It’s almost amusing how
the people that live in their energy gulping mega-mansions
can soothe their consciences by purchasing carbon credits
to offset their energy consumption. Perhaps the biggest hypocrisy
occurred this past weekend of the “Live Earth”
concerts held around the globe. It has been estimated that
private jets flew over 200,000 miles to transport performers
to these concerts. It is further estimated that flying one
hour in a Gulfstream jet burns as much fuel as driving your
family car for a year. John Buckley of Carbonfootprint.com
has calculated that the top five performing acts have an annual
output of 2000 tons of carbon. Madonna alone has an annual
footprint of 1,018 tons, according to Buckley. This does not
include the trucks necessary to transport equipment, the cars
to transport the fans or the power needed to stage the shows.
Then there is the garbage. Dr. Andrea Collins of Cardiff University
estimated that the concert at Wembley Stadium alone produced
fifty-nine tons of garbage.
Where were the carbon credits spent? John Nego, environmental
director of Live Earth, said, “They have chosen a reforestation
and agricultural project in Mozambique.” It’s
doubtful they can plant enough trees to absorb all the carbon
issued for that weekend.
While we commend “Live Earth” for raising energy
awareness, we do have an energy crisis. Congress has determined
that we cannot drill in the Arctic Circle or offshore, and
they have made it almost impossible to build new refineries
(where most of the gasoline supply problem lies). Then there
is the political unrest in energy producing countries; Nigeria
is the latest. Add on OPEC and Venezuela holding a gun to
our head and the worldwide booming economies of China and
India – sucking up every last drop of oil, and it is
obvious that we are at the crossroad.
There are options. We have a plentiful supply of coal, but
that is not carbon friendly. Bio-fuel is a short-term band-aid
approach but not the future. Wind power may work in some sections
of the country. Solar power holds more promise and several
companies are making advances in that area.
That brings us once again around to nuclear power. Although
we only derive 20% of our energy from nuclear power (vs. 80%
for France), we have the most operating nuclear reactors (104)
of any country on the planet, and the Nuclear Regulatory Commission
(NRC) expects orders for as many as twenty-eight over the
next two years in this country alone. This has not gone unnoticed
by investors as the price of uranium has risen from $7 a pound
in 2001 to $138 a pound recently. Almost everyone is aware
of the radiation dangers of enriched uranium as a result of
Three Mile Island and Chernobyl. However, advances have been
made concerning safety issues, and new technology has allowed
for recycling nuclear waste. Joe Indall, a Santa Fe lawyer
for the Uranium Producers of America, estimates that 600 million
pounds of uranium lie under the sandy soil of New Mexico.
The energy produced by a pellet of enriched uranium the size
of a fingertip is equal to that produced by nearly a ton of
coal. The “greenies” are even jumping on this
train as nuclear power produces zero greenhouse gasses. Japan
has even sent geologists to New Mexico to explore the possibilities
of uranium mining.
Albert Einstein, though a peaceful person, recognized the
energy that could be generated from uranium (E=mc2) and wrote
the President of the United States urging him to fund research
for the development of the atomic bomb – before Germany
or Japan did. He realized that the process that happens in
the sun (nuclear fusion) could be replicated on earth with
uranium creating a powerful source of energy. How we harness
this energy could determine the future of our planet.
Now on to market matters: The bad news continues to circulate
on the housing market. Sub-prime defaults on mortgage payments
hurt consumer spending as do high gasoline prices. In spite
of this, the economy continues to grow as does new job creation.
As the housing industry continues to work off the excesses
of the past boom, other sectors are picking up the slack,
most notably in the service sector. Interest rates are near
historic low levels and inflation remains relatively low.
The Fed has done a good job keeping the economy moving forward
and that trend should continue even as we experience some
speed bumps along the way.
Random thought for July 2007:
"If you think health care is expensive now, wait until
you see what it costs when it’s free!”
- P. J. O’Rourke
Thanks to Investors Business Daily
for data on Carbon footprints.
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