Redesign the Paradigm

Government:

Problem

• Well financed special interests led by large banks, financial institutions, and Multi National Corporations (MNC’s) use high paid lobbyists to acquire and even write their own favorable legislation.
• Special interests provide campaign contributions to get political candidates elected, these candidates become beholden to their
  contributor’s legislative needs. This is especially true for officials who are sitting or will sit in key subcommittee positions (the decision makers).
• This type of political environment creates a lack of fiscal responsibility among politicians that results in deficit spending in order to meet and support those interests.

Cause

• Lack of moral center by politicians  who are more concerned with financial support, re-election, and serving political party
  objectives over doing what is right by the country and its people.
• The incentives for politicians in the current political system are financial contributions for re-election. To acquire this politicians are expected to return support to  individuals or groups that provide the greatest contributions. Unfortunately, that does not include the U.S. public and is being reflected in the laws that are being written and voted on.

Effect

• Continued deficit spending increased the national debt, which has exceeded GDP ($14.3T) with over $50T in total unfunded
  liabilities. This debt is being dumped on the country’s future generations.
• Global investor confidence in the U.S.’ ability to govern and manage its debt is decreasing. These investor countries are
  looking for other investments than U.S. Treasuries which they feel are no longer the world’s safest debt instruments. They are also beginning to actively search for an alternative currency to the U.S. dollar.
• Politician’s protecting special interest and corporate profits are allowing legislation which is acting as a barrier to entry for
  new technologies or is restricting the functioning of current  systems deemed a threat to those profits. This is limiting effective change.
• Distrust for government is amongst the U.S. population is mounting. The population is beginning to realize the depth of corruption that has been legalized. Voter disenfranchisement is growing as citizens realize that money for elections matters more than their votes or the country’s real needs.

• Main Street America– Devaluation of the dollar has and will increasing result in more inflation making imports more expensive from gasoline to products in all those big box stores. This reduces families spending capabilities. Less spending in the economy means prolonged recessions.
• Main Street America – Legislation continues to inequitably favor large corporate and other well financed special interests resulting in polarization of wealth away from the middle classes and towards the wealthiest Americans.

Solution

• The current political system is so entrenched in providing legislation to the highest bidder and there is such a lack of transparency available to the general public that not much can realistically be done to initiate change. Idealistically speaking, U.S. citizens would do well to stop voting for candidates from either of the two main political parties.. Their interests and ideologies are so diametrically opposed that they render themselves incapable of working together or finding solutions. You can’t solve problems with the mindset that created them – Einstein.
• Keep working towards real campaign reform. The current election system has degraded so far that it would be cheaper for the U.S.
  taxpayers if all campaign contributions and individual contributions were strictly abolished and billions in taxpayer dollars were allocated every 2 years for all qualified candidates to share equally.
• Establish strict fact checking guidelines initiated by non-partisan independent groups on all campaigns and for all opinion based media outlets reporting. Penalties would include fines and requires these outlets succumb to be required to correct misinformation in the same time slots as it was originally presented.
• Create an easy to access internet site that display all legislator voting records, who they receive have received contributions from, what special interests benefit from their votong history, and what loobist contacts receive and which help their staffs in writing legislation. Transperency and exposure for public scrutiny is the purpose of the site.
• Electonic voting machine tabulation will be verified by taditional hand count paper ballots to ensure that electonica results are not tampered with.
• Limit terms of office. If the President can serve for no more than 8 years, a Congressman or Senator should not be allowed th either. Term limits decrease both partisan loyalities and special interest control of legislators.

Note – Resistance to such measures is incredibly strong and multifaceted. Any advances will be met with new legislation designed to circumvent those advances. This will be a long struggle that requires vigilance

Monetary System:

Problem

• Rising national debt due to lack of fiscal responsibility in government.
• International debtors are loosing confidence in the U.S. ability to pay its debts and are slowing down their purchasing of debt instruments (Treasury Bills) and seeking alternatives to the dollar
• The Federal Reserve (FED) is printing more dollars to cover increases in government spending and using Quantitative Easing in an attempt to stimulate a weak economy. This practice further weakening the dollar in the eyes of international investors..
• The FED’ has kept interest rates artificially low and implemented Quantitative Easing measures for so long that it is accelerating the risk of sustained inflation.

Cause

• Unrealistic philosophy that indefinite budgetary funding with debt will have no consequences.
• Too many officials in the Treasury and FED are straight from Wall Street with allegiances that appear more interested in protecting large banking and investment banking interests than reigning in debt.
• Lack of fiscal responsibility centered around politicians who are more concerned inj protecting constituent and special
  interests and ensuring their re-elections than limiting deficit spending and reigning in the FED and its propensity to print money.

Effect

• Loss of international debtor confidence is creating a cycle where international debtors / investors purchase fewer U.S. treasuries and dollars. This requires the FED to print of more dollars in order to meet budgetary requirements. This cycle results in an ongoing devaluation of the dollar and U.S. Treasuries.
• Devaluation of dollar gives rise to further inflation as imports (big box stores) and oil become more expensive.

Solution

• Restrict the FED’s ability to expand or contract the U.S. monetary supply without congressional approval.
• Restrcit the FED’s ability to issue or repurchase bebt instruments without congressional approval.
• Require an anual audit of the FED.l
• Protect personal savings and investments portfolios with investments not affected by devaluing dollar  i.e. gold or other precious metals and their mining stocks, more stable currencies, funds such as ETF’s that hedge against inflation, etc.

Banking/Financial System:

Problem

• Financialization of U.S. markets. Derivatives’ investing is tying up almost 1 in 3 investment dollars that could be better spent in the real economy for manufacturing, innovation, etc.
• There is $600T worth of derivatives worldwide, $433T are interest rate contracts and swaps ($223T in U.S.). Most of this amount is notional meaning it will never come due, but if the FED is forced to rapidly raise interest rates to counter growing inflation only a fraction of these interest rate contracts need to be called due before another round of “to big to fail” bank bailouts occurs.
• Large banks are reluctant to invest / lend to startup, small, and medium sized businesses the backbone (85%) of U.S.
  job creation and Gross Domestic Product (GDP), despite assurances to the U.S. government for receiving TARP bailout funds.

Cause

• Wall Street greed (mammon is the more accurate word). Derivatives investment fees and commissions are very lucrative and still virtually unregulated thanks to heavy lobbying and campaign contributions by the financial sector.
• Large U.S. banks penchant towards “safe” lending which involves lending to only big MNC’s with global holdings predominantly in Asian countries. These Asian markets are considered to be emerging markets that have greater opportunities for growth than the mature markets or what some MNC’s consider declining markets of the U.S.
• Incentives on Wall Street reward short term risky investments. Moral hazard is prevalent since the general belief is that there will be another round of “to big to fail” bailouts by a FED and Treasury Department that is made up largely of ex banking executives.

Effect

• Large banks are not investing / lending to startups, small, and medium sized businesses for reasons mentioned above. This is limiting  both job growth and taxable revenue from these businesses and their employees. This revenue is necessary for paying down national debt.
• Large banks are investing / lending to large MNC’s with global exposure. These MNC’s continue to export high paying jobs to reduce labor costs and to get access the emerging markets in Asia. The results are increased profits for the MNC’s and fewer high paying skilled labor jobs for U.S. workers.
• Lack of credit availability to start-ups, small, and medium size businesses results in fewer opportunities for these companies to expand which contributes to stagnant employee wages.

Solution

• Seperate traditional banking from investment banking or from offering speculative investments.  Banks that hold U.S. citizen savings and checking accounts should only be engaged in traditional banking. i.e. providing loans to consumers / businesses and offering savings or transaction accounts.
• Break up the largest four banks into smaller entities. Too big to fail should be too big to exist.
• Large established banks have demonstrated they are not open to any changes that will benefit the general public. Savings and checking accounts are better placed in small to medium sized regional banks who engage in lending to  small and medium sized businesses or in local community banks.

Energy:

Problem

•  Availability of key natural resources and commodities such as strategic metal and material necessary for maunfacturing of manufacturing of high technology components are diminishing.
• Insufficient production capacity necessary to meet global demand in the fossil fuels industry.
• World oil production has plateaued at just over 84.5 million barrels per day for the past five years indicating oil may have reached peak capacity.  Global consumption continues to escalate driven by non-OECD countries, last years consumption outpaced production by 5 million barrels per day.
• The U.S. has large untapped U.S. liquid oil fields that remained in reserve or under limited production and has the world largest concentration of shale oil. However, U.S. production strategy appears centered around using up the rest of the world’s petroleum supply first. There is growing evidence that many of the world’s reserves are depleting faster than reported.
• Natural Gas production is expected to be able to meet growing demand for at least the next 5 – 8 years and production capacity is not expected to be reached until 2025 – 2030. However, this is only possible by utilizing hydraulic fracturing (fracking), horizontal drilling, and extracting natural gas from shale in order to offset the decline of traditional natural gas production
• Coal production is also expected to be able to meet demand at least for the next decade possibly longer and production capacity is not expected to be reached until 2025 but is chief producer of man-made greenhouse gases.
• Regardless of reserves available, production capacities for fossil fuels will soon begin to decline as the easy to access reserves are depleted requiring longer extraction and refinement processes timelines. In addition, costs associated with production are increasing as existing resources become more difficult / expensive to extract.
• New procedures for extracting remaining fossil fuel reserves have greater risks than traditional applications. Deep water drilling spills has done massive environmental damage to local waters and wildlife. Coal mining is very polluting and hazardous to the environment and drinking water. Oil sands are essentially strip mining and also very polluting.  Shale production for oil and fracking for natural gas both represent serious threats to local water supplies.
• Fossil fuel prices will continue to rise as global demand outpaces supply creating geopolitical tension between countries.

Cause

• Profits from fossil fuels are in the billions of dollars a quarter. Fossil fuel companies are in business to make profits and
  generate share holder wealth. Oil, coal, natural gas production accomplishes are accomplishing these goals in record numbers.
• Fossil fuel companies stand to remain profitable even if they are not able to meet demand since prices increases will guarantee profits despite lower production. There is no incentive to develop additional capacities, invest heavily in alternatives to fossil fuels, or push to strongly for legislation that will open local U.S. reserves.
• Millions of dollars spent on lobbying and campaign contributions ensure continued subsidies, tax breaks, and barriers to entry for effective renewable energy projects. Misinformation campaigns have kept the public questioning climate change, world wide reserve capacity, and environmental safety and pollution concerns.
• Lack of political will to take on fossil fuel industry combined with a belief system (promoted by the fossil fuel industry) that
  renewable energy will never have the efficiencies necessary for wide scale production and therefore should not warrant infrastructure investment. This belief still exists despite successful track records in other countries that prove otherwise.

Effect

• As global demand for natural resources begins to outpace supply expect a continuation of price increases in fossil fuels and strategic metals and materials. Price increases in these commodities will drive prices higher throughout the U.S. and global economies.
• Greenhouse gases (CO2, methane, etc) will continue to rise and contribute to climate change that is already occurring naturally as part of the Earth’s heating and cooling cycles. Pollution from fossil fuel exhaust gases will continue to increase contributing to respiratory and other health concerns especially in dense urban areas.
• Successful legislative barriers to entry mounted by the fossil fuel industry guarantee limited federal funding for research, infrastructure development, and the creation of large scale solar thermal, geothermal, tidal, maglev windmill, bio algae, and other renewable energy projects.
• Oil price increases equate to rising inflation since oil is the primary energy source used for almost all transportation purposes, and all consumables travel hundreds of miles to get to their final destinations. Oil is also used extensively in manufacturing processes which contributes to higher prices of both base components and finished goods manufacturers.
• When all energy sources are combined (including projected increases in renewable energy) global energy production peaks just prior to 2020 then begins a steady decline until the end of the century as first oil and then coal fail to meet global demand. This will occur unless a new energy source is discovered with efficiency levels approaching zero point and this source is allowed to come to market. Otherwise, global consumption peaks in 2020 and then begins its steady decline to the end of the century. The population explosion of the past 75 years has been directly correlated to the growth of fossil fuel production. A decline in population can be expected to follow the decline in overall energy production capacity since energy is the catalyst for food production and distribution.

• Main Street America –  An upward trend of rising fuel an electricity costs combined with unpredictable and sometimes rapid price fluctuations.
• Inflation will continue to increases in the U.S. driven by higher transportation costs as products travel hundreds if not thousands of miles to get to manufacturing / processing facilities and eventually the consumer.  Food prices will reflect this trend the strongest since that average food product has to travel almost a thousand miles before it reaches the grocer.
• Rising manufacturing cost will also drive inflation higher and restrict employee wages as manufactures struggle to not pass on price increases to customers.
• Fresh water aquifers are beginning to show evidence of contamination and this will threatening the health of local populations as fracking and strip mining operations escalate.

Solution

• Escalating global demand for fossil fuels and public outcry over rising prices will allow renewable energy solutions greater opportunity to supplement the fossil fuel industry. Private sector renewable energy companies should take advantage of this trend and lobby the federal government for research grants to increase production efficiencies and subsidies for developing infrastructure..
• Grants and subsidies can be acquired by redirecting the fossil fuel industries subsidies and tax breaks towards private sector renewable energy companies.
• Employ a nation wide program to drill arctic, deep water, and the recently discovered deep intercontinental fields. Apply special taxes to industry profits for the rights to drill and use the money for a nationwide renewable energy research and development program designed to wean the country off fossil fuels dependence within the next two decades.
• Cease or severely limit all fossil fuel extraction programs that represent a direct contamination threat to ground water tables.
• Implement public awareness campaigns to inform the local populations of the dangers of new extraction processes like fracking pose to their health. Inform the public of the benefits and limitations of current renewable energy systems and the need for additional research and infrastructure funding.

Healthcare Costs:

Problem

• Healthcare costs in the Unites States are currently at $2.6T and projected to continue rising that equates to $7960 per person and is over twice the average of the 33 economically developed countries. What is even more startling is the rate of cost increases compared to the other countries.  Costs as a percent of Gross Domestic Product (GDP) is at 18% and rising.
• The biggest cost drivers are new patented prescription drugs, expensive new technologies and equipment, inefficient administrative costs, and profit taking in every sector, much of it hidden from public scrutiny, especially in healthcare insurance.
• Healthcare insurance premiums are rising at double digit rates (130% in the past decade) while benefits continue to be reduced and fewer employers are providing coverage (9% drop since 2000).
• Bankruptcies due to healthcare costs represent 30% of all U.S. bankruptcies. Even people with employer provided group plans have discovered they are vulnerable to bankruptcy. While Americans watch their healthcare premiums going up and bankruptcy rates continue to rise the major healthcare insurers are have  enjoyed record profits for the past three years, even in the midst of a lingering recession. This is possible because as monthly premiums and insurance deductibles have increased policyholders are coming to grips with the fact they don’t have the financial resources for expensive operations, testing and medical care.
• The $1T pharmaceutical industry ($300 B a year in U.S. drug sales alone) with its 16.4% profit margins is at the forefront of U.S. healthcare cost. What is disconcerting is not just the revenues that are being generated but the industry’s propensity for expensive  long term patented drug treatments as opposed to actually bringing any cures to market. A cure for any disease would never represent the same level of profits that a long term patented treatment would. Therefore the financial incentive remains focused on providing treatments while any promising research that could lead to potential cures tends to end up getting buried, redirected, or diluted into a treatment.
• Almost every prescription drug provides some level of toxicity to the human body. This means that prolonged exposure to a perscription drug will generally result in that patient developing a future disease from taking the drug. This is componded by the more perscription drugs a patient takes.  This is a very profitable model for pharmaceutical companies since they are essentially creating their next generation of customers, but ithis cycle is significantly driving up the country’s healthcare costs and adding to the national debt.
• The U.S. healthcare industry as a whole has demonstrated an utter lack of interest in preventative care.  Prevention has been proven in nearly all the other economically developed countries to lower costs, but that means it will also lower the healthcare industries’ profits. Of the 33 developed nations only the U.S. is without some level of universal care. Universal healthcare systems are either government backed or non-profit institutions which are more concerned with keeping their costs low than generating profits. Bottom line -  healthy patients don’t generate profits.
• Healthcare costs expectations are projected to rise much more sharply over the next two decades as aging baby boomers,  with increasing rates of obesity and chronic disease, will require more medical treatment and enter the Medicare system.

Cause

• Healthcare insurance companies, pharmaceutical companies,  medical device manufacturers, etc. are in business to make profits and like all for-profit corporations have a fiduciary responsibility to generate share holder wealth by increasing the stock’s price. Profits and rising stock prices are tied directly to executive compensations packages which in some cases have reached into the hundreds of millions of dollars. Greed drives  decision making in the healthcare industry.
• A culture has developed among corporate executives over the past 20 years that is so focused on profit maximization strategies that profits are sought even at the expense of the patients. For example, pharmaceutical companies have become so fixated on the development of blockbuster drugs worth billions of dollars in profits that they will routinely skirt regulations, falsify drug studies, cover up fatal side effects, illegally market drugs, and pay kickbacks to doctors ($200 M last year) for endorsements and prescriptions of their drugs, going so far as to encourage doctors to prescribed drugs for treatments the drugs were never approved or intended for. It is now considered a good business practice to accept the hundreds of million of dollars worth of government fines and private party lawsuits in exchange for the billions of dollars in profits the drugs will generate.
• Corruption and fraud is rampant in the healthcare industry. The pharmaceutical industry continues to have one scandal after another. 9 out of 10 of the largest pharmaceutical companies have either already paid billions in government fines and private party lawsuits or are currently under investigation. Healthcare insurance companies have intentionally created complex and convoluted billing practices designed to discourage customers from pursuing claims while they still engage in practices designed to deny or limit coverage regardless of the Healthcare Reform Act of 2010.
• The healthcare insurance and the pharmaceutical industries have spent hundreds of millions of dollars on the best lobbyists K street have to offer and for campaign contributions to senators and congressmen in order to ensure legislation and regulations remain favorable and do not interfere with revenues.
• The pharmaceutical industry’s massive $60 B marketing and direct to consumer advertising budget mislead the public about the safety and necessity for prescription drugs. Advertising dollars and financial contributions to major medical associations, review journals, and universities have grown to comprise sizeable portions of their operations budgets. This has made prescription drugs the accepted method of treatment while downplaying nutrition and non-patented remedies regardless of research findings. Even the FDA which is suppose to be monitoring the pharmaceutical industry is receiving more than $600 M in user fees from the industry amounting to more than 60% of its drug review funding.

Effect

• Healthcare costs are rising. The rate of the increase is projected to accelerate over the next decade as the baby boomer population goes into retirement. Aging baby boomers are already experiencing increasing levels of chronic disease (heart disease, cancer, diabetes, etc.) which represents 75% of all healthcare costs in the U.S.  The federal government currently spends $.9T (23% of federal outlays) on healthcare and is not prepared for the cost escalations expected in Medicare and Medicaid from an aging population with growing levels of chronic illness. There is no realistic way planned to pay for these rising costs except to print more money which means more deficit spending. Deficit spending adds to the national debt which further erodes international debtor confidence.
• Healthcare cost escalations if left on their current trajectory could threaten to bankrupt the country in a decade or two. Due to aging baby boomers and record levels of chronic disease and obesities related illnesses which will require greater amounts of expensive and toxic drug treatments.
• Powerful lobbying pressures and campaign contributions  ensure that there is little political will left to address rising healthcare costs. Politicians who receive large contributions from the healthcare industry fight diligently to protect those contributor’s profits and the status quo and this limits the chance of reform. As a consequence it is unlikely that the rising Medicare and Medicaid costs will be reigned in, or that competition from a national healthcare program or from non-profit insurance, pharmaceutical, and medical equipment companies will force the for-profit healthcare companies to lower their prices or become more efficient.
• Expect fewer cures and more expensive patented treatments. Half of all Americans are routinely taking some type of prescription drug. Those numbers will continue to rise as Americans find themselves having to take more prescription drugs to counter the toxicity effects of the drugs they have been taking.
• Prevention and lifestyle changes which could appreciably lower healthcare costs by building up the patients immunity will continued to be ignored or downplayed by the healthcare industry to protect profits. This reduces the populations chance at better health requiring them instead to rely on drug treatments and surgery. Prevention consist of a routine monitoring, exercise regimens, and a diet made up largely of raw foods and nutrient /immune building supplements. The diet limits meat protein & fat, dairy all of kinds, processed / refined foods, fast foods, and sugar.
• The U.S. ranks near the bottom of the 19 developed countries in healthy life expectancy (HALE). The U.S. is dead last in the age-adjusted amenable mortality rate before age 75 category, both of which are strong indicators of the ineffectiveness of how the US treats disease. The country is paying more for healthcare than any other country and will continue getting sicker for it.

• Main Street America – Individual healthcare costs will continue to rise while insurance coverage decreases.  More citizens can expect to go into bankruptcy due to lack of insurance, high deductable ($5000 to $10000), or policies reductions that result in insufficient of their healthcare bills.
• U.S. population is becoming more medicated and less healthy.  Life expectancy and quality of healthy life will be lower for this generation than the previous one.
• Quality of healthcare in the U.S. will continue to decline and more Americans will die at the hands of the medical system which has recently surpassed stroke as the number three killer in the U.S.  Each year 225,000 Americans die  as a result of modern medical treatments. The main causes are negative reactions to properly prescribed drugs at 106,000 (this is the conservative number from the CDC), infection at hospital at 80,000, hospital errors at 20,000, unnecessary surgeries at 12,000, and improperly prescribed medication at 7,000.

Solution

• General Option – A nationalized healthcare option which combines Medicare, Medicaid, CHIP, TRICARE and state / local health clinics into one system (the VA and the military’s healthcare system may remain apart) and subsidizes the creation of non-profit healthcare insurance companies, pharmaceutical companies, and medical equipment manufactures.
• Nationalized healthcare option and non-profit healthcare companies should be managed and structured for efficiency i.e. flattened hierarchies, computerized integrative billing, simplified regulations, established pricing etc. The goal is to provide quality healthcare at the lowest possible costs to Americans not profits for corporations or shareholder returns. This will force much needed competition within the industry.
• Fund  independent and university research facilities for pure research WITH NO TIES to pharmaceutical or biotechnology (owned by big pharma) companies. Redirect private sector donations towards these research labs. All research findings would be patented, human trials conducted, and any cures or treatments deemed suitable for public use be made available at cost to both the national healthcare option and to non-profit pharmaceutical companies.
• Remove the pharmaceutical industries influence from the FDA which is suppose to be monitoring the pharmaceutical industry not receiving the majority of the $1.5 B in user fees it supplements its budget with. Do not allow pharmaceutical executives to work in the FDA and require that FDA officials have to wait a minimum of 5 years before they can take high paying jobs with pharmaceutical companies in order to reduce conflicts of interest.
• Establish a nationwide prevention awareness program. Require labeling of adverse reactions and that doctors explain the toxicity risks of prescription drugs.
• Establish a program that allows all university graduates who pass medical school entrance exams the opportunity to attend medical school. State school s would be regulated to keep tuition costs low.  Provide grants to students that pay the costs of medical school in exchange for years of service at hospital in the nationalized healthcare system or at the VA. The goal is to have more doctors in the system and also to encourage doctors to engage in research or trial studies.

Food Production:

Problem

• The U.S. Farm bill subsidizes the country’s four primary crops – corn, soy, wheat, and rice. These crops are sold to food producers for less than costs of production. Third world farmers cannot compete with these subsidized exports leaving those countries susceptible to famine should production levels drop unexpectedly.
• Food production companies use the four primary food crops along with cheap chemicals to create the majority of U.S. food and food components. These foods are almost all heavily refined and processed. The processing causes foods to loose much of its nutritional value. Processed foods are  also heavily laden with addictive levels of fats, salts, and sugars.   Research scientists are discovering that some of the chemical additives have additive qualities of their own such as restricting receptors in the brain and stomach that tell a person when they are full or increasing a person craving certain types of food.
• Long term consumption of  processed food products is causing an obesity epidemic in the U.S. and contributing significantly to the rise in chronic diseases, both of which are driving up healthcare costs.
• Food production in the U.S. is becoming increasingly dependent on genetically modified crops (GMO). These crops usually consist of a monoculture (single) strain which lacks the genetic diversity necessary for crop resiliency against disease. GMO crops do not produce seeds requiring farmers to purchase seeds from the chemical companies who make the GMO crops.
• GMO crops are designed to be resistant to pesticides and herbicides. The chemical companies that produce GMO seeds / crops also produce the very same pesticides and herbicides. The crops are also drought resistant and produce large appealing fruits and vegetables. Unfortunately, they do not possess anywhere near the same nutritional value of their organic counterparts and lack proper long term trials to determine the health risks of prolonged consumption.
• Modern industrialized farming practices are deteriorating the nutrient composition of the soil rendering it almost useless in places and dependent on increasing amounts of fertilizers in order to grow crops. These fertilizers are produced by many of the same chemical companies that provide pesticides and herbicides.  Industrialized farming is also heavily dependent on oil for fertilizer production, fueling farming equipment, and transporting crops to food producers and food products to grocery stores. This makes food prices subject to price increases when oil prices go up

Cause

• Profit margins in the food industry are low and the industry is very competitive. One way that food companies have learned to sell more food and increase their profits is to generate a local population that consumes more of its products. The U.S. diet which consists primarily of processed and fast foods has increased obesity rates to over 34% nationally. Obese people eat more food.
• The food industry is incredibly efficient at providing the world with an abundance of cheap food. To achieve these goals and remain profitable food producers are providing the public with food that is not only nutrient deficient but is also so chemically altered through processing that what consumers are eating is essentially unhealthy.
• Lobbying and campaign contributions from the food and chemical industries have led to the creation of the U.S. Farm Bill and other legislation designed to subsidize industrialized farming. This makes it difficult for traditional and organic farmers to compete and isolates them into niche markets.
• Genetically modified foods (GMO’s) and modern industrialized farming practices serve as profit making machines for chemical companies more interested in selling pesticides, herbicides, and fertilizers than consumer in safety. These companies have successfully overtaken U.S. and European crop markets.

Effect

• The cost of mass produced processed /refined and fast food is significantly cheaper than healthier organic foods. Lower and middle classes who are being hit hardest by a lingering recession and are financially restricted to buying less expensive processed foods are experiencing the fastest decline in health.
• The U.S. population has become largely addicted to process and fast foods which generally taste better due to the high levels of fats, salts, sugars, and chemical additives.
• The U.S. population is becoming increasingly obese and more susceptible to chronic disease which is contributing to rising healthcare costs and the national debt.
• GMO monoculture crops with inferior nutritional value and possible long term health risks are also contributing to healthcare costs.
• Modern industrialized farming and GMO monocultures are producing crops less resilient to disease. Regional food shortages have already occurred due to extended droughts. A crop disease that attacks GMO monocultures could devastate production yields leading to famine in the third and world wide food shortages.
• GMO crops produce no seeds and chemical companies have successfully eradicated the majority of seed production through patent infringement law suits. This limits the farmer’s ability to rapidly recover from a large scale crop disease by planting a variety of each type crop in the hopes that one or two will be resistant to the disease.
• GMO producing companies bring litigation against farmers who don’t use their GMO seeds / crops under the pretense of patent infringement. The lawsuits claim that patent protected seeds blow onto their farms and thus violate their patents. Most farmers have chosen not to go to court and either sell their farms or agree to fines and to farm GMO crops in the future. Those who do go to court find themselves in a drawn out costly lawsuits that they generally win but financially devastate their businesses.
• Modern farming has become heavily dependent on oil for production and distribution that rising oil prices have already caused food prices to increase.
• Lobbying from the food industry is attempting to create legislation designed to limit the ability of organic and local farmers to bring their crops to market under the guise of food safety. While the vast majority of E Coli and other bacterial outbreaks come from large industrialized farms.

• Main Street America – Consumption of processed and fast food are increasing America’s obesity rates, heart disease, cancers, Type 2 diabetes, etc.
• Overall health in the U.S. population is declining due to a lack of proper nutrition and being over medicated. 
• Food prices will continue to be more expensive as oil prices increase and the dollar devaluates.
• Potential food shortages may be on the horizon and the majority of Americans are not prepared.

Solution

• Remove some of the subsidies from large food growers / manufacturers and redirect those  funds towards more sustainable local production that engages in organic or traditional crop rotation farming.
• Remove litigation threat to farmers from chemical companies who can sue farmers using their own seeds when GMO seeds blow onto their farms. Fortify the non GMO seed market and reintroduce seed variety back into mainstream farming applications.
• Tax processed food and especially fast food products in the same way tobacco is taxed.  Create a private sector fund not a government office to manage and distribute  the money to help pay for rising health care costs.
• Create a consumer awareness campaign to inform public of dangers of continued consumption of processed and refined foods. Create legislation that forces food companies to clearly illustrate chemical and additives compounds on labels. Enforce guidelines for what can be labeled as organic.

Growth for the sake of ongoing profits and investor returns is no longer going to be the answer for the majority of Americans. Favorable legislation for large MNC’s and the country’s wealthiest will ensure a continuation of polarization of wealth. Capitalism has propelled us to great heights, but it doesn’t have to mean profit and wealth creation for a few at the expense of the country and the middle classes. It is time to reassess our lack of responsible government, crony capitalism, corporate socialism for the largest MNC’s and realize that our critical sectors are not sustainable and need to be pulled back to their entrepreneurial roots. Sustainable business applications according to the long term needs of the country and a government that is also responsible to the people are what is need at this time.

In the first blog of this series, Problems in the U.S. Critical Sectors – Monetary & Banking, Energy, Healthcare, Food Production, and Government – An Analysis the major economic sectors critical to the survival of a modern day society were identified and their long term problems addressed. These sectors include: monetary & banking system, energy production, healthcare, food production, and water distribution. It was also noted that a stable and reliable government free of corruption is necessary to ensure proper legislation and regulation.  Finally, it was pointed out that if problems in these sectors remain unresolved they can have serious long term consequences for our economy even changing the lifestyles that Americans have grown accustomed to.

In the second blog, Problems in U.S. Critical Sectors  - Monetary & Banking, Energy, Healthcare, Food Production, and Government – The Cause problems in our critical sectors were identified as residing in a significant resistance to change from those who seek to maintain the status quo and the massive profits and wealth it generates for them. The underlying reasons for the resistance to change was also identified as an age old belief system which promotes selfish individual / group gain and achievement over all else. This philosophy has little regard for long term public or environmental consequences. In today’s world its mantra is “economic growth at any cost”, and it favors and rewards those who strive for profit maximization, wealth generation, and the influential connections to political power that ensure ongoing control. Ultimately it is greed, avarice, selfishness, and mammon (love for money above all other things). This philosophy is prevalent in many of the country’s most wealthy and influential. Their businesses and special interests constitute many of our nation’s largest investment groups and Multi National Corporations (MNC’s) and have considerable sway over our country’s critical sectors.

Societies have been warned throughout the ages by their greatest teachers and spiritual leaders of what would happen if too much wealth and power were concentrated amongst those who embrace this philosophy. Let us now consider the effects the past actions have had on our critical sectors and how the American public is faring.

Monetary System:

• U.S. national debt and lack of fiscal responsibility continues to rise making our international debtors lose confidence in our ability to pay.
• Effect – International debtors are already shying away from U.S. treasuries and looking for different currencies other than the dollar to conduct international commerce. If this keeps up expect a devaluation of U.S. treasuriesand the dollar
• Effect on main street America – foreign goods (big box store products) become more expensive and Americans experience more inflation
• The FED is caught between trying to stimulate the ec onomy with Quantitative Easing (QE) or printing money and buying financial assetsfrom large banks to increase their reserves combined with artificially keeping interest rates low, and running the risk of devaluing the dollar by printing to much money and increasing inflation by keeping the interest rates artificially low for to long.
  • Effect – The FED will likely continue the current practice of” printing money” (actually its all electronic transfers now). Large banks will continue to influence / pressure the FED to keep supplying them with free money to invest with because it is profitable for them to do so. This outcome, while beneficial for large banks and MNC’s, if continued only further lowers international debtor confidence which further devalues the dollar.
    • Note – this money is being spent on large MNC’s and in financial markets i.e. derivatives, it has not been used as was originally intended to relax credit for small / medium businesses which are the primary drivers of Gross Domestic Product (GDP) and job growth.
  • Effect on main street America - foreign goods become more expensive thus increasing inflation.

Financial /Banking System:

• Wall Street financial institutions increasingly invest in derivatives and other financial instruments that don’t contribute to GDP.  One in every three dollars is tied up in exotic financial investments like derivatives (hedges or bets on a derived value), this is essentially pulling money out of the economy that could be better used manufacturing, innovation, etc. They are also limiting investing to what they believe are safer investments – large MNC’s with global exposure in the growing economies inAsia.
  • Effect – Our largest banks virtually ignore startups, small, and medium sized business that are critical to job growth and who provide the bulk of taxable corporate revenue necessary in paying down the national debt. This has created credit restrictions to small / medium businesses which limit their expansion capabilities and our country’s job growth (85% of
    jobs).
  • Effect on main street America - Fewer manufacturing and other skilled labor jobs as large MNC’s export them overseas. Continuation of stagnant wages experienced in real world dollars since 2000. Fewer opportunities as growth slows and recession continues (unless you actually believe its over for most Americans)

Energy production:

• Readily available fossil fuels are becoming scarce. Extraction processes are increasing in costs and it is requiring more oil to
  extract resources. Some extraction processes are damaging the environment and contaminating water supplies.
  • Effect – Barriers to entry to protect profits from the fossil fuel industry for alternative energy resources guarantees that no
    significant funding or subsidies will become available (fossil fuel companies still enjoy subsides despite a decade of record profits). Global world production has plateau in the past 4 years while demand continues to increase.
  • The effect on main street America – Increasing energy costs at the pump and in electrical bills.  Increased inflation since almost everything has to travel hundreds of miles to get to its sales destination. Consider food which travels almost one thousand miles from processing plant to grocer. Fracking and other similar approaches contaminate
    local water supplies.

Healthcare costs:

• In response to rising healthcare costs insurance Companies are increasing premiums and stripping away benefits to meet profit expectations. All this while industry executives enjoy some of the highest salaries of any industry. Billing practices have become convoluted and confusing for anyone not in a billing department.  Simple surgeries or routine testing can cost
  thousands of dollars.
  • Effect – Medical bills represent 2/3 of U.S. bankruptcies and this includes people with “good Insurance”. Huge lobbying
    efforts, campaign contributions, and sympathetic media outlets successfully act as deterrents to real non profit healthcare insurance companies or the creation of a national insurance program from which they would have to compete against.
  • Effect on main street America – Rates continue to rise while coverage becomes limited. As more baby boomers
    reach retirement age requiring additional expensive treatments for chronic diseases this problem is expected to amplify.
• The pharmaceutical industry’s concern is to provide long term expensive treatments. The public can expect few if any cures despite hundreds of millions from charities and the government for research. The toxic nature of long term drug use ensures future disease requiring still more prescription drugs. The FDA is financially supported by the very industry it is supposed to
  monitor.
  • Effect – The U.S. is the most medicated country in the world paying more than three times the average of all other developed countries. The medical system revolves around expensive patented prescription drug use where health and preventive measures continue to take a backseat to profits has the U.S. ranked near the bottom of developed countries in Healthy life expectancy (HALE).
  • Effect on main street America – Prescription drugs and insurance costs continue to rise. Prescription drug use
    in the population continues to rise increasing the need for more drugs and lowering the populations overall health.

Food production:

• Subsidized food production makes our food cheaper than at any point in human history, but it is processed, refined, genetically modified, and laden with additive levels of salts, sugars, fats, and additive preservatives and other compounds.  Industrialized
  farming is rapidly depleting nutrient value of soil requiring ever more petroleum based fertilizers. Four crops – corn, soy, wheat, and rice make up the bulk of all U.S. food and is becoming largely genetically modified and homogenized lowering crop resilience to disease.
  • Effect – one third of the country is obese and that figure is growing. Consumption of current processed food creates obesity related illness and expensive chronic diseases such as heart disease, stroke, cancer, etc. to rising healthcare costs which drive up the cost of healthcare and contribute to the nations debt.
    • Note – Food profit margins are low. To increase profits it is necessary for the population to consume more food. Obese people generally eat more. While this is good for the food and pharmaceutical profits, this cycle is also contributing significantly to rising healthcare cost which is approaching 2.5T per year. This in turn contributes to national debt as Medicare and Medicaid costs increase.
  • Effect on main street America – Healthcare insurance and prescription drugs become more expensive. Population (including children) are getting more obese and unhealthy (just look around). Increased consumption of addictive processed foods lowers nutrition value necessary to maintain healthy immune system requiring more trips to the doctor and more drugs.

Government:

• Politicians remain in gridlock over what to do about the rising national debt; despite recent posturing and attempts at compromise they remain more concerned with gratifying wealthy contributors’ and getting themselves re-elected. Both parties realize that tax revenues need to increase and spending needs to decrease but lack the political will to challenge party lines, contributors, and special interests.
  • Effect – Raising taxes and / or removing Bush era tax cuts and the cessation of three unproductive wars will be met by considerable resistance from Republicans. Decreasing the size of government and trimming endowment programs (Social Security and Medicare) even if only through efficiency measures will be met with considerable resistance from Democrats.
    The result is ongoing political games and kicking the problem down the road. This is degrading the confidence of international debtors in the U.S. ability to deal with fiscal responsibility causing some to seek out alternatives to the dollar
  • Effect on main street America – If the dollar experiences rapid devaluation inflation severely impacts all but the wealthiest of American families who have less money tospend in the economy. Less spending means prolonged recession.
• Legislation is being determined and in many cases written by lobbyists. Campaign contributions ensure that legislatures will champion contributors causes. Large Multi National Corporations and other special interests view the millions they spend on these endeavors as investments that provide incredible returns. The populace has no organized way of matching or countering these expenditures.
  • Effect – Corporate and special interests are determining the course of the country over the interests of the American people. The more money a group has the more favorable legislation they will receive regardless of the long term outcome for the public. New revolutionary technologies are shelved to protect existing industry profits,
  •  Effect on main street America – Polarization of wealth, stagnate wages, environmental degradation, disenfranchisement, and a loss of faith in government.

The overall effect on our critical sectors if we continue on our current course will be a continuation of the status quo and these unsustainable systems even to the point of collapse in order to protect profits and investor wealth. Our critical sectors are more than profit maximizing engines; they are the foundation of our information age society and are the staple of the lifestyles we are accustomed to. Individual and group selfishness doesn’t have to lead the U.S. into an era of decline. I agree with Warren Buffet – “our best days are ahead of us, perhaps not on this current trajectory.”

It is time to evolve our thinking beyond personal gain and include our fellow man, our communities, and our environments. Capitalism has propelled us to great heights, but current paradigms are now disproportionately benefitting a few to the expense of the overall country, we can make it work for all of us again it just involves a restructuring of the objectives. Those who are benefitting from the current systems can continue to do so, but for many who no longer see the benefits reaped by a few there are other options. In the next blog we will explore a few such options.

In the previous blog, Problems in U.S. Critical Sectors – Monetary & Banking, Energy, Healthcare, Food Production, and Government – An Analysis - the major economic sectors critical to the survival of a modern day society were identified and their long term problems addressed. These sectors include: monetary & banking system, energy production, healthcare, food production, and water distribution. It was also noted that a stable and reliable government free of corruption is necessary to ensure proper legislation and regulation. Finally, it was pointed out that if problems in these sectors remain unresolved they can have serious long term consequences for our economy even changing the lifestyles that all Americans have grown accustomed to.

Problems in these sectors are becoming obvious even to the general public. The causes are numerous but largely reside in a significant resistance to change from those who seek to maintain the status quo. This is understandable since it generates massive profits and wealth. These influentialindividuals and their associated special interests constitute many of our nation’s wealthiest investors and largest Multi National Corporations (MNC’s). They believe they have the expertise, resources, and global exposure necessary to ride out any detrimental scenario the future may bring, but what about the other 99% of Americans? Can they expect to turn to a government which has demonstrated repeatedly a definite lack of political will to realistically deal with any of these concerns? Campaign contributions and the best lobbyists’ money can buy guarantee it otherwise.

The real cause, the one underlying the resistance to change revolves around a new philosophy that has evolved over the past several decades, one that has replaced the American dream of life, liberty, and the pursuit of happiness and redefined what success and achievement means in our society. In truth, this philosophy is not new; it has been with humanity since recorded history. It is a belief system that promotes selfish individual / group gain and achievement over all else, and has little regard for long term public or environmental consequences. In today’s world its mantra is “economic growth at any cost”, and it favors and rewards those who strive for profit maximization, wealth generation, and the influential connections to political power that ensure ongoing control. The cause has many names greed, avarice, selfishness, and mammon – it is the love for money above all other things, and seeks power to ensure that goal. People and resources become numbers on a balance sheet. Decisions to pursue profit and guarantee a return on investment (material wealth) can then be justified and even encouraged despite however much damage may be done.

Since World War 2 the US has experienced massive growth and most Americans have prospered, at least up until recently. Our country came out of World War 2 with an immense manufacturing base due to the war effort, and we were one of the few developed countries not straddled with large scale reconstruction costs. We rapidly became an economic powerhouse with readily available access to natural resources. The pie expanded for all. Now, large MNC’s view the U.S. as a country in its maturity phase, consuming more than it produces, relying on debt that because of fiscal irresponsibility is becoming more restrictive and more difficult to obtain from International debtors. The pie is growing much slower. However, large influential financial institutions, MNC’s, and investor groups still demand increasing profits and substantial returns on their investments in order to meet their growth models and expectations, and they are getting them by any means necessary.

The result of these actions has been a shrinking proportion of “pie” for Main Street America. This is evident by a decade of stagnant wages, a relatively jobless recovery, having to bear the brunt of a financial collapse that bailed out the very players that created it, and a growing polarization of wealth towards the upper 1%. Warren Buffet one of our nation’s most successful investors has stated accurately that the current rising tide is raising only the yachts. To make matters worse large MNC’s are looking towards what they believe are the more profitable growing economies and emerging markets of Asia. We can all sense that something is wrong in our country with our growing debt, increasing inflation, and a lack of faith in our political parties, but we are not sure what we can do.

Einstein declared that it is impossible to solve major problems with the mindset that created them. Yet that is exactly what continues to take place and the result has been a further entrenchment into the very systems causing the problems. Our aforementioned critical sectors are more than just profit maximizing engines for big corporations and the wealthy; they are the required foundations of our modern society.

Maximizing profits and increasing investor wealth are institutions of American capitalism and have helped raise the country to where it is.  But in our critical sectors it is beginning to limit progress and keep the country locked in archaic systems that are not only proving to be unsustainable but could result in a rapid decline of these sectors all at once. While the current paradigms are certainly financially beneficial to a select few, that benefit is not shared with the public. Quite the contrary, Americans are reeling from increasing costs and may soon have to prematurely deal with a tipping point that could result in an economic downturn even more severe than what we recently faced. The reality is that the playing field is no longer fair. Those with wealth and power have too much control over legislation, and that legislation is creating an environment that not only restricts the necessary change in our critical sectors, on a larger scale it is degrading the middle classes.

American’s are now being confronted with the reality that infinite growth and unsustainable debt models do not work in finite systems, and that an increased concentration of wealth into the upper 1% is taking away the very thing that makes America great, opportunity for all. We are allowing the insatiable appetite some have attained for profits and wealth to get the better of us as a nation. It is time for some of us to set aside the desire for personal gain and focus on more important things like fixing our critical sectors.

The greatest teachers and spiritual leaders of our past have all warned us against this type of belief system and what would happen when it is left unchecked.

Jesus Christ said “No man can serve two masters: for either he will hate the one, and love the other: or else he will hold to the one, and despise the other. Ye cannot serve God and mammon.” Meaning that if the love for money is all one is concerned about then all actions regardless of the consequences to others can be justified. Are we not seeing evidence of this today?

The Hindu Avatar, Krishnastated in the Bhagavad Gita – “A person with demoniac tendencies thinks: “So much wealth do I have today, and I will gain more according to my schemes. So much is mine now, and it will increase in the future, more and more”. Buddha said in the Samyutta Nikaya. – “Were there a mountain all made of gold, doubled that would not be enough to satisfy a single man: know this and live accordingly.”

In these passages and many others are references and warnings about the addiction to wealth, how it cannot be satiated, and how we can lose our compassion and the very essence of what makes us human when the desire for personal gain takes over.

Over the next few years the issues facing our society need to be realistically addressed, hopefully by people with the vision and courage to step beyond the selfish profit maximizing goals of today. Our critical systems have for to long only been driven and motivated by personal gain and ambition. Protecting profits and individual wealth is limiting our society’s ability to move beyond the unsustainable systems in our critical sectors. It may be time to assess our current form of capitalism as it applies to our critical sectors and realize that these sectors aren’t sustainable and need to be pulled back to their entrepreneurial roots.

In the next blog, the effects of the current systems in our critical sectors on the American people will be discussed.

There are four major economic sectors that are critical for the survival of a modern information age society. These sectors include: Monetary & banking system, energy production, healthcare, and food production /water distribution. It is also necessary to have a stable and reliable government to ensure appropriate legislation and regulation.

There are growing problems in these sectors and it is spilling into other sectors. If left unresolved these problems could have serious long-term consequences to the U.S. economy. Hindrances to their resolution consist of a growing lack of political will to deal with them and a significant resistance to change from those who seek to maintain the status quo and the profits and wealth it generates for them. These influential individuals and special interest groups constitute many of our nations largest Multi National Corporations (MNC’s) and wealthiest investors.

These large MNC’s and investor groups believe they have the expertise, resources, and global exposure necessary to ride out any scenario
and with their resources they could very well be right – but what about the other 99% of Americans?

Problems in our critical sectors will have to be dealt with sooner or later. If handled proactively, it will be possible to make the changes less painful. If continually postponed, they will have to be dealt with reactively and in a state of crisis. It is unfortunate that in our society critical issues are generally not addressed until they approach a crisis mode. The population is easily distracted by the various media outlets with the issues that are of lesser relevance but has more emotional impact.

Monetary & Banking Sector -  Problems in this sector begin with our nation’s rising debt, which is currently $14.3T, approaching 100% of GDP. What is significant here is that our rising debt means our international debtors, if they lose confidence in the U.S. ability to manage its debt & pay interest – they will purchase less of our debt instruments i.e. treasuries. The Federal Reserve or FED will then be forced to print more dollars to cover government spending – which will lower debtor confidence even more – thus creating a cycle.

The threat here is that this loss of confidence extends to the dollar – resulting in a devaluation of the dollar and consequently our treasury
bills. This scenario can also give rise to inflation. Our international debtors hold approx 28% of the U.S. debt – purchasing has already slowed or stopped altogether in China, Russia, and some of the oil bearing countries.

What does this mean for the U.S. citizen – If the dollar becomes devalued the $1.5 T worth of goods the U.S. imports each year become more expensive. More expensive goods means inflation.

In addition to rising national debt is U.S. financial markets preference towards financialization, which primarily involves derivatives investing – derivatives tie up money which could be better spent in the real economy. There is $600T worth of derivatives worldwide, $433T are interest rate contracts and swaps ($223T in U.S.). Most of this amount is notional meaning thankfully it will never come due. The scenario here starts with the devaluation of the dollar and treasuries occurring from a loss in confidence; this then requires the FED to raise interest rates / treasury yields in order to continue attracting investors and results in interest rates going up as well. Consider what will happen if interest rates, which currently are being held low artificially by the FED, raise faster than expected and just a fraction of these interest rate contracts get called due.

The FED is using something called quantitative easing to keep interest rates low. Explained simply, the FED establishes very low short term interest rates, then prints more money. It uses that money (created from nothing) to buy government and corporate bonds from banks and other financial institutions so they have more money to invest. The problem here is that it can cause inflation if too much money gets flooded into the system and printing more dollars also devalues the dollar. This risk is compounded if the FED has to raise rates to attract investors. Note – There is also the assumption the banks and financial institutions will invest in main street (small and medium size business loans ) as opposed strictly to Wall Street financial investments, this has not and is not occurring at expected rates.

Think of interest rate contracts / swaps as hedges or as insurance policies against unexpected interest rate adjustments. Now consider our four main banks, they have over $188T of interest rate contracts on their books, any significant movement in interest rates could mean another “too big to fail” scenario. Requiring even more money be printed, once again lowering debtor confidence.

Energy –  Energy sector problems involve a combination of diminishing access to natural resources (i.e. fossil fuels), production capacities reaching their limits, costs of production increasing as diminishing resources become more difficult to extract, and
increasing global demand rapidly outpacing supply. Using oil as an example, production levels appear to have plateau at around 84,500,000 barrels per day which may be indicating a potential global peak oil scenario, while demand from developing countries in Asia is rapidly increasing to support their growing middle classes. These are only a few areas remaining in the world with untapped easy to access surface oil fields, the remaining untapped fields will require greater production costs and increasing amounts of energy (oil) for extraction and processing. Consider the difficulties and energy requirements for deep water drilling and oil sands / shale production.

As production capacities peaks and demand outpaces supply oil prices will rise. Oil price increases equate to inflation since all consumables have to travel hundreds of miles to get to their final destinations. Oil is also used extensively in manufacturing processes – which also contributes to higher prices at the base component level.

Renewable Energy as yet represents only a fraction of our supply(8%), and will require heavy infrastructure costs and better efficiencies to become a viable alternative. Biofuels that could be used to ease some the oil demand as yet represent only 3% of consumption. I’m a big fan of renewable energy – but it can at best supplement oil over the next decade. There is also a lack of political will to seriously push alternative fuels like cellulosic ethanol, algae based bio diesel, or high efficient batteries or capacitors for electric cars. All of which require significantly more research and infrastructure development costs, something we will have difficulty affording in the future.

Resistance is very strong and well organized in the fossil fuel energy sector driven multifaceted lobbying efforts and campaign contribution. These corporations stand to profit greatly from higher prices regardless if demand is met, but this attitude and the subsequent higher costs in gasoline and electrical bills is not going to help the rest of the economy or the American people.

Healthcare – Escalating healthcare costs in the Unites States are at $2.5 T and rising, that’s over $8000 per person. $2950 is the global average among the developed countries. Cost drivers include expensive advances in medical technology and associated new equipment, cumbersome administrative expenses, new generations of patented prescription drugs, and of course profit taking in every sector. The biggest expectation of future costs increases will come from aging baby boomers accompanied with growing rates of obesity and chronic disease.

Possibly the greatest costs driver is the pharmaceutical industry’s ongoing concentration on expensive patented long term drug treatments as opposed to actually providing cures, and the lack of any real interest in preventative care. In addition, almost all drugs have some level of toxicity which means that long term exposure generally results in another round of future disease requiring additional treatments. While this may represent a lucrative profit model for pharmaceutical companies it is the principle driver behind the rising healthcare costs of U.S. and if left on its current trajectory could potentially bankrupt the country. Powerful lobbying pressures ensure that there is little if any political will to address these rising costs.

Do U.S. citizens benefit from these rising costs? Consider that the U.S. ranks near the bottom of the 19 developed countries in Healthy life expectancy (HALE), The U.S. is dead last in the age-adjusted amenable mortality rate before age 75 category, which is a strong indicator of the effectiveness of treating disease. To make matters worse, the US appears to be slipping even further behind the other countries despite its increasing spending and being the most medicated of developed countries.

Food Production – Food production represents problems on a number of fronts.   The U.S. is better able to provide its population with readily available low cost food supply than at any time in history. This is possible due to very efficient large scale farming and the U.S. Farm bill which subsidizes the country’s primary crops – corn, soy, wheat, and rice. These crops can then be sold to food producers for less than costs of production. Food production companies then utilizes these four crops and a variety of cheap chemicals to create the majority of the food we enjoy today.  Unfortunately, in order to achieve the mass production efficiencies necessary to keep costs as low as possible these types of  food  are heavily refined and processed, thus loosing their original nutritional value. They are also laden with addictive levels of fats, salts, sugars and numerous chemically based additives.

Long term consumption of these food products is causing an obesity epidemic and contributing to chronic diseases.  Chronic disease such as heart disease, stroke, and cancer and obesity related diseases like diabetes have no real cures and currently require expensive and often long term treatment. This in turn contributes to rising health care costs.

Food production in the U.S. is becoming increasingly dependent on genetically modified crops (GMO). These crops usually consist of only one strain lacking the genetic diversity necessary for crop resiliency against disease. There are benefits to GMO’s which include pesticide resistance (GMO companies are generally chemical companies), rapid growth, drought resistance, and large visually attractive produce. However, they  have inferior nutritional value and there are growing concerns over long term health consequences. This has resulted in GMO crops being banned in a number of countries due to inadequate testing.  Over reliance on GMO crops and the foods produced from them could be another driver towards increasing healthcare costs. Over reliance on GMO crops and the foods produced from them could turn out to be another major factor raising  healthcare costs.

GMO crops also do not produce seeds that can be replanted, thus forcing farmers to purchase seeds yearly instead of saving their own. Farmers who do not purchase GMO seeds or do not use GMO crops are subject to lawsuits if there farms contain any GMO plants. A virtual certainty when considering that plants reproduce by their seeds traveling through the air via wind currents. In addition, if there is a disease that attacks and decimates the GMO crops there simply is not enough backup seed or diversity available to quickly recover. This could spell famine for many regions in the world dependent on U.S. GMO crops since indigenous farmers stopped producing since they cannot compete against cheap GMO imports.

Modern farming has also become heavily dependent on oil. Heavy machinery is used prolifically on all large scale farms. Mass production requires petroleum based fertilizers since it degrades the soil to the point crops will not grow otherwise.  Produce and food products travel hundreds of miles to grocery stores, so when oil prices go up, food prices do as well which increases inflation.

Freshwater scarcity represents another concern.  Our glaciers are diminishing, aquifer and lakes water tables and dropping. Our largest aquifers are not even replenishable by rain water. This will threaten farm productivity and limiting urban growth in many regions. It is being expedited world wide by increasing populations and may represent one of our most significant long term threats.

Government – The final area of concern is our lack of responsible government or what some would argue is legalized government corruption. This has resulted in an ongoing decline of moral values among our leadership. The process begins with well financed special interests led primarily by large banks / financial institutions, and MNC’s all of which are using lobbying to acquire and even write favorable legislation. It also includes campaign contributions that get officials elected who are beholden to their interests, especially those who sit in key subcommittee positions, the decision makers. The return these institutions receive is substantial, for every $1 of campaign contributions and / or investment in lobbying there is a yield of $1000 in favorable legislation, tax breaks, and subsidies.

This environment also creates a lack of fiscal responsibility regardless of which political party is in office as politicians become increasingly beholden to special interests. This is one of the principle reasons for the rampant deficit spending that is increasing the U.S. national debt. These actions further decrease global investor confidence in theU.S. ability to manage its debt.

There was large scale disapproval from our international debtors when 2011 budgetary projections went from $900B to $1.5 T, the bulk of this increase went to extend the tax cuts. This occurred while Europe was and is currently taking on austerity measures to address its own debt. Without fiscal responsibility, an end of extensions for the Bush era tax cuts, and a cessation of combat duties in Iraq, Afghanistan, and now Libya, CBO projections expect a debt level surpassing $20 T by the end of the decade.

The abuses in lobbying combined with no limits on corporate campaign contributions are two of the primary reasons corrective actions to our problems are also so difficult.

All of these problems can be addressed effectively with the possible exception of water scarcity, which is very dependent on rising
populations and changing weather patterns.

These factors also are interconnected and each contributes to the others. These issues need to be addressed as a whole in addition to their
individual components.

In the next blog we will take a long honest look at the underlying cause of what is driving the scenarios in these critical sectors. Sectors
essential for U.S. economic growth and maintaining the standard of life so many Americans have grown accustomed too. In a nut shell, these sectors are evolving into arenas concerned with only short term profit maximization, wealth generation, and ensuring that power and control of these systems remain in place regardless of the consequences. This emphasis is now disproportionately benefiting a small
percentage of the population and it is happening at the expense of the overall country.

In the previous blog, A Call For The Transition To Renewable Energy  it was discussed that industrialized nations of the world will soon have to address that a world energy crisis driven by demand from developing countries is looming within the next 25 years. Fossil fuels alone will not be able to meet demand. The easier to extract surface sources are rapidly becoming exhausted requiring more difficult and environmentally damaging drilling and mining procedures that are both more time intensive and expensive. The increased costs of energy and potential shortages can create more geopolitical stresses between countries as they scramble to meet their energy demands. It is beyond time to ramp up existing renewable energy sources (biofuels, solar thermal, photovoltaics, wind, geothermal, tidal, and biomass) to supplement fossil fuels over the next 25 years while actively searching for long term, highly efficient energy systems to transition into beyond 2035.

The liquid fuel transportation sector is dominated by petroleum which is refined into gasoline, diesel, and jet fuel. The transition process in this sector would involve escalating biofuels production in order to supplement future petroleum demand. Cellulosic ethanol can be economically derived from gasification processes and will represent the most cost effective and efficient production means of ethanol production. It also doesn’t compete against food crops, requires much less water, and can be attained from a multitude of carbon based sources including the unusable residue from crops, natural fast growing grasses and plants, disposable wood from logging, and even human waste. Increasing the additive rates of ethanol in gasoline up to E30 (30% ethanol / 70% gasoline) and providing government subsidies for fuel line conversions will contribute significantly to mitigating demand and reduce the chance of rampant  price increases due to regional gas shortages.

Diesel fuel necessary for commercial transportation (large trucks and ships) can also be supplemented by biofuels, in this case utilizing bio-algae, jatropha, and halophytes to create bio-diesel.  Microbial organisms can be used during the processing to increase yield and refinement efficiencies and reduce costs. Diesel blends up to B30 (30% biodiesel / 70% petroldiesel) can be attained without major modification in fuel lines. World governments can then provide similar subsides for fuel line conversions to trucking and shipping fleets. Jet fuel blends can be supplemented with bio-algae; the U.S. military and some commercial airlines have already taken keen interest and developed prototypes for this application.  The goal is to supplement petroleum based diesel and jet fuels with biodiesel which will mitigate demand and reduce the chance of price increases in commercial transportation which adversely affects consumer goods pricing and airline ticket prices.

In addition, supplementing petroleum based fuels should be done in unison with the generation of new hybrid (gasoline/battery) or completely battery based automobiles and light truck production over the next 25 years. Battery technology and high capacitance systems need to be elevated in importance and additional government funding for research and development put in place to provide economically viable batteries and ultra capacitors with greater yields and longer life capabilities. If necessary the patents held by the fossil fuel and aerospace defense industries need to be made available for public use instead of being put on ice as a potential threat of substitution to petroleum, or classified for military uses. Suitable battery technology may very well already exist but the public sector does not have access to it. Utilization of hybrid, battery, or high capacitance system will further reduce future demand for liquid petroleum fuels but will require increased demand in electricity production. Heavy trucks, trains, and ships used for commercial transportation require considerable power to move heavy loads. Battery and high capacitor systems are not currently able to provide adequate power to solely meet commercial transportation needs. They will be more reliant on hybrid systems and will require more energy from the biodiesel / petroldiesel blends than are required for cars and light trucks.

The unspoken and long term strategic goal of many developed countries appears to be to use up the petroleum resources of other countries while saving their own reserves for emergency or to sustain their countries liquid fuel needs decades from now.  This strategy needs to be scrapped and replaced with a new 25 year goal that includes drilling and refining the readily available global petroleum resources in combination with increases in cellulosic ethanol and biodiesel production, government subsidization for replacing fuel lines on existing personal and commercial vehicles,  and creating high efficiency hybrid, battery and high capacitance electric cars and light trucks for personal transportation, and hybrid biodiesel large trucks, trains and boats for commercial uses. Then by 2035, begin the process of transitioning into hydrogen fuel based transportation models for developed countries, while allowing undeveloped countries additional time to become petroleum independent. This means limiting expensive and risky deep water drilling rigs, shale extraction, and production of more oil refineries limited only to petroleum. All government subsidization for the petroleum sector should cease and be transferred to companies generating second (cellulosic ethanol), third (bioalgae), and fourth (high yield genetically modified plants combined with microbial catalysts) generation biofuels, and for the development of biofuel infrastructure. This would include refineries that can be utilized for both petroleum and biofuels.

Resistance from the very profitable petroleum sector will be considerable and OPEC nations will put up a strong fight even going so far as to temporarily drop oil prices in order to draw attention away from the need to transition to renewables and to save the petroleum industry’s future profitability. Excuses for why renewables are a panacea will flourish and will need to be set aside. Our next generation of automobiles may not run as fast, or have the same mileage capability, but they will be clean and reduce our reliance on a polluting fuel source that has created enough geo-political instabilities and wars already. This 100 year old technology is past its prime and the world is certainly capable of doing better. The reason fossil fuels have been held in place this long as our dominate source of energy is because of the massive profitability and wealth generation it provides for a small percentage of the world’s population and not for its current benefit to humanity.

The other half of the fossil fuel equation is electricity production which is provided by coal and natural gas. Electricity production actually requires more fossil fuels than the transportation sector and demand is projected to outpace petroleum and will be further increased by the need for hybrids, electric, and high capacitance vehicles all of which will draw additional power from the grid. The transition of this sector, over the next 25 years, should be a move towards the existing renewable energy sources of solar thermal, photovoltaic, wind, tidal, geothermal, and biomass facilities. Biomass which uses carbon based refuse (forestry, crop, animal, and industrial) and wastes (sewage and municipal solid) will be the only source that requires commodity based replenishment that could be subject to price fluctuations, but this resource will be derived from throw away material.  The transition process itself can begin with the removal of coal and natural gas subsidies and strict limitations on future coal or natural gas power plant production. One such limitation could require no more coal fired plants built without adjacent bio-algae photo bioreactors for algae based biodiesel production and CO2 sequestration. Instead, funds could be allocated to infrastructure development of large solar thermal, geothermal, tidal and wind generation systems. Subsidies should also be provided to business and homeowners to put photovoltaic arrays on their premises.  If regional electricity service providers heavily vested in coal and natural gas production want to continue as public electricity providers they will need to be required to build an increasing number of energy facilities that are completely renewable in nature. Some renewable energy plants are more expensive to construct than traditional coal and natural gas facilities, certainly the case for large solar thermal operations. However, over the 25 year life span of the facility the infrastructure costs become offset within a few years since there are no ongoing requirements for expensive and environmentally damaging drilling, mining, refining, and distribution expenses associated with acquiring oil, coal, and natural gas.  Renewable energy power plants will be cheaper for developed and developing countries in the long run, providing clean energy, and not require purchasing or extracting fossil fuel commodities from potential hostile countries.

Synergies exist between complimentary renewable energy sources and with existing fossil fuel sources. Large megawatt solar thermal facilities can be designed to provide power for cities, or smaller solar thermal power plants can be utilized for neighborhood or suburb electricity generation.  Residential and commercial photovoltaic arrays with government subsidies to assist business and resident affordability can be utilized in conjunction with solar thermal (or other renewable energy sources) to help reduce the regions demand. Solar thermal, geothermal, and wind farms can share space with bio-algae photo bioreactors (PBR’s) to reduce land costs and reduce space requirements.  Biofuels can be generated from sewage, waste material, food crop residue, and wood residues creating fuel sources from material that would otherwise be burned or sent to landfills. Fast growing and drought resistant plants requiring little irrigation can be grown and harvested on lands unsuitable for crops and utilize husks, stovers, and other discardable material from traditional crop harvesting.  All existing coal fire and natural gas plants could have bio-algae PBR’s in place to absorb the CO2 that would otherwise be released into the atmosphere. In developed countries all new power plants should be renewable where possible and only natural gas if not. Coal plants should only be considered for poorer developing countries with large coal reserves.  

A new paradigm for worldwide renewable energy production can be implemented where profitability expectations are removed from future State owned and privately held renewable energy companies.  In countries with a private sector, existing renewable energy companies could be incentivized by their governments to switch to a strictly non-profit model. Another option is the creation of new private non-profit renewable energy companies with infrastructure development and scaling subsidies provided by their governments that would allow them to provide energy at lower costs to consumers and compete directly against for-profit renewable energy (and fossil fuel).  If full government subsidization is not possible then 0% infrastructure and scaling loans could be made available with repayment plans established that assure competitive energy pricing remains available to the public.  State owned energy companies with little incentive to eliminate their profit structure will still be able to provide energy indigenously and to the developing nations but in time will be hard press to remain competitive outside their own borders.

The goal of the non-profit renewable energy provider is to be able to produce and distribute electricity in the most efficient and low cost manner possible and to pass those savings onto their customers. It is also to provide energy sector jobs to replace those jobs lost from the fossil fuel industries.  Favorable government legislation and subsidization for private sector non-profits will be essential to ensure political barriers to entry are removed and to meet infrastructure costs and to develop economies of scale.  Subsidization can come from removing subsidies provided to very profitable oil, coal and natural gas companies and from tax revenues associated with providing clean energy. A non-profit model focused on efficiency and removing unnecessary expenses associated with pay for performance executive compensations, investor ROI expectations, profits for mining and drilling operations, costs related to exporting of fossil fuels, and short sighted profit maximizing decision making will be removed from the future energy equation.  I am not advocating government takeover of the western energy industry, but the establishment of true non-profit private companies in the free market economies. For already established state owned companies heavily vested in fossil fuels my hope is they will eventually operate under the same non-profit guidelines as they to transition towards renewable.  This should also decrease geo-political instability in certain regions of the world that use energy profits to sponsor terrorism or as funds to support military buildup and wars.

It is time for world governments especially those in developed countries with free market to start acting responsibly and considering its citizens. Energy is a basic requirement for all societies and the world has been limited to technology and policies that are outdated and no longer in its best interests. The question of how to pay for the transition to renewable energy is legitimate. Whether governments should increase taxes or use existing tax dollars to subsidize renewable energy infrastructure and provide assistance for companies to scale up production will be debate and heavily resisted from many channels. Interestingly enough, funding didn’t appear to difficult to acquire when it was necessary for bailing out irresponsible financial companies or providing massive subsidies to the ridiculously profitable fossil fuel industry. Fossil fuel based companies know they will eventually have to venture into the renewable market as oil, coal, and natural gas become to scarce or expensive. Why should the world wait until governments are near financial collapse due to high energy costs affecting nearly every sector of their economies, or countries are on the brink of war due to scarcity and conflicts over meeting demand?

Prior to 2035, world governments, academia, and even private sector labs should have been be utilized to search out the most promising energy sources with the greatest efficiencies that will meet the world’s long term energy needs. The push should be to develop free or extremely low cost energy systems such as fusion or kinetic systems for electricity production, and a hydrogen based fuel source for vehicles. We must begin this researching process and planning for this process now.

http://www.eia.doe.gov/oiaf/ieo/highlights.html

Oil companies have amassed massive profits over the past decade. BP is the largest oil and gas producer in the United States with over 22,000 oil and gas wells many on federal land) across the United States. It has enjoyed considerable profits along with the other major oil companies over the past five years. BP profits for the first quarter of 2010 alone were $5.59 billion dollars. Since 2005 profits have totaled approximately $105 Billion according to their own annual reports.

In the past three years BP has managed to receive 97% percent of all flagrant violations issued by the Occupational Safety and Health Administration (OSHA). BP accumulated 862 citations (760 classified as egregiously willful) for violations at two of its five U.S. refineries. It is also still under scrutiny by the federal worker – safety monitor for the 2005 explosion at the Texas City refinery that killed 15 workers after failing to correct problems that were pointed out by OSHA inspections.  Last year BP was fined $87 million for violations at the same Texas City refinery and another $3 million for violations at the Toledo Ohio refinery. BP is in the process of contesting the penalties.

It appears clear that BP has displayed a blatant disregard for regulations involving safety, maintenance, and operational procedures and this disregard extended to the rig Deepwater Horizon. Senior managers from BP were overheard “taking shortcuts” that involved substituting salt water for heavy drilling fluid in the well that blew out and resulted in the oil spill currently ravaging the Gulf of Mexico and 11 deaths. BP’s attitude of non-compliance towards regulation seems motivated by profit maximization and the company has not appeared overly concerned with consequences.

This may be due to the “cozy relationship” BP has with the Mineral Management Service who is responsible for safety and environmental regulation. The Obama administration has vowed that this relationship will cease. Another possible reason for non-compliance could be the tens of millions of dollars on lobbying ($16 million spent last year alone) over the past 5 years, much of which was concentrated against regulation. It also donated more than $500,000 in campaign contributions for federal elections. Another factor could be a result of oil industry lobbying influence from the past which resulted in a government reserve fund called the Oil Spill Liability Trust Fund. There is approximately $2 billion in this fund to cover a disaster like the one occurring in the Gulf. The reserve fund also ensures that operators of offshore rigs will be held liable for only $75 million in damages claimed by individuals, companies, States, or the federal government. They can still be held liable for clean up costs.

Regardless of the reasons for non-regulatory compliance, it appears BP will once again rely on lobbying to influence key legislators to reduce long term penalties and to fight violations and lawsuits in court much like Exxon did with the Exxon Valdez spill. They are confident this practice will result in the greatest cost savings and retention of future profits. Once again the U.S. taxpayer will be left picking up the tab, this time for unspecified clean up costs, loss of States revenue from tourism, and the economic damage done to numerous industries that rely on the Gulf. Not to mention the potentially irreversible environmental damage done to coastlines that may even include Atlantic seaboard states. This cannot be allowed to happen!

BP has demonstrated a willingness to take the measures necessary to cap the flow and take the lead in the clean up. Twenty-two thousand people and a small armada of ships are currently working on the spill. But in reality, they have not brought near enough resources to bear quickly enough to stem the flow or to clean up the oil. A small fleet of supertankers used successfully in the Persian Gulf spill, each capable of sucking up to one million gallons of oil / water a day has not been implemented to date. Additional fast moving Coast guard, military, and civilian vessels could have been utilized to skim and remove surface oil. Assistance from Exxon, Shell, Chevron, ConocoPhillips and other industry experts were not sought out quickly enough nor were suggestions acted upon. Many including the U.S. government incorrectly assumed that BP was the expert in such matters and had the best chance of correcting the damaged well.

BP is still cutting corners even in the face of this disaster choosing to use almost 800,000 gallons of the cheaper less effective and much toxic chemical dispersant Corexit to break the oil up even after the EPA asked it to cease. Corexit is produced by Nalco and BP enjoys a tight relationship with Nalco sharing board of director members .The Obama administration has also been accused of being at fault and not pressuring BP enough to ensure appropriate action was implemented rapidly enough.

Hopefully the Top Kill or Junk shot procedures will be effective in the next few days and a relief well will be drilled into the original borehole and drilling mud pumped in to permanently stop the oil flow. But even if these measures are implemented quickly there is no guarantee of complete success. Note – Top Kill was not successful.  All these practice were used on the Ixtox 1 back in 1979 in water 160 ft deep (Deepwater Horizon is at 5000 ft),  they were all unsuccessfull. That well was not sealed for 9 months until the releif wells were completed.

BP needs to be incentivized to ensure that it will take all actions necessary to ensure that not only the well is sealed, but that clean up is rapid and thorough, the coastlines have been restored to the fullest extent possible, and that the livelihoods of those affected by the Gulf spill are re-established or they are compensated accordingly. BP must not be allowed to lobby and litigate there way out of accountability.

The Obama administration should demand that BP have the well fully sealed by relief wells within 90 days, the bulk of surface oil be removed from the Gulf within 180 days and if necessary from Florida and the East Coast, and that the oil be cleaned from the affected coast lines and marshlands within 180 days. Note – these timelines are arbitrary and should be determined by the EPA, independent environmental, and industry experts. Failure to meet these conditions will result in:

• Suspension of all U.S. contracts and barring of future contracts – this will cease BP’s access drilling operation on all federal lands both onshore and offshore.
• Seizure of BP’s holdings on U.S. federal lands. Negotiate settlement requiring all profits derived from oil and gas obtained on U.S. federal lands be allocated clean up measures and restitution to affected parties. If BP attempts to use litigation to delay negotiations, turn over operations to U.S. base competitors and split the profits with federal/state governments until adequate cleanup measures and restitutions are made.
• Federal government will spearhead lawsuits and provide litigation support for individuals and companies affected by the Gulf disaster . Litigation will be directed at BP both domestically and abroad where applicable.
• Put a moratorium on BP’s lobby access and campaign contributions that would result in favorable legislation regarding the Gulf oil spill. This will include barring BP from hiring any third party (ie. the Chamber of Commerce) to lobby for them for the next five years or until the matter is rfully esolved in the U.S.

An investigation needs to be conducted to determine if BP was criminally liable, and to what extent TransUnion or Halliburton were at fault. If this appears harsh, it is meant to be. The long term effects of this disaster are immeasurable. It will affect people’s lives for years and the U.S. taxpayer should not be left paying the long term expenses.

My intention is not to put BP out of business, simply to stimulate the company to respond to its full potential, and not allow it to remain focused on maximizing its profits. It has lost that option concerning this situation. BPs profits over the past year should be more than suitable to cover all the expenses associated with this disaster. This will also send a strong message to the other oil and gas companies that strict adherence to the safety and maintenance protocols is serious, mandatory and can prove extremely costly.

This incident is just another in a long string of reasons as to why it is time to shift the focus away from fossil fuels and towards renewable energy sources such as cellulosic ethanol, biodiesel derived from jatropha, halophytes, and bioalgae, wind energy, solar thermal and geothermal. 

http://www.bp.com/extendedsectiongenericarticle.do?categoryId=9021605&contentId=7040949

http://www.osha.gov/dep/bp/bp.html

http://www.grist.org/article/2010-05-17-bp-has-numerous-safety-violations-at-refineries-study-finds/

http://www.opensecrets.org/lobby/clientsum.php?year=2009&lname=BP&id=

http://www.propublica.org/feature/epa-officials-weighing-sanctions-against-bps-us-operations

http://www.politifact.com/truth-o-meter/statements/2010/may/02/lamar-mckay/bp-letter-mms-urges-reduced-regulation/

http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill

Is lobbying a beneficial component of government decision making, or an avenue for corporations and special interest groups to guarantee that legislation will favor their goals, often at the expense of the public at large?

The purpose of lobbying is to influence legislators and government officials who are responsible for regulation on behalf of a special interest group. Lobbying is protected by the right to petition found in the first amendment of the constitution. The right to petition guarantees citizens the right to request or appeal to our government for or against policies that will affect them or they may have strong opinions or beliefs about. It also guarantees that these actions will be free from punishment or reprisal. But what percentage of actual lobbying goes towards defending a citizen or a groups right to petition versus influencing legislators in order to acquire government contracts, remove regulation, lower corporate taxes, limit competition, etc. in order to create an environment conducive to greater profits?

A lobbyist is defined as anyone who “directly or indirectly, solicits, collects, or receives money or any other thing of value to be used principally . . . to influence, directly or indirectly, the passage or defeat of any legislation by the Congress of the United States”. The intended rationale of lobbyists today involves not simply influencing legislators but explaining the goals of the special interest and assisting to overcome potential obstacles legislators may face meeting those goals. Lobbying occurs at the city, state and federal level.

Organized lobbying in the U.S. is almost as old as the country is. William Hull in 1792 represented Virginia veterans in attempts to acquire additional compensation for their services in the War of Independence. Early lobbying practices were free from any form of regulation and utilized far less legitimate techniques than found today. Early lobbyists quickly attained a reputation by both press and public as disreputable, corrupt and a subversive influence on democracy. All attempts to regulate lobbying over the past 200 years have been met with only limited success. Obviously, lobbyists lobby best on their own behalf.

The total number of registered lobbyists at the federal level for 2009 was 13,700 and at the state and local levels 38,800 representing some 53,400 clients. There are of course more lobbyists who have chosen not to register or have deregistered over the past few years but are still engaged in lobbying activities. This is easily done by adopting a title other than lobbyist such as senior advisor then claiming that no more than 20 percent of a persons time is spent lobbying, this is relatively simple since federal laws do not require that lobbyists document the activities they claim they are doing. Actual numbers of fulltime lobbyists are probably closer to 70,000 and this doesn’t include large public relations and marketing firms engaged in numerous activities that clearly fall under the definition of lobbying.

Lobbyists and their clients spent more than $3.47 billion last year up from $2.85 billion in 2007 attempting to influence legislators. How much of that amount went solely towards lobbying dedicated to increasing corporate profits? The numbers break down for the three major sectors and sub sectors as follows:

Miscellaneous Business Sector

Total Miscellaneous Business expenditures from 1998 to 2010 was $4,050,396,479

Miscellaneous business expenditures increased $145,000,000 or 35 percent from 2007 to 2009

        Sub Sectors

• Business Associations sector – Massive 173% increase in lobbying from the Chamber of Commerce which claims to represent approximately 3 million businesses and organizations but has been criticized for being primarily a republican lobbying machine focused on removing climate change legislation and healthcare reform and disproportionately lobbying for oil companies, pharmaceutical giants, and automakers.
• Manufacturing & Distributing sector – 25% increase in the past three years as fortune 500 companies ramped up lobbying. The top spenders in 2009 were:
  • GE increased expenditures to almost $24 million for a variety of lobbying to get government contracts and subsidies one of the largest was for wind turbines and clean coal research.
  • Honeywell spent $7 million more for aero space defense contracts, aircraft safety & technologies, and energy conservation / biofuels).  
  • Procter & Gamble paid $4.5 million to lobby for positive tax and foreign trade legislation in addition to having input on food and drug safety for its products.
  • Food & Beverage sector was led by the American Beverage Assn who is the major lobbying representative for the beverage industry ($18,850,000) and companies like Coca-Cola Co. ($9,390,000) and PepsiCo Inc. ($9,159,500), all totaled spent more than $40,000,000, a 400% growth over prior year, to successfully defeat the National Soda Tax of 1 penny per ounce designed to pay for obesity related health care costs.

Health Sector

Total Health sector expenditures from 1998 to 2010 was $3,980,184,031

Health expenditures increased $97,579,000 or 22% from 2007 to 2009

Sub Sectors

• Pharmaceuticals/Health Production sector – 18% increase since 2007 as the determined pharmaceutical and health services industry increased lobbying to fight against the democrat lead health care bill. The big spenders in 2009 were:
  • Pharmaceutical Research & Mfrs of America (PhRMA), is an exceptionally powerful and influential lobbying organization that represents 48 of the largest pharmaceutical companies. In 2009 alone it spent $26 million defending pharmaceutical intellectual property rights, fighting against price controls, creating favorable regulation, and a broad attack against healthcare reform. PhRMA also uses numerous other organizations to advocate on its behalf. 
  • Pharmaceutical / Health Product companies – Lobbying amongst all pharmaceutical companies was concentrated on overturning healthcare reform. Other lobbying interests included those lobbied for by PhRMA as well as specific industry related tax breaks. Largest individual lobbying expenditures included:
    • C Pfizer Inc spent $24,619,268 in 2009 as compared to $12,180,000 in 2008
    • Amgen Inc $12,440,000 in 2009 as compared to $10,800,000 in 2008
    • Eli Lilly  $11,215,000 spent less than 2008 amount of $12,485,000
    • The next 10 largest pharmaceutical companies all spent between $5,000,000 and $9,000,000.        
  • Health Services/HMOs sector – increased spending almost $23,000,000 a 45% increase over 2008. This sector represents large health care insurance companies like United Health Group ($4,770,000), Blue Cross / Blue Shield ($4,700,000), and Humana ($3,180,000). It also represents companies that provide health care related services such as DaVita Inc. ($2,870,000) and Medco Health Solutions ($3,977,000). This sectors principle lobbying interests involved defeating healthcare reform and ensuring Medicare and Medicaid payments / overpayments continue unimpeded.

Finance, Insurance, and Real Estate Sector

Total Finance, Insurance, & Real Estate expenditures from 1998 to 2010 was $4,050,396,479

Finance, Insurance expenditures increased $45,639,000 or 18% from 2007 to 2009

Sub Sectors

• Insurance sector – 18% increase since 2007. The principle increase in the insurance industry was from healthcare related insurance companies or healthcare divisions within insurance companies to once again overturn the new health care bill. The big spenders in 2009 were:
  • Blue Cross/Blue Shield spent $14,805,439 in 2009, as compared to $11,770,165 in 2008 and included measures to use the issue of state’s rights to render the proposed health care reform and its regulation of insurance unconstitutional
  • America’s Health Insurance Plans spent $8,850,000 in 2009, as compared to $7,540,000 in 2008 and included efforts to create the Campaign for an American Solution. This was an attempt to generate grassroots support for a suitable healthcare reform based on existing practices that would incorporate coverage, quality, affordability, choice, and core portability.
  • American Council of Life Insurers (ACLI) spent $7,530,583 in 2009, up from $6,375,032 in 2008 representing 300 insurance companies which accounts for over 90% of all U.S. life insurance companies focusing on privacy regulations, tax issues, and pension reform.
  • The next 10 largest insurance companies all spent between $4,000,000 and $7,000,000 and included life insurance, automobile insurers, and health insurance companies. Many insurance companies lobbied for legislative support to enforce and expand the Financial Services Act of 1999 which enables insurance companies to provide financial services.
  • Finance / Visa Credit Companies increased spending 26% since 2007. This sector represents large credit companies like Visa Inc ($6,010,000), American Express ($3,260,000), MasterCard Inc ($3,100,000) all of which spent heavy on legislation to curtail credit card restrictions, overdraft fees, consumer financial protection, and data security issues. It also represents companies like Sallie Mae (SLM)( $480,000) who increased lobbying drastically to fight against legislation designed to cut SLM and other private lenders out of student loan programs, and GMAC LLC ($5,320,000)  which lobbied for new consumer protections, assistance for struggling mortgage holders, foreclosure prevention, and against proposed regulation on the derivatives markets.

Energy and Natuaral Resources Sector

Total Energy & Natural Resources expenditures from 1998 to 2010 was $2,902,630,507

Energy & Natural Resources expenditures increased $156,606,000 or 50% from 2007 to 2009

   Sub Sectors

• Oil & Gas sector – The unprecedented 100% increase since 2007 in lobbying from the major oil & gas companies was due to the growing impression that fossil fuel dominance may be beginning its decline. Lobbying from all companies concentrated on battling the proposed cap and trade policy, debunking climate change, ensuring that the oil & gas industries remain influential over energy policies,  maintaining decades-old tax incentives and subsidies, and in successfully convincing the Obama administration to grant access to offshore and domestic drilling.
  • Exxon Mobil – Spent $27,430,000 which was down from 2008’s $29,000,000 but a substantial increase over $16,940,000 in 2007. Exxon Mobil also funded climate change denial groups to promote their climate views via publications and Web sites which were not reviewed or verified by the scientific community. In addition, strongly lobbied for free market advocacy.
  • Chevron Corp – Spent $20,815,000 up from $12,844,000 in 2008.  Chevron devoted extra attention shaping an effective U.S. energy policy representing oil industry interests. It also lobbied hard to establish political barriers to renewable energy companies and clean energy.
  • ConocoPhillips – Spent $18,069,858 up from $8,459,053 in 2008. Lobbying also focused on the federal government where ConocoPhillips was seeking additional time to pay for millions of dollars worth of fines for pollution related cleanup expenses associated with its refineries and favorable legislation for Alaskan oil drilling.
  • BP – Spent $15,990,000 up from $10,450,000 in 2008. BP has lobbied successfully over the past few years to win insider access and many believe has received lenient treatment on a number of violations. It also spent heavily to rebrand its image more towards an overall energy company embracing clean energy in addition to fossil fuels.
  • The remaining top ten companies spent between $12,000,000 and $2,000,000 and included Koch Industries ($12,300,000) which operates oil gathering systems and pipelines and American Petroleum Institute (API) ($7,320,000) which is the industries main trade association representing over 400 companies.
  • Electrical Utilities sector – 28% increase in expenditures over the past three years. This sector consists of the largest utilities companies across The U.S. such as Southern Co ($13,450,000),  American Electric Power ($7,297,245), and  IPG&E Corp ($6,280,000). All of the power utility companies lobbied to influence congress on new climate change legislation before and after it passed in the house. The new federal energy bill would require a reduction of greenhouse gas emissions, mainly carbon dioxide, that has been credited with climate change, this is significant since up to 80% of portfolio’s are concentrated in fossil fuels. Edison Electric Institute (EEI) ($10,500,000), the countries largest electric power company association led lobbying opposition against one of the new federal energy bill provision’s that would require utility companies to produce at least 15% of electricity from renewable sources.

Summing up these findings and looking at each of the top four sectors it becomes apparent that the vast amount of lobbying dollars spent is to improve the bottom line of a lot of corporations. The issue at heart is not that they are simply trying to influence favorable legislation from the U.S. government it is that the corporations then end up controlling a disproportionate amount of the federal budget, which ultimately means our U.S. taxpayer dollars.  There seems to be an unspoken calculation that if a certain amount is invested on lobbying and campaign contributions by corporations it can be expected they will receive both favorable legislation and a certain amount of money allocated through the federal budget (through government contracts, subsidies, tax breaks, etc). This just further exaggerates the imbalance of favorable legislation and access to federal dollars between those with millions of dollars available for lobbying and those who cannot afford it. As a taxpayer I am concerned how this benefits the US and the long term interests of its citizens.

Analysis of the each sector further demonstrates how  lobbying  favors well funded special interests. The Chamber of Commerce is the largest lobbying spender. It is supposed to represent businesses of all types and sizes. In reality, the vast majority of lobbying expenditures were focused on protecting fossil fuel and pharmaceutical interests and bailing out the automotive industry. Small and medium size companies the backbone of U.S. job growth were disproportionately represented. It could be argued saving the automobile industry would save jobs but lobbying for the fossil fuel and pharmaceutical industries was designed to protect profits.

The manufacturing sector concentrated on lobbying for tax breaks and subsidies and to acquire government contracts whether they were the best candidate or not. In some cases they lobbied to create contracts that may or may not be needed or directly benefitting the taxpayers.

In the health sector, large pharmaceutical interests revolve solely around defeating health care reform and limiting any price control measures that may be implemented. While this may benefit corporate profitability but we are the only country that pays the high prices for pharmaceutical drugs. All the while the taxpayer will be paying more money into Medicare and Medicaid to help pay for the high costs of health care and pharmaceutical drugs. Health service companies and HMOs successfully lobbied to defeat health care reform in order to protect their profits from government sponsored health care insurance or a non-profit healthcare system similar to countries in Europe.

The financial sector lobbied to limit regulation on lucrative financial arrangements and financialization. This is certainly not beneficial to taxpayers since it led to the financial collapse in early 2008. However, tens of millions of dollars has successfully stalled any significant regulation against financial instruments. The insurance companies may very well be an example of not meeting the before mentioned unspoken calculation, they did not spend or influence to the same levels as the pharmaceutical companies did and while they were able to defeat the government sponsored health care insurance system, they were not successful in completely defeating the pre-existing condition exemptions.

Finally, in the energy sector, the oil and gas companies lobbied strongly to discredit climate change, defeat cap and trade and reduce proposed climate change regulation. The fossil fuel industries were protected from legislation that was designed to limit pollutants and CO2 emissions while removing the requirement that 15% of energy use had to come from renewable sources. This has resulted in an energy policy still overwhelmingly influenced by the fossil fuels industries at a time when we need to be weaning the country off of oil and gas and into renewable energy sources.

Almost all of the top 15 sectors (see data below) with the exception of labor, ideological, civil service, non-profits, and education (the bulk of this subsector isn’t for education but for subsidies for universities) were lobbying to create an environment conducive to increase profitability and could be argued that the overwhelming amount of dollars spent supports profitability while not contributing much towards the well being of the country.

While lobbying is in compliance with the right for citizens and special interests to redress government legislation it is being exploited by corporations and those with enough financial backing.  Lobbying as it has evolved unequally provides favorable legislation and other perks at the expense of the citizens/taxpayers as a whole.  In addition, it is ensuring profitability in sectors that cause environmental damage, resulted in unnecessary and over spending, and even financial collapse of the country. This is the time that government spending and perks need to be reigned in to help rebalance the federal and state budgets. Tax dollars need to be allocated towards systems that actually benefit the public good and the long term viability for our country.

The problem that lobbying demonstrates is not that companies are not only lobbying to ensure their profits, they are lobbying to ensure profits in arenas that are hurting the US citizens and taxpayers. Lobbying for practices within industries that cause environmental problems, collapse of our country, lock us into long term fossil fuel use as opposed to clean energy, and intend to maintain the same type of healthcare system that will soon price itself out of the range of affordability are not in the best interests of humanity.

Other items of interest:

Over the last 10 years, 198 members of congress or 43 percent of legislators have left public office to become registered lobbyists. Similar percentages are applicable at the state level, fewer at local levels.

Lobbying fees have risen from $10,000 to $15,000 a month a decade ago to $20,000 to $25,000 a month or more now.  Republican lobbyist firms can charge even more.

Lobbying activity has increased despite the economic downturn demonstrating that lobbying is truly recession proof.

http://www.lobbyists.info/

http://www.washingtonpost.com/wp-dyn/content/article/2005/06/21/AR2005062101632.html

http://www.followthemoney.org/database/graphs/lobbyistlink/lobbymap.phtml?p=1&y=2009&l=1

 http://www.opensecrets.org/news/2010/02/federal-lobbying-soars-in-2009.html

 http://www.wilsoncenter.org/index.cfm?event_id=4244&fuseaction=events.event_summary

 http://www.sourcewatch.org/index.php?title=Southern_Company

The global warming debate rages on, and despite spending way too much of my time reading articles about it I am not convinced about either side’s conclusions. My main questions still remain: to what level is global warming or climate change occurring? are human’s contributing to it with green house gas (GHG) emissions and if so to what level? If we are contributing to it can we fix the problem preferably without devastating our economy? How dangerous will temperature increases be to our cities and population, and how soon will they occur? It appears that my much of my confusion exists because of two opposing groups themselves. 

The group supporting global warming is called the consensus but seem to be made up largely of the Intergovernmental Panel on Climate Change (IPCC). This is a large group of scientists (2500 from the IPCC alone), many of whom have been engaged in climate research for many years. They propose that man-made GHG emissions driven mostly by carbon dioxide (CO2) are heating the surface of the planet. The second group is referred to as dissenters or skeptics of global warming. They do not believer man-made GHG contributions are having any significant impact on temperature change and in some cases doubt whether it is occurring at all. 

The consensus believes that from data collected from climate research, ice core analysis, and computer modeling that certain conclusions can be determined: 

• Human activity has changed the composition of the lower atmosphere (troposphere). The composition has been changed through the emissions of GHG’s
• Changing the composition of the troposphere is warming the planet. Increasing GHG’s increases the amount of reflected IR heat that is absorbed in the troposphere; this in turn heats the troposphere which causes more evaporation and leads to increased amounts of water vapor. It is water vapor that has the greatest impact on temperature increase.
• Human activity driven by GHG emissions (carbon dioxide, methane, and nitrous oxide and ozone) has been making significant changes to atmospheric conditions that have been increasing over the past 100 years. These changes are now becoming evident by increasing surface temperatures, increasing water temperatures, and glacial melting
• If man-made GHG emissions from fossil fuel consumption (oil, coal, and natural gas) continue it will becoming increasingly difficult to stop or slow the heating process. Human activity has changed the climate in a few hundred years what it takes natural events 10 million years.
• Changes may occur more rapidly or become more severe. We will see the effects within our lifetimes. Disappearing glaciers and melting ice sheets at the north pole both resulting large fresh water losses, sea water levels rise flooding coastal regions, climate tier shifting i.e. the northern states will have temperature similar to the mid level states and so on.
• To slow global warming down will require decades of dramatic action. We will need to use less fossil fuel while increasing renewable energy sources. It doesn’t mean economies have to loose jobs and services but to realign them into new renewable industry.

Source: Listen to the Scientists: Global Warming & the I.P.C.C.              

The consensus has determined that man-made emissions are affecting our climate. They want to continue research to better understand the problem and the behaviors (burning of fossil fuel for power, transportation, and industry use) that perpetrate the problem. They want to stop what they call the false debate. They claim the science has already been agreed upon and dissenting opinions addressed numerous times. They want to begin to look for methods to deal with the basic problem of fossil fuel consumption and get renewable fuels established. Their goal is to have policy make the economy especially the energy and transportation sectors more efficient. Finally, most have come to some form of conclusion that temperature increases probably cant be stopped at this point, we will not be going back to where we were, but it can slowed down enough to provide governments a better chance to adapt and possibly avoid the worst case scenarios such as tipping point where positive feed back effects might lead to rapid warming. 

The dissenters or skeptics believe the data collected from climate research is inconclusive, ice core samples illustrate the irrelevancy of CO2’s contribution towards temperature increases, and that data and variables plugged into the sophisticated climate models are inaccurate or of little significance to predicting temperature change. They present a litany of errors found in the global warming theory and site numerous factors they believe are considerably more important causes of surface heating. Some examples Include: 

• Water vapor is the most significant GHG and the primary driver of surface heating. CO2 concentrations and its atmospheric heating capabilities are insignificant by many magnitudes compared to water vapor.
• The GHG effect is a naturally occurring phenomenon that has occurred multitudes of times in our past and will occur again in the future. It is driven by the sun which goes through its own heating and cooling cycles and it is the heat from the sun that warms the ocean which in turn creates precipitation and water vapor. IR radiation or heat reflected from the surface of the Earth becomes trapped by the water vapor and this increases the troposphere’s temperature.
• Ice core readings from Vostok and EPICA Antarctica demonstrate CO2 level increases that lag temperature increases by hundreds of years and therefore could not be the contributing factor for heating.
• The oceans release and absorb between 100 – 115 giga tons of CO2 each year. That’s a variance of approximately 15 giga tons. Ocean temperatures have increased 1 degree since 1960. As the ocean warms it absorbs less CO2 which causes a potentially greater variance. Trees exhale CO2 at night when not conducting photosynthesis at a rate of 40 to 50 giga tons each year. The variance there is approximately10 giga tons of CO2. Man-made GHG emissions constitute 3 giga tons per year. Skeptics claim that man-made CO2 contributions are insignificant compared to the natural carbon cycles of the ocean or all the trees on the planet. Plus GHG’s don’t warm the oceans, the sun does.
• Trees have a greater effect than CO2 in raising temperature. The northern hemisphere has experienced increased forest growth due to fire prevention. Also boreal trees do not act as the carbon sinks the same way tropical rainforests do and actually contribute more precipitation and hence water vapor into the atmosphere. When considering surface temperature increases, the increases are from the northern half of the hemisphere. The southern half is actually cooling probably due to the ongoing thinning of the Amazon and central African rainforests.
• Some site that heat and even CO2 may actually be good. It will create a warmer climate extending the growing seasons and food production. It will also reduce severe weather pointing out the middle ages between 1000 and 1500 as a period with relatively milder storm activity

There is also growing agreement among skeptics that as future fossil fuel production begins to decrease and oil, coal, and natural gas prices increase, the market will support the introduction of new alternative energy sources. This does not need to be prematurely forced onto the country at the cost of billions of dollars and thousands of lost jobs. 

There has definitely been mudslinging from both parties. Consensus believers argue that global warming or climate change has been endorsed by every national science academy including the science academies from every major industrial country. The final holdout – the American Assoc of Petroleum Geologists even revised their statement in 2007. The consensus scientists believe that  there is an attempt to replace the  scientific analysis conducted over that past two decades with politically motivated ideologies developed under the Bush administration and carried out today by overlapping groups of skeptical scientists, media commentators, and think tanks. The goal is an organized attempt to confuse public opinion with seemingly unrelated controversies or provide the public with an endless stream of seemingly important but irrelevant facts and questions. The real motivations are to preserve the status quo and big oil and coal profits while avoiding the economic hardships required to address the issues. They believe the actions of oil companies in their attempts to pay scientists to make dissenting comments or create / fund organizations whose main function is promoting global warming skepticism is both immoral and employs the same subversive tactics used by the tobacco companies to hide nicotine addiction. ExxonMobile alone they claim created a massively successful disinformation campaign between 1998 and 2005 where $16 million dollars was channeled to a sophisticated network of ideological organizations whose sole function was to generate uncertainty. 

The Skeptics site leftist political motivations and agendas as the driving force behind the consensus, and that the concensus scientists are altering science to create the appearance of something that either doesn’t exist or is not within the power of mankind to change. The IPCC they claim does not contain 2500 senior scientists and that global warming was created to ensure a continual stream of funding and research grants. They question why the same individuals doing the research are then allowed to lead the assessment committees assigned to evaluate the research. The IPCC they warn have used intimidation and censorship to limit any dissenting scientist’s ability to speak against any part of the global warming theory. They charge that any eminent scientist who wants to get grants and needs grad students to help with research will have to say yes to CO2 as the cause for global warming if they want to see the funding. They site numerous scientists who have complained about being placed under considerable pressure to distort or with hold research data that does not support human activity as the cause for global warming. They also claim that other more accurate hypothesis are not given the same level attention and that the so called consensus is not correct at all. Septics also claim that the IPCC stands to make a fortune if carbon becomes taxed or from a cap and trade system, and this is what is really motivates their actions. Finally, they warn that if global warming is occurring we should be looking for ways to predict and adapt to changes from the natural warming cycle as they occur and not engage in measures that drain 3 – 5% of our nation’s GDP away for something that cannot be controlled. 

There are at least a few things that the majority from both sides agrees on: 

• The Earth is showing signs of some type of climate change
• Since 1880 average temperatures have increased1.4 degrees Fahrenheit
• The rate of warming appears to be increasing
• The northern hemisphere artic is feeling a greater effect than the world at large
• Glaciers and mountain ice are melting
• Artic ice is showing signs of thinning and in some cases disappearing

Getting back to my original question, I would like to see information that is not tainted by political ideology and funding from either the left or the right. Tainted meaning information coming from scientists that have received financial compensation or are reliant on research funding from either the fossil fuel industry and their supporters or from the IPCC and those who stand to profit from cap and trade. I also don’t want to see or hear any more information from scientists / engineers who are not directly involved in climate research. This means scientists in other fields, think tank personnel, and media spokesman’s. If there is anything I have learned from the articles I have read,  it is that data can be manipulated to fit any agenda, and if the public is repetitively presented with even the most outlandish representation of the facts often enough from different sources many will come to believe it. There is certainly enough of this going on. 

Could some of the scientist’s actually conducting the climate research from both sides of the spectrum come together in a forum and discuss what is actually going on?  We need valid members from all sides, including the consensus, dissenting or skeptic scientists, and any neutral climate researchers to check their biases at the door and gather in the spirit of working together. This group could then go on to address the concerns of those who don’t agree that human activity is the cause of climate change. They could identify relevant data for analysis and determine what level if any the contribution of man-made GHG’s (mainly CO2) is having on the atmosphere.  Then if necessary decide what measures would be required to reduce the warming affect on the planet. The conclusions could then be presented through multiple channels to the public. If action is required the conclusions could be turned over to economic and professional councils to determine best potential solutions, courses of action to take, and economic costs associated with those actions. These recommendations could then be provided to the world governments and if necessary discussed at global summits or forums. What I am definitively not talking about, is any council or entity given authority to override a country’s sovereignty or introduce coercive tactics like economic sanctions to influence a country to its will. 

We are going no where with the constant back and forth bickering. It only sustains doubt and confusion and ensures that nothing meaningful will get done, which is probably the goal of some. I am not a scientist or researcher, so please provide corrections, comments, and constructive suggestions.   I only ask that you refrain from pointing out that these things have already been discussed since they have yet to be resolved despite the discussion. 

http://news.nationalgeographic.com/news/2004/12/1206_041206_global_warming.htmvl 

http://www.realclimate.org/index.php/archives/2005/11/650000-years-of-greenhouse-gas-concentrations/ 

http://www.worldviewofglobalwarming.org/ 

http://en.wikipedia.org/wiki/Global_warming_controversy 

http://science.howstuffworks.com/global-warming7.htm 

The two primary methods currently available for growing and harvesting algae are open pond systems and closed system photobioreactors (PBR). PBR’s create an enclosed growing environment for algae cultivation where light, air, and nutrients are supplied at regulated levels to ensure optimized growth. The following bullet points illustrate the problems versus benefits between the two systems.

Problems with open algae systems (pond)

• Light only effectively penetrates 2’ – 3” in ponds resulting in large amount of algae not receiving enough light which lowers yields
• Temperature fluctuations can effect algae growths and yields
• Open to contaminates or more hearty local varieties of algae which could take over the pond requiring draining and/or treatment
• Excessive evaporation

Benefits of open algae systems (pond)

• Less expensive to create and maintain

Problems with closed loop algae systems (PBR)

• Capital intensive – more expensive to set up
• Facilities require greater amounts of maintenance

Benefits of closed loop algae systems (PBR)

• Controlled environment – species integrity can be maintained
• Productivity increases – able to monitor complete system more efficiently
• Less evaporation
• Interior lighting can be adjusted for proper exposure levels

The production cycle for growing algae and harvesting oil and biomass in a closed PBR system is as follows:

Algae strains are usually started in small containers in a laboratory and then the culture is either transported directly into a PBR or to shallow specialized raceway ponds that have paddle wheels to maintain water flow. If the raceway pond method is utilized the algae are then allowed to multiply in these artificial ponds and once a satisfactory density is reached it can then be transferred to the bioreactor. The algae/water mixture is then poured into the bioreactor system’s tank where it mixes with water, CO2, and nutrients already present in the system. CO2 and nutrients can also be introduced later in the system. The algae are then pumped into racks of translucent plastic containers. These containers may consist of long polyethylene bags, polyethylene sleeves, plastic tubes, or glass tubes. It is here the algae are exposed to light for photosynthesis. Pumps may continue to force the algae through the system or gravity may be used to allow the algae to flow down through the containers. Types of bioreactors include air lift, tubular, and flat plate.

There are two methods of operation, batch and continuous flow. In batch operations once the algae is ready for harvest, in some cases as quick as 48 hours, the entire PBR system is drained and algae is removed from the system and the PBR is restocked. In a continuous flow system only the excess mature algae are removed as the system becomes overloaded. Continuous flow systems can potentially run for very long periods. They may require new cultures to be introduced occasionally to re-kick start the system. Great care in monitoring must be taken to avoid a collapse of the entire algae colony within the system.  If a collapse occurs it will require draining the system and starting over with a new culture. The advantage of the continuous flow is that air, CO2, nutrients, light levels, water mediums, and water temperature can be adjusted to create customized growing conditions. Cyanobacteria (blue-green algae) which excrete lipids (oils) as waste can also be harvested in this manner.

Algae can grow in a number of different water mediums including saltwater, brackish water, and waste water. It can also grow in a wide range of water temperatures. CO2 requirements can vary as well but when optimized can increase oil yields; the general rule of thumb is 2.2 lbs. of CO2 inserted into the system for every 1 lb. of algae for its lifecycle. The preferred method to increase CO2 solubility and oil yields is to use fresh water in moderate temperatures.  Exposure to high (hot) water temperatures creates a metabolic burden in the algae that can slow growth rates. Lighting conditions are also critical to growth rates. Algae can grow successfully in different lighting levels. Bright light however, tends to degrade algal pigmentation and which can also lead to slower growth rates. 5% – 20% of full sunlight exposure subdues and preserves pigmentation creating a metabolic benefit that can lead to faster growth. This can easily be accomplished in a PBR system by adjusting internal lighting levels or by using plastic that are not 100% transparent or tinting in outdoor sections. Algae must be also be allowed a recovery period in darkness between 2 – 6 hours depending on species to allow for regeneration. Nutrient content and quantity can also be experimented with and adjusted depending on desired oil yield versus nutritional content in biomass residue.

When the growth cycle is completed and the algae colony has reached maturity it is ready for harvest (2 – 5 days dependant on species). The algae and water medium can be either completely drained from the system (batch mode) or harvested constantly in a continuous operation cycle. Operating in continuous cycle requires greater system monitoring and more precise administration of water, CO2, and nutrient levels but provides potentially greater yields. The algae can be harvested from the system by a number of different procedures or combination of procedures. The process usually involves some type of micro screening that allows water to pass through but retains the algae. This can be combined with centrifugation which involves high speed spinning and use of centrifugal force. Other methods include flocculation which uses chemicals or catalysts to promote formation of clusters which can then be easily gathered, or by froth flotation which involves grinding and crushing the algae repeated into froth and then skimming the surface for removal.

Once the algae has been dewatered and separated from the system it is allowed a period to dry. The lipids or oil must then be extracted from the dried algae. Again, there are a number of different methods available and can be used in combinations to increase efficiency.  One of the simplest methods is using oil presses to crush the algae. There are a variety of methods used for crushing and pressing including screws, expellers, pistons, and other traditional presses that have been used successfully for extracting vegetable oils. A second method involves using chemical solvents such as hexane, benzene, and ether. These chemicals when introduced to the algae cause the cell walls to rupture releasing the oils. Another method involves using enzymes in a water medium to deteriorate the cell walls eventually requiring the oil to be removed from the water medium as it floats to the surface. With this process the alga doesn’t have to be removed from the PBR system via dewatering but can simply be transferred into another section for enzymatic extraction. Ultrasonic waves can be used in conjunction with enzymatic extraction to expedite the processes.

What are left are raw oil and a biomass residue. The oil can be refined to produce bio diesel, jet fuel, and pharmaceutical components. The biomass residue can be broken down into protein, carbohydrates, and raw biomass.  The protein can be used for animal feed stocks, aquaculture feed stocks, and as a high quality protein source for human food and supplements.  The carbohydrates can be fermented into bio ethanol. The remainder of the biomass can be utilized as fertilizers and as a solid fuel source.

PBR’s can be placed anywhere even underground if artificial lighting is used. The ideal location would be to place the PBR in direct proximity to an existing coal power plant or similar CO2 producing facility and pipe the CO2 directly into the PBR or storage connected to the PBR. This would provide mutual benefits and create a synergistic system where algae oil can be used to help power the plant providing the CO2. Some of the CO2 will be returned to the atmosphere when the oil is burned as a bio fuel but even that is in essence net carbon neutral since the CO2 was either absorbed by the algae in the form of CO2 already present in the atmosphere or absorbed from CO2 about to be released from a smoke stack into the atmosphere. Water can be used in the PBR that is otherwise unsuitable for normal farming with the consequence of lower yield expectations. Although, brackish, brine or wastewater is an excellent source for other essential nutrients like nitrogen, phosphorous, silicates, and sodium.

Bio algae production has a way to go before mass production expectations can be fulfilled. PBR efficiencies still require fine tuning. Government funding or subsidies would be a necessity especially for start up and small bio fuels companies. More research is required to isolate the most cost effective extraction processes. Despite these limitations, bio algae production from PBR’s represents one of the United States’ greatest opportunities for transition away from strictly fossil fuels, while providing a high protein food source for humans and as a feed stock for animal, poultry, and fish live stocks. It can also assist in the reduction of greenhouse gases by sequestering CO2. As production levels increase, PBR’s will be able to use their own oil output to run themselves removing the argument that it still requires fossil fuels to support bio fuel production.  

There are future applications that may transcend even the current benefits. Possible applications include using bio diesel to fuel power plants and transitioning cars to electricity. Larger trucks can still remain powered on petrol diesel / bio diesel blends. CO2 emitted from using bio diesel to power the facilities could be reinserted back into the PBR creating a near closed loop CO2 sequestration system. Another application involves powering the steam reforming or electrolysis processes are to common methods used for hydrogen production. The CO2 emitted by both the steam reforming process and the bio diesel used to power that process could be fed back into the PBR system. This process has been traditionally powered by fossil fuels and criticized severely since the energy (usually fossil fuels) used to create the hydrogen is greater than the energy output of the hydrogen. Another even more potentially beneficial use would be to extract hydrogen direct from the algae during photosynthesis.

Please add to or make constructive corrections that will improve this blog.

 http://ezinearticles.com/?How-To-Grow-Algae-For-Biodiesel&id=829645

http://www.biodieselnow.com/general_biodiesel_21/f/7/t/18423.aspx

http://www.oilgae.com/blog/2008/05/petroalgae-looking-to-test-commercial.html

http://www.oilgae.com/algae/cult/pbr/pbr.html

http://en.wikipedia.org/wiki/Algaculture

http://green.autoblog.com/2009/11/18/forget-biodiesel-algae-could-produce-hydrogen/

http://www.biodieselnow.com/algae1/f/13/p/4934/159825.aspx#159825

One of our planet’s fastest growing organisms is algae. It is literally the bottom of the food chain and has been able to survive and even thrive by replicating itself faster than all other species are able to eat it. Algae can grow at rates 100 times faster than current production food crops or plants that can be used for bio fuel, producing yields as high as 5,00 to 15,000 gallons in one acre per year. The U.S. currently uses approximately 450 million acres for crop production, and 500 million acres for livestock. For less than 10 million acres, or 1% of the combined land mass for crops and livestock, we could produce enough bio diesel to replace gasoline, diesel and jet fuel. These figures are based off of open systems, ie. shallow ponds, closed loop bioreactor systems can produce even greater yields per acre due to vertically stacked designs which increase the surface area.

Depending on the species, algae can go from germination to harvest in as few as 2 days. During harvesting, the water is drained and the biomass is extracted from the system via filtration or a high speed centrifuge process. The biomass can then be separated into lipids to provide a high grade vegetable oil and a high protein / high carbohydrate byproduct residue. The oil can be tailored to produce bio diesel, jet fuel, and heating / cooking oil. Algae lipids can produce oil yields of about 30% – 50% at harvest. Approximately 1/3 of that amount can be lost in the extraction and separation phase. The byproduct residue can be used as an organic high-protein food source, and/or as a feedstock for animals, fish and fowl. The carbohydrates from the byproduct can be refined into gasoline or fermented into ethanol. Another option is to use cyanobacteria (blue-green algae) because this type of algae excretes lipids as waste material. This reduces processing costs since it removes the need for extracting algae from the system and the lipids are continuously harvested from the water.

Algae can also sequester CO2, leaving oxygen as the byproduct and can be placed next to facilities that produce CO2 intensive hot fue gases. This process occurs naturally in open pond systems but the real value is to position closed loop algae based bioreactors next to energy and chemical plants with high amounts of fue gas (CO2, NOX, and SOX) emissions. The growing conditions for algae require CO2, sunlight, and water (brine or salt water acceptable), therefore providing a synergistic value to both algae production and green house emitting gas reduction. Algae are also capable of absorbing SOX and NOX the two primary contributors to acid rain. For every two tons of algae growth, one ton of CO2 is removed from the fue gas emissions. Industry emits CO2 twenty-four hours per day from their plume stacks. Algae requires approximately four hours of darkness per day for regeneration, requiring the use of dual closed loop bio-reactor systems with staggered hours and internal lighting to handle the load.

Possibly the most beneficial thing about bio-algae is that it does not compete with U.S. food crops for land or with population centers for potable water. Algae is a robust organism and highly adaptable to any environment. With a closed loop system, the space requirements are even further reduced and yield expectations higher. In addition, no green house gases or pollution are emitted by algae, and it does not require herbicides, pesticides or fertilizers for growth. Its byproduct can actually be a source of nitrogen based fertilizer. Finally, algae can be utilized to clean waste, brine, and salt water.

With all of the information that supports the uses and benefits of bio-algae, it causes one to wonder why this organism is not being hailed as the answer to a multitude of problems the U.S. and global economies are facing? Consider the following: bio-algae has few lobbyists or political action committees (PACs), it receives no government subsidies (it is not part of the farm bill), there are no subsidies for the refining process. Due to the lack of government subsidization, the private sector banks are unwilling to lend for infrastructure development since there is no government moderation of risk. In addition, there are growing concerns that as bio-algae development is stalled, patents (intellectual property rights) can be locked up by the larger corporations interested in preserving their status quo.

Bio-algae requires government sponsored subsidies for ongoing research, more efficient extraction, separation and refinement processing and to develop efficient, mass production capabilities. With this funding, bio-algae stands to assist us to meet the transportation needs of the civilian and military concerns regarding heavy trucks, ships and aircraft that use diesel. It can supplement existing petro-based diesel and help stabilize rising petroleum costs (possibly another reason that it is not being considered for subsidization). It also can provide economical feedstocks, reducing the need for corn and wheat based products and provide a high protein supplement for the world’s hungry. It represents one of the fastest ways to reduce increasing CO2 levels.

With all of these benefits to the U.S. it is up to the U.S. populace to demand that the government supports bio-algae as one of the main components in a sustainable, renewable energy program. This can be accomplished by either direct funding for government laboratories or university research, and through funding of start-up or existing bio fuel companies.

http://www.desertbiofuels.org-a.googlepages.com/GAS_sum_and_FAQ.pdf

http://i-r-squared.blogspot.com/2009/06/book-review-green-algae-strategy.html

http://www.biofuelsdigest.com/blog2/2008/08/21/carbon-dioxide-sequestration-via-algae-biofuels-an-overview/

http://educate-yourself.org/lte/algaepower27feb07.shtml

http://www.nationaldefensemagazine.org/archive/2009/August/Pages/MilitarySeesPromiseinAlgae-BasedBio-Fuel.aspx

The United States consumed 99.3 Quadrillion total btu’s of energy in 2008 (British thermal unit (Btu) is a unit of energy needed to heat 1 lb. of water 1 degree F). The breakdown follows below. What I found to be of interest is that for all the talk over the past several years regarding renewable energy we don’t produce or consume much of it. Solar is only one tenth of one percent of total consumption and it’s been around for 30 years. All the private equity money going into wind generation represents one half of one percent, and the bio fuels hope about replacing gasoline with ethanol and diesel with bio diesel appear to have stalled at about one half of one percent. I realize there are efficiency concerns and infrastructure costs related to establishing these sectors but for all the media discussion and political wrangling we have actually moved little.

When considering consumption by sector (table below), petroleum is primarily used for transportation (gasoline, diesel, jet fuel). Natural gas usage breaks down to 29% for electricity production, 29% for industrial uses and is utilized for building steel, glass, brick, etc. and 34% is for heating residential homes and commercial buildings. Coal has always been used for electric power generation and equates to almost half of the energy sources used to generate electricity. Nuclear is also almost exclusively for electricity generation as well and represents 20% of the energy sources used to generate electricity. All of these are considered non-renewable forms of energy.

U.S. Energy Consumption by sector for 2008:

• Petroleum                                      37.4%     36.7 Quadrillion Btu
• Natural Gas                                   24.0%     23.8 Quadrillion Btu
• Coal                                              22.6%     22.8 Quadrillion Btu
• Nuclear (Uranium)                           8.5%       8.9 Quadrillion Btu
• Renewable Energy                          7.0%       7.3 Quadrillion Btu

Breakdown of Renewable Energy sector for 2008

• Biomass                                        53%        3.9% of total sources of energy
• Hydroelectric                                 34%        2.5% of total sources of energy
• Wind                                               7%          .5% of total sources of energy
• Geothermal                                     5%          .4% of total sources of energy
• Solar                                               1%          .1% of total sources of energy

Breakdown of Biomass sub-sector for 2008

• Wood and wood waste                 64.5%     2.5% of total sources of energy
• Biofuels (ethanol & biodiesel)        23.5%       .9% of total sources of energy
• Garbage & Landfill gases               12.0%       .5% of total sources of energy

Although the total number for renewable energy comes in at 7% of consumption it is largely made up of wood burning in the biomass sub-sector and hydroelectric power generation both of which have been in use for years. The newer technologies of wind, solar, geothermal, tidal and bio fuels barely scratch 1.5% of total U.S. energy consumption. Total energy consumed from all sources indicates that traditional non renewable sources still dominate and will likely continue to dominate U.S. energy supply side.

When considering our nation’s demand for energy and how we use it, demand for transportation and electrical power generation make up more than half of that demand. Transportation represents 29% of energy demand. Electricity represents a 21.6% of energy demand. When considering electricity demand.  Industries and all their associated production facilities require 31% and electricity demand from industrial uses is 4.3%. The construction / maintenance of our commercial sector require 19% and electricity demands from commercial development are 7.8%. Residential construction represents requires 22%, and electricity demand for residential housing is 9.5%. The two most important energy demands regarding renewable energy is also for transportation and electrical power. 

Transportation needs are met through either importing petroleum/oil or domestically producing it. The United States produces 10% of the world’s petroleum and consumes 24%. We import 57% of our demand and, we produce 43% domestically. Of the 57% of our imports about half come from North and South America, including Venezuela. The Persian Gulf represents only 16% of our total imports, with 12% of that amount supplied by our ally Saudi Arabia. I am now wondering why there is so much diplomatic, military, and economic emphasis placed on a region that provides only 16% of the total imports of oil for our transportation needs.

More than half of U.S. Petroleum Imports Come from the Western Hemisphere

• Canada            19%
• Mexico              10%
• Venezuela          9%
• Others              10%

Remaining U.S. Petroleum imports come from the rest of the world

• Africa                   21%       (Nigeria              8%)
• Persian Gulf         16%       (Saudi Arabia   12%)
• Others                 14%

70% of all oil produced domestically or imported goes towards transportation, 24% towards industrial production, and 5% for residential / commercial heating oil. If we look at the transportation sector closely, oil constitutes 96% of the demand. The remaining 4% is made up of natural gas and biofuels. Even that is a bit misleading since the vast majority of the 2% from biofuels is ecorn based ethanol that is supposed to be used to supplement gasoline. Ethanol production has certainly seen its share of difficulties but remains the supplement of choice since it increases octane levels, and providing a safe alternative for oxygenation , and helps meet stricter emission guidelines.

62% of our oil imports are used for gasoline. Why is only 2% of ethanol being used with gasoline or as a replacement for gasoline? Ethanol is probably not going to be the sole replacement as an automobile energy source. It doesn’t have the high BTU/energy efficiency ratio that gasoline has, but it is a great supplement to our gasoline and we could be using it in greater concentrations. Current mixtures now range from 100% gasoline / 0% ethanol to 90% gasoline / 10% ethanol (E10). The E10 mixtures have had minimal negative effect on gas lines, but even E10 isn’t used throughout the country.

Second generation cellulosic ethanol can be a reality quickly. There are already cellulosic ethanol companies that have completed the prototype generation stage and are ready for full production. An additional bonus for cellulosic production is that it will not strain food crops or require thousands of gallons of water to produce one plant. We need to be stretching the use of existing oil/gas inventories and that can be done by integrating cellulosic ethanol. I don’t accept the arguments about it always costing $1000 to change fuel lines, injectors, etc. Once a mixture system for E15 or above is mandated, company’s will compete as they always do and drive prices down. So, why is this not being done immediately to relieve the pressure from all the imports? Maybe there are too many hands in the pot? Is big agribusiness trying to generate more demand from its biggest commodity cash crop, corn? Maybe big oil doesn’t like to have to share the profits with some upstart potential substitute? Maybe there is no rush to get the U.S. off of the imports from the Middle East because we really aren’t importing much from that region since 12% comes from our stable ally Saudia Arabia, leaving only 4% to come from other areas within the Middle East (essentially from Iraq). I certainly hope we end up with more oil from Iraq and that oil drilling rights do not end up in Russia’s hands for all that we have invested in the area.

Diesel and jet fuel make up another 31% of our oil imports. Both can be made from biodiesel. Biodiesel consumption currently represents less than one half of 1%. This technology has been around for a while and bio algae represents one of the greatest potentials in this field. Algae are the fastest growing organisms on the planet able to replicate themselves in a few days and some varieties can produce yields up to 50% oil. Why did all government funding get pulled from this potentially useful technology? Why is it that when a university has a breakthrough, a military defense contractor steps in and overtakes the project? Not that I don’t agree with running our fighters and transports off of biodiesel generated onsite via bio algae production, I would just like to see it fueling our semi-tractor trailers domestically as well. Trucking compannies could also benefit from access to simple inexpensive conversion processes that don’t void warranties. Perhaps federal tax incentives could be provided to trucking companies to help fund the conversion process for at least some trucks that are no longer under warranty. At the minimum the U.S. should be significantly funding research to try to increase the efficiencies of bio algae/bio diesel production.

The following breaks down the transportation sector:

Transportation    96% of all transportation needs are met by petroleum

• Gasoline              62%   Cars, Motorcycles, Light Trucks
• Diesel                  22%   Heavier Trucks, Buses, Trains
• Jet Fuel                 9%    Airplane
• Other                    5%    Cars, Light Trucks, Heavier trucks (2% from renewable energy)
• Natural Gas          2%    City fleet Cars & Light duty trucks

Energy consumption by vehicle type

• Cars & Trucks          60% of total energy used for transportation       – Gasoline
• Large Trucks            16% of total energy used for transportation       – Diesel
• Aircraft                      9% of total energy used for transportation        – Jet Fuel
• Boats                        5% of total energy used for transportation        – Gasoline & Diesel
• Agriculture                4% of total energy used for transportation        –  Diesel
• Trains & Buses          3% of total energy used for transportation        –  Diesel

In electric power generation, we clearly use non-renewable energy sources as well, and this constitute s almost 90% of electricity production. Renewable energy, when hydro-electric is taken out, is 2.5% and half of that is old style wood burning.

Electric Power – Used for electrical energy accessed through the grid

• Coal                                 48.5%
• Natural Gas                      21.6%
• Nuclear                            19.4%
• Hydroelectric                     5.8%
• Renewable Energy            2.5%
• Petroleum                         1.6%

Sources of the 2.5% Renewable Energy used for electric power generation

• Biomass                    1.3%
• Wind                           .8%
• Geothermal                 .3%
• Solar                           .02%

Percentage breakdown of the Biomass sources in electric power generation

• Wood and wood waste             70.2%
• Biofuels                                       3.7%
• Garbage & Landfill gases          26.0%

I am sorry, but these numbers seem ridiculous. I have heard all of the arguments about the inefficiencies of photo-voltaics, the poor birds hitting the wind turbines, and how geothermal is too expensive and can only be placed deep under water in volcanic rifts. But unless I’m mistaken, aren’t we one of the most advanced countries in the world? I cannot believe that we cannot come up with better electricity generation solutions than burning coal. Wasn’t this technology being used in the…1800’s?  Maybe in promoting our energy crisis we are simply guaranteeing that everyone stays in “crisis mode” and allows business as usual to continue. I do not think that there have been any serious attempts to do anything but keep the major players in place while throwing a few token renewable energy gestures out to the public. 

I wonder if oil and coal had to deal with the same litany of excuses of why things can’t be done as renewable energy has faced. How were they ever able to start production in the … early 1900’s? Personally, I am grateful that we have oil and coal, they have gotten our country to where it is today, but they are polluting our environment and they are technology from our grandparent’s day. (I know, they have made amazing incremental advances in production over the years). Maybe 100 years ago we didn’t tell each other how we couldn’t do something and instead we set out to do it no matter what. Well, I think we are passed that stage. Let’s pull our heads out of our proverbial oil tanks and set to work to provide an economically viable solution for renewable energy integration.

http://www.eia.doe.gov/

http://www.planetforward.org/pages/energy-consumption-by-sector

http://www.need.org/needpdf/infobook_activities/IntInfo/BiomassI.pdf

http://tonto.eia.doe.gov/energy_in_brief/foreign_oil_dependence