Energy and Economy News Round-Up

There are a number of good stories today regarding the global economy and energy prices that I think you all should know about. Sure I could talk about John Robert's dealing with assisted suicide as his first case or the nomination of the grossly unqualified, crony-esque Harriet Miers or the double indictment of Tom Delay, but I won't. Everybody and their mother is talking about those subjects. Here on PC we do something different, something interesting, something out of the mainstream when possible.

And speaking of something out of the mainstream...

Bush Begins Mulling Greenspan Successor

The task of plucking the new heir to Alan Greenspan's throne at the head of the Federal Reserve has commenced. "There is a group of people inside the White House...who will bring forth nominees," the President proclaimed, saying that the new head shall be: "one who is good at his job," and "viewed as an independent person from politics."

Public perception is indeed vital in the wake of Bush's nomination of his long-time confidante Harriet Miers--who'd never been a judge before--as a Supreme Court justice. (To read more about the nominee, see: "She's Good For Business"). And Miers' nomination follows the public outrage over Michael Brown, former Arabian Horse Association chief, who found himself head of FEMA during the Katrina disaster.

For now, the three current front runners are experienced economic advisors to the White House and reassuringly clever: Harvard economist Martin Feldstein, Columbia professor Glenn Hubbard and former Fed governor Ben Bernanke. Those who have been given the task of choosing the next person to run the U.S. economy are Vice President Dick Cheney, Chief of Staff Andrew Card and Karl Rove. Their quandary is in choosing someone who is both independent in thought yet viewed as loyal.

Not to mention the fact that Greenspan leaves big shoes to fill: Soon to be the longest serving Fed chairman ever, he maneuvered the economy through two stock market collapses, two recessions and presided between them over the longest expansions in U.S. history. And he plays a mean sax. More

That's nice that he plays a, "mean sax," but more importantly he's also a fraud who has created our current Social Security mess (along with Reagan) and then proposed a con job to fix it. Everything I have learned about Greenspan tells me that this fellow changes opinions and values with the political winds and only to the financial benefit of himself. The only thing scarier than Greenspan being the Head Fed is his replacement. If history is any clue, Cheney and company will propose ex-stockholders currently not in prison from Enron or WorldCom. I'm not so much worried about who the Supreme Court nominees are. There's plenty of checks and balances and "people in the room," that nothing dramatic will be done in short fashion. This really worries me as the gap between wages and the standard of living in America rises with each passing day. In all likelyhood, just like Greenspan, the new Fed Chairman will do nothing but exacerbate that problem.

Biodiesel use is growing in America

California Gov. Arnold Schwarzenegger signed a law Oct. 4 allowing public agencies to use vehicles that can run off biodiesel blends.

The California law was signed less than a week after Minnesota became the first state to mandate a 2 percent biodiesel mix for all diesel fuel, and a day after a Texas company announced plans to build a biodiesel plant on Galveston Bay.

“Californians have always led the way in protecting our lands and oceans and pioneering new forms of energy use that reduce our reliance on foreign fuels,” Schwarzenegger said. “Today, we are continuing that proud legacy with new legislation that will decrease our dependence on foreign oil and encourage the use of cleaner burning domestic fuels.”

The proposal was written by state Sen. Roy Ashburn, a Republican representing Bakersfield, home to American Biofuels, a major biodiesel plant.

“By using biodiesel, we can reduce dependency on foreign oil by up to 20 percent,” Ashburn said.

The facility will expand to produce as much as 10 million gallons of biodiesel annually by the end of the year, and further expansions will increase production to 35 million gallons annually, a company executive told the Central Valley Business Times.

“This is a major commitment even on a world scale, considering that the state of California has the fifth largest economy in the world and is also the tenth largest emitter of global warming gases in the world,” said Joseph LaStella, president of Green Star Products, which owns 35 percent of American Biofuels. More

I was thinking about California and biodiesel the other day. I thought that it couldn't be long before they jumped on the bandwagon seeing as their environmental and energy laws are near oppressive enough to spark interest in alternative fuels as soon as possible. The other item that occurred to me was that Bakersfield had unused/closed refineries that were ostensibly just wasting away. Why couldn't they be converted to biodiesel plants? Apparently I was not the only one thinking that way. Now we just need Schwarzenegger to use some of that Hollywood charm and marketing skill to make biodiesel hotter than boy bands and Pokemon.

Oil at two-month low as U.S. cars idle

Oil slid to its lowest level in two months on Thursday as U.S. drivers finally eased off the gas and the world's energy watchdog said there was no pressing need to dip further into emergency fuel reserves.

U.S. data on Wednesday showed the world's biggest consumer was burning through less fuel than a year ago. The news allayed concerns the United States could run short of heating oil and gasoline with a dozen U.S. refineries still shut by hurricanes.

U.S. crude was down 79 cents at $62.00 a barrel at 1058 GMT, its fifth straight day of losses. Gasoline fell 3.48 cents to $1.8730 a gallon after Wednesday's 11 cents tumble.

"We're not a million miles away from where we were before Hurricane Katrina," said Emanuele Ravano, head of portfolio management at PIMCO in London.

"In terms of miles driven, U.S. motorists are being a little more cautious. But it remains open to question whether this is a two-week phenomenon." More

This is what it means to be strapped to a finite fuel source. Sure one can argue, and I have, that there is plenty of oil in the ground to last well into my grandchildren's years but the lack of forsight in that argument is stunning. Why would you want to depend strictly on a finite fuel source while not bothering to proactively seek alternatives? This is essentially how we got into this mess in the first place. We depended too much on foreign trade with the Middle East and when the mullahs tossed out the Shah thus causing the series of events leading to the oil embargo, we still did nothing to change the way we fuel this nation. It's sad really. It seems that the one thing that binds rich and powerful people is short term thinking and a general sense of screw your neighbor.