, even while riding down the road, thereby extending his range, and giving himself a built-in charger.  I’ve seen others try similar approaches by simply pulling a small trailer with a generator bolted-down, accomplishing the same thing, but adding the problems associated with a trailer. I’ve seen others put a portable generator in the trunk that they can simply pull out and run to re-charge the car if they completely discharge between charging stations, but that cannot be run going down the road.

In the video, he takes this contraption on an 1800 mile journey of several days, the goal being never to stop for a charge.  Along the way, he stopped by a friend’s house, a friend who has a jet engine mounted on a pontoon boat(and I’d urge his friend to rethink the simple flat screen guard on that engine,) but a couple of things become apparent through the course of the video:

  • His generator is insufficient to keep up with his Tesla’s power consumption at highway speeds.
  • He is forced to refuel his “Cordless Tesla” several times, probably daily.
  • He has this noisy contraption running everywhere he goes, and must leave it running overnight while he sleeps in hotels.
  • It’s so noisy that people call the police.
  • The police stop him once because he’s driving too slowly on the highway as he attempted to match consumption to his insufficient generation.

While he was considerate enough to park it well away from the hotels so that it probably wasn’t too annoying to guests, he stopped at one restaurant, and I’m pretty certain that if I had been the owner of said eatery, I’d have asked him to shut it down while he dined.  At the end, he summarized his experience, and also displayed the mileage his “Cordless Tesla” was getting:

This is not MPGE, but actual mileage at the speeds listed

With all of this said and done, at the completion of his trip, he notes the shortcomings, and since along the way, he visited a Kohler Engines facility, I can only imagine that he intends to install an even larger generator in an attempt to improve his results.  What he may achieve is to extend his duration, but what he will not change is the left-hand column on the chart above, except perhaps to worsen it with a larger, heavier generator installed.  A larger generator will likely necessitate a larger fuel tank or severely reduced expectations, but what I must say is that I truly want to congratulate him.

He’s built an undisguised fossil-fuel-powered Tesla EV.

He undertook this project apparently to address the shortcomings of his Tesla, and all EVs in general.  What he succeeding in doing is to prove that only larger internal combustion engines can actually accomplish his desired outcome.  He still has the fuel stops.  He still has the noise(much more, actually.) He has a doubling of the expense. He still has a giant battery pack that when it dies, will cost more than his eventual final generator, fuel tank, plumbing, and wiring, and he’s still burning so-called fossil fuels for the pleasure.  I don’t think his rig would be legal in California, either for the noise, or for the fact that they’re banning all outdoor gas-powered equipment like chainsaws and lawn-mowers and generators, so not much use there.  And then there’s this:

My last long trip in our 2013 Ford F350 Crew-cab, diesel 4WD truck was around 1250 miles each way.  On the highway, I averaged 70-75mph, depending on the speed limits, of course, but on that trip, the diesel truck managed to get 19.3 MPG.  I stopped twice for fuel, each way, topping-off a little before hitting the road for the return trip.  At roughly the half-way point on the way home, after topping off, my range said 647 miles.  Of course, it also sips diesel exhaust fluid.  That’s a truck that likely weighs well beyond double what the diminutive Tesla weighs.  I made the same trip a couple years before in my Mustang GT, which is probably closer to the same weight.  I averaged, well, let’s say “the same speed.” In that car, I managed 23.7 MPG, though in honesty, if I’d made more judicious use of my accelerator pedal, I might have done somewhat better.  The point is, neither of the vehicles I mention are “fuel misers.”

The truth of all of this is that you can’t hide from reality in the end.  Physics is.  Chemistry is.  Math is.  Some people need to spend a good deal more time at all three.  The truth, however, is more plain when it’s undisguised.  That’s the one thing this gentleman, the owner of the Youtube channel Warped Perception has fully exposed.  I’m not sure if that had been his motive, but if so, he’s succeeded.  His other Youtube channel is called Matt’s Lab, where he describes himself this way: “I’m an Engineer, lover of Science and Mechanics and also a Filmmaker.” If he’s an actual engineer, he surely knows all of this, but again, that may have been his point:  All EVs are at least in part powered by fossil fuels.  That’s because the electricity being generated elsewhere to charge the EV is probably burning fossil fuels.  You can’t escape it.  The idea that we can replace internal combustion engines in any practical sense with EVs is simply madness.  In his attempt to make his Tesla EV more practical, what he’s done is to simply unmask the whole EV scam.

The one thing that actually is more efficient about his mobile power-generation, at least theoretically, lies in the fact that there aren’t many miles of cabling between the source of the energy and its destination in the Tesla’s batteries.  You see, much energy is lost in the transportation of energy because of a little thing called “resistance.”  Measured in Ohms, it’s a measure of how much impedance a given current encounters while traversing a given conductor or device.  Rubber is a very poor conductor, which is why it’s often used as an insulator on cabling, while copper and gold are excellent conductors, as are most metals.  Aluminum is common in transmission lines, but one of the problems with aluminum is that it has higher resistance to current than copper, but because it’s lighter and much cheaper, it’s used there.  Chances are, the power cable that runs from the transformer on the pole near your home is aluminum.  In any event, for every mile and foot of cable between the power plant and your home, energy is being bled-out by this resistance in the form of heat and electromagnetic radiation.  It’s one of the costs of an extensive, lengthy distribution grid.  You’re bleeding energy all the way from the source to its point of use.  In this sense, his “Cordless Tesla” exposes another problem people don’t understand in this discussion generally:  In most instances, it is far more efficient to generate power where it’s being used, rather than to generate it at a distance, transmit it over miles of cable, through transformers, and ultimately into a chemical storage device(battery) from which it will be again transformed back into current on demand.  At each transformation along its path, and in the process of storing it and then pulling it from storage, there is a certain amount of loss built into each step.

He could make his generation more efficient by getting an even larger generator, and just driving the electric motors directly from the generator. To get the acceleration he sees now, however, he’d need a really large generator to produce the bursts of current he’d need, and transformers, as well as more weight and more fuel.  At that point, he’d be better off simply getting rid of the generator, keeping the motor, and hooking it directly to his transmission, and then do you know what he’d have?  A standard gasoline-powered car.  In the end, you have a vehicle just like the ones we’ve been driving for generations.  Problem solved.  Genius!

The most efficient solution that would also be as practical as gasoline or diesel engine is something else entirely, assuming you’re dead-set on getting rid of fossil fuels:  Hydrogen.  You can even keep the internal combustion engines.  All you need is hydrogen, which is in every molecule of water on Earth.  The problem is storing it.  You can derive hydrogen by simply using an electrical process to split the water molecule into its constituents, using electrical current.  The tricky part is that hydrogen in any quantity is quite combustible, and explosive.  There are methods for storing hydrogen that would be completely safe, or at least as safe as gasoline.  If the society used primarily nuclear power, augmented by wind, solar, geothermal, and hydroelectric, the problem becomes much easier to address.  You could have a hydrogen station anywhere you have a supply of water and electricity, which means they could be as widely distributed as gasoline, diesel, and other fossil-fuels. Gas stations would be replaced/upgraded to hydro-electrolysis stations.  The best news is that the exhaust from your car would be heat and water vapor. Quick fill-ups, back on the road in minutes, with the convenience and range to which you’re accustomed, with the added benefit of a mostly clean exhaust stream, all of which could be yours without the EV scam, and reliance on China for rare Earth minerals and the ecological catastrophe of battery disposal for the cells used by EVs. You’d still need your common lead-acid batteries, just like the ones you use now, but that’s not an obstacle.

People buying into the Electric Vehicles are being scammed.  There are many hidden costs people don’t yet see, although the impracticability of these EVs becomes pretty plain to most folks who buy them.  Early indicators are that many people who buy one EV are unlikely to buy a second. This is a bit like Biden voters: Having chosen him once, many aren’t apt to do so again. Obviously then, while it’s harder to convince people they’ve been fooled than it had been to fool them in the first instance, it’s clear that one’s wallet is a powerful persuader.

 

 

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Posted in Climate Hoax, Economics, Energy, Environmental Hoaxes, Featured, Global Warming, Politics, Science, video | Comments Closed

Oil Price Slippage Constitutes Warning

Sunday, May 6th, 2012

Producing Our Economic Life-blood

Over the life of this blog, one of the subjects that has arisen repeatedly is our energy problem, and the effects Obama’s policies are having on our nation’s economic condition.  I have offered you charts, graphs, economic theory, and an understanding of why we remain in the economic trouble we’re in, and much of our troubles originate with energy concerns.  Again validating what I’ve previously reported, global oil prices are now falling in response to the economic outlook in the US and in Europe.  The reason I again bring this to your attention is not to thump my chest, since there’s nothing revolutionary in what I’ve argued, but instead to reinforce the point, because in the broader media, there are too many sources interested in obfuscating and otherwise muddling the matter.  To have a growing, vital economy, the US has relied historically on inexpensive energy.

The American economy is a vehicle of vast capacity for growth, and the American people remain its vital engine, both as consumers and producers.  What the Obama policies have done is to choke down this engine, and the result is an economy that is bottom-bouncing at an idle, struggling for air that a reckless government policy forbids it to consume.  Every time the American people start to accelerate, the market effects of the regressive policies of our government govern the capacity of our economy like a vast engine choke. You could rightly call the policies of Barack Obama the “stuck choke” of American economics.

An engine makes a great analog for the state of our economy, because an engine must both consume energy, and convert it into motive power.  In a healthy state, that’s what the US economy does, and it’s why we must not ignore the grave costs of the current Obama policies.  Consider what happens when you step on the gas in your car:  The throttle opens up, allowing the engine to draw more of the air-fuel mixture, permitting the engine to accelerate, reciprocating more rapidly, and those converting the energy to the horsepower needed to make the vehicle go.  This is how our economy functions: It’s demand for consumption increases, and we have traditionally answered it by permitting more air-fuel mix(energy and capital) into the engine, and it accelerates(grows) providing output some of which is reintroduced back into the stream going in.  It’s a marvelous thing, and the prosperity of every American increases on average.

The situation we’ve been placed in by the Obama policies, combined with the inflationary policies of the Federal Reserve is that the air-fuel mix becomes prohibitively expensive.  Imagine driving down the road at 30mph in order to conserve fuel.  You could come up to speed, but because fuel is so expensive, you really can’t afford to put your foot in it, so instead, you patiently move along at a snail’s pace because you’re trying to do the minimum consumption you can manage and still get to your destination.  This is what happens each and every time the economic engine gets going these last several years:  The price of fuel begins to tick rapidly upward, we get a price spike, and everybody goes into conservation mode, and as a result, the economy slows down.  Naturally, as soon as the economy slows, the prices for fuel begin to fall again, and one can expect that at around the time they hit the bottom of the trough, people will begin to feel safe accelerating their cars back up to highway speeds, and the process begins once more.

The slippage in oil prices this week constitute a warning, because what it implies is that you’ve already hit that point of conservation.  Of course, it’s not merely consumers, but businesses and every form of productive endeavor that uses energy, which is of course all of them.  In that environment of rationing, what occurs is that people necessarily become more frugal, but so do businesses.  It’s unavoidable.  You can only afford to spend so much of your capital on energy, because you must still pay for all of the other necessities of living, and the United States has been operating very close to this line for several years.  A rational Federal policy would realize that this is a supply-side problem, and that to alleviate the problem, what we must do is increase the supply of energy available to the market, but our government has instead answered with tepid notions about conservation, and highly speculative and fanciful programs for “green energy” while it chokes off the supply of real energy to the market.

This is our situation, and the current drop in oil prices is a result of the fact that our economy is again on the downside, and that is further substantiated by the poor numbers of jobs being created.  At this point, it should be so obvious to every living person with two brain cells remaining to clack together that there ought to be a national movement to remove any politician who isn’t focused on this problem.  Instead, we have an administration that is dithering, and is actually making things substantially worse through its regulatory paradigm that insists America simply do more with less.  This insane, nearly maniacal policy is impossible to sustain, because it is driving us to the poor-house, and yet the radical left is fine with that outcome.  They want to make us poorer, and the reason is clear:  Poor people who must choose between groceries and gasoline are easily managed by a central authority, and they are only too willing to do the “managing.”

Let us place this in context:  Imagine that you have a home that is all electric.  Many Americans do.  Imagine that the power grid that supplies electricity to your home generates that power with coal, oil, and nuclear processes.  You might also have a little hydroelectric power, or a little wind and solar, but on average, those supply only a small fraction of our power generation.  Remembering that oil derivatives are one of the primary fuels used in power generation, what happens if we take away one of the others, like coal?  Coal currently provides half of our electric generation, nationwide.  What happens to the price of oil and all its derivatives, including the gasoline or diesel for your vehicle when coal is taken away from power generation?  The answer is obvious, and so is the result, because we’re living it.

Understanding the relationship between energy and our economic prospects is key to understanding our current economic malaise, and the impending disaster we face if our policy is not soon changed to promote more energy production, and to unshackle energy producers from the chains that prevent them from providing to the market the energy that a growing economy requires in order to sustain itself in that state.   This is why Newt Gingrich’s idea of $2.50/gallon gasoline was important, and it’s also one more reason so many of us had hoped that  we would see a Sarah Palin candidacy, because she understands, perhaps better than any other politician in the country, how thorough is our reliance upon energy, but also how to best develop the resources we already have at our disposal.  We desperately need an “energy President,” who understands that growth and prosperity are only possible with abundant and inexpensive energy, permitting the American people to do what they already know how to do, and want to do: Build, grow, and prosper.

The proof of this thesis is contained in our cycle of boom-spike-conserve-bottom. When energy prices fall, the economy (and the American people who drive it) respond with jobs, growth, and productivity.  The problem is that in our current environment of government regulation and governmentally-induced inflation, when the growth begins, the price of energy begins to immediately climb upward, eventually spiking to unsustainable costs.  This places the entire economy into conservation mode, and very rapidly, we slide to the bottom again.  It’s no longer a matter of proving the theory.  It’s proven, and the evidence is all around us, but until we make the conscious decision to end the misery, we’re stuck.

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Posted in Barack Obama, Economics, Energy, Featured, News, Politics, Sarah Palin | 5 Comments »

Viral Video: If I Wanted America to Fail

Monday, April 23rd, 2012

I had this video passed along to me, and I must say that it’s very much in line with what I’ve been saying on this blog since its inception. Those who want America to fail are indeed following this model, and while the Obama administration fiddles, America is burning.  This video was published by www.freemarketamerica.org, an organization that says it exists to fight for free markets and against the environmental extremists.  Take a look. It’s well done:

[youtube=http://www.youtube.com/watch?v=CZ-4gnNz0vc]

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Posted in Activism, Economics, Energy, Environmental Hoaxes, Featured, News, Politics, Video | 10 Comments »

Running on Empty: Petrol Panic in UK

Monday, April 2nd, 2012

Could We Face the Same?

I recommend my readers check out this piece over the UK Telegraphon what is going on with our friends across the pond.  They’re experiencing a fuels shortage to the extent that the government is being urged to begin an emergency program of rationing.  The issue began when a union of truck drivers who deliver fuels threatened to go on strike, and a government official, Francis Maude, a Cabinet Officer advised people to fill up their tanks and store fuel in storage containers.  Quite naturally, the people responded by doing just that, emptying filling stations everywhere.  While telling the people not to panic, the British government incited a panic, and the resultant run on fuels, in a shortage so severe that first responders there are having difficulty finding fuel to run their ambulances.   What we should learn from all of this are at least two important lessons, and I hope my readers will take note:  Governments cause panics by their actions, but more importantly, our fuel supply is more vulnerable than most people think, because of the structure of the supply chain.

If you drive to your favorite filling station, most days there will be no problem.  You’ll simply dispense the fuel, pay and depart, and there’s no fuss about any of it.  What most people don’t realize is that the amount of fuel out at filling stations is based on the expected, ordinary quantity demanded, and while there may be some small amount in surplus, it’s really not much more than a day or two extra under ordinary conditions.  Fuels are dangerous to store in large quantities, and EPA regulations have made the job harder, but most important is the notion of just-in-time inventory management which means retailers don’t keep more on hand than they will immediately sell under normal conditions.

The reason this matters to consumers is that it means that any small fluctuation upward in quantity demanded can quickly lead to a shortage. As we should have learned in the aftermath of hurricanes Katrina and Rita, anything that causes a shortage at the margins in one locale can quickly spread to others.  If there’s a run on fuels in just a few key locations locally, it can spread like a wildfire as displaced customers shift their demand to other locations, driving those to shortage, and thus pushing the shortage around.  As the shortages spread, panic takes hold, so that people descend on every location for fuel they can find.

This tells us a little bit about the psychology of the market and why such shortages can materialize for no apparent good reason, looking at the matter on a macro scale:  Is there enough fuel for immediate demands? Had people simply gone on with their ordinary purchasing patterns, would there have been a serious market-wide shortage?  No.  The problem lies in the fact that people can be moved by fear and uncertainty regarding the immediate future.  The notion that some days in the future, tanker drivers in the UK might be on strike, and might cause a shortage, was enough to cause a government official to make remarks that started a panic.  Even if the strike never materializes, it will take days or even weeks for the UK to restore things to the normal flow.

What this also should remind us is that on-hand supplies at retail outlets is never nearly what the whole market might demand at once.  At any one time, the capacity of every filling station is just a small fraction of the total capacity of every vehicle’s tank.  When everybody goes to fill up at the same time, the situation is made evident, because the on-hand retail supply can in no way match the condensed time frame of such a move by consumers to tank-up.  In the UK, they’re openly talking about rationing now as a way to restore the normal flow.

The more interesting part about this problem is the human psychology implied: When faced with potential shortages, we tend to horde in response, and this can clearly add to the problems.In the US, where we are much more dependent on fuels to maintain the course of our daily lives, commute and travel distances being so much greater, we’re especially vulnerable to panics generated by short-run, geographically-limited marginal shortages. For this reason, the US can be subject to very small-scale shortages turning into regional or even nationwide problems.  It doesn’t take much.  If a few gas stations over a metropolitan area run short, it can ripple outward and spread like a virus. People begin panic-buying almost as soon as they hear that there is a shortage somewhere nearby.

This is why our current situation is actually so precarious.  It doesn’t take much but a day or two of delayed replenishing in distribution to cause a serious problem.  This is also another reason we should seek to increase not only the amount of oil we produce domestically, but also to increase our refining capacity. The situation underway in the UK  is small compared to the impact such a panic could cause here, primarily because the geographical expanse of our country means that public mass transit isn’t economically viable in most areas.  In short, we need our fuel, and our lives have evolved to depend upon it.  It’s bad enough when governments do idiotic things like start a panic, but what’s worse is when they’re so utterly unprepared when they happen without government prompting.

The American people should be made aware that panic hoarding only worsens the problem and increases the span of time before a situation driven by natural disasters is resolved.  The goal in such a situation should be to delay purchase as long as possible, but that’s so counter to our nature that I don’t expect many people to react in perfectly rational ways.  The other problem we face is political, in that too few Americans understand just how fragile this system has become, and with it, all the dependencies upon which it relies.  If more Americans understood just how reliant they really are on an energy supply to maintain their standard of living, they might bring more pressure on politicians to get out of the way.

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Posted in Capitalism, Culture, Economics, Emergency Preparedness, Energy, Featured, News, Politics | 6 Comments »

Score Another Victory for Obama’s War on Americans

Tuesday, March 20th, 2012

Record March Fill-ups

Gasoline prices at the pump are now officially higher than they have ever been in the month of March, at a nationwide average of $3.87 for regular unleaded gasoline, breaking last week’s new record by four cents, but more than double the price when Barack Obama took office thirty-eight months ago.  At my own regular filling station, it was $3.63 up from $1.46 on inauguration day at the same pump in 2008.  That’s another change we could have lived without.  Of course, diesel fuel for the tractor and the farm truck now stands well over $4.20/gallon locally, and with this jump in prices, I expect these “green shoots” the Obama economic team and its shills in the media keep talking about will now wither, though most have seen scarce evidence of recovery anyway.  Barack Obama and his Secretary of Energy Steven Chu are getting what they desired:  European energy prices levels and European economic stagnation.

There cannot be a sustained economic recovery until energy prices are brought down.  There’s simply no mitigating the matter otherwise.  Since this President isn’t interested in bolstering America’s economy, he continues to stubbornly wage war against the energy sector, but those who pay the real price are always American consumers.  No new drilling in the Gulf?  Prices go up.  No drilling in ANWR?  Prices go up.  No Keystone XL pipeline from Canada?  Prices go up.  Shutting down coal-fired electric plants?  Prices go up.  Delaying tactics on new nuclear power stations?  Prices go up.  Supporting unrest in the Middle East, and playing patty-cakes with OPEC tyrants?  Prices go up.  All of these things and more, the Obama administration has done to put a strain on the energy sector of the economy, and we consumers pay the prices.  Now he’s talking about another release from the Strategic Petroleum Reserve, but with the possibility of aggression by Iran looming, is it smart policy to sell off part of a reserve that constitutes one day’s worth of oil consumed by the nation?

The fact is that we cannot sustain this course much longer.  Each time oil prices spike, it hollows out the economy, and it chokes off economic growth. Unless and until that pattern is broken, we’re not going to see a sustained recovery, and this means we’re not going to have unemployment fall appreciably.  This ought to be the season when new housing starts begin to accumulate, but the housing market is still on its heels because so many houses are still vacant.  We overbuilt during the housing bubble, and in a natural market, without government interference, we would have seen many fewer houses, but we also would have seen many fewer foreclosures.  This is the problem into which you run when government meddles in markets of any sort, but what makes this time worse is that we have a President who is bound by his ideology to pursue this course.

Barack Obama can stand at the podium and tell reporters it wouldn’t be smart for a President to want higher gasoline prices in an election year, but this is a man who campaigned for office promising higher energy prices across the board.  We now have them.  Barack Obama isn’t a failure, from his point of view, because he’s accomplished what he said he would do.  The problem is that far too many Americans were taken in by vague platitudes of “hope” and “change,” but few seemed to really understand what sort of change they had signed-on to impose.  Of course, it’s now too late to cry over that spilled milk.  Instead, we have a new opportunity to unseat this President before he can achieve another “victory” in his war against America.

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Posted in Barack Obama, Energy, Featured, News, Politics | 2 Comments »

Bill O’Reilly’s Economic Idiocy Almost as Bad as Obama’s

Friday, March 9th, 2012

Bloviator-in-Chief

I seldom watch Bill O’Reilly, because if I want to listen to somebody pontificate on subjects about which s/he knows little, I can simply re-run Joe Biden’s most recent speech…in any time-frame.  Thursday evening, O’Reilly was on when I came through the door, but since he seemed to be talking sensibly about the Fluke Fiasco, I listened briefly with interest, but in the very next segment, he went on to discuss the price of oil, demonstrating he’s at least as ignorant as Barack Obama pretends to be on the subject. Part of it is driven by the fact that O’Reilly is a panderer who tries to placate ‘the folks’ while serving his masters in the establishment.  His oft-mentioned Harvard degree clearly isn’t in economics.  As usual, O’Reilly failed to identify the actual causes of the high energy prices accurately.

Naturally, being a  panderer, he talked about “speculators,” but he failed to mention even one valid reason that makes up the bulk of the increased prices we’re experiencing at the pumps.  Since O’Reilly did such a masterfully incompetent job of explaining the issue, I feel duty-bound to correct the record, or at least explain it.  There are really five major factors controlling the prices you pay at the pump, and while speculation might be a distant sixth in importance, it really has little to do with what you pay most of the time. Rather than lead you in circles of pompous pandering, let me try to make it a good deal more clear.

By far, the biggest factor in the price of the fuel you buy at the pumps is the price of crude oil itself.  As the amount of oil being supplied to the market contracts, or the quantity of oil being demanded increases, you can expect a corresponding movement in the price you pay.  When producers get together as a cartel(OPEC) in an attempt to restrict production, this will necessarily constrain the supply, and you will generally see higher prices, unless you have some manner by which to throw a significant monkey-wrench in the mechanism, for instance being able to increase your own domestic production, or by augmenting the supply to the market from a reserve.  This should seem simple enough to most people who studied basic economics in High School, never mind earning a degree from that institution of fame we might call “Hahvaad.” The available supply versus the quantity demanded will always dominate the basic calculation.

Another factor that is nearly as important to consumers in a given country is the relative value of their currency in the world oil markets.  The US has enjoyed the distinction of possessing what had been (and still remains, barely) the world’s reserve currency and the currency in which oil trades are made.  Unfortunately, as our Federal Reserve has printed more dollars out of thin air in order to bail out the banks, and Europe, but also loan to our Federal Government to feed it’s insatiable hunger for dollars, we have seen the value of our dollar fall dramatically in the last few years.  This means that no matter what commodity you buy, it will take more dollars to buy one unit as compared to before.  In late 2010, when the Federal Reserve announced QE2(Quantitative Easing, Round2 – a.k.a printing vast sums of cash,)  Sarah Palin, the former Alaska Governor, took to the podium to warn Americans that all of this money-printing by the Fed would result in higher food and energy prices.

Some people, mostly jerks like Paul Krugman of the New York Times actually mocked the Governor for that prediction, and even Fed Chairman Ben Bernanke got in on the act.  After all, what would a former governor of Alaska know about it?  As you probably know by now, she was right on every count.  Everything she said came to pass with respect to the inflationary effects of “Quantitative Easing.”  Score another one for the lady who knows how to take down an elk, but also a pompous commentator.  She understands the energy markets, meaning she knew how the monetary policy of the Federal Reserve and the unrestrained borrowing of the Federal government would wind up effecting the general economy, but particularly the energy sector.

The next thing that affects the price of oil is the availability of substitutes.  For instance, a fair amount of the electricity generated in the US comes from petroleum distillates and residual products from the refining process.  There are just a few commercial alternatives, and apart from nuclear power, the vast bulk are fossil fuels, including oil, but also natural gas and coal.  The grand total of wind and solar energy production nationwide doesn’t provide what one nuclear plant does, so let’s call that source negligible in any commercial sense.  Coal accounted for more than half of all electric generation in the US prior to Obama’s arrival in Washington, but due to regulations being slapped on the energy producers, coal-fired plants are rapidly going extinct.  As this happens, plants that use other fuels are necessarily being forced to pick up the slack, running at closer to 100% capability, and some of those plants use…oil and its byproducts.  So you see, as you reduce the use of substitutes, it necessarily will cause an increase in the price of oil.  Like in any market where substitutes are available, the reduction of the availability(or use) of one will cause a corresponding increase in reliance upon another.  If beef prices go up, before long, people will shift to pork and chicken, and then the prices of these substitutes will move up also.

The fourth big factor affecting the price of fuel at the pumps is government taxation.  If you live in a state like mine, where we pay a federal and state excise tax by the gallon, it’s bad enough when the Feds increase the taxes, but if you live in a state where the tax is a percentage, you really get blistered by any upward movement in fuel prices, because not only do you pay more in fuel, but you also pay a good deal more in taxes on it.

There is another factor that comes to mind, and it has to do with the distribution of the product, and how temporary displacements and shortages like we saw in 2005 with Hurricans Katrina and Rita caused trouble depending upon where you were and what the distribution chain that feeds it looks like, but those sorts of problems are a result of what happens when Just In Time inventory management tries to contend with the unexpected that Mother Nature throws our way.

We currently do not find ourselves under that sort of instability in the distribution chain, and this only goes somewhat further in explaining why the fuel price spikes we saw under George W. Bush bear little resemblance to the structural causes of the high prices we face today.  Four dollars for a gallon of gasoline may not be entirely new, but resulting from something other than an ongoing distribution chain problem as a result of natural disaster, it is most certainly unprecedented in the 21st century. Today’s  closest analog occurred under the administration of Jimmy Carter, if that tells you anything.

Together, these five factors have much more to do with the price of fuels than anything Bill O’Reilly mentioned. Speculators play a role, but by the time you add up the five factors I’ve mentioned, what you discover is that while speculators can drive things a little in one direction or the other, most who trade in commodity futures wind up losing, at least according to the statistics.  Besides, they are an important part of the market too, and to pretend they have no other function but to somehow cheat consumers is a laughable bit of Marxist theory often pushed by panderers in both parties. Realize that listening to economic analysis from Bill O’Reilly is roughly analogous to getting investment advice from a fortune cookie:  It contains only meaningless platitudes that will gain you little more than a moment’s amusement, but will reveal no cosmic truths.

Now, think of Joe Biden speaking.  See my point?

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Posted in Business, Economics, Energy, Featured, Media, News, Politics, Sarah Palin | 7 Comments »

The Obama Volt – Video(Humor)

Friday, March 9th, 2012

Change?

Somebody did me the kindness of forwarding me this video, created by Ben Howe.  It’s clever and straight to the point.  Best of all, it was good for a laugh. It’s a short video that makes a point about the entire Chevy Volt fiasco through the lens of we who have been shafted to pay for it. If you’re an Obama fan, or simply an environmentalist who believes in all of this “green energy” nonsense, you may not want to watch. Hopefully, sane Americans will find it entertaining.

Enjoy:

Chevy Volt – Building a Better Tomorrow from Ben Howe on Vimeo.

 

 

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Posted in Barack Obama, Energy, Environmental Hoaxes, Featured, News, Political Humor, Politics, Video | 5 Comments »

Obama Says Energy Costs Beyond His Control; Not So Fast

Thursday, March 8th, 2012

Something Stinks

Barack  Obama has been on the campaign trail mocking Republicans, particularly Newt Gingrich and Sarah Palin(although not by name,) who advocate an energy policy of increasing domestic energy production.  This is a bit odd, because while Obama mocks “Drill Baby, Drill,” he has already undertaken policies with the same effect in mind.  If increasing the supply can have no effect on prices, as the President claims, why did he order a release from the Strategic Petroleum Reserve late last summer?  It’s now rumored that he will soon do so again in response to rising pump prices.  Does Barack Obama think we’re idiots?  Releasing oil from the SPR merely accomplishes the same thing as producing more oil domestically:  It provides more crude oil to the market, and that bump in supply tends to bring prices down over time.

Either Barack Obama doesn’t understand basic economics, or he thinks we’re too stupid to notice the contradiction implicit in the difference between his words and his actions.  Here’s what he’s saying:

 

 

Notice that he continues the lie about the so-called “hand-outs” to “Big Oil.”  You may hear his thesis that “there’s no silver bullet,” but what you must understand is that he fully understands that the silver bullet is supply, and when he has order releases from the SPR, it’s an acknowledgement of the fact that an increase in the supply available to the market is a downward pressure on prices.  This is pretty basic, and I assume even President Obama understands that concept, despite frequently demonstrating a a general ignorance of economics.  If he knows better, then there must be a reason he’s misstating the facts in this case, and there is:  He’s in political hot water over the issue, and he knows it.

This is his attempt to stave off criticisms over escalating fuel prices, but it’s not going to work when the electorate realizes that in other ways, Obama is working to constrict the supply of oil available to the United States.  On Thursday, even Mitch McConnell seemed to get it, and from the well of the Senate, he pointed out that Barack Obama is still obstructing the Keystone XL pipeline, and all of the jobs it would create, and the effect it would have on pump prices domestically:

 

[youtube=http://www.youtube.com/watch?v=0GJ_GfcOv2o]

 

Unloading On The Campaign Trail

This is a plain debunking of Barack Obama’s thesis, and Obama knows it.  You can’t expect fuel prices to come down so long as you’re restricting the growth of exploration and development of new productive fields.  Why does Saudi Arabia, in particular, but OPEC in particular regulate its production?  The answer is obvious: To prop up the prices oil brings in the market.  They intentionally restrict supply, and what increased production of domestic oil resources will do is to take away the ability of Saudi Arabia and other OPEC nations to effectively dominate the question of global supply delivered to the market.   Doing so will begin to have an immediate effect, as the oil market, like any other sees dramatic moves on the basis of even small marginal changes in the quantity supplied relative to demand.

Obama can’t talk his way out of this one, and worse, he’s been caught lying. You can’t legitimately claim that to increase  supply won’t effect prices while having undertaken measures to artificially prop up supply in order to drive down prices.  This is the nature of Barack Obama’s dishonesty, and it’s all political. I leave you with this:

[youtube=http://www.youtube.com/watch?v=gpdjt3hSRnY]

Update: I just received this link via email. It’s a story on RightScoop, same basic subject.

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Posted in Barack Obama, Economics, Energy, News, Politics, Video | 5 Comments »