Emkro (beta)

In case you have been on a deserted island for the last few years, I want to clue you in to a major shift in our world’s energy picture. Please prepare yourself; it may come as a shock. Oil and gas prices have gone up a lot while you were away (675% since 2002) and they probably are not going back down. Now for the rest of you, this comes as no surprise. You feel it every day. Luckily, we can and we will be able to do something about it.

America has seen high prices before. The 1970s brought an oil embargo that created an artificial supply shortfall and a relatively brief spike in prices. That event, however, was not a test of the fundamental limits of oil’s energy supply. The difference this time is that the free markets are setting the price for a product that is arguably limited in supply. This is not a knee jerk market response to a war, hurricane, embargo, or refinery catastrophe. Instead, it is a steady rise in prices based upon supply, demand, and free markets. And that is what really makes smart people stand up, take notice and look for alternatives. Most critical to this awakening is that many people believe these new prices are here to stay. With the rise in prices, our demand as a consuming nation has barely diminished. This fact alone has sounded the death knell for the cash cow that is Middle Eastern oil. Don’t believe me? Keep reading.

Look around and observe. What do you see? Cars, trucks, SUVs, busses, planes and trains all running on oil. You think to yourself that they are here to stay. How could they not be here in 10 or 20 years? Americans are not going to stop driving or going on vacation or taking business trips. One would assume that in 10 years we will need just as much oil as we do today, probably even more if our population keeps growing. Even with McCain and Obama’s proposed strict fuel efficiency standards; our consumption won’t drop more than 4% in 10 years. If you believe Obama, you would think ethanol is our way out. It is the answer to our problem. It is how we are going to grow our way out of this mess. Unfortunately, that is already proving to be foolhardy and shortsighted with food prices skyrocketing and people starving. It looks as though we have dug such a huge hole that there is no way out. But I say not so fast! A huge and fundamental change is coming. A great force is at work whose groundwork has been slowly laid for many years now.

That force is the one which created this monster to begin with. It is American capitalism combined with the mother of invention, necessity. The industrial revolution took advantage of its most cost effective energy source of the time and built an infrastructure around it. Now, smart people have seen that foreign greed has made that source unfit. They have seen that alternatives and domestic energy production offer wild economic benefits, as well as a preferred political status from a security, reliability and environmental standpoint. Forward thinkers saw these same things in the 1070s. However, there was not the technology nor the long term prospects for a return on investment to develop them. Three decades later, a perfect storm has formed which will cause a new technology and industrial revolution. The 80s and 90s saw the dawn of the computer. The 00s and 10s will see the dawn of boundless clean, inexpensive and secure energy. Moreover, and more importantly, a way to replace much of our oil need with that newfound clean and abundant electric power.

America laid the groundwork for this ‘Energy Revolution’ during the 1930s with Roosevelt’s New Deal and one of its programs, the electrification of America. No one would have ever guessed it would someday play such a high tech hand. The ensuing decades brought great technological advances in battery design and fundamental electrical and electronic engineering. Now, with oil at $130 a barrel, America will spend just shy of 1 trillion dollars this year on oil. To type it out in all its zeros glory looks like this: $1,000,000,000,000.00. A fraction of that could do wonders for our clean energy supply and power grid maintenance. It is something we need to do anyway, therefore you best go big or go home. So why would an investment in the power grid with clean generation like nuclear, wind and solar make a difference in our oil consumption and give America complete energy sustainability and freedom? The numbers do not lie. Let us look.

A case in point, who would want to drive a car that gets 30 miles per gallon with 4 dollar gas and an incremental cost of 13 cents per mile when you can drive a car for 2 cents a mile on electricity that looks sharper, is safe, silent and has just as much getup and go under the hood? Not me and I dare say not you. In 10 years time you will find it weird that people actually used to rely solely on their gasoline powered cars. Tractor trailers and other special applications will still use diesel and gasoline, but they will be using domestic oil. We currently import 58% of our oil. That means 42% is American made. When we reduce our need for oil by 58%, we will not need to buy one iota of oil from elsewhere. Better yet, we will stay true free capitalists and purchase the cheapest first; wherever it may come from. It really is about efficiency and optimization after all. The technology is finally mature and solutions are coming to a GM showroom near you soon. They will be safer, smarter, and cheaper to run, exactly why electric cars and plug-in hybrids are about to win.

Stay tuned. I am working on a follow up article explaining why I cannot wait for electric vehicles and plug-in hybrids like the Tesla or the Chevy Volt. I am already on a waiting list and you should be too.