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Doug Oriard


Energy Policy and Politics

Political Issues and Energy Policy, 2016


-- There are only two nearly unlimited sources of energy on the planet... oil is running out. The oil shale will only last about 5-10 years at current production rates. The remaining oil is unrecoverable with current technology and costs. It is unreasonable to build a plan based on things that don't exist today. You can hope for future events but not plan based on things that don't exist today and aren't on the drawing board. The two nearly unlimited sources of energy are solar and thorium-based nuclear.

-- Solar energy in the best source of unlimited energy for the future. It is the cleanest, most abundant source. However, solar power from solar panels it not the answer. Current technology produces about 20% efficiency from solar panels. Even if that efficiency reaches 80% with the 5-10 years we have left from the oil shale it will not be enough to supply the world's energy needs. Currently there aren't enough rare earth elements available to build the required number of solar panels to replace oil, but newer materials such as perovskite and graphene may reduce or eliminate that problem. Solar panels have a place in homes and smaller businesses, but to get the higher output to power cities requires the use of concentrated solar power from massive concentrators in remote areas outside heavily populated areas. This form of solar power is cheaper to build, scalable, and can supply an unlimited amount of energy. Environmentalists complain about birds being killed by getting caught in the light beams and fried, but steps can be taken to mitigate this, and besides, you have to remember birds get killed in huge numbers near airports, some factories, and other places, as well.

-- Wind energy is derived (comes from) sun energy also. Until recently wind energy was not a viable source of energy due to the small contribution. Recent designs of windmills with 650 foot blades placed out in the ocean now make wind energy more useful as a real energy supply. It's not likely that more than 5-10% of the nations energy could be supplied this way, even the the Enery Commission is targetting 20%. It would also be costly to transmit this energy inland, but the windmills could still be used to supply costal cities. Wave generators fall into this category also and could be used to supply energy to costal cities.

-- Nuclear power from thorium, not uranium, is the only other nearly unlimited source of energy. It is nearly unlimited because thorium is abundant in the Earth's crust. Thorium reactors are also safer since they don't melt down if a power outage occurs due to hurricane, earthquake or other disaster. Thorium reactors shutdown, not melt down, when disaster occurs. This is because it takes a small amount of energy to keep the reaction going. If that energy is removed the reactor shuts down. Thorium reactors still have a radioactive disposal problem, which makes them less desirable than solar, but still useful as a backup and in regions where the percentage of sunlight is insufficient. It takes time to build these solar and nuclear power plants so they need to be started before the actual need for power arises.

-- About 45% of the gasoline used in the US in burned in cars and trucks, so reducing the usage in these vehicles would go a long ways toward reducing the dependency on oil. Best batteries is the answer to the holdup in getting more widespread adoption of electric vehicles and in reducing the cost of electric vehicles. Lithium batteries, fuel cells, and current battery technology is not sufficient for the needs of electric vehicles. The are too heavy, too unreliable, too expensive, and have too low energy density, so that the range of electric vehicles is short and the weight and cost of batteries are high. Several promising battery technologies are in the works but the development needs to be accelerated. DARPA has a good track record of overseeing the development on new technologies such as this. They coould be brought on board to assist in finding and developing the most promising battery technologies. If even 25% of current gasoline vehicles could be traded in for electric the benefit to both reduced oil consumption and cleaner air, would be huge. Reduced gasoline vehicles in major cities would greatly reduce smog conditions. Those who believe in global warming would also be pleased at the reduced oil product burning.

-- High frequency trading is a purely manipulative trading scheme which provides no real liquidity or other value to the markets. It merely de- stabilizes the markets. There is a simple solution to handle high frequency trading: every order that is entered into the stock, bond, or commodities markets is delayed (and hidden) at the exchanges for 3 seconds before the order is placed. Likewise, the manipulative place-then- cancel orders that are used to test for securities demand can be stopped with a 3 second delay before the order is placed, and another 3 second delay before the order is cancelled. Any legitimate order will not be significantly affected by a 3 second delay. Only high frequency manipulation schemes will be stopped.

-- Commodities price manipulation is another illegal scheme that is rampant now that huge commercial banks are allowed to trade the markets at will. The solution to this is to set solid position limits on all commodities. Stocks and bonds are a different question and may need to be handled separately. A limit in the range of 3% of open interest, or 3% of world production, whichever is smaller, would be recommended. JPMorgan currently owns about 30% of the entire world futures contracts in silver. A position of that size is manipulative in an of itself, regardless of intent, and JPMorgan has no legitimate hedging interests. Commercial banks being able to use their huge size to trade the markets is something that should be reviewed and possibly limited as well. These banks used to be largely business and consumer accounts managers, and a source of loans. Now they are the primary world traders, with a huge impact on world markets.

-- Exchanges like the Chicago Mercantile Exchange should not be allowed to set trading policy that affects their profits, such expanding or reducing margin debt limits at peak times to increase their profits. The rules should be set by a separate agency that does not profit from the rules.

-- Reducing government debt is one of the top two issues (energy policy being the other) with the most significance and urgency in the country today. Since over 75% of the US expenses come from entitlements and military (about equal between the two), it makes the most sence to concentrate on these two areas. Of these two, the most immediate gains can be made in the military. The military needs a dramatic overhaul. We should never have spend the nearly 2 trillion dollars on a war with a justification of "weapons of mass destruction" that did not exist. The real purpose was to protect oil and even that result was not achieved. The world's security is not about large wars with tanks, bombs, planes and bases around the world anymore. Now it's about cyber-security, bio-terrorism, and nano-terrorism. We need a smaller, more mobile, highly trained, well-equipped armed forces (that also included drones, exoskeleton armor, etc. when these technologies are ready).

-- On the subject of cyber-security, the recent fiasco with DOJ and FBI harassing Apple to get data off an iPhone 5 was as embarrassing as it gets, for those that really understood what was going on. There were at least 3 ways that the data could have been extracted from that phone without a huge public spectacle and violation of Apple's rights. The simplest was to just hack the iPhone, as the hacker community eventually told them. Learning how to hack that iPhone 5 could be learned on Google in under a minute. To see this kind of nonsense going on and coming from agencies that are responsible for the security of our country is shameful. The heads of these agencies only proved themselves to be totally incompetent in handling technology issues and they should be fired immediately.

-- Reducing government overhead to further reduce expenses and reduce the burden on businesses is also important. One way to do this is to simplify OSA laws that are far too complex, especially construction industry. You cannot prevent people's stupid mistakes completely with laws and trying to do it will only take away freedoms and increase expenses for everyone. One solution is to make many of these laws as just guidelines instead of laws. This would give business owners more decision making power but still gives leverage to accident victim in court.

-- Re-negotiating US Treasury yield with foreign countries would be a bad idea. That would be similar to defaulting on our debt and would create distrust of our country that would last for decades.

-- Building a wall between the US and Mexico might be a workable idea as long as it's a wall of surveillance, not a physical wall. The former is less expense and less insulting to Mexico. Deporting existing illegal immigrants would be expensive and disruptive. It would be better to spend the efforts preventing new illegal immigrants from entering. Illegal immigrants should only be deported if they are found to have a criminal record or are causing trouble in some way. They should not be given US government welware aid however, that is reserved for citizens. Nor should they given due process or other US legal protection, other than basic protections of their own safety. Ethnic profiling at the borders and in airports is certainly reasonable, and a good way to pinpoint efforts on the higher percentage of troublemakers so that less delay and hassle is caused to non-profiled citizens. The travelers don't even need to know they are being profiled though. They should be treated with the same politeness as anyone else while they are being inspected more closely in private.

-- Eliminating NAFTA is a very good idea and it never should have been initiated in the first place. It's terms are far to unbalanced against US businesses. It could also be possible to revise NAFTA instead of eliminate it, once more equitable terms are set up.

-- Dodd-Frank is another bad idea that has kept money from flowing out of banks into the hands of businesses and consumers. It should be repealed and replaced with something much simpler, including position sizes for all entities in the commodities markets. Commercial banks should not be allowed to be the largest traders on the planet. Their size alone makes their trading manipulative, and they do not hesitate to manipulate the markets to their advantage.

-- Tariffs can be appropriate if not done excessively. It's about time the US started using this tool to counteract the subsides other countries have given their businesses to compete with US businesses. Proposed tariffs as high as 45% are not reasonable though, but starting with 5-10% tariffs and adjusting from there could send a strong message to China to stop subsidizing their companies' manufacturing at the expense of other nations. Several European nations are currently looking into tariffs as a way to equalize Chinese subsidies on their own companies.

-- Immigration issues have popped up in the news recently and these issues have built up for decades and things need to be done about it; however, it is not at the top of the list of most important issues needing attention. The top of the list includes the budget deficit and government debt, followed by energy policy (although the private sector is gradually solving this area), followed by fixing the corrupt banking system which heavily manipulates the commodities and other markets.