Forgive me, please, if you are one of those people who hated math in school, but I want to start off today with a few calculations. They are simple calculations, let's not panic anyone. I am talking about the actual numbers the Whitehouse has put out in support of the President's State of the Union Address, specifically relating to the Energy Policy section, small though that was.

At a page on the internet under the www.whitehouse.gov location you can see http://www.whitehouse.gov/stateoftheunion/2007/initiatives/energy.html, where you will find a quite extensive discussion of Bush Administration policies, and accomplishments on the energy scene, as well as expanded language detailing the statistics behind and within the State of the Union address. So let's look at those a little more carefully. I promise it is unlikely to change your political stripes to spots or vice versa, but I would like us all to be able to see with some degree of clarity just what has been proposed. The problem in the main seems to be that these measures are so small, considering the vast scale of the problems they purport to address, that we may have difficulty seeing the impact at all.

First let's look at that proposal to double the Strategic Petroleum Reserve. The Whitehouse points out that the SPR in 1985 was 493 million barrels and represented 118 days of net oil imports. It further states that "currently" the SPR is at 691 million barrels which represents "only" [their word] 55 days of net oil imports. So what does that mean? Even on the surface it certainly looks like too little too late. If you double current reserves to cover twice the barrels which would serve today's needs for twice as many days, double 55 is only 110, right? That still falls about 7% short of what we had twenty years ago. And as if that wasn't clearly "too little too late" this calculation takes for granted that we would have no additional needs for the next ten years. That is, no growth in the rate of consumption. Just how dumb do they think we are?

Those SPR figures indicate that we had a growth in demand from 4.17 million barrels per day in 1985 to 12.56 million barrels a day today (in net imported oil). So a doubling in today's number not only fails to catch up to the reserve levels of 1985, some twenty two years ago, but plays ostrich, head in the sand, with respect to future growth. If import demand grew by over 300% in the last 22 years, how naive are either the creators of this proposal, or how naive do they assume the American public must be to believe that the next ten years will not see any additional increases? Somehow this scenario reminds me of the cartoon cat, Sylvester, and his perpetual pal, Tweety Bird. Maybe that is just because I have a semi-suppressed, subconscious desire to see someone smash a frying pan on their heads long enough to get their attention so that they would realize that increasing the SPR to what they claim is 97 days worth of reserves is rather unlikely to even maintain the status quo of 55 days worth even if they do manage to moderate the growth in petroleum demands over this next 10 years.

Okay, say we grant them a second chance to redeem themselves mathemagically. How about their calculations on the increasing importance of biofuels in reducing gasoline (and generally petroleum) consumption? Just a couple of paragraphs later in this Whitehouse "analysis" (obviously I am using the term loosely here) they say: "Increasing renewable and alternative fuels used in automobiles from 3 percent in 2006 to 15 percent in 2017 can give drivers a built in defense against supply disruptions and high gasoline prices." Now wait a minute, my gas pump already shows that my gasoline (remember I drive a 1993 Buick, almost the same one as traveled across the USA unmodified on 100% butanol last summer) already contains 10% methanol to reduce air pollution.

Okay, I admit that from my perspective, I consider statistics to be one of the black arts (that's "dark arts" for the rest of you Harry Potter fans who are still salivating, like I am, over the announced release date of the new "Deadly Hallows" episode in that marvelous series). From my standpoint, then, government budgeting is the raving of lunatics about imaginary beasts. Of course the defense against such chimeras is always to throw more money into the volcano, er, I mean economy via perpetually stoking the furnace with government spending (or tax cuts and credits for your wealthiest friends if you happen to be of that political stripe). That works, or so the believers seem to think. Still, on the scale of things federal, $2.7 billion for the Advanced Energy Initiative, a 26% increase over that already spent in the 2007 budget, plus another generous (I'm being "ironic", I hope) $179 million (with an "M" and NOT a "B") for the Biofuels Initiative, a 19% increase, it does seem a weak position to take toward "energy security". Not that $2.7 billion wouldn't shore up my personal bank account rather handsomely, but considering that the supplemental appropriations request for the Iraq war are going to be $100 billion for this year and another $145 billion for next year, (and those items are "off budget" for reasons that I don't fully agree are justified), doesn't it seem to make more sense to put $200 billion into the next two years to accelerate the fuel independence of the county on a permanent basis by transitioning rapidly to biofuels?

Admittedly the spending doesn't end with the mere few billions already mentioned. The President's Farm Bill Proposal (still according to this same Whitehouse web page) will contain more than $1.6 billion in "new funding over ten years for energy innovation" (whoops I thought $1.6 billion was significant, but over 10 years that's a measly $160 million a year) aah, but, there's also $2 billion in LOANS for cellulosic Ethanol Plants. (Remember I mentioned Senator Grassley's grin. I'll bet ADM and Cargill executives broke out the champagne about the same point in the State of the Union address.)

Hang on a minute, is that right? Yes, $179 million for the Biofuels Initiative is the correct number. Why does that sound familiar? I see now. I was confused for a moment, that number sounded remarkably similar to the amount that the President is redirecting (yes, redirecting, not actually proposing to spend, but merely re-prioritizing) of Department of Transportation funds. It turns out that amount is actually a little less, just $175 million. That is because, as the Whitehouse reports, "In 2003, drivers in America's 85 most congested urban areas experienced 3.7 billion hours of travel delay and wasted 2.3 billion gallons of fuel, costing a total of $63 billion." That's more "government accounting" black magic. When 2.3 million gallons of fuel costs $63 billion dollars, that HAS to be government spending, doesn't it? That works out to about $27 per gallon. (Okay, okay, that's "economic impact" in government speak which means they are probably attributing about $2.50 a gallon, and $15 per person hour in lost labor productivity for 3.7 billion hours. Just because I CALL it "black art" doesn't mean I don't understand it.)

But back to my original point, they are proposing to "solve" this problem of commuters producing some 20 million metric tons of carbon dioxide (not to mention the other pollutants) annually, but spending only $175 million. This is the federal government's idea of "addressing the problem." Let's see what that amount might buy us in real terms. I was delayed slightly the other day, not far from home. The sign said, "Intersection Improvement Project" where they were widening an intersection from 2 to 4 lanes in all four directions. The sign also said that the cost of the project over about 4 months was going to be $250,000 dollars. Since this widening project encompassed all of about 1/2 block in each direction, that totals about 16 blocks of single lane paved and curbed 1/4 that amount, or 8 blocks of 2 lane street. So, in other words, $175 million would buy this country about 140 miles of paved two lane highway, maybe. Spread those 140 miles over the "85 most congested urban areas" and you get about 1.6 miles per city that get a 2 lane road widening. Ahh, but do we even get that from this expenditure of tax revenues? No, we do not get any such tangible improvement; this $175 million is intended to pay for ideas. Those ideas should be in the area of expanded work schedule flexibility in the private sector, faster real time traffic information or ideas for "congestion pricing".

All right ladies and gentlemen, here's an idea worth all $175 million in that category. Allow the telecommunications companies $50 billion in tax credits over the next 3 years (I hate those 15 year targets that dribble out just enough to make people think they are "addressing" the problem, when all they do is put a public Band-Aid on the face of the issue) to install fiber optic communications at 23 gigabytes per second to every home in America. That is based on a little less than $1000 for each home in America, assuming 300,000,000 people and a net of about 50,000,000 homes with some savings by aggregating apartment buildings, condos and coops. How do I know that? Well, a few years back I was considered a "guru" of video in the xDSL world. DSL (digital subscriber lines for telephone and data communications) comes in almost the same number of flavors as Baskin Robbins, so from ADSL, VDSL, IDSL and others, came "xDSL" to cover them all. In those days, some years back, one of the doomsday scenarios that convinced me that DSL was a short term transitional technology was the fact that a Canadian company was proposing to do that kind of fiber optic installation for the whole of Canada. Having lived over 30 years in Canada, I can assure you, the cost of winter time trenching to install fiber optics north of the border exceeds the needs for most American homes. I am not suggesting that no one ever has to leave home again, but with fully bidirectional fiber optic communications to every household, billions of commuters' driving miles could be eliminated every week by telecommuting. And by "telecommunication companies" I mean that to include companies large and small as well as your local cable television companies too, since many of them already have established community level fiber networks, and in many cases full, fiber-to-the-curb (FTTC) installations in some of their territories.

"The Administration is also pursuing large-scale tests in the United States designed to advance carbon sequestration technologies which can have the potential to store more than 600 billion metric tons of carbon dioxide, the equivalent of more than 200 years of emissions from energy sources in the United States." So says the same web page. I would like to hear more about that. It does come in the same paragraph as a discussion of "clean coal" technologies, which suggests that something on the horizon may be truly amazing or at least very promising. It could just be a boondoggle or a hustle from the coal industry to overcome objections that even clean burning coal is releasing already "sequestered" carbon (and ultimately carbon dioxide and sulfur) into the atmosphere, but it could really be a viable strategy to keep coal as a leading, secure, domestic source of energy. Definitely worth keeping an eye open for developments on this front.

The US Presidential campaign was heating up quickly this week with all the major democratic candidates speaking before the DNC. Senator Hilary Clinton's "I am in, and I am in to win," slogan surprised no one. But as George Will said on ABC's This Week program on Sunday morning, the only thing that can stop Hilary is Hilary. Barack Obama was the most eloquent, and emphasized his anti-war position, which is usually a strong platform plank when standing before a crowd of (large "D") Democrats. Senator John Edwards also received a rousing show of support, but Senator Joe Biden's campaign kickoff this week stumbled with a remark that was perceived, unjustly, to be tinged with racism. His DNC speech started with a light-hearted, "Well, how has your week been?" that received a warm wave of chuckles from the sympathetic audience. Biden is, as you may recall, the only candidate to really have proposed a constructive political solution for Iraq, a tri-partite confederation created by a division of territories, powers, and revenue sharing among the major factions that already exist in the country. It is still the only solution that makes sense to me, and seems like the logical outcome of any political solution that engages the various regional powers in supporting a peaceable solution to the violence that threatens to spill over the borders into other countries in the Middle East.

Finally, to end on a positive note, that same Whitehouse web page also calls for reforms to the New Source Review program which will allow for less uncertainty in power production investments, particularly with respect to cleaner and more efficient improvements. That's an encouraging sign. It may mean additional loopholes, but it should mean streamlining an already complex and convoluted approval process, particularly when it comes to energy innovation and greener energy sources. So much of politics seems to be the art of implementing the best of intentions badly that I am frequently disheartened by the whole process, but the miracle of democracy is that hope springs eternal, at least once or twice every election cycle.

Oh, yes, speaking of hope springing eternally, I am off to Las Vegas next month to the PowerGen Renewable Energy and Fuels conference of which I spoke last week. Conference prices are quite modest by the standards of which these things go these days, and it looks like it will be another opportunity to learn a great deal. If you plan on attending, please, by all means, drop me an email note and I will look for you there.

Love

Stafford "Doc" Williamson