Last Friday on a narrow vote, the US House of Representatives passed legislation to curb greenhouse-gas emissions. The bill, based on the cap-and-trade model, now goes to the Senate.

The bill is designed to reduce global warming; instead, it will likely increase your taxes:

http://online.wsj.com/article/SB123655590609066021.html

The idea is that the government would create a new commodity that is scarce: the right to emit carbon. Then, government would mandate that businesses buy this right. Businesses that need to emit carbon, like those in the energy sector, would likely purchase these permits…and then pass it off to you the customer in the form of higher energy bills.

As the Wall Street Journal article notes:

“The Congressional Budget Office…estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That’s about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%. Cap and trade is the ideal policy for every Beltway analyst who thinks the tax code is too progressive (all five of them).

Translation: your electricity bill is about to go up. And there will also be an impact on renewable energy, too. Currently, electricity that is produced from wind and solar is sold and purchased on the wholesale market along with other electricity produced from fossil fuels like crude, coal, natural gas, hydro and nuclear. Today all of these sources are priced competitively and renewables cost the same as coal. Renewable energy companies must charge the same rate as fossil fuel producers or today the customer will buy whatever is the lowest cost. Once the cap-and-trade starts renewables will be a very special and nitch market that will be in high demand from big power users. Now energy producers will be able to charge a high premium for their kwh production from renewable sources. That will likely enable the other energy companies to increase their market prices too, which will in turn hammer the small businesses and consumers.

Let me say again that I agree with the President that we need to reduce our oil consumption. But this is not the way to do it. Instead of penalizing all of us with higher energy bills, why not do more to encourage alternative energy, like biomass, solar and wind?

Today, as we begin our second week of blogging about the economic crisis, I want to focus on planes, trains and automobiles.

Since the Industrial Revolution, the American economy has traveled down the road of transportation. Cars move people; planes and trains move people and products.

And that makes energy the key ingredient in our entire economy. When
gas prices are low, the economy moves along just fine. But when gas
prices go up, the economy starts to slow down.

We saw that again last summer when gas prices reached record highs. It wasn’t long before everyone was feeling the pinch.

Now, despite demand being moderate and inventories being high, gas prices
are rising. How is that possible?

http://www.time.com/time/world/article/0,8599,1901446,00.html

According to this article, the Saudis explain the rise in gas prices this way:
“The price rise is a function of optimism that better things are coming in the future.”

What?  So today’s gas prices are not based on today’s reality.

This week, as we begin to focus on solutions to our economic challenge, we’ll be looking more at how we can “re-fuel” our economy with different sources of energy.

With volatile fuel prices chocking the auto, agriculture, transportation and construction industries, we can kiss goodbye to any hopes of a quick and solid economic recovery. Its going to take something drastic to shock the heart of our economy and get it restarted. We need what I am calling CPR (Cheap Petroleum Reserves) to get us back to building, buying and hiring.

This week the president arrived in the Middle East:

http://blogs.telegraph.co.uk/toby_harnden/blog/2009/06/03/two_kisses_for_king_abdullah_from_barack_obama_but_no_bow_this_time

Much is being made about the speech the president will give in Egypt.  But before that, he began his trip by landing in Saudi Arabia and meeting with King Abdullah. Political scientists say that in diplomacy, what you do often matters as much as what you say.  Starting the trip off in Saudi Arabia says a lot.  This is the same country that is gouging us at the gas pump and where much of the money that funds terrorist networks comes from.

I wish the president would have left Saudi Arabia off his travel itinerary.  But at least he supports alternative energy, like biomass.  The time has come to get off of Saudi oil and get onto American biomass.

Yesterday, I wrote about the news that oil had dropped a bit.  Today
comes news that OPEC will do everything it can to push it back up
again:

http://www.reuters.com/article/GlobalEnergy09/idUSTRE5513BW20090602

Since the 1973 Yom Kippur War, Arab states have used oil as a
geopolitcal weapon.  OPEC wants us to use its oil resources to make all
of us dependent.

As the article notes:

"'The price will go to $80-$90 maybe at the beginning of 2010,'"
OPEC's Abdullah al-Badri told the Reuters Global Energy Summit.

"'I don't think the price will go down... By the end of the year
we'll see $75. $80-$85 is possible -- not with the demand we see at
this time, but if demand picks up month after month, then maybe we'll
see this price.'"

I ask the question again: how long are we going to let groups like
OPEC have this kind of power over our energy policy?  It's time for a
change.  It's time for biomass.

This week we learn that the price of oil has begun to slip:

http://apnews.myway.com/article/20090602/D98IG75O0.html

As I’ve previously written on this blog, I think oil is overpriced and will eventually come down.  This is a small example.  What’s interesting is why the price is down: investors fear that inflation is on the horizon.  And they may be right.  The projected Obama budget during the next few years is expected to add more to the national debt than all the other presidents combined from Washington to Bush.  Now, I’m not a mathematician.  But that sounds like a lot of money.

Inflation is another good reason why we need to invest in renewable energy.  Energy sources like biomass are affordable and effective…and can help get us off our oil addiction.

Check out my website for more information on how our new Advanced Trailer for Biomass is changing the energy industry.

University of Idaho selected as the recipient of a biomass research grant

Abilene, TX—Randy Hill, President of Advanced Trailer, today announced that the University of Idaho has been selected as the recipient of a grant his company will fund to study the application of Advanced Trailer’s agricultural crop drying trailer for biomass. Nearly two years ago Advanced Trailer began exploring the possibilities of using its drying trailer to remove moisture from woody mass by providing a trailer to the Herty Advanced Materials Development Center in Savannah, Georgia. This revolutionary application will remove moisture from wood chips which are used as fuel for the University of Idaho’s steam boiler plant located at their campus in Moscow, Idaho. The results of this new research at the University of Idaho will benefit biomass plants in other cities.

“The prior testing has shown that the trailer works and it does the job,” Hill said in announcing the grant. “But we were looking for a facility or institution that had an actual application where we could daily see the benefits of lowering moisture in biomass products used to fuel a plant. The University of Idaho was eager to put the trailer to work and we are excited about finding an educational institution with a direct and specific application.” A video of Randy’s press release discussing the grant and its potential impact on the biomass industry can be found at the website, www.advancedtrailer.com, and at the Advanced Trailer Youtube channel at http://www.youtube.com/user/AdvancedTrailerTV.

In December, Advanced Trailer met with representatives at the University’s steam boiler plant located in the heart of the university’s campus. After touring the facility and seeing the similarities in handling wood chips compared to peanuts, plans were made to provide equipment to the school’s steam plant. Advanced Trailer is recognized as revolutionizing the peanut industry with its semi trailers that dry peanuts; now Advanced Trailer hopes to revolutionize the biomass industry. In late January 2009, a trailer and dryer were transported from Advanced Trailer’s plant in Vienna, Georgia 2600 miles to Moscow, Idaho. The initial 12 month testing period is expected to begin within the next few weeks. The grant will provide written research on lowering fuel (wood chips) cost while reducing carbon emissions by lowering the moisture content in woody mass products.

“This is a very exciting day for the University of Idaho,” said Darin Saul, Sustainability Coordinator at the University of Idaho. “This is a win-win situation for everyone. Thanks to this donation of both funds and equipment from Advanced Trailer, the University of Idaho will be able to evaluate the economic and environmental benefits of drying biomass before burning it in a boiler. This fits into UI’s efforts to increase the efficiency of its biomass boiler as part of ongoing energy conservation efforts.”

APT Advanced Trailer and Equipment LP is best known for their trailers which are used to procure (dry) agricultural products. Currently Advanced Trailers are widely used to dry peanuts in 10 American states, almonds in California, and seed in Kansas. Texas Tech is currently using an Advanced Trailer to dry manure for bio fuel-methane gas conversion. Advanced Trailer is Headquartered in Abilene, Texas with a semi trailer conversion plant located in Vienna Georgia. Patent applications are currently pending in the U.S. Patent and Trademark Office covering various aspects of the Advanced Trailer and including over 50 patent claims.

After a brief increase, the price of oil has again fallen, this time to less than $39 a barrel.
http://apnews.myway.com/article/20090112/D95LIUJ00.html

Traditionally, economists would expect the price of oil to be up at a time like this: tension in the Middle East, talk of OPEC cutting production and the dispute between Russia and Ukraine. These factors often create market pressure that causes the price to rise. So what explains the continuing decline in price?

It’s common sense, really. Higher gas prices last summer reduced demand. People began to find other ways to get to work, maybe by car-pooling or taking the train. And lower demand lowered prices. It’s that simple. Meanwhile, economic uncertainty is effecting what economists call “market psychology” and keeping prices low.

I still believe we could see $20 a barrel before too long. And I repeat my plea: now is the time to think about alternative energy. Why wait until there is an oil crisis to begin thinking about other options?

Today is the time to start building tomorrow.

-Randy Hill