|
Powering America
Forward |
Volume 1, Issue
17 | |
Neighbors &
Friends,
 Big changes are starting to
rumble through the oil markets. This week
prices for crude oil futures took their
biggest hit in over a decade.
Readers of this newsletter will recall that I
indicated the upward pressure we've
seen on crude prices since 2004 has been due to a
feeding frenzy among traders rather than any
underlying economic process that should result in
such high prices. Is this the tipping point,
then? Is this the point in the market where
speculators interested in their own commissions
much more than in the price of the commodity start
bidding that price Down with as much fervor (and
Self Interest) as they had when they ran
it up over the last two years?
The answer is, "It Could Be if
Congress Helps that Process Along."
To me that means, "It
Should Be if Congress is Thinking at
all about Home Heating Oil Prices in Cranston
or Westerly this winter."
Let's look at whether or not
Congress has figured out that Oil Prices are a Big
Problem, yet. Then let's look at what kinds
of things they are doing about it. Then You
be the judge, as you will be on Election
Day.
- Mark Zaccaria
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| Quote of the
Week |
|
"The democracy will cease to exist when you
take away from those who are willing to work and
give to those who would not."
Thomas
Jefferson | | |
| Booms & Busts |
 Dick Morris, author and Fox News
commentator, has studied the current run-up
in crude oil prices extensively . As reported
here in past weeks, his analysis is that the
underlying economics of costs and consumption
rates would never have predicted the present high
prices for the commodity. Morris' work has
indicated, instead, that current prices for
Crude are a result of a huge infusion of cash
into the Oil Futures Market that began when
trading moved off shore to avoid SEC
controls. Whenever more cash chases the same
amount of a commodity product the price goes
up.
Since the underlying economics
cannot sustain these price levels it is only a
matter of time until futures speculators who've
been buying Long begin to buy and sell
Short. In other words some day the prices
will come down, probably even faster than they
went up.
That will be a good thing for
you & me when we fill up at the gas
pump. It will be a great thing for any of
us, like me, who heat our homes with #2 Fuel
Oil. But it will not be much fun for the
pension funds and institutional stock portfolios
that have invested in shares of oil futures
funds. They'll see their values
plummet.
So what should the Government
do?
Just this week we've seen that
one announcement from the President can have the
immediate psychological effect of lowering
the per barrel price of crude. When
President Bush rescinded the executive order
banning off shore drilling the speculators started
covering themselves by bidding lower, even though
it will be years before any new American Oil will
hit their markets. I don't believe that this
one announcement, alone, will be enough to do
anything but put a downward blip in the advancing
price of crude oil... Unless we keep up
the pressure, both real and imagined.
Which brings us to
Congress. They, too, have a standing ban on
off shore drilling. It, too, dates from a
day when fears of ecological disasters made it
seem sensible to avoid exploration in what were
thought to be delicate areas. It also dates
from a day when other sources of crude oil were
both inexpensive and plentiful. The price is
higher now and our technology for extracting the
natural resource is far more refined. I have
long called for the inclusions of Non Governmental
Organizations (NGO's) in the planning and
execution of our evolving plan for energy.
In the case of oil exploration I'd think that a
group such as the Audubon Society or the Sierra
Club should be involved in writing specifications
and overseeing production on public oil leases,
just to insure that best practices are used and
there are no environmental problems.
Given all that, I now have to
paraphrase Ronald Reagan as he stood at the
Brandenburg Gate in West Berlin, June 12th,
1987: Congress! Tear Down That
Ban!
There's more the Congress could
do, starting tomorrow. Real, aggressive
plans for researching and commercializing
Alternative Energy Sources would also serve to
lessen the importance of oil on our future energy
infrastructure. Similarly, a more permissive
environment for citing and permitting Nuclear
Powerplants would do the same thing. In both
cases NGO's should be involved as watchdogs
against pollution. In both cases, though,
other countries do it now so it's a cinch America
could, too, if we decided to. Both steps
would further accelerate the rush for the exits by
the Bears in the Oil Futures Market.
So why doesn't the Congress
act? Here, too, there are many
reasons. Some of them could be eliminated by
sending a new Freshman Representative to
Washington from Rhode Island's Second
District. Maybe the most disturbing of those
being the fact that since the Investment Banking
community took control of the Oil Futures Market
away from the SEC in 2004, those brokers have
sold shares of their trading funds on the open
market. These Derivatives cover the
investment houses against loss but they expose
pension funds and other institutional investors in
the process. That means when the price of
oil does crash the brokers will get all their
commissions but their clients will be left to
count up huge losses. But how can a freshman
congressman help with that problem?
By standing firm in the face of
cries for a federal bail out.
-
MZ |
| What Has Our Guy Been
Doing About It? |
|
By all appearances
Representative Langevin has been following the
party line established by the majority
leadership.
He has called for a continued
ban on additional oil exploration here in
America. (10 News Conference, 1 JUN
08) This position makes it clear that Mr.
Langevin has lost touch with the people he
represents. He seems to have no idea of the
pressure being put on the folks in Providence,
Warwick, or Narragansett by the current spike in
gasoline prices. That's little wonder.
He hasn't had to buy his own gas since it was
selling for around $1.00 per gallon because
Members of Congress get their's covered as
part of the job. Sadly, he also seems to
have no idea of the mechanics behind present price
levels or some of the things he's in a position to
do right now to alleviate them for the rest of
us.
He has, instead, participated in
a mass photo opportunity staged by House Members
of his party from the North East. On the
hottest day of the summer in Washington, Rep.
Langevin sat outside with his colleagues to call
for higher handouts from the federal government
this winter to tide some Rhode Islander's over by
paying their fuel oil bills for them.
http://www.beloblog.com/ProJo_Blogs/politics/2008/07/new-england-del.html . You and I both know where the
money would come from to pay for this latest
giveaway program: Your Pocket & Mine.
Don't you wish he'd been doing something all
along about the price of fuel for
everybody? That would do much more for the
poorest of us than any short term hand out could,
and the rest of us would get a break, too, at no
cost to the federal treasury.
Don't worry,
though. The incumbent's Hand-Out
Program never actually happen. His
photo-op plea, coming as it does on the eve of
adjournment with a campaign at hand, has no
practical chance of becoming law. And what
does that say about his sincerity?
Maybe We Need
to Get a New Guy.
I have been researching the root
causes of oil prices as part of the development of
a comprehensive plan, not just for American Energy
Independence but overall American Economic
Independence. Here's what I
propose:
- Drill Now in America to cover
our Short Term Needs. All our energy
infrastructure is based on Oil. We
 can't change that
overnight. New Domestic Production and the
bursting of the Speculative Bubble it will
create will give us the one to five years we
need as a Bridge to the Future.
- Create Businesses Now that can
profitably exploit the research and development
of alternative energy sources. Solar
Voltaic needs work on both silicone chemistry
and production yields in
manufacturing. Let's get to it. Wind
power needs legislation to encourage utility
companies to pay for the excess current
individuals generate during times of peak wind
speed. Then people need affordable
alternatives to the $100 - $200 per month paid
to National Grid. Check this out:
http://www.youtube.com/watch?v=q9flSPAdOLk. And, by the way, we need to be
open to nuclear power to
generate electricity. It works well
in France. It can work well here if we let
it.
- Develop a Hydrogen Based Energy
Economy in the long term.
If any of this sounds sensible
to you please remember that I am currently
applying for the job of New Guy.
-
MZ |
| It's Not All Solemn
Study... There's Plenty of Fun to a Political
Campaign, Too. |
 As the weather warms up people come outside
and gather at all sorts of organized events.
This gives a working politician plenty of places
to go to find hands to shake as he introduces
himself around the 20 cities & towns in
our congressional district. Here are a few
of the highlights of this weekend's
work:
Our Lady of Czenstochowa parish,
in Coventry, is holding its annual Polish Festival
this weekend. Ruth and I attended last
night. I'm not sure our Polka Demonstration
was the best on the dance floor but we campaigned
with local Town Council Candidate, Joel Johnson,
and may have changed the minds of a few
voters. Check it out yourself:
Click Here.
On Saturday it's the Wakefield
Balloon Festival in the morning. Click Here.
Then later it's off to the Civil War Encampment at
Sprague Mansion, in Cranston. Click Here.
On Sunday the weekend winds down
with a concert by Warwick's own School Committee
Candidate and Tenor Extraordinaire, Aaron
Guckian. If you want to hear a Big Voice
unleashed, and maybe shake my hand to boot, please
join me for this delightful end to a summer
weekend. Details Here.
By the way, next Saturday I participate in my
tenth consecutive Save The Bay Swim. Here's
the News
Release. Check it Out Early on Saturday,
the 26th.
There is plenty of fatigue work
to be done in a campaign. The chance to get
out and contact voters one-on-one is refreshing,
though. You've got to love meeting people
and learning more and more about the different
neighborhoods in order to keep up this kind of
schedule. And I
do. |
|
Do you have an upcoming
event where people will gather and some new ideas
on running our government might be welcomed?
Please let me know. I want to join you and
bring my message to the voters of the 2nd District
in person.
Until then, I'll be elsewhere on
the campaign trail. Please try to catch up
with me and I'll be back in touch with you via
next weekend's Newsletter.
Sincerely,
Mark Zaccaria
Mark Zaccaria for
Congress
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Paid For & Approved
By Mark Zaccaria for Congress |
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