Monday, June 27, 2016

Oil-pump-fossil-fuels

Oil-pump-fossil-fuelsOil-pump-fossil-fuels

By Nancy Thorner –  

 On Monday, June 20, The Heartland Institute hosted a rare opportunity to hear one of the nation’s acknowledged leading conservatives, Stephen Moore, speak on his new book, Fueling Freedom: Exposing the Mad War on Energy, which flies in the face of the nation’s political and media love affair with climate change. The luncheon event was held at The Union League Club, in the Loop in downtown Chicago. 

Heartland is known globally for its work debunking myths about human-caused climate change caused by the burning of fossil fuels – in short, that global warming is driven by human activity and a warming planet is, on whole, beneficial. Fossil fuels constitute the lifeblood of the modern world, having ushered in the Industrial Revolution, but continue to be vilified by global warming alarmists.

In his book, Moore, with co-author Kathleen Hartnett White, make an unapologetic case for fossil fuels. They argue that if fossil fuel energy is supplanted by “green” alternatives for political reasons, humanity will take a giant step backwards and the planet will be less safe, less clean, and less free.

Moore’s Background

Moore is a Chicago boy, having graduated from New Trier High School in 1978. After various stops at conservative outlets and organizations – including one he started, the Club for Growth –Moore is now a Distinguished Visiting Fellow at Heritage, where he focuses on advancing public policies that increase the rate of economic growth to help the United States retain its position as the global economic superpower. He also works on budget, fiscal and monetary policy, and showcases states that get their fiscal houses in order.

As an economist, Moore said he was influenced by two great economists of the last 50 years: (1) Julian Simon, who was proven to be right, when in 1980 he disputed those in this country and worldwide who claimed the earth’s natural resources were becoming so scarce they would become even costlier, and (2) Arthur Laffer, who triggered a world-wide tax-cutting movement in the 1980’s, when in the Reagan administration he recommended tax cuts to stimulate the economy. Moore is currently an economic advisor for the presumptive Republican nominee, Donald Trump.

Moore’s Discussion

Moore believes that if our energy resources were utilized the way they were meant to be used, this nation would become energy independent in the near future, turning us into the Saudi Arabia of the next century.

Positive benefits from the development of our energy resources include the following, according to Moore:

  • Creating jobs by the millions.
  • Creating good jobs with good pay.
  • Reduce trade deficits.

As far as the value of oil, gas, and coal under U.S. public land:

  • Over the next 20 years, with current technology, this nation could have available $50 trillion worth of oil, gas, and coal.
  • The federal government could raise $4 trillion by leasing federal land for exploration. With a deficit of $20 trillion, $4 trillion would be tidy sum toward reducing our deficit.

Republicans have a great opportunity to gain the upper hand in the energy struggle, but they haven’t done a good job. The major donors to the Democrat Party are the unions (the teachers union dominates here in Illinois) and lunatic green movements funded, in part, by billionaire Tom Steyer of California, who is an environmental advisor to the Obama administration. Green groups want to keep coal and oil in the ground by stopping drilling and coal mining. Republicans need to drive a wedge between those who traditionally support the Democratic Party by getting out the message that “we (Republicans) are the ones who are trying to save your jobs.”

Moore and Harold Hamm

Moore said he was influenced by the story of billionaire industrialist Harold Hamm, who left home when young because there wasn’t money enough to feed all 14 children … and Hamm was 13th in line. Hamm now owns most of the energy resources in North Dakota. Invited by Hamm eight years ago to travel to North Dakota, Moore was amazed to see what was happening in the state. “Wildcatters” like Hamm had developed fracking and horizontal drilling. The code was cracked to find more natural resources, which put America way ahead of the rest of the world – yet no government was involved in this development.

As Chairman and CEO of Continental Resources, the fortune of pioneering oilman Hamm peaked at nearly $19 billion in 2014, but has since been reduced to $11 billion when oil prices plunged. Hamm does remain bullish for the future, however, and expects a new boom to come. Hamm expects $60 oil again, and says America will double output again.

Moore said he believes that if not for the shale and gas revolution, Obama wouldn’t have been elected. But that doesn’t keep Obama from running around the country falsely proclaiming how we are running out of oil and gas. As Moore stated, “We are running into it, not out of it, through fracking and horizontal drilling.”

Vilification of Coal and Oil

Even if global warming was scientifically indisputable and here to stay, Moore said, it could not be stopped by shutting down sources of American energy. In Virginia where Moore lives, EPA regulations on coal have shut down entire towns. These once-vibrant communities have been replaced by unemployment lines.

And what is to be done about China and India where there are plans to construct 500 new coal plants, Moore asked? For every one coal plant shut down in this nation, 10 new ones are being added in China and India – and they use coal technology much dirtier than here in the U.S. Compared to 50 years ago, this nation’s emissions have been reduced more than any other country in the world, but that is still not enough for the greens. Climate alarmists continue to spread their unwarranted fear to a somewhat gullible public.

It comes as no surprise that children are being told that coal and oil must be replaced by so-called “green energy” to prevent Mother Earth from heating up and being inhabitable. This indoctrination is now standard practice in the public schools from K – 12th grade. It’s difficult to talk about global warming at the college level. The new thing with kids is to believe it’s cool to go with windmills and solar power. Moore asks this question when meeting with children: “Where does your electric power come from?” Most often the response is: “It comes out of the socket.”

Sources of Power in U.S.

Well over 90% of this nation’s electrical power comes from four sources, ranked in order: natural gas, coal, nuclear, and hydro power. Wind comes in at a measly 4.7% and Solar at 0.6%. Combined, coal and natural gas supply about 70 percent of this nation’s electrical power. If a global warming catastrophe were really upon us, nuclear power would be the way to go. It is a clean and safe form of energy which gets the most bang for the buck. Yet the public has been turned against nuclear power through bad publicity over unfortunate nuclear events.

According to Moore, we are witnessing a war on energy. Presently this nation’s economic growth is pathetic, at less than 2 percent. Energy independence and tax reform could quickly increase this nation’s growth to 4 percent, but this will have to wait until the next Republican president.

Natural gas was described as a wonder fuel – it’s abundant – it’s made in America – and it’s clean energy.

Introductory Comments made by Jim Lakely

Jim Lakely, in describing the five issues covered by The Heartland Institute, spoke about the environment as being the issue Heartland is most known for. Accordingly, Heartland is a target of the eco-Left for not embracing climate alarmism and declaring that the science is not settled.

The most recent development is how ExxonMobil is being accused of misleading the public on climate change. The corporation is being sued by the attorneys general of the Virgin Islands, New York, Massachusetts and 14 other states. Likewise, The Competitive Enterprise Institute is now fighting a subpoena that requests a decade’s worth of communications, emails, statements, drafts, and other documents regarding CEI’s work on climate change and energy policy. Although The Heartland Institute is mentioned in all the lawsuits, it has yet to receive a subpoena in what amounts to a fishing expedition to silence those who do not subscribe to Obama’s stance on Climate Change.

Moores

Stephen Moore

By Nancy Thorner –

Northwestern University sponsored a lecture by Stephen Moore of the Wall Street Journal on Monday night. The theme of Moore’s lecture was “Keys to Prosperity.”

Moore embraces the free market system in contrast to the Keynesian economic theory, which contends that productive activity is strongly influenced by total spending in the economy, but that spending does not necessarily equal the productive capacity of the economy.

FDR prolonged and made the Great Recession worse in the 1930’s by following the Keynesian theory.

In that Stephen Moore has been covering the pro-American story about this nation’s energy policy for several years at the Wall Street Journal, Moore initially spoke at length about Williston, North Dakota, a boom town that sits on top of the Bakken formation.As indicative of a boom town, Moore related how he had to spend $650 to say one night at a Best Western Hotel in Williston.

The fracking taking place in Williston, North Dakoka, and in other areas located within the Bakken formation, is reshaping the oil world.  It is the biggest find of oil in North America in the past 50 years and represents a real game changer. At least 2 billion gallons on oil are to be gained through fracking.  According to Stephen Moore, North Dakota has more oil than Saudi Arabia.

It is hydraulic fracking that has changed energy production in the U.S.   Hydraulic frackiing enable drilling two miles deep into the ground. There is also the ability to drill horizontally,  At high speeds in hydraulic fracking thick shale rock is cracked open through which oil flows out that has been there for millions of years.

Hydraulic fracking is also happening in Montana, West Virginia, CA, allowing this nation to go full speed ahead so that within ten to twelve years this nation can go from an oil import country to an oil export country.

Through hydraulic fracking also to be realized is a150 year supply of natural gas, a certain death knell for wind and solar, which could not exist except for generous government subsidies.

The Left has had some success in demonizing fracking.   Twenty states have banned hydraulic fracking, including New York.  Although New York has banned the practice, Pennsylvania hasn’t.  So Pennsylvania oil producers routinely “dip their straw in New York’s milkshake,” fracking away to extract oil from New York’s rich shale deposits

Stephen Moore is not complimentary about the Energy Department and believes that a priority in Washington, D.C. should be to dismantle it.  Moore deplores the billions being spent to develop alternative energy.

Most interesting was Moore’s discussion of “Who’s the fairest of them all?”, in which which America’s “Boom and Bust” periods were designated.

1972 – 1982     Represented a -60.5% drop in the economy.

1982 – 2000     Represented a +700%  increase in the economy.  It was then that God gave us Ronald Reagan.  Even though Reagen had inherited from Jimmy Carter what had been an 18-year long depression, the election of Ronald Reagan initiated the greatest period of wealth creation ever seen, more wealth than in the prior 200 years combined!

2000 – 2012    Represented a -30.5% drop in economy due to over investment in the dot coms.   Stephen Moore did admit that his figures were somewhat out of date given the recent surge in the stock market which he attributed to the low interest rates purposely being kept low by Ben Bernanke, Fed Chairman.

In explaining what caused the economy to go from a depression to the greatest period of growth this nation has ever seen, Moore cited the dramatic reduction in tax rates from 70% in the 1970’s, a time when government took two thirds of what a person earned (or 70 cents of every dollar), to a  28% tax rate which allowed individuals to keep 72 cents of every dollar after taxes.

In noting how the rich are exploited by the Obama administration for not paying their fair share of taxes, Moore went on to explain how the top 1 percent pays well over its “fair share” —  22.3% more than their share of earned income which is 13.3%.  The same a holds true for the full top 20%.  Meanwhile, the bottom 40% income groups earned 14.9 percent of income but paid just 4.1 percent of federal taxes, while the bottom 50% paid just 2%.

JF Kennedy had it right when he said in1962 that the soundest way to raise the revenue in the long run is to cut tax rates. This is in contrast to President Obama who insists that tax rates must be raised, especially on the rich, to stimulate the economy.  History tells another story.  Our economy soared when tax rates were lowered during the boom time of 1982 to 2000.

Stephen Moore believes that everyone should pay some income tax to have some skin in the game.  Moore does advocate a  flat tax.

Moore casts blame on Ben Bernanke for the lack of growth of this nation’s economy in that the Federal Reserve is flooding the economy with dollars.  Moore called Bernanke’s approach the “Helicopter Method”, because it’s akin to stuffing a helicopter with $100 bills and then dropping them over cities to stimulate the economy.

Why then is this nation not experiencing run away inflation in that it is dealing with its debt not unlike the model used in Mexico, Bolivia, and Argentina.  Even though the U.S. government is issuing bonds and the Federal Reserve is purchasing the debt, the American people are too traumatized to spend freely not knowing what the future will bring.  For this reason the inflationary measures Bernake is creating by purposely keeping interest rates low are not taking hold.

A sign of the uncertainly many Americans are experiencing over their financial futures can be noted in the sale of 10-year treasury bonds.  Despite a negative real interest rate on 10-year treasury bonds, these bonds are selling even though they will be worth less in 10 years, which makes the case that low interest rates are not a sign of strength, but instead a sign of weakness.

Part of the reason for the stock market surge is because many individuals, dissatisfied with the low interest rates on their investments, have no where to go but to return to the stock market, hoping for the best in the long run.

Stephen Moore described free trade as important and disinflation as a good thing.  Disinflation is often confused with deflation.  Deflation refers to a sustained fall in price levels. This is a phenomenon when the periodic change in CPI is negative. Disinflation, on the other hand, is a decline in the rate of increase in price levels.

Because of  disinflation the American people can afford to buy more things like new vehicles, apparel, software and computers.  Prices most out-of-control over the past 10 years and which have gone up instead of down were in Education and Medical Care,.  Both are products of the public sector (government controlled)– 70% for education and 40% for medical– in contrast to lower prices in the private sector.

In speaking to the college students present, Moore informed students that their tuition shouldn’t be going up every year, but instead downward, and that the present exorbitant cost of tuition represented a big bubble that would eventually burst because of on-line education.

In offering advise to this generation of college students, Stephen Moore prefaced his advise with a question as to why so many of you most likely voted for Barack Obama given that he ran up $5 trillion in debt in four year.  Voting for Obama could have been forgiven the first time around in 2008, after having come off a period of big spending by Republicans.

Students were reminded that you and your kids will pay for the debt Obama is running up unless spending can be brought under control.

Lastly, Stephen Moore enjoined the students present to do what they love in life as a preparation for future success and also to question authority while in college.  Just because a professor says something, doesn’t mean that it’s true.  Moore spoke of his college years at the University of Moore where 70% of what he was taught was not true.

Speaking of his mentor, Milton Freeman, Moore related two conditions garnered from Freeman as important to America’s future and its prosperity:  1)  Universal school choice for every child in America and 2) Cutting government spending.

Stephen Moore believes that cutting government spending, along with a flat tax, will create the strongest economy this country has ever known.

Thursday, March 07, 2013 at 08:00 AM | Permalink