American Greatness - Letter to Rachel Maddow

Rachel Maddow, D.Phil
MSNBC Broadcast Journalist

Dr. Maddow,

Thank you for your contributions to the world of journalism. While so many of your colleagues are challenged to stay inside the lines of your profession’s proverbial ethics, your smiling face appears on my screens delivering a “better reality”. Your recent series of broadcasts regarding our nation’s history and heritage are indeed inspiring, however, they do not reflect an understanding of current resource availability. To better convey my point (in your own style) I will share the following quotes from the movie, “Six Days Seven Nights”…

Robin: Aren’t you one of those guys?
Quinn: What guys?
Robin: Those guy guys, you know, those guys with skills.
Quinn: Skills?
Robin: Yeah. You send them into the wilderness with a pocket knife and a Q-tip and they build you a shopping mall. You can’t do that?

Tom Brokaw’s “Greatest Generation” was indeed great because they wielded the greatest amount of the cheapest energy in human history. The great accomplishments - Hoover Dam (about 5 miles from my offices), …, the vast majority of the entire U.S. Civil Engineering infrastructure - were all basically the result of this same “unique in all of human history” energy resource opportunity.

To share some background, after graduate school, I ran my own firm for 12 years then went to work for the then Fortune 82 Corporation. A few years of experience provided a path to the then Fortune 67, then Fortune 38 and finally Fortune 8. Afterward I worked for the DoE and the DoD for many years. I served as an Analyst and Project Manager/Principal Investigator in all of these public and private organizations. My university education was focused on data modeling/analysis and these organizations provided funding for continued education totaling about $500K over the years. My typical project targeted the establishment of new revenues in the $5B-$10B annual range that “touched” tens of millions of individuals’ lives. Extreme large scale planning has been a primary priority throughout my career.

Most everyone will agree that what blew up the sub-prime mortgage system was the sudden move in interest rates. The Fed Funds interest rate went from 1% (basically free money) to 5.5% over the course of 2 years. A nation’s interest rate is a mere image of its inflation rate. In 2004 the inflation rate in the U.S. was 1%, but by 2006 the rate was almost 6%. What drove that increase in inflation? One factor - one component in the U.S. CPI; Energy. Energy inflation was running at 35% as petroleum prices more than doubled. The sub-prime mortgage crisis was not the cause of the Recession, it was only a high-level symptom. The cause of the Recession was an energy shock - twice as large as the OPEC Shock of the 1970’s. While it can be argued that deregulated speculation significantly contributed to the higher cost of petroleum, speculation legislatively became part of the equation - good or bad - as our reality.

Petroleum has been the largest traded commodity in the world for almost 100 years so even a small change in price has a rippling and compounding impact on world GDP and a large change will have a staggering and long term effect on world GDP. The current Recession is the most severe compared to past Recessions simply because the 2008 petroleum peak price was the historic record high. The looming “double dip” or a full blown Depression will also be the result of the continued soaring petroleum prices. Though the price of petroleum dropped from its 2008 $147 barrel peak down to the high $40’s, trading quickly recovered to the low $90’s and again peaked over $110. Respected petroleum analysts are projecting a return to a $100+ barrel price within the coming months and the impact this will have to the already weak global economies will not have been experienced since the Great Depression.

There is no legislative policy, no change in party control and certainly no government cash bailout to flailing industries that will solve our current economic problems. We continue to live (granted - now at a more humble level) in a petroleum economy.

We must solve our petroleum problem to solve our economic problem as the former continues to be the catalyst of the latter.

We must solve our petroleum problem to solve many of our environmental problems as the former continues to be a catalyst of the latter.

While your enthusiasm for “Future American Greatness” is stirring, it is not founded in reality. Please view Richard Heinberg’s video (2nd video down on this page).

About 6 years ago, I became intimately aware of the issues so partnered with a group of associates and Founded a renewable energy firm and created substantial revenues in the worst economy in a millennium. My growing team and I are showing others how to shift gears in their businesses as well.

If you want “Future American Greatness”, please consider using your celebrity and platform to communicate the concepts of the U.S. Migration. This plan will ease the economic pain significantly and almost immediately and will provide the infrastructure that will support and utilize the large scale production of biodiesel sourced from 2nd generation feedstock. This is the only scalable, economically viable, environmentally friendly and truly sustainable replacement for petroleum we have today. U.S. citizens have wasted over $2T by purchasing hundreds of billions of lower energy density gallons of gasoline and burning that fuel in lower efficiency gasoline engines over just the past 10 years. There is a direct 1-to-1 relationship today between the strength of a nation’s economy and the percentage of that nation’s light fleet that runs on diesel fuel with biodiesel mandates.

I invite you to re-review this note when this once great nation passes the following milestones: gasoline hits $6 gallon at the pumps, when a U.S. city has Marshall Law declared, when a total of over 100 U.S. counties and municipalities have collapsed and when riots become a weekly event in major U.S. cities. I also project that 1/3rd of the U.S. population will no longer be able to afford to drive a private vehicle within 10 years if we cannot motivate at least 50% of our population to join this U.S. Migration to diesel powered vehicles.

While I would like to believe U.S. citizens will embrace options that will allow them to move forward with less impact to their lives, I am sorry to report, they simply are not grasping the reality of our situation. Local/Regional/National Resource Protectionism will play a growing role in the next 5-7 years and this political and economic tool will modify the slide down the back side of Peak Petroleum into almost a vertical cliff for all net importing nations.

Please research Dr. Colin Campbell (Ph.D., Oxford Geologist - Energy Adviser to the IMF and dozens of nations - his long and celebrated career virtually defined petroleum exploration). One interviewer mentioned the challenge of food production per the rising cost of petroleum to feed the current 7 billion world population as it grows to 9 billion. Dr. Campbell’s response was to state that his projection was a total world population of 3.5 billion by the end of this century. The interviewer was dumb founded. How does a current 3.5 billion population mass cease to exist in 80 some-odd years? Resources wars, famine, natural disasters, …

Dr. Campbell writes: Despite the uncertainties of detail, it is now evident that the world faces the dawn of the Second Half of the Age of Oil, when this critical commodity, which plays such a fundamental part in the modern economy, heads into decline due to natural depletion. A debate rages over the precise date of peak, but this rather misses the point, when what matters — and matters greatly — is the vision of the long remorseless decline that comes into sight on the other side of it. The transition to decline threatens to be a time of great international tension. Petroleum Man will be virtually extinct this Century, and Homo sapiens faces a major challenge in adapting to his loss.

The next time you are in the Las Vegas area, please take the time to meet with us - informally for the first discussions. We travel to Washington and New York from time to time also. We will be happy to present our plans and progress. Our efforts will establish a new energy infrastructure that is scalable, economically viable, environmentally friendly and most importantly, truly sustainable. Then and only then, will Americans again wield the energy resource to achieve the “Future American Greatness” as challenged by your recent series of broadcasts.

Please ponder that much of the current “American Greatness” is virtual (this contrasting concept - virtual vs. the physical - is worthy of a few dissertations). To highlight “American Greatness” over the past 20 years, you could focus on this aspect of our economy and technological prowess. This note is sent on the day of the Facebook IPO. While the true value of the Facebook stock shares has likely been over-sold by the underwriters and media hype, this American based product has established itself as a complex interactive tool used by 1/8th of the total population of the world. It is arguably changing human history and redefining the concept of American Greatness.

Regards,

Steve Frazer