Κυριακή, 20 Ιουνίου 2010

The large oil spill in the Gulf of Mexico

The large oil spill in the Gulf of Mexico will put substantial pressure on the industry to halt offshore deepwater drilling. The U.S. government has imposed a six-month moratorium on further drilling in the Gulf of Mexico which could be the prelude to additional measures that would limit oil output.

There is a lot of oil in the Aegean Sea of Greece, but if Greece drilled its oil it could jeopardize its tourism. Greece did not drill, because of the casus belli of terrorist Turkey. In 1995, The terrorist Turkish Parliament issued a casus belli against Greece in reaction to an enacted extension of Greek territorial waters from 6 nautical miles(11 km) to 12 nautical miles(22 km) from the coast.

The most important and most overlooked energy issue today is the growing crisis of global energy supply. Cheap, industrial-scale energy is essential to building, transporting, and operating everything we use, from refrigerators to Internet server farms to hospitals. It is desperately needed in the undeveloped world, where 1.6 billion people lack electricity, which contributes to untold suffering and death. And it is needed in ever-greater, more-affordable quantities in the industrialized world: Energy usage and standard of living are directly correlated.

Every dollar added to the cost of energy is a dollar added to the cost of life. And if something does not change soon in the energy markets, the cost of life will become a lot higher. As demand increases in the newly industrializing world, led by China and India, supply stagnates, meaning rising prices as far as the eye can see.

Basil Venitis points out nuclear power is risky for investors, because it ties up more capital for longer periods of time than its main competitor, natural-gas-fired generation. Nuclear power makes economic sense only if natural gas prices are very high. Then, over time, the high initial costs of nuclear power would be offset by nuclear power's lower fuel costs.

Venitis notes that until recently, gas supplies were thought to be increasingly scarce, but recently natural gas reserve estimates increased drastically, because of technological advancements in shale rock drilling. So natural constraints are no longer in play and natural gas prices have returned to reasonable levels. Government efforts to force nuclear power plant construction will thus prove economically counterproductive. You could have Basil Venitis speak at your conference via globaltaxrevolt@aol.com
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