Gas or Hot Air

Congress is holding congressional hearings this week. They are beating up the oil executives in hopes that they will reduce their salaries so that the common man can make it to work tomorrow. At $4.00 per gallon for gas, reducing gas prices through means other than the law of supply and demand has become a national pastime. What have we learned from this circus?

Well we have learned that the cost of a barrel of crude represents about 75% of the cost of a gallon of gas. We have also learned that corporate profit represents 4% of the cost of a gallon? What about the other 21%?

Well, here are some facts from the Energy Information Administration. In 2005, when gas was $2.27 per gallon, component costs were: (1) 9% - distribution and marketing; (2) 18% - refining cost and profit; (3) 19% Federal and State taxes; (4) 53% - crude oil price. So, with a little mathematical manipulation, we can reliably state the following:

1. 75% goes to the crude oil provider (principally OPEC, Venezuela, Canada, Mexico).
2. 9.25% goes to state and local government.
3. 7.25% goes to refining;
4. 4.5% goes to distribution and marketing; and
5. 4% of a gallon of gas goes to oil company profits.

The above assumes that oil company profits in 2005 were 4% and the relative proportion of the remaining 2008 cost is similar to that in 2005.

Soooo .... the oil companies are making less than 50% of that collected by the state and federal government AND the state and federal governments are taking no business risk. Maybe we should ask our representatives, who seem not to understand economics OR basic math, to take a pay cut. Then again, may be we can harness the energy in the hot air. We know they will never vote to use clean coal, oil in Anwar, or nuclear energy, which are in abundant supply.

Leading by Example

This photo appeared in the Virginian Pilot on May 26, 2008. It is a powerful testimony to a father who has been a strong role-model in the home. It also reflects a principle of leadership: great leaders beget great leaders.

The caption reads: " With unwavering determination and a steady stare, Evan awaits the return of his father L. Cmdr. Ian Burgoon at Oceana Naval Air Station. Evan's dad, an F/A-18 pilot with Strike Fighter Squadron 211, returned after a six-month deployment aboard the aircraft carrier Enterprise in support of operations in Iraq and Afghanistan."

America's Imbalances of Power

In a recent editorial piece in the Virginian Pilot, Thomas Friedman lays America's failure to enact comprehensive energy policy at the feet of George Bush. In fact, the last four presidents have attempted to communicate and address this issue, unsuccessfully. The failure is a failure of the United States Congress AND the American people, who have not faced the facts and demanded accountability from their elected leaders. Over the past 40 year, we have successfully exported a form of free market capitalism to Russia, China, India, and other countries. They have learned to compete globally, using the resources within their own borders. At the same time, we have become narcissistic, socialistic, and complacent. If we are to remain a viable force in the world, we must re-discover our core values and assert them in the world. I believe that these core values are: faith in God as He is revealed in the Bible; freedom to act responsibly and not freedom from responsibility; smaller government that is by the people and for the people; and a bias toward action rather than reaction. People act on what they believe; if they believe nothing or anything, then they either do not act or their actions are unfocused and misguided. Whether it is energy independence or any other issue, I would rather our country seek respect from nations of the world through principled action, rather than seek popularity through political correctness, accomodation, and inaction.

Senator Webb's Proposed GI Bill - How to Destroy an Effective Military

Recently, Senator Jim Webb of Virginia (my home state) has proposed a revision to the GI Bill that would provide a rich set of educational benefits to veterans who complete a three year enlistment. While I agree that we should address Veterans issues in part by improving GI Bill benefits, I disagree with the manner in which Webb's bill introduces these benefits. The benefits should be graduated based on years of service and extended in a manner that encourages continued service, not short term enlistment.

I am a veteran: been there and done that. Webb does not speak for me on this issue. His approach is no different than Charlie Wrangle's proposal to reinstitute the draft and thereby destroy our country's ability to effectively wage a war -- just more subtle by offering a benefit. By offering benefits that would keep a sailor, marine, soldier, or airmen in for only two to three years, he effectively makes it more difficult to attract and retain experienced NCOs -- the backbone of the military.

Dis-ease in Our Discourse - The Saga Continues

Fox News announced this week that after almost two years of repeated invitations, both democratic candidates for president have finally appeared on Fox News. Not to be outdone, the Chairman of the DNC, Howard Dean, was interviewed later in the week. Interestingly enough, these events have triggered an immediate, negative reaction from the Democratic faithful, who have demanded that no candidate appear on Fox News, fearing a loss of control in the Democratic party's message. Supposedly, the faithful are concerned that this could be disasterous to their winning the White House.

What I find amusing is that at least one of the two democratic candidates, as well as the democratic party, have advocated meeting with leaders of terrorist nations and other despots, with no pre-conditions. The party of "toleration" and "freedom of speech" apparently will not talk with a US news channel that consistently draws more viewers than any other cable news channel in the United States, but will dialogue with our enemies. This makes one wonder what they have to say to our enemies that they are not willing to say to us.

So much for the party of "toleration" and "freedom of speech." It makes one wonder, which "aisle" the democrats want to reach across.