Friday, March 4, 2011

The Equation Is Still The Same – Flivver, Fuel, The Road

First in a series of articles about energy in a world hostile to America and Americans

By The Legendary
Jim Parks

Now it's red meat when I'm hungry,
moonshine when I'm dry,
Greenbacks when I'm hard up,
religion when I die.
- Drew, the Coca-Cola
salesman shot by a rapist in the gorge of the Cahoolawassee
on the second day of “Deliverance”

WASHINGTON (AP) – Mississippi Governor Haley Barbour, a potential Republican presidential contender, accused the Obama administration Wednesday of favoring a run-up in gas prices to prod consumers to buy more fuel-efficient cars.

Obama administration officials rejected the charge...

In 2008, while the head of the Lawrence Berkely National Laboratory in California, (U.S. Department of Energy Secretary Steve) Chu told 'The Wall Street Journal' that energy prices were the lynchpin to an energy overhaul. “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” Chu said then.

White House spokesman Jay Carney said Chu made his comments before Obama assumed the presidency and has since renounced the notion that high gas prices would benefit the country...

In a previous century, in the car business, the man in the fedora was the man in charge. On the assembly line, on the show room floor, in the bank, at the restaurant drinking coffee or in the speakeasy drinking a beer, it was the guy in the fedora calling the shots.

Remember when the insurance salesman named Bobby, the man who was buggered and humiliated in the film of the James Dickey novelette, made his cute little remark about the filling station owner's hat?

What did the little old man tell him?

“You don't know nothin'!”

The lights have changed, but the equation is still the same - tripartite, systemic as to time and place, use, and expectation.

You've got the flivver, then there's the fuel, but the highway, well, you know, it goes on forever.

Or does it?

The math has never changed when it comes to the money. The consumer is upside down when he rolls off the lot in his new car, used car, loaner, rental, lease - whatever. He just took a 40-50% hit on the worth of the car. By driving it on to a street, he lost half its value.

It's understood. The car is worth a lot less because you put it in gear and – you know – used it to get somewhere such as, oh, well, gone. It's a major cost factor. Next up: fuel.

One of the big three big ticket purchases in the average man's life – the home, the car and the funeral – autos are the nexus, the quintessential lynchpin of the American dream.

You go where you want to go. You don't follow the shiny iron and the time table; you follow the macadam, the gravel, the concrete ribbons. You go where you want to go.

And it comes in any color you want, as long as it's black.

That's the way things appear, but it's not all there is to the story in the new millenium.

Something never foreseen by the men in the fedoras has erupted, a development of the international politics of non-renewable fossil fuels, the relative worth of currencies, and government regulations based on open-ended federal statutes.

Aside from inflation, finance, tax, title, transportation and all the other figures found on the invoice, there is a hidden $5,000 cost factor on most family-sized, high-powered vehicles with the kind of zoom it takes to make it on the appointed rounds of commute, soccer, lessons, errands, and trips to Granny's house, no matter where the corporation that manufactures the vehicle headquarters – Detroit, Tokyo, Seoul, France, Germany, the UK, Italy.

The average miles per gallon requirement laid down by the U.S. Government is a regulation; it costs a manufacturer $5,000 to break it when the auto-buying public won't buy the little Prince Albert cans - the death traps the government says they have to build and the government says you have to buy - in any color you want, as long as it's green.

Let's say the folks at Ford, GM, Chrysler decide to ignore the regulation.

Who pays?

The guy who puts it in gear and drives it off the lot – upside down – with no such thing as equity and no hope of recouping the largesse he just paid to a faceless system that doesn't bother to explain itself or even inform the public what the hell is going on with his greenbacks.

So, what does it burn, this big old wagon with all the zoom?

Gasoline is made from crude petroleum cooked, distilled and “cracked” in giant cooling towers at refineries so tightly regulated by the EPA that no new refinement capacity has been constructed in 40 years.

Why? Because the bureaucrats won't approve any new environmental permits for additional refineries. Their rules are not only very strict, they change without notice, without warning, and without any real explanation.

That's just the way it is.

Or is it?

Can that change?

Thinking men and women are starting to ask the question, long, loud and insistent on an answer. It's an answer they will get if they just keep it up.

American consumers suffer automotive fuel woes not because of a lack of product availability, but because of a shortage in refinement capacity.

Carbon footprint?

More like the fee-fi-fo-fum footprint of a fickle tyrant in a think tank monkey suit bearing a sheepskin under both arms and spouting the kind of rhetoric any man with enough common sense to get himelf an automobile can tell you with a greater economy of words and without the high-faluting phooey of the kind of phoney baloney jargon endemic to the groves of academe.

So, what do we have plenty to burn in this premier, first and foremost OPEC nation of Texas?

We have natural gas.

How about Colorado, Oklahoma, Arkansas, Louisiana, Wyoming, Montana, Nebraska, Kansas, New Mexico, California?

Loads and loads and loads of it.

It's practially the national brew of the Lone Star of Texas, that whole other country the tourist bureau likes to rave about.

What's more, we have the drilling technology - horizontal - the fracturing techniques to use the natural gas you strike, add water and petrochemicals, and crush the shale strata where the crude and natural gas hide, pump it out and send it to processing plants where it can be made into a readily available and clean-burning motor fuel, compressed natural gas. Energy producers such as natural gas guru T. Boone Pickens and the CEO of Chesapeake Energy say American dependence on foreign petroleum could be halved within a couple of decades.

The fact of the business is simply this – and nothing more. In the nineties, the state and the whole nation was poised to go with compressed natural gas in a big, big way, but then, a funny thing happened.

The government stepped in and passed a regulation to accompany some legislation Congressmen concerned with the greening of America could understand – and the rest is history.

All the technicians trained to work on the engines developed by the big three, all the tooling made to forge the engines, inject the fuel, compress the gas - all the engines, all the vehicles, all the systems - were shelved when the EPA came up with its miles-per-gallon requirements for the various classes of vehicles marketed for American highways – sub-compact, compact, SUV, sedan and truck.

Meanwhile, the Arabians and their first cousins the Eurasians and Asians know all this. They watch the government's tightening of American production processes through hostile taxation of well owners who used to derive huge benefits from depletion allowances, refiners who at one time were able to depreciate the diminishing worth of their refinement plants, transporters in the same boat, and vertically integrated oil companies who marketed their wares in full-service filling stations.

It's all a thing of the past. With each turn of the ever-tightening screw, the foreign producers exact a huge cost of doing business from the consumer and the American taxpayer in terms of environmental regulation, military materiel and operations to defend the supply lines and production sites in hostile nations, and the rapidly diminishing worth of the dollar beside other currencies generated by nations who lend American greenback back to Americans at a very high price.

They tell you the cost of a barrel of light sweet crude has jumped to more than $100 - but do they tell you the true cost of that barrel of light sweet crude? Do they calculate the expense of keeping two carrier battle groups on station at all times in the Persian Gulf and Meditarranean Sea? Do they give you any really meaningful correlation between a gallon of gas and the true cost of doing business, what it takes to keep division of U.S. Marines in the field, Air Force planes in the air, Army battallions in the field, missiles trained on targets?

No, they don't, do they? They don't ever give you the true costs of all this crazy quilt arrangement.
Foreign providers and manufacturers put their profits back into the deepest, most liquid pool of wealth available on the planet – the U.S. Treasury. Why? Because this way, their investment stays at an acceptable worth. The dollar's worth against other currencies is a vital factor to an exporting nation investing its profits somewhere in the constant search for liquidity.

Strong stuff. What with environmental regulation - the greening of other nations' bank accounts - it's much, much cheaper to ship American jobs overseas than it is to make it here, in the U.S.

Or is it? How do you feel about that when it costs you twice as much to put that tiger in your tank?

How to cut the knot, untangle the net, put it back on the road - burning our stuff at a price we can afford?

Find a way to start using our best, cheapest resource – the one that can be produced by domestic drilling companies and processed by domestic refiners and marketers – natural gas.

What has to change? The government's insistence on getting involved in the process with needless and impractical regulations based on academic projections as yet unproven.

How do you do that?

Well, this past November was a pretty good indication what the American working man and working woman can do when they get together and kaffe klatsch and make up their minds to put in a new bunch of rascals and eject the other set of rascals.

Watch these columns. There is more to come.

NEXT: Auto manufacturers projections, predictions, parameters

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