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New energy bill: falling our dependence on external oil - knowledge


The U. S. cheap is affection the brunt of skyrocketing oil prices as the nation's dependence on alien oil continues to grow. We need a accountable energy plan to cut our confidence on distant oil. Leader Bush and Senator Kerry arrive to be fudging the real issues involved.

Growing haulage necessities joint with declining domestic oil fabrication have led to escalating oil imports. Rising oil prices are having an adverse brunt on the U. S. cost-cutting as evident from contemporary financial data and stock advertise performance. We need a answerable energy plan which will assess our hauling rations with the basic to cut down our dependence on exotic oil.

Rising Oil Prices.

Oil prices have been on a roll this year. As of Dignified 10, crude oil prices have climbed over 45% since the start of 2004. A barrel of West Texas Intermediate a short time ago recorded its all time high of $45. 04 on the New York Merchant Exchange. And this has happened although the Association of Oil Exporting Countries growing its oil output.

Earlier in the year, the run up in oil prices was attributed to heaving call for fuel crop due to a biting international economy. Then it was the apprehension in Venezuela and Nigeria.

Concerns on collateral of oil food have keen more recently. Added to the pipeline disruptions in Iraq are kidnappings of alien human resources in the Center East.

Yukos, the Russian oil company's tax elusion dispute has taken concentrate stage currently. With a fabrication rate of 1. 7 million barrels a day (mmbd), Yukos is Russia's chief oil producer.

While the underlying factors after the dramatic add to in the price of oil this year are a code of all the above, the bearing is only just comforting.

Weakening Economy.

Higher oil prices that work like an added tax have the achieve of asset down hiring, consumer spending, and corporate profits.

The July jobs account that was on the loose by the Labor Area on Eminent 6 was a disappointment. The U. S. cheap added a mere 32,000 to the non-farm payrolls, the lowly monthly add-on this year. The rate of employment cyst is slowing as commerce confidence appears to be damaged by rising oil prices. High oil prices are also compelling the bite out of consumer spending.

By some economists' estimates, every $10 rise in the price of oil knocks 0. 5% off of GDP cyst and adds about the same sum to inflation. The impartiality markets have been hooked with the trend in oil prices and have inexorably spiraled lower since late June. On Grand 6, the Dow Jones Built-up Be around congested at 9,815. 33, its buck level since Nov. 28 after behind more than 300 points over the last two sessions. The equipment heavy Nasdaq Composite Index is down over 11% since the start of the year.

The Root Cause: Hauling Relies on Distant Oil.

A blend of declining domestic oil fabrication and ever-increasing oil burning up has left the U. S. increasingly reliant on distant oil.

The U. S. Branch of Energy's Energy In rank Direction states that domestic oil construction in 2002 was 5. 8 mmbd, about 36% lower than the 9. 0 mmbd bent in 1985. The total use of gasoline foodstuffs on the other hand has grown from 15. 2 mmbd in 1985 to 19. 3 mmbd in 2002.

The lion's share of oil burning up stems from haulage needs. In 2002, the hauling sector accounted for about 68% of total fuel use with gas accounting for two-thirds of the juice consumed in the moving sector.

U. S. net oil imports have grown from 4. 3 mmbd in 1985 to 10. 4 mmbd in 2002. Net oil imports as a percent of U. S. oil creation use has risen from 28% in 1985 to 54% in 2002.

Based on Sandia Countrywide Laboratories and U. S. DOE/EIA forecast, an added 7. 5 mmbd of oil and gasoline goods will have to be imported by 2020 to channel the gap concerning developing drinking and lessening domestic oil production. In 2020, U. S. oil construction will contribute less than 30% of U. S. oil needs.

The Energy Bill: Long-Term Plan for Energy Security.

The conceive of the existing measures paint as a preview of the expectations is cause for concern.

On Dignified 6, Egalitarian presidential entrant John Kerry outlined a $30-billion, 10-year plan to veer the U. S. towards energy independence. The plan includes tax breaks and incentives for carmakers and buyers, coal producers and another fuels research. Leader Bush responded aphorism Kerry's proposals mimic much of what Bush had before now anticipated but is hindered in Congress.

It will not be ample if Leader Bush and Senator Kerry just reignite the energy debate. To bring clarity to energy security, we need a ample long-term citizen energy plan that will cut our confidence on distant oil while assembly the nation's increasing haulage needs.

Both contribute and challenge sides of the moving issue will have to be addressed to make a evocative bearing in plummeting the dependence on external oil. Steps to augment the bring in of domestic haulage fuels as well as alternatives to oil will expected be required. So too will labors to bring down per capita haulage fuel consumption.

Based on what has been outlined to date, neither the Bush application nor the Kerry plan appears to fully attend to the analytical hauling issue. The House-Senate conferees have an opening to carry a dependable energy bill to the President's desk for his signature. If the dependence on exotic oil is not reduced, the avenue of the U. S. cheap and the stock promote may well be shaped more by decisions made in Moscow, Riyadh, and Vienna considerably than being dogged by the decisions made at home.

Notes: This arrive is for in a row purposes only. Nil here ought to be construed as an offer to buy or sell securities or to give characteristic investment advice. This arrive does not have affection to the certain investment objectives, fiscal situation, and detail needs of any certain character who may accept this report. The in order enclosed in this arrive is obtained from a mixture of sources assumed to be perfect and is provided not including warranties of any kind. AlphaProfit Investments, LLC does not be that this information, counting any third party information, is perfect or accomplish and it must not be relied upon as such. AlphaProfit Investments, LLC is not conscientious for any errors or omissions herein. Past accomplishment is neither an hint of nor a assurance for expectations results. No part of this article may be reproduced in any comportment exclusive of in black and white agreement of AlphaProfit Investments, LLC.
Copyright © 2004 AlphaProfit Investments, LLC. All civil rights reserved.

After running for the nation's important oil and auto companies, Sam Subramanian, PhD, MBA is at this time Administration Principal of AlphaProfit Investments?, LLC, an investment delve into firm based in Houston, TX. Sam edits the AlphaProfit Sector Investors' Newsletter?. For the 5 year dot finish June 30, 2004, AlphaProfit model portfolios bigger by up to 252%, a compound yearly arrival rate of 28. 6%. To learn more about AlphaProfit and to subscribe to the FREE newsletter, visit http://www. alphaprofit. com


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