Friday, April 11, 2014

Are you ready to declare Independence from High Gas Prices and Expensive Electricity?


Would you like to be free from the fiscal power grip of the gas pump and the electric bill? We all do, don't we? There's some good news to report. But before we can appreciate the welcoming facts, we've got to get the bad news out of the way first.

Gas prices once again are going up and up...and up.

Here we go again! Many Inland gasoline outlets are surpassing the $4.25-per gallon mark with some breaking $4.35. We can go on all day and belly-ache about this troubling trend but we have to say that there are several Americans who are ready to declare independence and self-reliance from the pain at the gas pump and there are many Inland Empire citizens who long to be free from the expensive power bills and monopoly of Southern California Edison. The high cost of both of these forms of energy has long obstructed the market economy.

Ridesharing and taking transit have long proven to be powerful ways to combat high gas prices and stats show that price spikes often lead to more commuters into taking transit and carpooling. That has been one of the best short-range solutions to declare "enough!"

However, if the high gas price situation stays the way it is, it will be very difficult for the Inland Empire to have a robust vibrant economy and a clean environment simply because the bloated prices weakens the spending power of the dollar. Worse yet, one can only wonder what happens to all those oil profits that flow into the Middle East through OPEC.

What exactly is going on at the gas pump? It's actually not a supply and demand issue as some in the industry claim. That's the political spin. It is very clear that Americans are doing their parts in consuming less gasoline, conserving, ridesharing, and driving more fuel-efficient cars even though fuel taxes are at record levels.

OPEC has a near-monopoly power grab on this situation. Oil supply and production in the Middle East are intentionally kept low to keep demands artificially high. That keeps prices bloated. Here at home, the big oil oligopoly is exporting significant sums of our inventory to other countries to the point where demand exceeds domestic production. That too keeps prices inflated even though we have plenty of oil. That means more domestic oil drilling is not a solution.

Bring in oil speculation. Investing in oil is a legit business practice but there is a line that has to be drawn; that is, the destructive practice of artificially increasing the price of a barrel of oil for the sole purpose of making money off of the higher prices. Like the artificial speculation of the real estate market which contributed toward the great 2008 economic recession where foolish investments had nothing really to do with the housing trade, these investors want nothing to do with the physical oil barrel. It's all about the money.

When such speculation occurs, companies like Arco, Chevron, and Shell hike their prices quickly by pointing to the artificially inflated value of a barrel of oil. When the price of oil drops, oil companies will often wait for a set period of time to lower their prices as they are betting on the possibility of the speculators to drive up prices once again. We are all caught in this casino-like crossfire and voters should hold the state and federal government accountable of outlawing such artificial market manipulation. Again, legit investments are good, but artificial speculation of the market economy is destructive to the United States.

And now, some good news which may free us all from this madness and greed of power.

Independent private sector entrepreneurs are responding by voting with their hands and labor by introducing innovative clean products that can compete against the monopoly. They are electric cars and solar panels.

The Maturing Electric Car

© Steve Jurvetson CC-BY-SA
On March 30, CBS featured a 60 Minutes story of the start-up car company Tesla founded by entrepreneur Elon Musk who also founded PayPal and worked on the Hyperloop, a pneumatic tube transport designed to quickly move people. You can read more about our views of this innovative technology here.

According to the report, the Tesla car plant manufacturers 600 Model S electric cars per week. The car drives very quietly but looks and functions like a modern four-door passenger vehicle. It is powered by 7,000 battery cells and can drive up to 250 miles on a single charge. The vehicle is currently worth about $71,000 for purchase or can be leased for about $408 per month. Demands are high enough where buyers are wait-listed.

The price is still a bit on the high side, but Tesla appears to be heading toward success given strong demands. Other major car companies certainly will have to jump aboard this technology in order to compete and bring the prices down and tax incentives need to continue to be offered to expand all-electric motor technology to larger vehicles requiring strong horsepower.

Some electric car critics claim that the new technology will overwhelm the electrical grid and hike power prices. In response, Musk envisions charging stations powered by solar panel technology. Because the stations would be independent from a centralized grid, drivers would pay nothing to refuel. So the question now is just how is solar power faring these days? 

Smart economic growth concepts in Moreno Valley
Watch out Southern California Edison. Your monopoly days are done.

Solar energy is proving to be headed toward an industrial victory. The technology continues to mature at a rapid rate and the facts are now proving it. Rooftops of homes and commercial buildings are turning into self-reliant solar power generators. Panel prices are dropping as competition, production and supply increase. Better yet, according to a report released yesterday by the Environment California Research and Policy Center, Los Angeles and San Diego lead in production.

If entrepreneurs continue to grow this technology to the point where the cost of per-watt solar power production drops below coal, nuclear, and oil, we will see massive economic growth ahead as we the people will have plenty of extra spending money that would otherwise go to the gas pump and Southern California Edison. It is safe to predict that such panels with do-it-yourself installation kits and affordable prices may wind up on a shelf at the local Home Depot within a few years or less.

To be fair, giant concentrated solar power plants like the Ivanpah Solar Power Facility still have some work to do ensure surrounding ecosystems are not negated given their sprawling sizes. However, individual property solar panels are bringing us into a new and clean form of self reliant, energy production. This is a win-win reality.

Ecosystems and the Pro-environment lobby will get a cleaner Earth. Companies and the Pro-business lobby will get a robust market economy. Workers and the labor union lobby will get a stronger job market which in turn means higher salaries and benefits. Every American should be supporting these innovations.

Addressing the Fuel Tax Fund

With all of these good news going around, there's one small problem both the state and federal government are going to have to deal with: Replacing the fuel tax.

As cleaner, gas-free cars make their way into the marketplace and become the norm, the fuel tax fund at the state and federal level will eventually dry out. That's a reality. Here's a debatable but fair solution:

Future federal and state transportation tax revenue would come out of general tax receipts. How to fairly calculate the amounts would boil down to this: Economists--not politians--would calculate and predict how much money citizens are saving by not having to pay the outrageous gas prices. They would be tasked to find out how much more money that would otherwise be feeding the big oil monopoly is going into other sectors in the market economy in the form of increased spending sales, jobs, and interest from savings. They would figure out how much more tax revenue the government is collecting through these means. Economists would take that figure to calculate a fair percentage of the general fund that would fund future transportation and transit projects. Again, this is debatable and feel free to post any views in the comments.

We also understand that even more solutions are going to have to take place to ensure a smooth transition which includes revising incentives to rideshare or take transit and removing free carpool lane access for solo drivers of the clean cars. Such plans will certainly have to be debated in the public forums. We'll talk more about this next week.

One last question and stat: Will the world run out of sun power? Short answer: Not as long as the sun continues to shine. A 2006 Ecoworld article reports that the total solar energy hitting the Earth each year adds up to a whopping 12.2 trillion watt-hours. Do the math. The Earth takes in more than 20,000 times more solar heat energy than the entire world population consumes each year.

4 comments:

  1. I fully expect electrician and lineman unions to put up a big roadblock in the quest to getting solar kits into Home Depot that the DIY end user can install on a Sunday morning. Which is unfortunate because people will still do them, just with questionable materials and methods instead of with a tested kit.

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    1. Marven, you raise some valid points: Regarding quality, as solar technology evolves, the federal government will need to step in and pass/enforce safeguards to ensure panels do not create a fire hazard nor expose the end-user to risk of electric shock.

      Under the market economy, competitive entrepreneurs can step in, pitch to the buyer of a major retailer like Home Depot and introduce DIY products even if existing solar-panel-based electricians and labor unions object. The irony is that there are many end-users that would need some kind of help installing the panels, much like doors, light switches, ceiling fans, toilets and other household goods. That would generate high demand and competition for third-party licensed installation services. That's the nature of the market economy.

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    2. I actually work with an electrician's union, and they are very, very happy to see solar power becoming a thing. Most people aren't going to muck about wiring solar panels into their electric meter-- as well they shouldn't, that's a good way to get yourself fried if you don't know what you're doing-- and they see a lot of prospects for business in solar installation.

      Realistically, the solution is some kind of hybrid, where you get on the roof and bolt the panels on, and hire an electrician to connect them to the grid.

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    3. That could very well be the reality which will certainly bring a positive impact toward self-reliant, clean and renewable power production which very well could support the growing electric car market.

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