The debate about energy independence will begin to become a very large issue for the Presidential election. There have been little bites of it strewn throughout the Republican debates but it has yet to become a full-blown issue. It needs to be the primary driver of the conversation because without a robust energy policy, there stands a good chance that the manufacturing base in this country will remain flat. We are beginning to see signs of the unsustainability of the solar panel business here in the United States, and the public is beginning to realize that although the idea of alternative energy is altruistic and environmentally sound, it is very much in the infancy stage and the government needs to get out-of-the-way and allow the private sector to grow that industry. I feel in time it will become a decent size part of how we power our world but that is years away. What is here and now is three items. Oil, in all its forms, Natural Gas, and Corn.
Oil it seems is everywhere. From gasoline to plastic, oil is a primary ingredient in much of our world and will be a dominant player in our economy, both socially and politically, as long as it is around. It drives our trucks and our machines and so it exists at all levels of production in our manufacturing world. Its importance cannot be overstated.
Natural Gas is next. It is used to make fertilizer. It is used to generate electricity by powering power plants. It is used in refrigeration and now we are seeing a push to use it to power the trucks that ship our goods. It is an incredibly valuable commodity that we are fortunate enough to have in abundance.
The new/old player is Corn. Corn is everywhere. It is the base product for almost all animal feed worldwide. Think about that for a while. It is all through the grocery store-corn syrup, cereal, corn starch and let us not forget that high fructose corn syrup is the glue that binds almost all foods. Thanks to the government, now it is in our gasoline.
Now we grow corn to burn it for fuel. Brilliant.
These applications don’t just apply to us in the United States, they apply to the world. Corn is the number one crop in the whole world and the main fertilizer used to grow corn (and most other crops) is Urea which is made from Natural Gas. Are we beginning to see the pattern?
Everything in our world (the United States) was going along fine until China and India, and Russia, all became players on the world food stage. We cannot forget that the push for democracy and reform in these countries is great for those being oppressed but the western world has suddenly been hit with 2 billion more mouths to feed. These economies are trying desperately to feed people who want more than staples to eat. Our fertilizer markets our driven by the demand of these countries and, especially in the case of China, who makes the majority of the worlds Urea (fertilizer that grows corn remember) they don’t have enough acreage to grow enough corn to feed their people so they buy ours.
Here is where the law of Supply and Demand kicks in as corn prices rise here in the United States and impact our trips to the grocery store-and still we grow corn to burn it. Add to the mix that our Corn crop has been severely damaged in locations from either drought or flood and we have a smaller supply in greater demand. The laws of Supply and Demand dictate that prices go up. So, Corn goes up and everything it is a component of goes up.
So, we don’t dril for oil anymore, we don’t make our own fertilizer anymore and T. Boone Pickens is lobbying for Natural Gas 18 wheelers so he can build the gas stations. Remember two years ago it was wind power! Pitiful.
What has been our government’s response to the growing demand overseas?
We send our corn overseas (what we don’t use or burn), we fight Natural Gas exploration in Pennsylvania (thank goodness it is booming and thank goodness that Russia has tons-maybe we can pay for theirs!). We don’t allow oil permits to go through in the Gulf and in Alaska, so we have to deal with speculators and OPEC setting our oil prices and therefore impacting us from top to bottom economically.
This is why Energy should be a major issue in the Presidential campaign. It is probably the largest part of our economic lives. We work to put gas in our cars, keep the lights and the refrigerator at home on because every business, house, and person in this world needs power. Our computers need electricity and even our battery chargers for those who want to run off of batteries need to be charged! The last time I looked, batteries don’t charge themselves.
Here is a final thought to reminder-it is another law of Supply and Demand. When Demand doesn’t equal Supply, Prices drop.
We are well past the point of politics. This is about people
I think it is time for an aggressive Energy Policy-And TERM LIMITS!.
We might even create a job or two (and get some bums out of office)!