Discussion: Continued

This development would allow the U.S. consumer’s appetite for large automobiles and SUV to be satisfied while improving fuel economy to reduce the demand for gasoline and diesel fuels. Re-tooling the auto industry will create new job opportunities and may provide a way for U.S. car manufacturers to re-emerge as the world’s premier manufacturers of automobiles. Replacing the existing fleet of cars and trucks with Hybrid vehicles will generate more vehicle sales in a shorter time than any other market development plan the auto industry could imagine – again, more jobs, and let’s not forget, more income for the strained social programs of Social Security, Medicaid and Medicare.

4. Solving the Social Security, Medicare and Medicaid problems:

It has been estimated that Medicare, Medicaid and Social Security will require funding levels exceeding $5 trillion dollars/year by 2040. This level of expenditure will only be possible if the number of U.S. jobs is maintained at a level of approximately 4.25 contributors for each recipient of “social contract” funds.

This will mean that the number of jobs in the U.S. must increase from 130 million in 2004 to more than 260 million in 2040 to fund the social systems as they currently exist. Obviously doubling the employment in 36 years will require an average of as much as 400,000 new jobs to be created each month.

Clearly, the energy sector alone cannot provide this level of job creation, but it is a basic industry that creates a significant multiplier effect when expanded. It is normally estimated that for each basic industry job that is created at least four other service or supply jobs are created. Therefore, if the energy industry can create 35,000 direct jobs/month for the period, it will have created the required economic expansion to account for one-half of the new jobs that are required to meet the Nation’s social contract for Social Security, Medicare and Medicaid.

Maximizing the production of corn for ethanol production along with various oil seed crops for the production of bio-diesel will produce large number of basic industry jobs that will displace imported oil and enhance the U.S. economy while providing funds into the SS/M/M system.

Development of additional domestic oil and natural gas resources will create additional domestic jobs that will reduce trade deficits.

Expansion of the transmission system and potential expansion of coal and nuclear generation will keep U.S. energy prices competitive in the world and create additional domestic jobs.

Expansion of the renewable fuels potential in the form of wind, solar, geothermal and hydro-electric capacity in conjunction with a national grid will not only create many jobs but potentially will reduce the overall cost of electricity.

5. The Federal Solution vs individual State based solutions:

It is becoming increasingly clear that the Federal Government in this election year is not looking for long-term solutions to anything. The two parties are unwilling to agree on anything positive that might provide a greater advantage to one party over the other. Unfortunately, the Social Security/Medicare/Medicaid problems will not sit by and wait for people to agree. These problems will become extremely acute within the next four years. The liquid fuel and energy problems at the Federal level are also immediate in their impacts and cannot wait for reasonable men to find reasonable solutions. Therefore, the only possible solutions that might be available are at the individual State levels.

California, Nevada and Arizona provide a specific example of ways that individual States may be able to at least partially accomplish what the Federal Government is either unwilling or incapable of doing.

Both California and Nevada have passed laws mandating a certain percentage of their electricity be produced using renewable resources. Other states have also passed this type of legislation but their renewable levels are significantly below those of these two States. Both California and Nevada were looking forward to favorable Federal legislation that would improve the economic environment for wind, solar and geothermal projects. Unfortunately the Federal Government is not capable of producing this legislation.

California, Nevada and Arizona are currently faced with a different problem, however with the potential for liquid fuel shortages looming within the next two years. Gasoline and diesel prices have risen to all time high levels and are unlikely to decline in the near future. There are only 12 operating refineries in California and these are operating at near capacity. Therefore, the combination of high crude oil prices and limited refinery capacity have created the high retail pricing levels.

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