We love our country and are proud of an America that has historically sacrificed, strategized and saved when needed (The Great Depression, World War II, etc.).
Our current oil price crisis is one more opportunity for Americans to use their collective guts, perseverance, and ingenuity to solve a seemingly insurmountable problem. How can we cry the blues about energy prices and our dependency on foreign sources and at the same time limit our options?
Regulations have severely handcuffed alternative energy suppliers, like nuclear and wind power.
Further, our leaders refuse to consider drilling for oil on federal lands or coasts where huge oil deposits lay in wait (for example, Alaska, the Dakotas, Santa Barbara and Florida, where Castro is now drilling 90 miles off our coastline!). Admittedly, these are beautiful places, and I’d hate to see them marred
with oil rigs, but the fact is, if we limit supply, prices will continue to go up.
We need to diversify. GE predicts alternative energy, such as wind, solar, and bio-fuels, could provide 10 percent of our needs by 2020, compared with less than 2 percent currently. Like other energy producers, nuclear is limited by the “not in my back yard” syndrome.
Yes, we need to care about our environment; however, we also need to look at breakthroughs logically and through the eyes of current science and not fall for extremist scare tactics.
If we want energy prices to go down, we must increase supply. Therefore, we suggest you call your congressional representatives and ask them to renew wind and solar tax credits and cut the red tape on new, safe nuclear power plants.
Ask that they explore new oil drilling techniques that keep the environment safe. Because when supplies of energy go up, prices will go down. On that happy note, let’s go to our question of the month:
I am very disappointed about the current energy prices. It seems these oil companies are making tremendous profits on our backs. Furthermore, the government seems powerless to help. Who’s to blame? Is there any light at the end of this tunnel?
The reason for high energy prices is complex, and a full discussion of them is beyond the scope of this column. However, energy is a commodity and is subject to the laws of supply and demand. If a lot of people need energy and the supply is limited, there will be price spikes.
Now that China, India, Brazil, Turkey, and others are joining the industrial world, and that’s a very good thing for their poverty levels are dropping sharply as they modernize, their demand for energy is rising dramatically. These countries are buying electronics and cars at record rates. This demand, coupled
with our own energy needs, is driving prices up and up. So what do we do?
The quickest, most direct fix is for each and every American to conserve. Even if you can afford four dollars a gallon for gasoline, your conservation efforts will help the trucker or neighbor
who can’t. We suggest you consolidate trips and properly inflate your tires, which will
save 10 cents per gallon of gas (Mother Earth News).
Also, clean out the extra stuff in your car, as every 100 pounds saves two percent on your miles per gallon consumption (Washington Times).
Walk to errands if possible. It not only saves gas, but also is good for you. Around the house, seal windows and buy CFL energy saver light bulbs. At my house, we just bought an old reel-style non-motorized lawn mower. It saves gas and, whew, it’s a workout too!
As to oil profits, yes, they are huge and they need to be scrutinized. But, as a percentage, oil companies made fewer profits than beverages, tobacco, pharmaceuticals, and computer product companies.
Remember, average U.S. citizens, like you, own 94.5 percent of all oil stocks in our pensions, 401(k)s, and mutual funds (American Petroleum Institute, 2008).
If we all do what we can to conserve, as well as call and challenge our leaders to be statesmen, not politicians, we can tackle this crisis. After all, Americans have historically proven to be resilient, resourceful overcomers. Truly successful solutions will come from the pooled results of our individual actions and sacrifices.
For further information, may we suggest you Google the following websites to further explore energy issues and alternatives: American Petroleum Institute (good fuel saving tips at api.org), Green Car Journal (greencar.com), and Mother Earth News (motherearthnews.com).
Dan Searles, CFP, is a financial planner and a Registered Representative offering securities and advisory services through National Planning Corporation, member FINRA/SIPC, and a Registered Investment Adviser. Medallion Financial Group and NPC are separate and unrelated companies.
National Planning Corporation does not endorse the opinions expressed in this column. The information here is not to be considered as financial, tax or legal advice. As with any financial, tax or legal matter, consult your qualified adviser before taking action. No investment strategy can ensure a profit or protect against a loss. As always, past performance is not indicative of future results.