Friday, May 17, 2013

Happy Summmer Everyone!

 
 


"These are the things dreams are made from..."
 


Many of us that live in the northern climate spend many waking moments day dreaming. We mostly dream about what life will be like once the (seems like) eight months of winter is finally over. Some have a lake escape to go to. Others have a yearly visit to their favorite resort. The real lucky ones have a friend with a cabin. As soon as that last flake of snow melts, dreams are set to become real.
 
All of a sudden, dreams are on a collision course with reality. The family truck is pulled out of the garage and the boat is cleaned up after hibernating all winter. Everyone is packed up for the first trip up north. The boat is hooked up to the family truck and it is off to the gas station to fill up with gas. The family truck has a 32 gallon tank and the boat has a 15 gallon tank. Both are mostly empty. As the happy family arrives at the neighborhood gas station, they look in shock to see the new price of $4.30/gallon. How can that be? All winter long it was reported that our country is awash in oil and gas reserves.
 
The truck is filled up and takes almost 30 gallons of liquid gold. Then the boat. The boat still has some gas in it from last season, so it only took 12 gallons. The 42 gallons of gas purchased just to get going cost the family $180. Since the cabin is way up north, it will cost almost as much to fill the car and boat to come home. Over $300 just for a weekend up at the cabin. The cold hard slap of reality has just taken the dream out of a fun summer.
 
As has been reported, this latest SNAFU was caused by a "scheduling problem" with two refineries in Chicago land going down at the same time for "maintenance". In reality, it could have been anything. For example, the speculators are just waiting for the expected eruption in the Middle East. Gas would be over $5/gallon over night if the spot price of a barrel of crude oil hit $200. Or in mid summer, a Cat 4 or 5 super storm headed into the Gulf and shut down all the off shore platforms, gas would skyrocket.

However, the real cost driver would have come if the Administration was able to get Cap and Trade legislation passed. A big part of Cap and Trade is the carbon tax. This tax is a disincentive to use carbon based energy. As an example, one study showed that the carbon tax on a gallon of gasoline would be $2. Rather than our family paying $4.30/gal to go up north for a weekend, the cost would be $6.30/gal. That would put the fuel cost for a weekend up north at around $400.

Most Americans would agree to extra gasoline taxes if the outcome was more exploration leading to lower prices. However, the extra money from the carbon tax would only go to more government largess. The big winner is big government, the big loser is the American family, just trying to live out a simple dream.

Our lack of a solid energy policy has been a millstone around our neck since the 1970's. Since then, we have spent over a quarter of a trillion dollars in the Department of Energy and have nothing to show for it. We still are stuck over the same barrel (of oil) as we were forty years ago. The price of energy drives many of our costs, including fuel, housing and leisure.

Hope and change? It is time for a change. It is time to restore our dreams. It is time to get real. Our hope and change is really hoping for a change in some kind of energy policy that restores our dreams.


 
 
 

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