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FedEx CEO Frederick Smith (right), a former U.S. Marine, says that America's oil "addiction" is costing American lives and jobs.  (Source: AP Photo/Mark Humphrey)

Many have claimed that America's invasion of Iraq, costly in American lives, was driven by a desire/need to safeguard the nation's oil supplies.  (Source: AP Photo)

Mr. Smith says electrification -- and government intervention -- are the only workable solution as there's no "free market" in oil (FedEx EV delivery truck pictured)
Company says failing to transition to EVs would be disastrous for America

Oil prices may be easing for a minute, but it's fresh off new record highs, having reached $4.30 USD across many parts of the U.S.  Yet despite enthusiasm by industry figures and the government, there's still much debate about whether electrified vehicles like hybrids, battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEV) are really going to be viable.  Some analysts and customers say they are turning the corner -- others say electrified vehicles still don't make sense [1] [2].

FedEx Corp. (FDX) joined the fray, when its Chairman, President, and CEO Frederick W. Smith published an editorial in The Financial Times, which FedEx later reprinted on its own site.

In the article Mr. Smith firmly throws FedEx's support behind electrification, which he characterizes as vital for U.S. security and financial stability.

Regarding the financial costs, he writes:

Every American recession over the past 35 years has been preceded by – or occurred concurrently with – an oil-price spike. The last time this happened, just a few years ago, the average retail price of gasoline in the US increased from $1.46 to $3.27, costing typical households $2,115 a year in increased fuel expenses. That price spike contributed greatly to the recession and financial crisis which the world is still struggling to recover from.

And Mr. Smith, who served as a U.S. Marine from 1966 to 1970, also complains that America's "addiction" to foreign oil is also costing the lives of servicemen:

This addiction has also led the US to commit its young men and women in uniform to protecting the world’s oil infrastructure. And it means that western diplomacy is handicapped by the need to placate oil-producing nations, including those that do not share America’s views or values. 

II. What Should be Done?

Mr. Smith says that given that the U.S. spent $260B USD last year on foreign oil, the "wisdom of producing more [oil] domestically becomes clear".  He praises stricter safety and environmental standards regarding oil exploration, but complains that some environmentalists and government bureaucrats are acting as obstructionists.

Fuel economy improvements are another vital mechanism, according to Mr. Smith.  The CEO praised former U.S. President George W. Bush and current President Barrack Obama for passing updates to the CAFE standards, which are actively forcing automakers to improve fleet wide efficiency.

But he complains that oil drilling and fuel economy improvements are only "interim measures".  He comments that the only real way to save the U.S. is through electrification, stating:

Only electricity can give the transport sector the flexibility to switch fuels when one or more become too expensive. Electricity from homegrown sources – wind or solar, coal or hydro, natural gas or nuclear – would free America’s mobile economy from dependence on a single source. And unlike some alternatives, the infrastructure backbone for “refueling” electric vehicles already exists in the US national grid, which offers significant spare generating capacity at night, when it is needed for this purpose.

He says he's not one usually for government intervention, but that the government must intervene to push electrification as there's no free market on oil.  He writes:

I am not someone who tends to advocate for increased government involvement in the private sector. Free-market solutions to these economic threats would be ideal. But there is no free market for oil. To the contrary, today more than 90 per cent of proved conventional global oil reserves are held by national oil companies that are either fully or partially controlled by foreign governments, whose interests often have as much or more to do with geopolitical considerations than free-market principles. 

The issue is one that hits close to home for FedEx.  FedEx has attempted some modest electrification projects, but the majority of its fleet runs on gasoline.  And as a business heavily driven by ground shipping, the company is very vulnerable to gas price fluctuations.

The company's CEO remains optimistic that America can electrify and kick America's "addiction" to foreign oil, but warns, "The time to do so without truly calamitous consequences is rapidly running out."

DailyTech has raised similar thoughts, in some regard, in past editorials about transition America's economy to an all-electric infrastructure driven by clean nuclear power.



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But then again.....
By swizeus on 5/20/11, Rating: 0
RE: But then again.....
By GruntboyX on 5/20/2011 9:10:06 AM , Rating: 3
Its a weak argument, because batteries can be built from different chemistry.

Plus we can still use oil, so we can balance the evils. not to mention there is lithium everywhere, but only china mines there reserves.

Bolivia is the Saudi Arabia of Lithium.


RE: But then again.....
By dgingeri on 5/20/2011 10:47:31 AM , Rating: 4
I've heard there are lots of "rare earth" deposits in North Carolina and Virgina, but the state governments there won't allow them to be mined.

I'm thinking it might be a good thing, as we spend our money on foreign sources (this includes oil, rare earth elements, copper, etc.) while their supplies are big, but when things get really sparse, we can then open up our own reserves and make much more back later.


RE: But then again.....
By JasonMick (blog) on 5/20/2011 9:24:55 AM , Rating: 4
quote:
America is also dependent to foreign on Lithium, since the big portion of Lithium found in China.

Maybe the shift to EV just so America can invade China then...


That's a good point, but China is at least much more stable and predictable than the Middle East. Sure it may be power hungry, but it's a modern mindset. The Middle East is still a violent region, controlled by irrational fundamentalist interests.

That said I have personal objections to the kind of government intervention that Mr. Smith is suggesting.

Here's an idea:
Why doesn't America just cut the EV subsidies AND the subsidies to oil companies. Just level the playing field.

Sure automakers would whine and moan. Too bad. Spend your own money if you think the tech is promising.

And of course oil companies would say it would "kill U.S. prospecting". Guess what? Too bad. If you can't do something without handouts, maybe you shouldn't be doing it.

By the same note it would be nice to see the red tape towards approving drilling requests and nuclear plant applications cleared.

The real problem here is that the U.S. government is behaving in a bipolar manner, conversely propping up both the oil business and the EV push, while at the same time acting as obstructionist to cheap, clean electricity (aka nuclear) and U.S. oil expansion (drilling).

To borrow the Chewbacca Defense, "That does not make sense."


RE: But then again.....
By Chadder007 on 5/20/2011 10:09:47 AM , Rating: 3
I'd like the see them cut the Ethanol (Corn) subsidies too. I have found that crap to make me loose 1-2 mpg overall per tank in my car when I use gas with any Ethanol in it.


RE: But then again.....
By JasonMick (blog) on 5/20/2011 11:42:01 AM , Rating: 5
quote:
I'd like the see them cut the Ethanol (Corn) subsidies too. I have found that crap to make me loose 1-2 mpg overall per tank in my car when I use gas with any Ethanol in it.


Absolutely agree there. Ethanol as a fuel source for America is very problematic on a number of levels.

First, ethanol blends hurt the engines of none Flex-Fuel vehicles. And on Flex-Fuel vehicles you get reduced mileage/performance vs. gasoline. People often mistake ethanol as giving better performance, but that's only possible with optimized engines and pure ethanol blends as they run in Brazil.

Secondly, there's a fundamental problem with using CORN ethanol. Corn is a food product, so pushing for it to be made into ethanol drives up food prices. And there's nowhere near enough corn to provide for America's fuel needs. And last, but not least, from a cost and pollution standpoint perspective corn is the WORST kind of ethanol -- it raises NOX/Sulfate emissions.

At the end of the day it takes almost as much gasoline (mileage-wise) to create corn ethanol and bring it to the pump as equivalent mileage you get out of the resulting ethanol itself. In that regard it's just a big shell game to pay off millions in taxpayer money to commercial corn farmers.

Not surprisingly corn ethanol bills or additions are always pushed by Senators/Congressmen from farming states, whose campaigns were funded by wealthy corn growers. Politicians from other states aren't the biggest fan of the idea, but once the corn politicians (e.g. Sen. Franken) agree to endorse their favorite brand of pork (whatever happens to be in their state), they agree to vote in favor of it.

And at the end of the day they try to pass off the measure as "green" and "progressive", when in fact it's just robbing from the taxpayers and giving to the corn farmers, and destroying the environment in the process.

See how great government intervention is, kids?


RE: But then again.....
By Solandri on 5/20/2011 1:29:49 PM , Rating: 4
While I agree corn ethanol has become perverted by the corn lobby, it didn't start off that way. The reason we have so much corn everything (ethanol, HFCS, foreign aid, etc) is because the government subsidizes corn production. The reason the government subsidizes it is so that there won't be food shortages in the event of a crop failure or natural disaster.

This means that every year that there isn't a crop failure or natural disaster, we have an oversupply of corn. The question then becomes, what do you do with all that extra corn? Some is turned into cattle feed (thus effectively subsidizing the beef and dairy industry). High fructose corn syrup is another result. Most of the foreign food aid we send overseas is excess corn and grain.

Some clever people were trying to think up other things we could do with all this excess corn. One of them noticed our heavy dependence on foreign oil, and proposed turning it into ethanol. This is why we ended up focusing on corn ethanol instead of crops with higher energy yield like sugar beets or switchgrass.

It's a fine idea, as long as you convert only the excess corn into ethanol. But once the market for fuel and the market for food become intermingled, that becomes impossible. So as long as corn is subsidized, corn producers should be prohibited from selling their corn for ethanol. The government (which buys up the excess corn) should be the only ones allowed to sell corn to corn ethanol producers. It's far from ideal, but it's the sort of heavy intervention you have to do to the market to fix things if you skew it with things like subsidies.

Unfortunately, since this would only benefit the American people, and not some big pocket constituent who will contribute to a politician's campaign, it will never happen.


RE: But then again.....
By icrf on 5/21/2011 9:42:36 AM , Rating: 2
I've heard the "don't make fuel from food" argument many times before and have always been confused by it. I know the concern is displacement of food for fuel, but the fact that the fuel is made from food seems secondary to the more simple re-purposing of arable land from food to fuel, regardless of what's grown on that land.

Even if we were using switchgrass, which grows on more marginal land, eventually the price of fuel could be high enough to convince a corn farmer to grow switchgrass instead of corn, achieving the same displacement without using a food product. It always struck me as a bad way to make a decent argument.


RE: But then again.....
By marvdmartian on 5/20/2011 2:03:45 PM , Rating: 1
Absolutely. Instead of subsidizing the end product, how about they spend all that money on subsidizing the research on how to make fuels from alternative materials? Instead of subsidizing corn-based ethanol, subsidize research on other materials that will make ethanol, that aren't necessarily food crops as well. In addition to subsidizing fuel cell research, subsidize research on more efficient ways to produce, store and distribute hydrogen.

I realize that the government IS subsidizing research on all of this, but imagine how much better results we might get, if we pulled subsidies on ethanol, electric cars, etc, and poured it ALL into research?


RE: But then again.....
By inperfectdarkness on 5/20/2011 8:31:37 PM , Rating: 2
do you drive an e-85 ONLY vehicle?

no?

well then your "study" means nothing.

i agree with mick (surprisingly). the only thing i'll add (to touch on another reply) is that i'm in favor increasing ethanol crop production (switchgrass, etc) until we can kill all of the subsidies.


RE: But then again.....
By Gzus666 on 5/20/2011 10:27:54 PM , Rating: 1
As Mick even pointed out in another post, ethanol is a bad idea. Ethanol has less energy than gasoline and is really bad on engines, even those built for it.


RE: But then again.....
By kattanna on 5/20/11, Rating: 0
RE: But then again.....
By bah12 on 5/20/2011 10:16:59 AM , Rating: 2
quote:
Why doesn't America just cut the EV subsidies AND the subsidies to oil companies. Just level the playing field.
The flaw in your thinking is that this would hurt the big bad companies. It wouldn't Exxon will still have a growth year, the only thing that would change is that gas prices would jump up at the pump.

Now eventually supply and demand would kick back in, and it would level itself out. But just ripping the band-aid off in an already fragile economy would be disastrous.

Don't get me wrong those subsides should have never been there, but they are and getting rid of them has far reaching implications.


RE: But then again.....
By JasonMick (blog) on 5/20/2011 11:47:48 AM , Rating: 3
quote:
Now eventually supply and demand would kick back in, and it would level itself out. But just ripping the band-aid off in an already fragile economy would be disastrous.


I agree with that statement on some level, but my statement wasn't the text of legislative Bill proposal and wasn't meant to be a precise plan for America.

I meant it in a long term sense.

I'm fine with slowly phasing out oil subsidies over 3-5 years, but we need to start NOW.

quote:
The flaw in your thinking is that this would hurt the big bad companies. It wouldn't Exxon will still have a growth year, the only thing that would change is that gas prices would jump up at the pump.


As far as oil prices, you're paying for them anyways, whether you realize it, if the government is giving tax subsidies to keep prices low.

And how many extra pockets are getting filled in the bureaucratic chain with subsidies, versus if the consumer was directly giving money to the company itself.

You're ultimately paying far more yearly in taxes than whatever premium you'd pay at the pump were the subsidies were removed...


RE: But then again.....
By cpeter38 on 5/20/2011 1:14:32 PM , Rating: 2
quote:
And how many extra pockets are getting filled in the bureaucratic chain with subsidies, versus if the consumer was directly giving money to the company itself. You're ultimately paying far more yearly in taxes than whatever premium you'd pay at the pump were the subsidies were removed...


Are you sure?

I thought the government did that for free. Are you suggesting that the bloated federal payroll is caused by thousands of programs like this?

I'm shocked!!!

/sarc

It is amazing how "conservatives" (me) and "liberals" (you) can see eye to eye on so many subjects. Yet when we look at government and our politicians, it seems that they only agree that government should be bigger and have greater control over citizens. Successive regimes only create additional rules, laws and bureaucracy to obstruct the opposition.

There is little time left to save our country.


RE: But then again.....
By JasonMick (blog) on 5/20/2011 1:36:51 PM , Rating: 5
quote:
It is amazing how "conservatives" (me) and "liberals" (you) can see eye to eye on so many subjects.


I tend to be "liberal" in so much that I don't believe in policing petty drugs like marijuana and I don't believe in the government adopting moralistic crusades (cough, morning after pill, cough) based on the religious beliefs of some of its citizens.

But then I tend to be "conservative" when it comes to fiscal policy and foreign relations.

I guess at the end of the day I can have a variety of views, because I don't constrain myself to one party/perspective -- I strive to be a free thinker and come up with my own logical conclusions.

Let what politicians tell you to believe be damned, think things over yourself. That's my philosophy.

The more I see of how inefficient and full of cronyism the federal government is, the more I realize how much reform is needed. True fiscal conservatism, on a federal level, is largely dead. Everyone is scratching everyone else's backs and you're always going to be the one to pay...


RE: But then again.....
By Solandri on 5/20/2011 1:47:37 PM , Rating: 2
Actually, I think that describes the majority of Americans - socially liberal but fiscally conservative.

The problem is one of the major parties is socially and fiscally liberal, while the other is socially and fiscally conservative. This is what happens when you reduce election campaigns to hot button topics and 30 second spots, instead of voters doing their research to get a big picture idea of what each candidate stands for.


RE: But then again.....
By cpeter38 on 5/20/2011 4:16:49 PM , Rating: 2
quote:
I tend to be "liberal" in so much that I don't believe in policing petty drugs like marijuana


Maybe I am not so socially conservative. It seems to me that on balance, the prosecution of marijuana has caused much more harm than good. Although I have never used marijuana, I don't see it as the ultimate evil or "gateway drug" it is made out to be. Extreme use (abuse) of it appears to cause problems, but the same can be said about alcohol. I suspect that the effects of alcohol abuse are actually much worse. The biggest problems I saw in my employees related to their interaction with the illegal aspects of marijuana (i.e. drug dealers, adulterated drugs, police, etc.). However, we do need to draw a line.

Am I correct in assuming that you would agree that drugs like meth should stay off limits? What criteria would you use to rationalize a new approach to the legality of drugs (harm to individual & society, addictiveness, etc.)?

Stopping our
quote:
government adopting moralistic crusades (cough, morning after pill, cough) based on the religious beliefs of some of its citizens
might be an area we could compromise on as long as my tax dollars don't fund somebody's use of the morning after pill or more "extreme" solutions.


RE: But then again.....
By Gzus666 on 5/20/2011 4:51:48 PM , Rating: 1
quote:
Am I correct in assuming that you would agree that drugs like meth should stay off limits? What criteria would you use to rationalize a new approach to the legality of drugs (harm to individual & society, addictiveness, etc.)?


I see no reason to limit any of them. Realistically, the people who do meth aren't stopping because it is illegal and the people who don't do meth aren't not doing it because it is illegal. Once you break into things where you can no longer function on them, the majority of people won't do them, legal or not.

I find it odd that we care so much about harm to themselves when you can go out and eat 100 Big Macs a day and no one cares. If someone wants to destroy their own life, it is not my place to say they can't. Actions are still illegal whether you are on drugs or not, drugs being legal would not affect this. If you shoot someone while on meth, you still shot someone, no difference.

quote:
might be an area we could compromise on as long as my tax dollars don't fund somebody's use of the morning after pill or more "extreme" solutions.


Your tax dollars will fund somebody's bastard child on welfare, but the few bucks on a morning after pill bothers you? I would much rather they abort some child that will grow to be a pile of crap vs. an 18 year welfare child, then a welfare adult, making more of itself. Remember, the burnout idiots breed considerably more than the successful people. I'm fine with socialized eugenics, at least there will be less stupid/lazy people to deal with.


RE: But then again.....
By JLL55 on 5/22/2011 12:35:26 PM , Rating: 2
I agree that many of the prosecutions are bad - if someone wants to destroy themselves, that's their right. however, I think on the otherside, people using meth/crack/etc can have a deleterious effect on others in the specific state. I feel laws should still be present to protect you from someone else. That's why i laud the passage of the anti-smoking acts and feel that they should be implemented country wide. If you want to smoke, go ahead, enjoy it, but don't make me breathe it because you decided to poison yourself. Same with hard drugs, you want to do it, fine, but don't make me suffer for your decisions. I also like how other countries (Netherlands) don't treat hard drugs as crimes, but as sicknesses. Instead of being thrown in jail for using, help them stop, let them become productive members of societies. If however they don't then maybe punitive results can be considered. Very very good article and comments. I am very impressed.


RE: But then again.....
By Lerianis on 5/22/11, Rating: 0
RE: But then again.....
By Solandri on 5/20/2011 1:15:18 PM , Rating: 1
quote:
As far as oil prices, you're paying for them anyways, whether you realize it, if the government is giving tax subsidies to keep prices low.

The government charges far more in fuel taxes (18-40+ cents per gallon) than any price cut due to subsidies (about 2-3 cents per gallon).

The point of the subsidies is to increase supply. The point of the fuel taxes is to reduce demand (or ostensibly, to make demand match up with the true cost of maintaining our roads and air quality). They are not intended to act on the same people, nor should they be analyzed as such.


RE: But then again.....
By TSS on 5/20/2011 11:35:15 AM , Rating: 2
China is so predictable, that based on their shutting down of the rare earth metals, as soon as they have an important position, maybe even a monopoly, on the lithium market they will shut it down and gouge prices too.

You cannot replace reliance on foreign countries with a reliance on a foreign country and say "well we are alot safer now". Especially if your moving your dominant superpower business to a emerging superpower's country. That sounds like it'll end well.

China is stimulating domestic demand like crazy. They even had a monthly trade deficit this year - the first one in 7 years including during the crisis! The only thing they lack now is advanced western technology, but once they have that (and their law designs and cyber attacks show their hard at work) they won't *need* the west.

They'll drop the US like a stone. Why? Because the chinese look out first and foremost for chinese interests. And once the US is no longer of any use to china, not as a market nor a source for technology, they will dump their dollars and become the new dominant super power. They won't even need to worry about being invaded, the US cannot afford it!

If you want to beat china at their own game theirs really only one thing you can do, stimulate domestic production of something you need, but the chinese will desperatly need as well. And the awnser might be simple, Hydrogen technology.

Making hydrogen costs alot of elecriticy, but so far that's the only thing the US has plenty of because your sitting on huge coal reserves. The grid might be outdated, but power generating wise, you're fine. The benifit of hydrogen over EVs is you don't need a big electrical grid, you simply build the hydrogen plants close to power plants. Once it's been generated you can move it around in liquid form, possibly even take advantage of the current oil infrastructure.

But here comes the kicker: Electricity cannot be exported, Hydrogen can. The Chinese will have MASSIVE fuel demand the next few years and after that. They simply cannot stick to a single source: if they choose oil, they'll use up all the oil in the world in record rates. If they go EV they'll burn through their own coal and even nuclear fuel in no time. Even combined it'll be a stretch.

Get GM to sell hydrogen based vehicles over there and *let* them steal that technology, let them produce millions and millions of cheap hydrogen based cars. Then closely guard your secret of hydrogen generation, and sell them the hydrogen fuel. Do the same to India.

Heck a plan like that might even turn your budget deficit into a surplus in a decade, even with future liabilities. Do not underestimate the resource hunger of nearly 3 billion people in those 2 countries alone.


RE: But then again.....
By yomamafor1 on 5/20/2011 12:41:52 PM , Rating: 2
The only problem is that hydrogen vehicles are not even close to being deployed in an economically feasible matter. The only hydrogen cars being deployed in relatively large numbers, the Honda FCX Clarity, cost nearly 120k for Honda to produce, and have around the same range as a Tesla Roadster.

On to the hydrogen itself. The hydrogen storage is still the largest obstacle towards hydrogen vehicle adoption. It is still very costly, and does not store enough hydrogen to justify the cost. Most experts agree that hydrogen vehicle is at least 20~30 years out before it is feasible, and that is a big IF. Putting all the hopes on hydrogen vehicle is like putting all the hopes on nuclear fusion power generation. Both are beautiful and great if true, but the risk of them ever becoming a reality is high.

At least with the battery EV, it is on the brink of becoming a viable alternative to regular gasoline cars.


RE: But then again.....
By grant2 on 5/22/2011 5:52:56 AM , Rating: 2
"Then closely guard your secret of hydrogen generation"

Ah yes, those foolish chinese will never decrypt the secret of electrolysis!! mauhaah grade 9 science experiments will forever be outside their grasp!!


RE: But then again.....
By Zingam on 5/22/2011 7:16:57 AM , Rating: 3
Wow! You people speak as if China and India are on another planet. Dude, we all live on a small planet, a very, very small, tiny planet called Earth. If a country destroys its environment we all will get it.
If a nuclear power plant blows up in Japan we'll all swallow the radioactivity. And if everybody goes on polluting on a massive scale and we all try to steal each others lands, goods, food, wives and stock we will destroy the planet and ourselves.
As long as we live in a single house we have to find a way to live together in harmony.


RE: But then again.....
By Reclaimer77 on 5/20/11, Rating: -1
RE: But then again.....
By JasonMick (blog) on 5/20/2011 12:38:56 PM , Rating: 5
quote:
Jason, that would be disastrous for America. There are only thousands of EV cars in America. Your idea would make gasoline prices rise astronomically, impacting hundreds of MILLIONS of American's, not to mention the trucking industry. Which would raise the cost further on EVERYTHING in the country.


Oh yes, the U.S. economy is far too weak to support free capitalism. Poor us. We have to subsidize our businesses, by handing pork down a long government chain.

Are you honestly that naieve/stupid? You're paying twice as much to funnel your tax money down the government supply chain as you would be if you were paying more at the pump.

EITHER WAY YOU ARE PAYING.

I can't believe you're promoting socialism and big government! Because that is PRECISELY what oil subsidies are. In effect, it's the government exerting a degree of ownership/sponsorship of what SHOULD be a private institution.

I'm glad we've at least been able to establish that you're not a conservative except when it suits your interests.

quote:
Also the federal government makes hundreds of billions in tax revenues from oil companies and gasoline taxes, making the oil subsidies almost a wash. How much tax money do EV's bring in again?


Was I suggesting EV subsidies?

No, if you had read the one sentence (I know, so long, must be hard on you) that you quoted, you would see I was suggesting EV subsidies be cut.

For the record I also suggest removing the high gas taxes. (Oil should be taxable similar to other domestic goods, on a state by state basis, imo.)

But to claim that gas taxes make up for gas subsidies is MORONIC. If the government was taking away the same amount of money it was giving to oil companies, they'd be getting no net monetary gain.

So there'd be no benefit to them and removing the subsidy and high oil taxes would have no net impact, if what you claim is true.

In reality you just have a very poor knowledge of the situation and bafflingly are supporting government pork and bloated bureaucracy. Have fun paying that bill, my friend.


RE: But then again.....
By Reclaimer77 on 5/20/11, Rating: -1
RE: But then again.....
By Zoridon on 5/20/11, Rating: -1
RE: But then again.....
By cpeter38 on 5/20/2011 12:48:26 PM , Rating: 2
Dailytech should have an option to allow our members to vote for a +6 rating (i.e. if the rating is +5, an option will open to vote for the +6. If 20 people vote for the +6, the post gets promoted)!!!

Since I cannot,

Kristopher, please give him +6!!!


RE: But then again.....
By Paj on 5/23/2011 7:49:18 AM , Rating: 2
Great idea! Cutting subsidies is the only way to make sure domestic industries are viable. I guess thats why the US props up its farmers to the tune of $20 billion every year. I know that food != energy, but what do you think would happen to domestic farmers if this subsidy was cut?

The whole 'fear of big government' is a bit crazy at times.


RE: But then again.....
By bildan on 5/20/2011 11:18:03 AM , Rating: 3
Do your homework...

As of now, the biggest lithium deposits are in Bolivia not China. There are other large lithium deposits throughout the world.

"Resource Depletion" stories are created by commodity traders trying to cheat the markets.

The best estimates say there are no resource limits to transportation electrification. Even the rare earth story is bogus - motors can be made without permanent magnets.


RE: But then again.....
By Reclaimer77 on 5/20/11, Rating: -1
RE: But then again.....
By worldbfree4me on 5/20/2011 6:50:30 PM , Rating: 3
Americans are addicted to War which uses Oil!!!!!!!

NO WAY_ CUT DEFENSE SEVERELY NOW!

Eisenhower warned against the military industrial complex-

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”
Dwight D. Eisenhower

+++++++++++++++++++++++++++++++++++++++++++++++++ ++++

Well guess what Americans- Dwight's fears have been realized- read on-

The defense budget that both parties and the media present to the American populace are not even close to the reality- we are WASTING over $1.5 TRILLION a year- below are the actual defense and security costs-

The real cost of military and security spending in FY 2009-

Current Military= $965 billion:

• Military Personnel $129 billion
• Operation & Maint. $241 billion
• Procurement $143 billion
• Research & Dev. $79 billion
• Construction $15 billion
• Family Housing $3 billion
• DoD misc. $4 billion
• Retired Pay $70 billion
• DoE nuclear weapons $17 billion
• NASA (50%) $9 billion
• International Security $9 billion
• Homeland Secur. (military) $35 billion
• State Dept. (partial) $6 billion
• other military (non-DoD) $5 billion
• “Global War on Terror” $200 billion in “allowances” for the “War on Terror,” which includes the wars in Iraq and Afghanistan]

Past Military= $484 billion

• Veterans’ Benefits $94 billion
• Interest on national debt (80%) created by military spending, $390 billion

Subtotal = $1,449 TRILLION

Does not include the following-
+ Three letter intel agencies $80 Billion (estimated cost by the wash post)

REAL TOTAL = $1,529 TRILLION

America must stop invading countries and killing and maiming hundreds of thousands....bring our troops home and close down nearly all foreign bases and reduce dod and security in half....America is spending more than 20 times the next largest defense spender China and 2 times ALL rest of world defense spending.....

STOP THE MILITARY MADNESS NOW!


RE: But then again.....
By Doormat on 5/21/2011 2:55:07 PM , Rating: 2
No we aren't. Well, at least we don't have to be.

There is enough Lithium in Nevada to build over a billion Chevy Volts. Nevada is the Saudi Arabia of Lithium . There are at least three major lithium deposits - Kings Valley, Clayton Valley, Fish Lake Valley. Estimates are all over the map unfortunately, but if you take an average of them all, Nevada has approximately 40M metric tons (40B kg) of lithium carbonate (LCE).

At about 0.9kg LCE per kWH of battery capacity and a 50% recovery rate (that figure is conservative, it might be has high as 85%), that equals 22B kWh of battery capacity. Thats 1.378 billion Chevy Volts, or about 3.3 billion Toyota Prius Plug-ins. Just on the Lithium in Nevada. The US only has 250M or so cars and trucks on the road, so we can replace every car on the road with a Chevy Volt five times over.

So no, we wont have to rely on other countries if we don't have to. The difficulty isn't availability, rather cost. Its cheaper to pay workers a pittance and have virtually no safety regulations in third world countries (and China) and import it, rather than mine it here and have to pay workers a living wage and make sure they are safe. But if the cost of oil continues to stay elevated, the frieght cost of either the lithium or the finished batteries may tip the scales back in our favor.


Will he pay for it?
By seamonkey79 on 5/20/2011 8:56:16 AM , Rating: 1
I am eagerly awaiting his check in the mail that will pay for all of these things they want me to do.

Until then, the higher initial cost vs benefit is grossly out of proportion in favor of keeping my current car (2004 Malibu, 27 mpg average)




RE: Will he pay for it?
By tng on 5/20/2011 9:14:14 AM , Rating: 2
I wouldn't hold my breath....

Same thing here, 99 Civic DX, 40 mpg average. I feel I am doing my part to keep oil consumption down, yet I get criticized weekly because I should buy a hybrid, what 40 mpg is not good enough?


RE: Will he pay for it?
By mcnabney on 5/20/11, Rating: -1
RE: Will he pay for it?
By mdogs444 on 5/20/2011 9:31:10 AM , Rating: 2
quote:
would occur naturally if we slap a $2-4/gallon excise tax on gasoline and diesel.

It wouldn't occur "naturally" if you're slapping a $2-4 tax on the product in order to artificially manipulate prices and demand.
quote:
even with a massive tax like that we wouldn't be anywhere close to the highest gasoline prices.

Gasoline prices around the world - most notably Europe where it is most expensive - is not that way because of demand, supply, or refining. It's because they tax the hell out of everything to pay for nationalized/socialized healthcare.

I guess if it was up to you, we'd all just keep writing blank checks to the government so they can "invest" in boondoggle after boondoggle, pad the wallets of special interest groups who fund their campaigns, give us more dept...and then somehow con the people of the need to tax the rich and socialize industry. Sounds pretty sheepish to me.


RE: Will he pay for it?
By StevoLincolnite on 5/20/2011 10:32:10 AM , Rating: 2
quote:
It wouldn't occur "naturally" if you're slapping a $2-4 tax on the product in order to artificially manipulate prices and demand.


The US does tax it's fuel, see here:
http://en.wikipedia.org/wiki/Fuel_taxes_in_the_Uni...

quote:
Gasoline prices around the world - most notably Europe where it is most expensive - is not that way because of demand, supply, or refining. It's because they tax the hell out of everything to pay for nationalized/socialized healthcare. I guess if it was up to you, we'd all just keep writing blank checks to the government so they can "invest" in boondoggle after boondoggle, pad the wallets of special interest groups who fund their campaigns, give us more dept...and then somehow con the people of the need to tax the rich and socialize industry. Sounds pretty sheepish to me.


Most countries that heavily tax fuel are also in less debt, the United States debt level is simply incredible with it in the Trillions, not that there is a clear link between the two.

http://www.usdebtclock.org/

Here in Australia, Petrol/Gasoline is taxed higher than the USA, but I ended up getting LPG Gas installed on my vehicle.
With LPG at half/third of the price of Petrol/Gasoline it was a no brainer, it's cleaner to with only just slightly worse economy and power.
It probably helps that we have significant deposits of natural Gas though to keep prices stable. (The Government might have a helping hand in that to.)


RE: Will he pay for it?
By mdogs444 on 5/20/2011 11:24:17 AM , Rating: 1
quote:
The US does tax it's fuel, see here:

The fuel is taxed to pay for road upkeep and maintenance (at least as far as we are told). The taxes on fuel in the US are not to manipulate markets, demand, supply, or to fund some boondoggle venture that can't be done efficiently in the private market.
quote:
Most countries that heavily tax fuel are also in less debt, the United States debt level is simply incredible with it in the Trillions, not that there is a clear link between the two.

Are you being purposely obtuse? Of course our debt is higher than other countries - because our national wealth and GDP are also higher. Debt to GDP ratio is what really matters, and the short term and long term outlooks on that debt. We are in major debt crisis, but the democrats don't want to cut down the debt. They want to keep spending at the current rate, make new programs, and just tax people more.
quote:
It probably helps that we have significant deposits of natural Gas though to keep prices stable.

We have enough of that in the US as well to keep us running on our own for about 100 years. Then again, we have enough oil in the shale to last over 100 years and coal to power every home for over 100 years. But the people on the left keep trying to find ways to make the wind blow...


RE: Will he pay for it?
By Solandri on 5/20/2011 2:09:55 PM , Rating: 2
quote:
Most countries that heavily tax fuel are also in less debt, the United States debt level is simply incredible with it in the Trillions, not that there is a clear link between the two.

Say what? The U.S. has substantially lower debt as a percentage of GDP than most Western countries which tax their fuel heavily.
http://www.nationmaster.com/graph/eco_pub_deb-econ...

Japan: 225.8%
Italy: 118.1%
Belgium: 98.6%
Ireland: 94.2%
France: 83.5%
Portugal: 83.2%
Germany: 78.8%
U.K.: 76.5%
Austria: 70.4%
Netherlands: 64.6%
Spain: 63.4%
U.S.: 58.9%
Norway: 47.7%
Finland: 45.4%
Mexico: 41.5%
Sweden: 40.8%
Switzerland: 38.2%
Canada: 34%
South Korea: 23.7%
Australia: 22.4%

Countries in italics are major net oil exporters. Incidentally, this is why I don't buy the doom and gloom stories about the U.S. dollar due to U.S. debt. If debt is really that big a problem, the Euro is in far, far worse shape than the USD.


RE: Will he pay for it?
By corduroygt on 5/20/2011 10:33:54 AM , Rating: 1
Not to mention a tax on fuel will hurt the lower/middle classes the most. Much better to tax millionaires.


RE: Will he pay for it?
By mdogs444 on 5/20/2011 11:26:06 AM , Rating: 3
Better to cut spending all together and not have to raise any sort of taxes at all.


RE: Will he pay for it?
By corduroygt on 5/20/11, Rating: 0
I agree, but...
By MartyLK on 5/20/2011 9:02:12 AM , Rating: 5
The oil companies will not allow the nation to migrate to any technology that gets away from oil consumption. The oil companies have long and powerful reaching abilities within the government and industry. The whole nation could collapse but the oil companies would still not allow America to get away from oil.




RE: I agree, but...
By TEAMSWITCHER on 5/20/2011 9:25:08 AM , Rating: 3
It's even worse than that...Despite record industry profits our government voted this week to maintain 2 Billion Dollars in oil tax breaks and subsidies. No one in his country is free. America is a lie.


RE: I agree, but...
By Zoridon on 5/20/11, Rating: -1
RE: I agree, but...
By Reclaimer77 on 5/20/11, Rating: -1
RE: I agree, but...
By ZachDontScare on 5/20/2011 3:13:44 PM , Rating: 3
Those 'tax subsidies' are really tax deductions for the expenses incurred when exploring for domestic oil. They are no diffeerent than any other business that can deduct their expenses.

Plus, what happens when they go away? Gas prices go up because the oil companies expenses go up.


RE: I agree, but...
By pequin06 on 5/20/2011 10:15:17 AM , Rating: 2
Can you elaborate on this master plan that "Big Oil" has for America?


Typical nonsense
By Beenthere on 5/20/2011 10:46:47 AM , Rating: 3
U.S. oil is sold in Japan because they can get a higher price than selling it in the U.S. Oil prices are all about financial greed. Oil is a commodity and is sold for whatever consumers will bear, commonly known as RAPE by the oil companies who continue to reap record profits. The only way you reap record profits from lower sales volume is by raping consumers.

If Fedex wanted to do their part, they would ban together with UPS, DHL and all airlines worldwide then park their fleets of planes and trucks until the price of fuel dropped to $2/gal., which would only take a few weeks. Yes their would be a lot of turmoil but the oil companies would get the message that the law of supply and demand works. The oil companies know consumers will not stand to be inconvenience so they will continue to rape us all because consumers are too dumb to figure out that oil is worthless if no one buys it.

EVs won't fix anything as the cost of electricity will increase just like oil prices. When you have a Cabal or industry monopoly, you have a license to steal from consumers and the oil and utility companies are happy to oblige.




RE: Typical nonsense
By SnakeBlitzken on 5/20/2011 11:00:44 AM , Rating: 2
American companies making big profits is not always a bad thing. Those profits translate to a lot of jobs not to mention all the citizens invested through pensions, mutual funds etc. Oil companies don't directly set the price of oil. The commodity traders do. Their only influence is on how much they produce. OPEC tries to manipulate price by controlling production. If there's so much money in it, buy stock in oil companies.


RE: Typical nonsense
By Beenthere on 5/20/2011 4:06:41 PM , Rating: 2
Actually windfall CEO salaries and bonuses does not create any more jobs nor does it pay dividends to investors. There is a big difference between making a good profit and raping consumers so that the CEO gets a $10 million bonus annually. It's pure financial greed.

Controlling the supply side and duping consumers via false, misleading, deceptive, "industry news" released to the media is what inflates prices based on investor speculation. You may be able to hedge your bets buy buying some oil stock but that doesn't help society nor reduce the unscrupulous behavior of those who exploit consumers for great wealth.

RAPE is the name of the game when you have a monopoly.


RE: Typical nonsense
By ZachDontScare on 5/20/2011 3:17:26 PM , Rating: 2
Simply Wrong . American oil is sold in Japan because its cheaper to ship oil from Alaska to Japan and then use that money to buy oil from Venezuela and Mexico and ship that to New Jersey, than it is to ship oil all the way from Alaska to New Jersey. Big oil tankers cant go through the canal, so it saves a trip all the way around South America.


RE: Typical nonsense
By MrTeal on 5/20/2011 6:58:54 PM , Rating: 2
You know what you should do? Organize a day where everyone doesn't buy any gas at all! That would totally clog up the oil system, and bring down all the big oil companies.

It would be awesome, you could post it up on Facebook and all your friends could invite all their friends and soon everyone would be ready.

That would definitely teach the MAN that the little guy still has all the power.


A conservative agrees
By GruntboyX on 5/20/2011 9:07:44 AM , Rating: 2
He hits the biggest reason we need to get off oil. National Security, the benefits to the environment are a nice bonus. While we can debate the means to do that, Electrification is attractive. Only problems I for-see is securing the minerals to build the batteries. But theoretically the material can be recycled to a degree. Additionally battery technology can be built from many different chemistries so this is less of an issue than oil.

I would still like to see the feasibility of hydrogen, but I dont think the fuel cell technology has reach a point were it can be mass produced. Not to mention the infrastructure nightmare of delivery.

I agree we need government intervention to drill domestically to temporarily secure our future, and then move to electric vehicles. However, I fear our government lacks the fortitude to stick to a plan long enough to accomplish the goal. Every election cycle the pendulum will swing violently and in the end nothing will be accomplished.

We also need to control the lobbying that is crippling and corrupting the effectiveness of our government.

This is our number 1 national issue, we solve this then we can tackle other priorities like health care and social security.

At the end of the day this is something we should all unite around. High Gas prices hurts us all, no matter the political spectrum of your opinions.




RE: A conservative agrees
By Zuul on 5/20/2011 10:14:08 AM , Rating: 3
I'm always surprised when major public figures fail to realize that the largest supplier of oil to the United States is infact Canada. A rather quiet, but friendly neighbor.

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_...

There are major projects under way in Canada to export more oil to the US, however the environmental groups are pushing back quite heavily and several are at risk. These are projects that will bring more stability to the US oil and gas industry as it is coming from a friendly stable neighbor. There are also other major projects under way in Canada to bring more oil to the coast for export to Asia (China).

Canada has significant reserves of oil that if the US does not secure, will see itself competing heavily with China for. China doesn't care about any internal issues or politics when it comes to buying resources like oil. They don't care about environmental policies, what kind of government the country has, or how it treats it's citizens. They just want to burn the oil.


RE: A conservative agrees
By ClownPuncher on 5/20/2011 12:04:35 PM , Rating: 4
Yep, I don't understand the idea people have about the Middle East supplying our oil when Canada is obviously the biggest.

This trade with Canada is also GOOD for our economy. (and theirs)


RE: A conservative agrees
By Reclaimer77 on 5/20/11, Rating: -1
RE: A conservative agrees
By ClownPuncher on 5/20/2011 4:39:57 PM , Rating: 1
Oddly, if you post facts about where our oil comes from (Canada) you get rated down...


RE: A conservative agrees
By Reclaimer77 on 5/20/11, Rating: -1
He should get serious
By aromero78 on 5/20/2011 9:47:53 AM , Rating: 1
I agree that the real benefit isn't in the cost analysis of gas vs. the alternatives, nor is it in the environmental benefits, it's in giving the middle finger to the middle east. But if this guy was serious he would convert all, not just some of his fleet to something other than gasoline. Electricity, hydrogen, or even natural gas. Personally I think natural gas would be the way to go. We have some of the worlds largest supplies of natural gas and existing vehicles can be made to use it with some minor changes. Some states (California comes to mind) have already started the process of converting garbage trucks and bus to natural gas with some success. The major caveat to that of course would be that he would have to build the infrastructure to support such a fleet. I'm sure he could partner with other companies or investors to foot the bill. I'm just sayin'; he should put his money where his mouth is.




RE: He should get serious
By StanO360 on 5/20/2011 10:17:45 AM , Rating: 2
Remember, if we don't force it, just encourage it. The infrastructure is fundamentally there already. Major pipelines are all over the country and city.

I love the free market and hate taxes and government. But why don't they tax foreign oil. Not for the government to choose what's best, but as a source of revenue. Price will eventually go up to where alternatives from the market will become feasible.


RE: He should get serious
By aromero78 on 5/20/2011 10:35:25 AM , Rating: 2
You're right fundamentally it is, but at the moment fueling stations are few and far between. This represents a huge obstacle to natural gas. I'm not a natural gas shill but if we have it in abundance we might as well use it.


RE: He should get serious
By ketchup79 on 5/20/2011 11:21:36 AM , Rating: 2
quote:
But if this guy was serious he would convert all, not just some of his fleet to something other than gasoline.

This will not happen, because the cost to the company would dramatically increase, which would drive up their prices, which would cause the companies that use FedEx to look for other options. Sure there are people out there who would respect their decision to get away from foreign oil, but they will be greatly outnumbered by those who want to save money.


I got an idea
By ZachDontScare on 5/20/2011 3:23:48 PM , Rating: 3
How about we just start drilling for and exploiting our own oil?

I know Chairman Obama likes to brag about oil production being up, but those are from permits granted as long as 20 years ago. His administration has basically stalled oil exploration. This will result, 10-15 years down the line, in even more serious problems (but he'll be long out of office, so why should he care?), making us more dependent on foreign sources (hurray for Obama!).

Between oil reserves and north american oil tars and shales, we have trillions of reclaimable barrels of oil. Yes, thats with a T . It'll take some improvements in technology to really be able to harness that, but those will come in time (look how we can now drill in the Marcellus shale, which we couldnt 20 years ago). The govt needs to start opening up most federal land to drilling, and fast track permits.




By Steve73 on 5/20/2011 7:46:30 PM , Rating: 3
quote:
Mr. Smith says electrification -- and government intervention -- are the only workable solution as there's no "free market" in oil (FedEx EV delivery truck pictured)


These comments do not make sense unless you are in bed with government or want to get in bed with government. Since when does more government added to a highly regulated market such as oil make any since. The government is already greatly involved in the oil business. You can not freely decide where, when, and how to get at oil anymore without the government giving you a thumbs-up. The argument should focus on the opposite track of getting rid of government. Instead, we have someone calling for more government intervention which will only make it worse and give the public a new problem to fix.




Moot point?
By SnakeBlitzken on 5/20/2011 10:53:08 AM , Rating: 2
Oil will no longer be affordable when the US dollar is dropped as the world reserve currency or at the very least, oil is traded in another currency. America will no longer be able to afford it when the dollar will become worthless. Times, they are a changin.




So, what's stopping them?
By HoosierEngineer5 on 5/20/2011 12:57:17 PM , Rating: 2
Do they need government to get involved so they can convert to electric vehicles, or is the point to force everybody else off gasoline, so they have the 10% supply to themselves?




Cheap oil!
By Pjotr on 5/23/2011 7:52:12 AM , Rating: 2
quote:
Oil prices may be easing for a minute, but it's fresh off new record highs, having reached $4.30 USD across many parts of the U.S.


Boy, that's some seriously cheap oil in the US... in the rest of the world, oil is at $100+ a barrel. Wanna rephrase that sentence?




...
By Mortando on 5/20/11, Rating: 0
"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007














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