While the U.S. hydraulic frackingindustry hit its peak earlier this year by reaching the awesome production of 10 million barrels per day (matching the Saudis and Russians), the White House-inspired biofuels industry expanded its tax-advantaged percentage usage of each gasoline gallon component and continued to broaden its base.
Little known is the fact the President Nixon-inspired biofuels approach, implemented by his instigated Environmental Protection Agency in the early 1970s, established a legal limit of 10% ethanol component back in 1978. However, this tax-advantaged supplement did not receive congressional endorsement until 2005 when the Energy Policy Act created its renewable fuel standard, requiring 7.5 billion gal. of renewable fuel annually — primarily from corn ethanol — to be blended into the fuel supply by 2012, consisting primarily of that corn derivative.
Although fracking already was on the way to more than doubling shale oil output by then, the Midwest congressional “corn lobby” pushed through an additional one-third increase of renewable fuel, including mostly tax-advantaged ethanol, but also bio-diesel and hydro-treated vegetable oil.
To accommodate the quick outstripping of biofuels as components of each gallon of gasoline, the 2007 Energy Independence and Security Act increased and accelerated the scheduled mandate. This especially impacted the demand-oriented corn ethanol industry from 2005 until 2011 when some of the tax credits were allowed to expire. This since has been accommodated by Congress under heavy pressure from the agricultural conglomerates which had come to depend on increasing “gasoline-ethanol demand” even as fracking was outperforming such renewables in their refinery derivatives.
While the current oil glut and continued weak oil prices make biofuels excessive and more expensive, there is no indication of a cutback in the renewables per percentage of each gasoline gallon.
This commitment of “renewable addendums,” whether needed or counterproductive, has become a modus operandi for the congressional participants of both parties, more in tune with the agricultural corporate ownership sector than the remarkable progress being made in the revolutionary strides of the ingenuity of America’s technological advancement.
This process may well be a forerunner indicating the future congressional reaction to technological breakthroughs such as robotics, which may face U.S. employment with a major cutback in tens of thousands of “hands-on” workers.
Independent distribution success
When analyzing the unprecedented diversity, volume and end-use utilization of America’s odds-on gross domestic product superiority, the nation’s unmatched independent distribution system is unequalled anywhere else in the world.
What makes this segment of the channel from basic raw material to the ultimate consumer utilization successful is the domination by independently-owned business enterprises. No matter what the product or the final consumer, the intimate territorial knowledge and ultimate retailer-consumer relationship, this uniquely American method of reaching the final consumer of goods and services is a decisive factor. That is why almost 70% of the nation’s $18 trillion GDP is based on ultimate consumer consumption — a volume and percentage that stands in a class by itself.
What makes the undisputed success of America’s nationwide
independent distribution system within the overall channel so special is it blends the combination of base product and ultimate consumer more effectively than any attempt at duplication. This is not found among other world multi-trillion-dollar GDP business-oriented nations (China, Japan, Germany, India).
Such a successful system recognizes
the unparalleled partnership of America’s overwhelming business structure relationship between large corporate manufacturers, importers,
commodity producers and the retailers/end users,
regardless of size and capacity.
With the immense size and regional and local differences reflective of America’s complexity, the millions of personal relationships needed to keep this multifaceted channel intact and growing can best be accomplished by the personal multigenerational relationships that tens of thousands of distributors bring to the table. Intra-personal relationships still hold the key to the world’s most variegated business arena.
This multi-tiered business system has proven to be the most cost-effective as well — the ultimate sales/profit generator ever designed since the birth of the industrial revolution 300 years ago.
Even the nation’s largest corporations have determined their ultimate success of optimum market penetrations lies in their ability to obtain and maintain ongoing local relationships. Distributors are the mainstay of these marketing channels.
No matter how strong the brand-name identification, without the continued long-term associations the brightest logo can flame out if not constantly burnished by its “guardians” at the multi-thousands of distribution levels.
U.S. global economic leadership
With the emergence of the world’s two most populous nations (China, India) comprising almost 40% of the world’s inhabitants while leading all other nations in gross domestic product growth percentage-wise as well as total revenue growth, a good case could be made for these Southeast Asian titans becoming the epicenter of the world’s economy now and in the future.
While the U.S. is no longer the overwhelming economic and world-dominant powerhouse it represented during its phenomenal influence throughout the 45 years of Cold War with the Soviet Union and beyond, the China/India equation represents a definitive economic shift toward Southeast Asia in general and the Sino/Indian combine in particular.
This lurch toward the East has been accommodated by the formation of the “East Asia Bank” that facilitates the bulk of internal transactions encompassing the 11 East Asian economic power blocks, and the AIIB, China’s emerging competitor with the U.S. financially-dominated World Bank.
Although these developments will be instrumental in cementing Southeast Asia as the world’s most promising global economic growth center, the United States’ balanced uniqueness is incomparable when considering the following factors:
- The U.S. is the only world nation that can boast of overwhelming natural resources in fossil fuels (coal, oil, and natural gas), renewables, basic metals, such as copper and steel, in addition to the world’s dominant agricultural sector.
- Its growing population will reach the 400 million mark late in the current century ranking third in the world, but an overwhelming first in consumer consumption percentages.
- Its educational institutions exceed all other nations in graduating professional talent in such varied arenas as engineering, medical, law, the arts and sciences, as well as agriculture.
- The U.S. is the undisputed leader in technological breakthroughs in such varied areas as robotics technology, communications, health care and economics.
Despite certain government policies that have impacted its growth potential, the U.S. is still the undisputed world leader in the formation of independent businesses, large and small. These outnumber the combined total in all other world nations.
The constant influx of immigrants from all parts of the world combines to make the U.S. the only developed world leader that encompasses a substantial future population increase factor and the geographical acreage to accommodate this future growth and expansion of inhabitants.
U.S. dominates 2014 energy production
In analyzing the comprehensive global 2014 energy production, the U.S. took the triple fossil-fuel crown of oil, natural gas and coal, becoming the first nation ever to achieve this feat.
However, the most interesting aspect of these confirmed results was the onrushing growth of renewables such as solar, wind and ethanol, which comprised almost 3% of energy usage. Hydro-power added another 7%, signifying a major future growth potential.
Oil continues to be the world’s leading primary energy source at 33% of overall global energy usage. Surprisingly, much maligned coal still holds on to a solid 30%, mostly in underdeveloped countries because of its low cost; and even as a power generator for a sizable, if receding element for U.S. electric utilities. Natural gas is on the upswing, currently at 24% of the globe’s energy usage total.
The U.S. has vaulted from its third place in oil to Saudi Arabia and Russia to the No. 1 position, reaching the 11.6 million oil barrels of all types per day mark in 2014, primarily due to its roaring success in hydraulic fracturing, which exceeded an additional 1.6 million bpd in the 2013-2014 one-year time period.
But even with worldwide oil consumption eclipsing all previous records by reaching 92 million bpd production by the largely Mideast OPEC nations led by Iran, Iraq and Saudi Arabia, America’s fracking potential has overwhelmed the demand/supply equation. This has led to an all-out attempt by the Saudis to accept greatly reduced world prices to halt the U.S.’s energy blitzkrieg.
Current incremental oil prices could be forced substantially upward later in the year if the increasingly inflamed Mideast geopolitical fracas leads to a military confrontation on the huge Saudi Arabian oil-rich desert peninsula that includes Kuwait, the Emirates, Oman and Qatar.
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