31 August 2005

**KATRINA** the Aftermath 3.0

The Agony Continues

The human suffering and agony continue. True to form, Americans are stepping up to help in ways too numerous to count. Beyond the immediate human suffering the severe and widespread economic impact is beginning to be felt.

President Bush Opens SPR

Bush White house to announce opening of the Strategic Petroleum Reserve in response to the devastation caused by hurricane Katrina. This is good news to relieve upward pricing pressure on unrefined oil prices. However it will do little if anything to relieve pressure on the nations already inadequate refinery capacity . President Bush has the authority as the nations chief executive officer to release the SPR by executive order. President Bush and Congress can do more, and they should do it now.

I have been watching television news programs with some bemusement as talking head after talking head, keeps making the point that our economy is strong overall, and an energy shock probably won't derail the nations overall economic growth. One point that is not getting much airtime, if any, is that our economy has shifted to become a largely consumer driven phenomenon. The average consumer will certainly give more weight to the end price of refined petroleum products, than most of these analysts are.

Gasoline prices of up to or exceeding $3.50-$4.00 a gallon most assuredly will affect consumer behavior. This phenomenon has already been cited by the worlds largest retailer Wal-Mart, as gasoline prices this summer were already exorbitant. If gasoline prices "stabilize" above $3.00/gallon, look for a slow retail Christmas season this year. Another factor to consider is that normally at this time of year is when petroleum refineries are gearing up for heating oil production. A significant portion of those refineries will instead be concentrating on getting back in operation.

What More Should Be Done?

Recognizing that we are largely a consumer driven economy, we must be cognizant that energy shocks pervade the entire economy and persuade the President and Congress to act to minimize the severity of such shocks. The EPA falls under the executive authority of the President. Now is the time he should exercise such authority. The energy bill that was recently passed does little to address these concerns. The President should issue an executive order, suspending the EPA mandates requiring so-called "Boutique" fuels, until such time as we have constructed additional refinery capacity to handle the necessary, and frequent changes in fuel formulation without sending economic shockwaves through the largest economy in the history of mankind. When sufficient refinery capacity is on line, only then we can return to the regime of optimizing fuel blends to local markets.

The EPA has good intentions, but with refinery capacity as limited as it is right now, it is simply a luxury we cannot afford. This includes overriding Californias CARB requirements as well. Thats' what President Bush can do as the nations Chief Executive. It will require substantial political fortitude as the howling-environmental-moonbat-crowd, not to mention the bureaucrats who are invested in the process of making fuel production more complicated rather than less, will have a bloody fit.

Expect lawsuits.

I am convinced that President Bush has such internal fortitude, whether he has the political will is another matter entirely.

Congress Must Act Also

Congress must act now to address the problem of insufficient refinery capacity. Again, the congress must recognize that our economy is now primarily consumer driven. As such they have a duty to enact legislation which enhances this circumstance rather than diminishes it. President Bush should call congress back into session early and have legislation introduced that will significantly ease the burden of the construction of new oil refineries. Create tax exemptions and other additional incentives to encourage the swift completion of such assets. Such legislation must also include the bold step of curtailing or significantly limiting the jurisdiction of the courts to hear the nuisance litigation, certain to be filed by environmentalists, NIMBYs, and BANANAs whose sole purpose it is to impede this plan. Only the congress, as your representative body has the constitutional authority (under ArticleIII) to do so. Again; constitutional authority is one thing, political will is quite another.

Environmentalists, with their usually superficial and emotionally driven analysis, might think that they are helping the environment by blocking such projects, but they are actually hurting the environment by impeding this nations economic progress. This nation has made the greatest strides of any advanced society to lessen its environmental impact and has done so only because it had the economic wherewithal to do so. Take that away by continuing to hurt the heart of the American economy, the consumer; and they risk taking away the economic ability to continue improving the environment. Environmental regulation is a luxury conceived in wealth and executed through bureacracy. We are likely at the point where improving the environment has put sufficient drag on the economy as to impede our ability to continue the progress we have made in improving our environment. In other words, we are likely at or past the point of diminshing returns with regard to the negative impact environmental regulations have on our economy.

Failure to take such bold political steps now, as outlined above is certain to incur the risk of harming our environmental and economic well being through the misfortune of a diminished economy. -SpinDaddy

Update 31AUG05 1356 hrs: Thxs to the Dummocrats website for linking here....also from the excellent must-read-everyday-dummocrats-site is this link with some tremendous pictures of the damage. -Spin