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Shift To Natural Gas Will Not Lower Energy Costs
Monday, June 7, 2010, by Stathis
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Serving as a catalyst for BP's oil spill, Obama recently addressed the need for the U.S. to move forward with an initiative to emphasize utilization of its vast natural gas reserves. This is just another distraction by Obama to cover up from his failed healthcare reform and the soon to be failed Wall Street reform.

In the recent past, the switch to natural gas has been argued as a means by which to blaze a path towards cleaner air, less foreign oil dependency and lower energy costs. However, benefits expected from a shift to natural gas are not likely to pan out.

First, while natural gas is a cleaner burning fossil fuel than oil, replacing oil with natural gas amounts to little more than replacing landmines with hand grenades. The real solution to clean air is to focus on solar and bioenergy (but not ethanol). In addition, America must erect a public transportation system that will reduce its dependence on autos.

Second, America is dependent on foreign oil for some very good reasons. Not only is the source of U.S.-based crude in decline (assuming constant costs for exploration relative to 30 years ago, adjusted for inflation), but the demand continues to increase. Part of this could be remedied by building a national transit network similar to those in Europe and Asia (Japan and China). 

In past decades, heavy reliance on automobile transport served the U.S. economy by boosting demand for autos, which provided millions of U.S. jobs.

Things are very different today. America's world-leading automobile use now supports more jobs overseas than in America. Thus, America's dependency on automotive is serving as just one more force sending jobs and incomes overseas. 

Even when autos utilizing alternative energy are made affordable, Americans should reduce their dependence on the means of transportation because the auto manufacturing industry no longer benefits the U.S. economy nearly as much as in the past. Based on the continuation of current trade policies, this relationship is certain to progress. http://www.avaresearch.com/article_details-80.html

Furthermore, America's dependence on OPEC is not by accident or oversight. While Canada and Mexico import more oil to America, the fact is that the U.S. will always import Saudi oil in return for their continued support for the dollar as the cartel's only accepted currency.

As a result of the dollar-oil link, you must have the dollar to buy oil virtually everywhere around the world. This relationship keeps the dollar anchored as the universal currency, which allows the U.S. to export inflation. I first discussed this in America's Financial Apocalypse. I have since mentioned it many times in the public domain. http://www.avaresearch.com/article_details-93.html

The dollar-oil link also partly explains why the dollar isn't likely to experience hyperinflation anytime soon.

Think about it. How can you have hyperinflation (which sends a currency to essentially zero) when that currency is linked to oil?  

Back in the early1970s when the final installment of the gold standard was severed, this gave the Federal Reserve unhindered abilities to control the economy. Since then, it has created every boom and every bust. However, the dollar-oil link was established as a backdrop so that the dollar could never be abandoned regardless how many dollars the Fed printed.

[Incidentally, another reason why America will not face hyperinflation is because the majority of dollars printed by the Federal Reserve have been held by banks rather than being made available to consumers via credit. This printing frenzy continues not only as a manner by which to help the banks fix their balance sheets, but to enable them to generate risk-free income. Rather than make credit available to businesses and consumers, the banks are stealing from the people. And Washington is permitting these activities.

One of the primary forces leading to hyperinflation is due to banks flooding consumers with credit. This argument adds to others presented previously.
http://www.avaresearch.com/article_details-64.html]

Third, the transition to natural gas will not result in a long-term reduction in energy costs. While natural gas is severely underpriced, this relationship will change once the supply is tapped as a primary source of energy.  Anyone who states otherwise is either lying or has no idea how things work. The current low price of natural gas and massive reserves serves as the bait. Once you are hooked, prices will be controlled by a few hands. 

If a clear transition to natural gas is made, the recent purchase of XTO by Exxon will signal many more deals to come by other big players.

I continue to be amazed how the masses allow themselves to be fooled over and over again by new scams promising solutions. Once the people realize you cannot have solutions when the same antagonists that caused the previous problems are the ones providing the solutions. Any shift to natural gas is certain to involve the big oil producers, who will snatch up these resources very quickly so that the ball remains in their court.    

One solution to prevent price control by the large oil producers would be to place meaningful limits on the amount of natural gas assets oil giants can own. This would help keep the market open for competition. Otherwise, natural gas prices would eventually soar.

The real solution is to move forward with alternative energy, but not because of global warming. This is yet another scam created by oligarchs to tax the world. 
http://www.avaresearch.com/article_details-490.html

Clean and renewable energy systems must be designed in order to slow the release of pollutants. This alone would slash trillions of dollars from global healthcare costs over time. The transition to alternative forms of energy will be gradual and occur over decades, but it must commence immediately.

Despite the fact that viable technologies have been available for many years, Washington has continued to find excuses to delay widespread commercialization of alternative energy. Now you know why; to preserve the dollar-oil link. However, they realize the transition is coming, so they are buying time while devising another scheme that will preserve the dollar's universal currency status.

As Europe continues to implode, any previous speculation that the Euro would be used on OPEC is likely to dissipate further. Additional measures currently proposed by the Federal Reserve will ensure the dollar maintains its position as the universal currency for many decades. However, these measures will result in further economic devastation across the globe, as the Federal Reserve gains complete control over the global financial system.

Washington should do all that it can to enable oil companies to harvest oil and gas so as to minimize foreign dependency. This includes a continuation of off-shore drilling.

The current oil spill should serve as a valuable lesson. With better safety and emergency response mechanisms in place, deep-oil drilling can be made safe and come will little threat of another disaster. 

Finally, you should not assume a shift to natural gas would offer a safer route of energy production. Despite the most rigorous measures, mistakes will be made and accidents will occur. If in the future, as shift to natural gas is made, you should expect to see many more gas pipeline explosions on U.S. soil, taking human lives.

Already, several natural gas explosions have occurred over the past few years. Yet, they don't seem to make the headline news.  I suppose journalists feel that it to be a more devastating event when fish and birds are killed rather than humans.

 

 

 

 

 

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