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July 08, 2010

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Correction: Three Rivers is actually The Three Mile Island accident. Bad memory.

Perhaps our prayers were answered. At around 3:15 today the oil stopped leaking. Hopefully it will hold. Here are some thoughts on Energy Policy:

I am very concerned about America's energy policy direction from three perspectives:

1. The use of nonAmerican companies in the production of domestic energy sources. (I'll try to be brief) It appears that the accident at Three Rivers greatly dampened the willingness of America to trust our energy production to nuclear fuels. Thus, we regulated and priced our way out of the nuclear business. Since that time Westinghouse sold it's nuclear division to Tashiba and GE sold theirs to Hitachi.. However, both operate under the GE and Westinghouse brands. Meanwhile Mitusbishi has taken a strong position in the world nuclear production business as well and is currently in line for the Lake Anna expansion. So here we are with the Japanese taking high paying US jobs and American dollars and opportunities for the US to sell technology services overseas and losing more in our balance of payments. American universities basically gave up producing nuclear engineers for twenty years. They are just now reinstating the programs. Thus, there is a lack of qualified, experienced nuclear engineers in the US even if we wanted to restart the industry. I asked the question today about who produces the nuclear power plants for the Navy ships and subs. (I assume also for the space programs) I found this: GE and Westinghouse are the designers (Japanese owned) along with Bechtel and Combustion Engineering. Babcox and Wilcox produce the reactor cores under the name BWX Technologies in partnership with a French firm AREVA. Westinghouse produces the coolant pumps and TRW the control rod drives under the name Marine Mechanical Corp. So the defense department is funding Japan and France to build our defense nuclear systems. In the end this is an example of the US giving away jobs, cashflow and security as a result of over reacting to a safety issue driven by environmentalists who focus on banning things rather than improving them.

2. The same scenario is now occurring in the oil production business. The US has highly capable oil exploration and production companies led by Exxon and Conoco. However, we have fallen to forcing oil and gas production into more remote areas of the territory in deference to the environment. Again banning instead of improving the systems. And this BP spill is a result. The Dept of Interior bans and restricts rather than innovates and improves and monitors safety systems. They lease the US territories to foreign companies who are far less caring, reliable and easy to regulate or punish than American companies. This gives away jobs and cashflow to our econmic adversaries. We have something like 27,000 capped wells in the gulf. We have all the perfectly productive capped wells off California with huge reserves. Anyone monitoring them for leaks? Anyone proposing we open them and produce oil and gas for our economical advantage or jobs? Does the Department of Energy or Interior have an R&D program for oil and gas production safety technologies? Or do they spend all their time making sure Federal and public lands are not opened to exploration and production? How many gasoline refineries exist in the US? We have hundreds of thousands of acres of abandoned military land that could house a gasoline refinery operation on each coast. What an investment that would be for the country's economic well being, cashflow, job creation and most important security. We could lease them to the US companies.

3. And where is that natural gas plan discussed in campaigns years ago? America has trillions of gallons of natural gas inside the US territory. It can burn clean. It can supplement much of our countries needs. Solar, wind and biofuels cannot match the potential of this fuel. Turn America's industries on to that problem and we'll marvel at what they'll do.Free them up to build the distribution system for it.

If politicians want to get reelected it might work to forget bashing the Republican lack of cooperation and stand up and talk about the real solutions to America's problems. Not windmills and solar panels. You can produce hydrogen from sea water and liquify coal too but at what cost? We can sell our corn and wheat to China --why turn it into gasoline? In only ten years the Chinese will consume 50% of the food on the planet. Is it any wonder that they have no environmental policies? Reality is what America is all about. Especially in business. Sorry, friends, if I sound frustrated but I'm a doer and all this political stuff frustrates the hell out of me. I worked on this problem for the government back in 1972 and here we are today still debating it. We knew then what we had to do NOT to get to this point.

First, on the two tier system - in Canada it is not legal to offer insurance outside of the government system - the full "single payer" option where Liberals would like to go. The logic is that the upper class will then be forced to make the "lowest common denominator" be high enough to satisfy them. (Government spending is about 5% higher as a portion of GDP than in the U.S.)

On the court, not only no veterans, but no Protestants. So much for diversity.

Let's all say a prayer for the success of the new cap that BP is attaching today to control the oil spill. All politics aside this is a devastating blow to Americans in the Gulf region and the economy. And, to American energy production. The faster it ends the better for all of us.

OBAMACARE

I visited my doctor a couple weeks ago and was invited to sign the papers for his new business plan. As I had just reached Medicare age I was being welcomed to the new two tier American system. In his plan which he believes most American private practice doctors will opt for I am offerred his personal care in return for my assurance that I will pay whatever my insurance provider or the Medicare system does not. And, I am responsible for filing the paperwork for Medicare reimbursement if I do not have medical insurance and rely solely on the Medicare system. In essence he is opting out of the Medicare only system and beginning to build a practice based soley on those patients who have medical insurance or enough money to pay cash for treatment (like Rush Limbaugh). It is his belief that America will simply become a two tier system and that most doctors will go for the same side he is going for and leave the Medicare only patients for clinics run by doctors with nurses giving most of the treatment. He believes this will create long delays in the treatment process and lower levels of competance as patients are shuttled to nurses.

The second thing I have learned is that only 37% of small businesses offer medical insurance. Under the new law the very small companies will be offerred subsidies of around 30% of the cost of the premiums if they cover their employees. If they do not then they will be penalized around $800 a year for each employee. Employee coverage for a family is likely at even a minimal level to cost about $12-20,000 a year. So, a 30% subsidy will cover perhaps $3600-$6000 leaving the employer with a net cost of $8-$14,000 per family. Single coverage is less but the lesson is the same. The penalty for not providing coverage is much less and most employers who do not currently offer coverage will opt to pay the penalty. In fact it is likely that some employers will drop coverage and let the government pick up the tab putting more people into the noncovered system. In the end this will lead to a government assumption of the Medical coverage of the Medicare Tier system--the so called universal coverage plan. Not a pretty thought if I am getting the story right.

The Supreme Court

The retirement of Judge Stevens will leave the highest court in the land without a Veteran among it's ranks. A troubling thought for those of us who have served. It seems to me that for the balanced view and experience in defending the Constitution that is desired of the highest court in the land it would be of much value to always have a veteran on the court. The separation of powers is not only desired amoung the Legal, Executive and Legislative branches of government but also between the civilian and military components of our people and government. So, I beleive this to be an important objective that should be pursued by the President in the next few appointments.

I will comment on Obamacare in time but this morning the news is the incredible audacity of the liberal politicians in America. Illinois, one of the most bankrupt states in the country, has given the staff a 20% pay increase. At the same time they gave the Union state employees a 14% increase over two years. While 15 Million Americans are unemployed, millions more under employed and a vast number of private workers enduring salary freezes/cuts the state hands out pay raises they do not have the money to pay for in OBAMA's home state. Why should we be surprised?

1. The former Governor is being tried for trying to sell the President's Senate seat.

2. The Mayor of Chicago has served since 1986--24 years.

3. The Presidents #1 man from Illionis is accused of bribing politicians with promised jobs to drop out of races.(Where has that gone in the news?)

4. Unions are given favored status in government contracting.

5. Unions far out spent corporations in campaign contributions in this years primaries. Is that what Union dues are for?

6. Obama has requested $25B from Congress (1st request denied) to "bail out" the bankrupt states. So seeing that it will eventually be forthcoming in either stimulus relief or a Federal loan to the states why not give some to the boys and request more aide?

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