Charlie Pedersen
wexinfinity@gmail.com
186132.myauthorsite.com
NOISE : The President speaks

 

Copyright Charlie Pedersen; we2infinity.com

9/1/2012

Excerpt from NOISE : No Oil Imports (from) Semitic Exporters

 Chapter VII Presidential speech to the American People (What should be said)

 I’ve come to you today because I want to address our great energy challenge with a new breath of honesty that you see as not only important, but as a line in the sand as we step towards our future. . Since the 1960’s and over the last fifty years, there are several times when the executive branch has not been forthright as it should. Case in pointVietnam and Iraq both started on premises that were highly suspect: the Gulf of Tonkin in Vietnam; and Weapons of Mass Destruction (W.M.D.’s) in Iraq. We were not clear when we supported Saddam Hussein versus Iran in the nineteen eighties, and Bin Laden against the Russians in Afghanistan. We sacrificed our soldiers, our future, and our principles time and again.

We pursued a “Guns and Butter” campaign in the 1960’s and early 70’s which ultimately gave rise to inflation and interest rates up to 20 %. Since 9/11/2001, we allowed deficit spending and loose money policies to pay for Iraq and more, and that led to the economic mess we’re now in. If you recall, WW II, a credible war, was supported not only by our troops and money, but our citizens experienced rationing of food, domestic goods, and for a time, no commercial cars were built, and more. Citizens supported the war. Today, we still have the spirit, but not the committed objective. 

We have new challenges which haven’t been clearly explained for you, and I’m going to change that. You know I’ve been traveling around the world talking about Energy, and why it’s time for a change.

You know we’ve been struggling with oil since the nineteen seventies, but since 9/11/2001, the last ten years, prices have tripled, about $1.11 for a gallon of gasoline to $3.60 – 4.50 per gallon, while our consumption, largely due to our economy, has gone down. Our excuse was it was largely because of the energy growth of China and India. But the profits soared in the American and world Oil & Gas companies. Since the seventies, when we could no longer use only domestic production to meet our needs, till now, we’ve evolved to over 45-50 % of our needs being met through oil imports from Mexico, Canada, the Middle East, South America, and more. Our prices have increased largely due to uncertainty in the Middle East. Meanwhile reserves have grown, even though U.S.A. production rates for oil have been flat, until recently.  Last year, for the first time, Saudi Arabia sent over one (1) million gallons of oil per day to China and less than a million gallons per day to the U.S.A. Remember all petroleum in the world is settled in American dollars. We have to be more productive! We have to protect the  dollar as a reserve currency.

 This is a subject that bewilders most Americans. In the months ahead  you will learn a lot about this, for the wrong reasons. Much of world trade occurs in dollars, because the currency is not volatile, including about 76 % of oil trade. You know we have about $16 trillion in national debt due to operating with an unbalanced budget. This is called deficit spending. WE sell treasury bills (T-bills) to the world at a current rate starting at one and a half (1.5) percent (%) interest. Don’t you all wish that was your credit card rate! Nations buy it because they need dollars to support their trade. If we can’t sell T-bills, we have to raise rates until we balance our debt with these “loans”. So a strong dollar supports lower T-bill rates. Another factor is that the US military supports the trade world, it secures our stability.

Well, this is under attack and the implications of the dollar not being the world’s reserve currency is potential of massive inflation, some predict, beyond 1980. I’ve said enough on that for the moment.

You and I know that a lot of the drag on the American economy is led by the cost of energy, and particularly, oil and petroleum. It has almost destroyed the airline industry, and has hindered transportation, and in particular, trucking throughout the world. Energy presses on the cost of manufacturing and retail delivery, and is the biggest single factor behind our depressed economy, and in fact, the world economy. Meanwhile, we also see record profits in the Oil & Gas companies.

We are threatened by climate change, and there has been significant drought in middle of the U.S.A. impacting agriculture, and in particular corn. Much of the dismay in Libya, Egypt, and the Arab Spring was that although oil prices were high, with profits to their governments, the cost of food for the everyday person was skyrocketing. Corn is the staple diet for hogs and cattle including dairy cows, and more. Livestock consumes 47% of the soy and 60% of the corn produced in the U.S. Some governments supplement food costs, but that didn’t solve the problem, they just traded oil profits for keeping the peace at home. And it didn’t work. Agricultures problem is water. With seven (7) billion people, food and water must be stable commodities.  Imagine with nine or ten billion people. We’re going there!

This has to change and I’m sure you are dismayed at our seemingly unacceptable choices.  In spite of what you’ve seen and heard of as stimulus, economic progress in the U.S.A. is still marginal at best. One thing that should have been pronounced by all of us (in government), is that 2/3 of stimulus was really stopping of the economic decline. After all, supporting police, fire, teachers, and more doesn’t stimulate anything except the status quo and preventing a depression. But I believe the American people were led to believe that we were investing in growth, not anti-decline. For that I apologize, not for doing it, for communicating poorly. Government is too frequently afraid to be honest and it always comes back to haunt us. 

 So we spent over a trillion dollars on war in the Middle East. We let our banks, frankly, invest in poorly underwritten loans, which shook our financial stability, and we absorbed tripling the cost of our transportation energy and more, even though as I said, the U.S.A.’s consumption of fossil fuels declined in the last ten years. Think about it: China is buying some of our debt in T-bills while their growth persists and that is why our transportation energy expenses have tripled. That’s insane. Countries are buying our debt in T-bills, so we can secure their energy at triple the price. We need energy independence. Not the words, the reality. We are spending many billions of  dollars extra per year so we could pay foreigners interest on our debt?

This is why the paradigm of:  demand exceeds supply, has to be reversed and we need the support of the American people to change it. When energy supply is properly reversed, prices will fall, it is as simple as that. We can do this fairly quickly. This is why I’m speaking to you today, so you can understand the dynamics of change, and what we’re, together, going to do about it.

This is a commitment as secure as our commitment to WW II. 

One of the great things about America is the government and entrepreneurs often invest in change, and the public benefits: computer chips, the internet, cell phones, satellites, and much, much more. This has been going on at a steady pace since WW II, and in fact, much of basic U.S.A. baseline technology R&D has Department of Energy (DOE) funding involved in many of the our universities throughout the U.S. You’ve heard a little about Shale gas and new discoveries of Natural Gas (NG) that have made the U.S. the largest producer of NG in the world, a distinction  previously held by Russia and Saudi Arabia. This wasn’t a discovery. Our history with Shale oil and gas goes back to 1821, with specific grants and tax benefits flowing to NG partners since the 1970’s. It turns out that in 1998, the diamond drills, the art/science of horizontal drilling, and hydraulic fracking came together so that cost effective mining could occur. Much credit for the investment in Shale oil drilling is given to Mitchell Energy, Texas. In the 1980s and 1990s the company pioneered new technology for horizontal drilling of Natural Gas (NG). This technique, combined with hydraulic fracturing of rock, makes it possible to economically extract Natural Gas (NG) (and oil) from Shale rock formations. The new approach has been widely adopted by the gas industry and spawned a new gas boom in North America. The Potential Gas Committee estimates that U.S. recoverable reserves will last 118 years at current production levels. Extracting from Shale rock is rapidly spreading to countries outside the United States. Some consider Mitchell's innovation important in the context of energy security, making the United States less dependent on foreign sources of energy. Mitchell Energy & Development Corp. was later acquired by Devon Energy. Prior to this, Natural Gas (NG) was in decline, and the forces of government grants and tax allowance together with entrepreneurial market proponents made the research and experimentation happen. 

 For the moment, allow the evidence to show that hydraulic fracking can occur without endangering water resources in our wells. Give me that, for the moment. It’s manageable, and it has been recently certified by the EPA  in Pennsylvania. (July, 2012) ( a continuing process).

Well the story is much bigger than that because all over the world and in particular ChinaIndiaCanadaMexicoArgentina, and many other nations have many large deposits of Shale oil and gas. In fact it’s big enough to call it an energy revolution. It's big enough to call it an energy revolution.

To really forecast a revolution, however, you need to see that the resource, e.g. gaseous fuel can overcome risks such as the analytical models being too zealous. However, simultaneously, there has been decades of research on methane hydrate, another capture of methane in the porous ice at the bottom of the ocean and on land in ice in the northern permafrost. According to one conservative academic calculation, Earth’s conventional (including Shale formations) reserves of Natural Gas (NG) hold 2,331 billion tons of gas. Earth’s reserves of oil contain 160 billion tons. Earth’s reserves of coal contain 675 billion tons: Taken together, 3,186 billion tons of fossil fuel. But Earth’s methane hydrates contain 3,000 billion tons of carbon based methane. Or more. Methane hydrates are found at larger and larger volumes the deeper you drill. ConocoPhillips drilled 830 meters for its field test at Prudhoe BayAlaska. Prudhoe Bay Oil Field is a large oil field on Alaska's North Slope. Earth’s reserves of this resource could theoretically reach millions (1,000,000s) of trillion cubic feet.

 (Source: EIA Annual Energy Outlook 2011)

 In other words, the forecasts of Shale Gas don’t stand alone; they are augmented the potential for methane hydrate, the largest fossil fuel source on earth. Then if the coal industry became a producer of gas and liquid hydrocarbons, that would also play into the paradigm supply exceeds demand, stimulating use! The forecasted volumes are in excess of what is needed to transform the paradigm of energy transportation, electricity generation, and heating in America and the world.

The primary issue with NG is not volatility or fear of explosion. This is addressed. It’s when converted to “Compressed” Natural Gas (CNG) there is a loss of efficiency. In NG’s natural state, it’s extremely light but its physical size makes compression desirable in vehicles. With Natural Gas (NG) selling for about $2.30 per million BTUs, its energy equivalent price for a barrel of oil would be $13.34, or 87% below the price of WTI oil (at $103/barrel).  When measured on an energy equivalent basis, Natural Gas (NG) has never been cheaper than oil than it is today. As to cost equivalence Related: Forbes reports that major oil and gas companies Chevron and Exxon Mobil will continue drilling for NG, even with record low prices, with Chevron planning to double its production in the Marcellus region: Why? They are winning the war with the coal market. This is an opportunity market for Oil and Gas (O&G), net new business.

But remember, we’re not necessarily looking for the ultimate answer such as hydrogen and atomic fusion; we’re looking for a sustainable bridge. Here is also deep research into energy storage like advanced batteries which raise the specter of 500-1,000 miles of charge for conventional electric cars. This isn’t wishful thinking, it is hardened research.

But the real impetus behind Natural Gas (NG) is innovations in efficiency. Here’s an example, which I’m providing to show you how dynamic the alternative fuel market can be. Natural Gas (NG) when converted to fuel cells which operate from hydrogen can make the case for a bridge to hydrogen over time. The big question on NG vehicles is efficiency. But innovation is the solution. For example, what is the best use of Natural Gas (NG) for transportation?  Pardon my detail, but you must see that the key to real game changing decisions is realizing the opportunity of a competing innovation like this:

Directors of the National Hydrogen Association in 2007

 “Is it better to burn that Natural Gas (NG) in an Internal Combustion Engine (ICE), Natural Gas Vehicle (NGV), or is it better to decide that NG can make hydrogen for a fuel cell electric vehicle (FCEV)?  Converting NG to hydrogen is the clear winner for two reasons: less NG will be required to travel a given distance, and hydrogen in a FCEV (fuel cell electronic vehicle) will create less well to-wheels greenhouse gases (GHG) than burning the NG in an NGV (Natural Gas Vehicle).. First consider efficiency.  The steam reforming process to convert Natural Gas (NG) to hydrogen is approximately 75% efficient on a lower heating value basis, meaning that 25% of the energy is wasted in converting NG to hydrogen. But a FCEV is up to 3 times more energy-efficient than an internal combustion engine. This is equivalent to 69.1 mpg of gasoline on an energy equivalent basis. The conventional Toyota Highlander is rated at approximately 22 mpg, so the FCEV version is 2.325 times more efficient. Thus the Fuel Cell Electric vehicle (FCEV) will travel 2.325 times farther on a given quantity of Natural Gas (NG) than a Natural Gas Vehicle (NGV). And its emissions are H20.”

  This logic would also apply to converting coal to hydrogen and compensates for the inefficiency lost in the coal conversion. The reason is a fuel cell vehicle is essentially a converter of hydrogen to electricity, and the electric motor is far more efficient than an internal combustion engine (ICE). So you can have a fuel that is less efficient then say gasoline, but the motor is far more efficient than the ICE. This is because electric motors lose very little power from friction, they also make more torque at a lower rpm than gas engines, they also require little maintenance, and pollute less. With hydrogen fuel, a FCEV is more efficient, more reliable, and cleaner burning than an internal combustion engine. Cleaner burning?  Its emissions are H20.

For any of this to be true though, you have to decide to invest in both the technology and it’s distribution system. Although a Natural Gas (NG) distribution system can front end the Natural Gas (NG) to Fuel Cell Electric Vehicle (FCEV) system supplying both alternatives. That is until innovations on the FCEV make the NG Vehicle (NGV) or the Internal Combustion Engine (ICE) obsolete. Given this path with variable innovation time, the solution is to convert to the NGV and FCEVs.

So with all this opportunity, what are the main barriers to moving foreword? There are three:

  1. We need an expanded distribution system to make Compressed Natural Gas (CHG) as accessible as petroleum. Further, we need to be able to tap home, office, and retail pipelines to make a superior pipeline system for cars and trucks. The system must support multiple fuels and battery charging, including the adaption of a FCEV converter (NGV to hydrogen).
  2. We know there will be plenty of retrofitting of transportation systems to integrate safe Natural Gas (NG) vehicles in our world. Fortunately, there are already 14,600,000 vehicles in the world running on Natural Gas (NG), including Pakistan with 2,300,000, as an example. The U.S. is only several hundred thousand NGVs.  Hmmm, we give billions in foreign aid to Pakistan and they’re more advanced in gaseous powered cars
  3. We need the American people to see this large view and recognize that the key factor for the first years of this century is that supply of transportation energy has to exceed demand, as opposed to the current state where demand exceeds supply, by design.  This isn’t the ideal green solution we’ve been looking for, but it is a bridge to our goal with immediate environmental benefits; i.e. replace coal with NG and  significantly expand the use of NG in trucks, automobiles, and yes, airplanes. 

Now let’s look at some other benefits:

  •  Lack of military support to be assured of our energy supply. This is an all-in U.S.A. product;
  •  The multiplier effect if the world changes with us; 
  •  And a cleaner environment at lower cost; significant progress towards a green planet, and economic recovery tied to lower cost fuel and the environment. You and I are tired of the debate over global warming. The real concern you should have is over global warring. We made over a trillion dollar down payment. It’s too expensive and ineffective.  Islamic leaders want us out of the Middle East.

 Now there are other larger questions to be answered, so let’s consider:

 1. What about China and India?

Won’t they leverage our action into deeper relations with the Middle East? We think the market for oil and gas is a viable market. The suppliers have to be price competitive in an open market of supply and demand. One of the new terms you have to absorb is Paradigm change, a change in fundamental understanding, like when automobiles began replacing horses. This age is a new paradigm when CNG and LNG and other Natgas or hydrogen fuels become the dominant source of electricity and vehicle fuel. Petroleum will earn its way back into competition through efficiency, cleanliness, and price. What you need to understand is that energy supply will transform over 10-15 years and that’s O.K. But right up front, we will begin progressing with supplies exceeding demand. This means that the goal of expanding distribution is of the highest priority. And we have source agreements in America to handle the flow of oil and petroleum right now, if we pulled out of Middle East imports, to compensate for not buying fuel from the Middle East. Fracking is also increasing oil supply in Canada, Mexico, and the U.S.A.

  2. What about Israel?

 America and Europe are, and will always be, strong supporters of Israel. They are not major energy producers, so they get no downward impact from revenue loss. Beyond that, we are their strongest ally. They knew this paradigm shift had to happen. After all, does anyone think that we’d accept $100-200 per barrel fuel costs for a sustained period?  You see, 2002-2012 is what I call a decade of an energy bubble which was bound to pop. With the American people behind this shift, Israel knows of our steadfast support. It would be very foolish, very, very foolish, for a neighboring country to Israel to think the west isn’t resolute in its support of Israel. We back our resolve with blood.

The real issue of Israel is layered, but its roots go back from the Crusades to World War II. Underneath it, the Middle Eastern Islam countries have been slow to provide the diverse economy they need, and the culture defines the role of men and women differently. This is anathema to the west, but the solution over the long term is education. You have to wonder whether the “Arab Spring” will influence that. Since it seems clear that Sharia law will dominate, we can assume that “democracy” isn’t what we perceive or would like it to be. Islamic countries don’t believe in separation of church and state. Israel, to a large extent, is a country of immigrants from Europe for the most part, and Middle Eastern Jews. It is a western state physically in an eastern culture. Their biggest threat is that they are physically small and their population is seven point eight (7.8) million people, about fifteen (15) million people worldwide. Islam in all sects is about one point six (1.6) billion, worldwide. Israel cannot even consider the idea of a nuclear explosion in their country. Israel could fit into Florida eight (8) times: 263 miles long, north to south; width nine (9) and seventy one (71) miles (East to West). So they will not let nuclear weapon capability exist anywhere near hurling distance to their borders, including short range missiles.  It’s that simple and it is irreconcilable. Meanwhile, economically, their country thrives even with no Oil & Gas industry. So the only real hope is economic prosperity within the Islamic countries, which has to move beyond Oil & Gas. With lowered pricing assured, the only hope of Islamic people is the better distribution of income from the Petro-business into emerging industries and education. No matter how you turn it, this is the only bridge to the reality of peace and prosperity. Meanwhile Israel will persist and defend itself vigorously, and the West will defend Israel’s independence and freedom. This is very clear to the west and there is no compromise. If the Middle East wants Armageddon, it will be contained to the Middle East.

 3. What about Saudi Arabia and Iran?

 The Saudis have known for a long time that this type of action would occur. The world energy consumption is rising, and improved cost effectiveness will make U.S. energy consumption rise with our recovered economy. Air transportation will boom with profitability, and all forms of economic transportation and leisure travel will excel. The Saudis, besides having huge gaseous reserves, will leverage their position into the improved economy they serve. Now they have to compete on price, cleanliness, and efficiency! They of course will strengthen ties to China, but China can’t let the U.S.A. dominate the lower cost, cleaner fuel paradigm just when China is growing their power consumption with coal, Oil, and Gas. They need these efficiencies as much if not more than we do!

   Iran has to reconcile their position as an energy provider and a robust business partner. We won’t have any energy embargo on them because supply of oil energy is no longer a limitation on the world. Iran needs to realize that this market action is inevitable. If they progress to nuclear weapons, Israel will destroy their nuclear manufacturing capability. If they care about their people and their history, they will change, or their people will revolt. However, the current embargo placed on Iran by the allies is being circumvented by direct sales to India with Gold and sales to China denominated in Yuan. The U.S. currently settles about 76 % of world oil in US dollars. But this is rapidly declining. Aggressiveness with Iran may very well be the catalyst for the whole USA-Oil house of cards coming down. If the USA looses this,  then the motivation to buy US T-bills is diminished and it could spur interest rates beyond the 1970's. So our entire money printing exercise over the last ten (10) years collapses and the US faces financial catastrophe that could exceed the depression of the 1930's.  With that in our sights, the alternative is: WAR.

 Likewise, all dominant energy users will respond to the economic uplift from lower priced and cleaner energy. Energy suppliers will adjust to new pricing dynamics which will still produce profitable returns due to the rise in consumption. For example, most people don’t realize that oil is extracted out of Libya for about $1.00 per barrel. Nigeria and Saudi Arabia also have easily “tappable” reserves, maybe not that inexpensive, but with plenty of profit margin. The point is profitability is not under a major cost constraint. Obscene profitability is. Additionally, in the unlikely event , if OPEC just dropped their price to $50.00 per barrel for oil, market pressure would keep the cost of NG or derivative energy sources low so the winner is the consumer. You can choose to use petroleum and an ICE. Who knows, maybe oil will drop to $30.00 per barrel. Over the post WWII period, the median for the domestic and the adjusted world price of crude oil was $20.53 in 2010 prices.

 Remember the U.S.A is not acting out of any anti or pro anything. We just are recognizing that, after years of government supported business research and development, we have harnessed multiple sources of gaseous power and are creating a strategy that includes coal, NG, and towards hydrogen with a clean transition from one paradigm to the next. (A paradigm is a model that forms a basis of something, especially one that forms the basis of a methodology or theory like how to power airplanes and automobiles) Support NG for transportation and your energy costs will drop and the economic / environmental impact will be vastly improved.

The competition herein will ignite the kind of innovation from one single fact: the U.S.A. will invest in expanding the transportation fuel distribution system, so the baseline for NG innovation is set. Just watch our innovations soar. You just need to follow through. We should be proud when Government supported Private sector pioneers in innovation. The system works, even with obscene lobby money graft and weak politicians. It has to be clear that change will happen.

 4. What about the Oil and Gas industry in the U.S. and the world oil markets?

The great American and international companies are behind this initiative, and in fact they are participating in Shale oil and gas exploration all over the great nations of the world. Remember, Oil & Gas have been advertising about their role in leading edge research and development for alternative energy for decades. Our positive results in Shale and methane hydrate are with their deep involvement. If WE the people decide to embrace change, Oil & Gas either competes, innovates, and responds, or become the consumer railroads of the twentieth (20th) century. The companies who embrace the change will have a world market to embrace their expertise and a new basis for innovation. In the 1970’s, there were about 170 million cars in the world. Now it’s over one (1) billion and is expected to rise to two point five (2.5) billion by 2050. That is staggering growth that Electric Vehicles (EV), FCEV, and hybrids will have to address. 2050 is less than forty (40) years away.

Remember, these realizations are not just some lucky find. The federal government and private sector have been at the center of this discovery for decades. In fact the U.S.A., in the last five years, has become the largest NG producer in the world and thanks to joint efforts, huge findings in ChinaRussiaAustralia, European nations like Poland and England are all in the forefront of NG discovery. U.S.A. companies are spreading the revolution. The major constraint is if the country has no pipelines to move NG, and can’t afford to establish same. Although L(iquid)NG conversion provides even more options. Additionally, oil sands drilling are expanding U.S.A. and Canadian oil.

 And, by the way, we approve the Keystone XL pipeline with safety provisions.

 We just knew, as the world’s largest energy consumer, we needed to step forward so that the paradigm shift will occur.  We wouldn’t do this without careful consideration of all the impacts that change has all over the world. But we really can’t ignore the facts. Our earth, our science, and our entrepreneurial efforts were rewarded just when we needed a boost: one that will lead to cleaner, lower cost energy, and allow us to continue our evolution to a clean and energy rich nation, as well as improved world economics. The market will decide the efficiency of NG to hydrogen or the rapidity of electronic battery storage density improvement. The U.S.A. will fund the progression of R&D along with private enterprise, and the innovators will win. Once we commit to NG distribution, the forces of innovation are unleashed. American innovation is back in charge. You, the citizens, are back in charge. The equation for energy control is simple: supply > demand.

 5. The other subject that I felt I must discuss with you is Water. You know that the effects of climate change, whether permanent or not, leave us at bay with droughts and other natural disasters. This is another global problem, but we’re using this change to leverage technology to address a series of options, wherever possible. Here are some of the related actions we will address. What if, for example, NG or hydrogen fuel was only one point five (1.5) times efficient and the difference was invested in fresh water for agriculture, bio-fuels, fracking, and expanded living choice?

From this point forward, all energy and chemical initiatives will determine if there is a water adjunct. That means because our incoming assumption is to drive the cost of energy downward, all generator projects will include a steam capture and recycle aspect so that water can be produced as a byproduct. This has a lot to do with the coal to gas initiatives with power plants and any nuclear plants. As we convert from coal to gas, we want to create desalination wherever possible. We’ve talked to China and other areas that are deep into coal, and we will share R & D and investments where practical. The primary role of coal once consumed by NG, will be to develop a low cost coal to NG and/or hydrogen process and feed the local hubs of NG or hydrogen collection. By design, NG will fit into an array of small to medium sized companies, as well as the NG arms of the oil and gas conglomerates. We will ask all related chemical and gas and thermal producing organizations to consider opportunities to consolidate or reuse H20 in their plans, buoyed by tax incentives. We will ask our Attorney General to propose a legal model that permits competition without mass consolidation. In general, we are to be very rigorous about evaluating and assuring that the oil and gas business has no cartel involvement and operates to assure the evolution of the energy model. We recognize that fusion operations as well as hydrogen will require large organizational structures, but will let the marketplace decide, yet under strong anti-trust enforcement. Shale, as with any other energy initiatives, requires water, so the integration of a water action plan is part of the new paradigm. We will re-assert the Sherman (1890) and Clayton (1914) anti-trust acts where required. It is imperative that the energy costs go down.

 Think of what innovation followed the breakup of AT&T. One provision was to separate the networking business from the equipment business. The rest is history.

 Likewise, we will assure that drilling, fracking, or whatever will be very cautious about earthquake or any potential intersection with the water supply. This is especially sensitive along the west coast. Part of the answer is to let carbon fill the holes created by fracking. Carbon and C02 will be a big part of coal redeployment.

Of course, the issue of safety and methane containment are primary objectives; you will find that industry and the EPA already has that well considered.

 There are series of endeavors going forward, an agenda for Congress, some of which they already have initiated. I would like to share some of them at this time, at a high level.

 1. We know of existing legislation to provide tax incentives for the creation of methane distribution, electrical standards for battery swapping, and upgrades to refueling sites for multiple petro choices at gas stations. We will follow through on this, a.s.a.p. We also will encourage and set up tax incentives for converting NG to CNG and potentially hydrogen, in homes and office locations at very affordable prices.  Distribution and access will not be an issue in a very short time.

 2. We will ask Congress to create legislation to put significant emphasis on funding    R& D and development and implementation funding for extending battery density and recharging with improvements, incrementally if required, to five to ten times current storage levels for the purposes of supporting the electric car and hybrid enhancement. At least fifty billion dollars, we estimate. We also will encourage any innovations to augment the productivity of the internal combustion engine or alternatives with the goal of achieving gas mileage or equivalent price performance of 100-150 MPG, through hybrid efficiency, ICE/FCEV innovations, or alternative motor and/or fuel choices, including NG to hydrogen. These are well within reach. The Honda plug-in hybrid is already 95 mpg, that plus the Chevrolet Volt just need more battery density.

At this point, with the water pre-discussion, I want to share with you the triangle of our lives:                                                  

                                     The Economy

                            Energy              Environment

This triangle tells you that our economy is held at its base, by  Energy  (electric, transportation) and Environment (food, water). Please grasp these numbers because they are part of the pyramid of this decade. The subject is exponential growth. You tell me what’s wrong!

 Source based on data under the Copyright - 2012 Money Map Press All Rights Reserved

  Money Map Press| 105 West Monument Street | Baltimore, MD 21201 (Chris Martenson, Keith Fitzgerald,  Dr. Kent Moors)
  Note: interpreted and augmented by Charlie Pedersen

                                

               2012    Population  : world 7 billion

         Year ending           growth in pop.        cumulative

             2012                         +  1 billion          7 billion    (2012)

             2000                         + 1 billion           6  billion

             1987                         + 1 billion           5 billion

             1973                         + 1 billion           4 billion      (50 years-1962)

India : population 1.2 billion will pass China  1.3 billion in the next 10 years.

We know that 2050 population is targeted at 9.5 billion in 2050. It’s supposed to level? Really? In 38 years?  Last 50 years  + 4  billion                                                              

                         USA's water for:                                                         cukm per year                                                                                                   

                             Agriculture            2000-2025                + 700                 

                             Domestic use        2000-2025               + 250         “               

                             Industrial use       2000-2025              + 175        “

                            Total                                                  + 1,125       cukm per year

U.S.A. states with water shortage by 2021                        36                      

Ogallala reservoir (8 states) 30 % of national irrigation drained by          2021 to 2035

  • Drinking water for 2,000,000 people   (This is the American breadbasket)

     Solution : dig deeper with more Energy expended or adapt a W&E policy.

 U.S.A. -large exporter of wheat. Water to produce one (1) ton of wheat =     1000   tons

  • 2007/2008  mm metric tons, 30 % of world 100 mm metric tons

U.S.A. money supply 2000 -2012      + $4,800 billion

U.S.A. federal debt    2001 -2012      + $8,000 billion

Current  U.S.A. federal debt               $16 trillion

The planets use of freshwater (last 10 years) + 58 %                                            

 World production of oil peaked in 1960 and flattened around 2006  75 million barrels per day

I know you may be asking what have we been doing for the last 10 to 20 years ?

The answer, besides the aforementioned R & D :   Kuwait, Iraq, Afghanistan, Arab Spring, Al Qaeda

I present this case to you because we know it is time to shift our Water & Energy policies. We are proceeding to Congress along these lines and we will surround our budget, foreign policies, and domestic priorities with “warlike” focus. This is dramatic, but it can happen rapidly and without economic uncertainty. Uncertainty till the next drought or economic collapse?  It is time for all Americans so say with me, it’s about time we faced the challenges at home and abroad with purpose and vigor. Over the next few months, you’ll see our focus is around the cooperation that will magnify in the Americas: Mexico, Canada, Brazil, Argentina, Venezuela, and all our friends on the two continents. We will also spend much time with our allies, Russia, the Middle East, and all of Europe, Asia, and Australia.. These countries recognize this, not as a U.S.A. problem, but a world problem.

So I’m presenting this agenda to you and recognizing that this can occur very effectively with your support. There will soon be a book published to broaden this action plan, NOISE, No Oil Imports (from) Semitic Exporters, obviously named to get your attention.

 I have one more agenda to discuss with you. As part of this initiative, we are redeploying some troops and working with Mexico to resolve our border problems, another demand and supply problem, particularly with drugs.

 We are going to migrate some of our troops around the world, maybe 50,000 or more, back to the states and join a border force in our south to stop illegal immigration and combat drug movement. We have already discussed this with Mexico and have assurances that we have a mutual objective of shutting down drug cartels and eliminate the business of Chrystal meth and cocaine trafficking and stop any heroin traffic from Afghanistan. We suggest that those in that business have to understand that they should find legitimate business. We are focused inwardly and demand this assault on our youth, stop. I repeat, we demand that this assault on our youth stop. We also are asking Congress to legalize and decriminalize marijuana at the federal level for individuals over twenty one, with severe penalties for sale of such to minors.

Additionally, we will have strong initiatives to assure we can track gun sales to end-users and stop the sale of American weapons to drug traffickers. Mexico has agreed to work with us on stopping the trafficking of guns from RussiaChina, and elsewhere, as long as we develop a comprehensive approach to inhibit guns to flow from our manufacturers through third parties and into Mexican cartel hands. This has no impact on our personal gun security laws and freedoms, but it must be done. Period.

 If the near future, probably tomorrow, you will get a lot of feedback from lobbyists and spokespeople from the status quo. I’m getting your attention because we know this will work. But you must understand these objectives and any possible short term considerations. This is a moment in U.S.A. history as significant as World War II. That’s a bold statement, but you have to know this is right, and the time is right, right now! I’m not overstating it. We can not go on subordinating the U.S.A. and the world to Water & Energy shortage.

  1. There may be a lot of second guessing us, but you must know this is a prudent action that will work, on a positive path to a needed green economy. It’s forward progress that will be visible in the short term, and you will see many actions, reactions, and over-reactions, but Europe, RussiaChinaJapan, and others will quickly have parallel or alternative plans. That is O.K.
  2. I know you are tired of actions or inactions that don’t move the agenda forward. These actions will do more than move the U.S.A. forward, Water $ Energy change will be the step that improves  the economy, prevents war, and causes the greatest peacetime world cooperation in the last hundred years.

What are the downside risks?

 The downside is simple:

We have to improve extraction and transportation methods so there are no significant leakages of methane. Although it dissipates faster, methane overall is a denser greenhouse gas than C02. So, deeper insight needs to be developed over: leakage risk and cost of prevention, and the risks associated with the creation and distribution of hydrogen, which has a greater greenhouse benefit in the long run. But understand, this plan includes the re-engineering of coal as another methane and/or hydrogen source, so the benefits long term of coal reduction, plus the creation of carbon and C02 stores have additional benefits. The work currently being done to convert carbon as a replacement for silicon in electronic chips and graphene’s role and timing in denser lithium battery storage has to be realized. The point is, though, that when we make this decision, we begin what is necessary for a new paradigm change. For example, phase 1 can be enough distribution capability to impact the trucking industry and then geographic evolution of gas stations to fuel depots over a longer period. The other choice to isolate is airline fuel, although once cars and trucks are addressed, the cost of airline fuel will drop, no matter what. The U.S. electricity is about 36 % coal (rapidly declining) , 36 % natural gas (rapidly increasing), and 18 % nuclear.(the rest hydro, thermal,  renewable, etc.). Once our commitment and action is seen by the world, the real impact of true paradigm change will occur. If China and other nations join the change, the impact on world ecology is substantial. If they hold out, they will do so at the detriment to their own people. Quite frankly, once the methodology, mining, distribution, and safety concerns are addressed, Asia will respond. The amount of efforts around the world, and particularly, Japan, will create a whole new market for technologies that improve the process and the safety. Remember, there are already over 11,000,000 cars running on natural gas. In fact, Albania has seventy five (75) percent of its transportation running on natural gas. This is not a fledgling industry. It’s a proven industry that has to address scaling up. This is what we do. What’s needed is commitment, to not only cleaner energy, but improved quality of extraction, pipelines, etc. Remember we are already deeply committed to the extraction and use of Natural gas, with over 1/3 of our electricity, soon to rise to over fifty (50) %.  The issue is transportation.

This is all done in close coordination with China, our Middle Eastern allies, Russia, Japan, Australia, India and Pakistan, Indonesia, and Europe. It will strengthen our dollar and keep the dollar as the safest and most stable currency on the planet. China and India have almost insurmountable demand and resource problems, including water pollution. They know that the mix of water and energy must change. They also know the U.S.A. is one of their best customers.

 The all important second downside is if/when the USA loses the role of the American dollar as a world reserve currency. Understand this has massive potential of inflation and high interest rates. This is caused by our massive $16 trillion in debt, covered by T-Bill (Treasury Bills) sales all over the world. The T-bill rate ties to our prime lending rate, and importantly, many variable rate loans. This has a lot to do with our strife with Iran and recent movements with the BRIC (Brazil, Russia, India, China) nations and others. This means the shift from the dollar has already begun, the product of our 16 trillion dollar debt and failure of congress to achieve consensus on tax and/or spend. 

So ask yourselves an important question. What’s your alternative? After conferring with the world’s leaders, I am pledging to you that we are going forward. This bridge was built to be crossed. Not only will we improve quality and efficiency, we will reassert ourselves in energy and economic leadership around the world, and the dollar. Bare with me on the dollar problem, you have to understand that it’s already in motion.

Thank you for your attention.  It’s time to consider how we can assure that this agenda is successful. That’s WE, short for Water & Energy. You will look back at this and decide that you were fortunate to be alive when the people of the Twenty First Century overcame the energy bubble. The bubble didn’t burst, except for the energy created by dismissing the quagmire created since 9/11/2001. We took care of Bin Laden, now we’re going to participate in the courageous act of moving the energy challenge forward. We know a paradigm shift will soon embrace the world and address fresh water generation and pollution, particularly in the U.S.A., with its volume of Water & Energy use, and Asia with its emerging Water & Energy consumption, current over-reliance on more coal for electricity, and massive water quality issues.. This momentum will speak for itself around the world. And we will protect the Ogallala reservoir, the source of our mid-western bread basket.

The second risk is the aforementioned pressure on the dollar as a reserve currency. This risk exceeds all others. The problem is the assault is already happening. In 2002, Saddam Hussein departed from selling oil in dollars. In 2004, we invaded Iraq, He was hung by his people, and Iraq went back to selling oil in dollars.

I would like to underscore this direction with two points.

 I’m not sure the impact of these actions will have on the lobby money in Washington or the states. Remember the issue of excessive lobby money is the underlying problem regarding the relationship between the President and Congress and the citizens we serve. Our goal is to serve the citizens, not finance elections. Somehow, we've forgotten that.

  • The quest for a new Water and Energy paradigm is a challenge for WE, the citizens. We have to prioritize our spending this way. For a long time, you have been lobbied that bio-fuels, etc. are great as oil prices rise to the cost of alternatives.  This is not true, or acceptable.  We’ve been overpaying for Oil & Gas for over a decade. We will make it a clear choice that Water and Energy supply exceeds demand, and you will pay less for clean, efficient energy.  You can thank focus from Government and Private enterprise for that.
  • The market can compete for the best delivery system, but in order to achieve change, NG, and progression towards hydrogen are at the solution’s center, and at significant cost savings. Now. This is the center of a paradigm change.

  In 1962, President John F Kennedy said: “If we could competitively, at a cheap rate, get fresh water from salt water, it would be in the long term interests of humanity which would really dwarf any other scientific accomplishments.”

There is only one way to realize that dream: provide the low cost energy source and the integrated strategy to make Water & Energy at the core of our economic upturn.

The WE paradigm is the necessary turn of this century. It is the point that we take back the economic momentum and innovation from world history and rewrite the playbook of this century. This is the path of an “earth walk”, to humanity’s future.

If you doubt the clarity of this necessity (a vision that must be done.), remember, we wasted over one (1) trillion dollars on Iraq and Afghanistan. Yes, with the lives and refugees sacrificed, you may think this as harsh and unfeeling. You may think this root cause of our economic breakdown is unfeeling. We hate it, but it dwarfs the impact of not recognizing the world pyramid scheme. The danger is the scheme is unintentional, but real.

In 2006, Stephen Hawking, noted British physicist, asked Yahoo Answers: “In a world that is in chaos politically, socially and environmentally, how can the human race sustain another 100 years?” One of the brightest minds on the planet is dismayed..

The road to clean, economically efficient, and safe Water & Energy are joined together.  WE are the solution. This is one giant leap for mankind