Hydrogen As a Fuel Source

From water to air, there are a number of ways to energize your car. Alternatives to petroleum are a hot topic today. The growing concern for the environment is steadily increasing. It’s an important issue that many people want to feel personally connected to. Hydrogen as a fuel source is not an entirely new idea. But science is taking a closer look at the impact that using hydrogen could have on both the environment and the economy. The best solutions are the ones that have more benefits than drawbacks.

Hydrogen burns in a vehicle much the same way that petroleum does. This makes it a good imitation even though it is not at all the same thing. Many alternatives are not this easy to work with.

Hydrogen makes a great fuel option for more than just automobiles. It can also be used in airplanes and even bicycles. A bicycle is already a great alternative to driving a car. By powering it, you make it faster and more efficient while still avoiding the use of a vehicle.

Major car companies such as Daimler Chrysler are already investing in hydrogen options for drivers seeking a hydrogen vehicle solution. These types of things certainly do not develop over night but the fact that they are in production at all is a great sign.

Hydrogen is an energy source that can be obtained from both renewable and non-renewable resources. This makes it much more environmentally friendly than some other petroleum alternatives currently being used and studied. It is much more flexible.

One really positive aspect of hydrogen fuel is that it can be produced and used continuously. It is highly renewable which is exactly what many consumers are waiting for. Making a fuel change is not a light decision to make. Benefits like this can help to aid your choice.

Every positive thing always has a negative counterpart. It’s just the way the world works. Hydrogen is not a fool proof fuel option. The burning of hydrogen actually produces more emissions than regular petroleum gas does. Since less emissions is what we really need, that just is not acceptable.

There are economic aspects that do come into play here. Hydrogen without fossil fuels is not economically friendly. When it comes to money, unfortunately that is where a lot of decisions are made. Anything that is not good financially just won’t take off no matter how good a fuel it is. The two must go hand in hand.

If hydrogen was to be a leading fuel alternative to diesel and petrol, then plenty of preparation work would have to be undertaken first. In order to properly produce clean, useable hydrogen, new facilities and systems would have to be built. The cost of that would be substantial. These types of developments cannot be done without intense amounts of study and planning.

Hydrogen is a realistic fuel source that is in use in some places. However, it is not yet ready to become a worldwide solution.

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Capital Campaigns – Roadmap to Success

If your nonprofit is considering expanding or renovating, you’re probably thinking about launching a capital campaign. But how do you create an effective campaign? How many donors do you need? How much money should you try to raise? Here’s a quick tutorial to outline the answers to these questions and more.

A capital campaign is a significant project for a nonprofit organization. A successful capital campaign, and the completion of the project for which funds are raised, can be a transformational event. Ideally, when viewed in retrospect the capital project will appear as a logical and inevitable step in the development of the organization as it strives to fully serve its audiences and community.

With careful planning and keen attention to detail, a capital campaign can be a powerful bridge to the future.

A successful campaign is the result of many constituencies working together for a common goal, including the board, staff, volunteers, donors, and community representatives. As the project grows from an idea to a proposal to reality, a Campaign Planis key to success. A comprehensive plan provides a framework for action and a template that is transparent and universally accepted. It is a document that speaks both internally (to those who are managing the campaign) and externally (to those who may be asked to contribute or who may be impacted by the project). As campaigns are multi-year, a clear plan also serves as a guide if key team members drop out and new team members are brought in.

1. The Goal

A key element of success is to accurately estimate the amount of money needed to be raised.

The costs of planning, acquisition, renovation, and endowment must be carefully determined. In addition, the following items need to be added to any actual cost of building, buying, or starting an endowment.

? Ten percent for campaign materials, cost of consultants and staff time, office extras.
? Ten percent for building project extras like insurance, building permits, design costs, and estimates for cost overruns or unforeseen delays.
? Ten percent additional for people who pledge but cannot or will not finish paying, or whose stock gift depreciates.
? An additional ten percent for added protection.

2. Timing

Many nonprofits hesitate to undertake capital campaigns because board members believe that the timing isn’t right; typically, if the national economy is slow, or if the stock market is underperforming. While there may be good reasons for postponing a campaign, board members should remember that the national economy is cyclical, and donors make annual appeal gifts from discretionary cash and capital campaign gifts from assets. Most organizations do not run a major campaign more than once every few decades. Your supporters will be enthusiastic about supporting a transformative project and will plan accordingly.

3. Organization

The nonprofit must have the capacity to undertake a capital campaign. A successful capital campaign must have the full faith and support of the organization’s board of trustees.

However, support grows incrementally. The following action groups are formed as the campaign progresses:

? Steering Committee. Typically composed of not more than twelve, including board members, the executive director, a campaign consultant, and perhaps major donors who are not on the board. The steering committee organizes and spearheads the campaign.

? Outside Consultant. Generally, capital campaigns require the participation of a part-time fundraising consultant who can help manage the campaign, train staff and volunteers, and interview prospects during the feasibility study.

? Campaign Committee. This group may be very large and include board members, donors, and community supporters who want to take an active role in the campaign. The campaign committee grows as the campaign gains traction. Subcommittees may include finance, fundraising, architecture and building, and public relations.

? Volunteers. These are campaign supporters who participate sporadically. They may include community leaders who host fundraising events in their homes, or who have a connection to a potential donor.

4. Campaign Case

The campaign case is the key document that provides a rationale for the project. It is both an internal summation of the organization’s goals and a marketing tool to help inform prospective donors. The case must be prepared early in the process and may be revised periodically.

5. Gift Pyramid

Once the total monetary goal has been set, a gift pyramid is created. This shows the number and size of gifts needed to meet the goal. Gifts may range in size from millions to under a hundred, depending upon the goal of the campaign.

The figures are set to reflect the giving potential of the highest donors and the total number of donors expected.

6. Prospect List

Once the gift pyramid is established, the names of prospects must be attached to each of the gifts. This is the task of the Steering Committee. Acting in complete secrecy, the committee compiles a list of prospects. Next to each prospect name is the amount projected, and the name of a person who will solicit the prospect.

If the prospect list cannot be filled with prospects to reach 50% of the goal, then the project must be reconsidered.

7. Interviews with Prospects

If there is the slightest uncertainty about prospect support for the project, a feasibility survey is required. An impartial consultant who is not directly involved with the organization is selected to conduct confidential interviews with key board members and donors. The interviews are about a half-hour in duration and are conducted at the interviewee’s convenience, in home or office.

8. Solicitation of Key Donors

The “Quiet Phase” is an initial private solicitation. It should begin only after certain conditions have been met, including if the project has been approved by the board of trustees and if the feasibility study is positive. During the Quiet Phase, it is expected that 50% of the goal will be reached.

9. The Public Phase

During the Public Phase, the solicitation effort is broadened to include anyone not directly involved with the organization, including charitable foundations, corporations, and government agencies.

10. Conclusion

A well-prepared organization need not be apprehensive about considering a capital campaign. If the appropriate incremental steps are taken, conditions can be assessed at every stage. If at any time conditions are considered unfavorable the campaign can be postponed. If conditions continue to be positive, the campaign can be allowed to progress to the public phase and then to a successful conclusion.

Thomas Hauck Communications Services provides writing and editing solutions for businesses and nonprofits. Visit us at http://www.thomashauck.net/ for information on how THCS can impact your bottom line.

Better Not Be a Non Profit Business

Non Profit organizations are often criticized for not being run “like a business”. What that means is pretty murky but seems to imply that the Non Profit is wasteful and could do better by following general business practices. This assertion has always amused me. Especially now as we see so many For Profit businesses closing or being bought by others for a small percentage of their worth a few weeks ago. It seems as if being run “like a business” isn’t all it’s cracked up to be!

Non Profit organizations are often run by people who aren’t business majors. They are former teachers, social workers, ministers, etc. Their primary interest in the Non Profit organization is that of providing services. Often the organization was started by volunteers who have a strong interest in a specific social concern such as homelessness, eradication of a disease (breast cancer, heart disease), services to people who have experienced a disaster (Katrina, 9.11.01). Their expertise lies in the direction of providing these services. The lack of business management training among the staff may lead certain observers to criticize the way business is done. In fact a few problems may arise if the staff does not pay sufficient attention to the legal and accounting standards associated with Non Profit management. However, many times these skills can be found in the person of volunteers such as attorneys and accountants. By using volunteer expertise, the Non Profit saves their meager income for the provision of the service which is the core of the mission of the organization.

The advantages which a Non Profit organization has include that it has fewer expenses of doing business. Many Non Profits have free or low cost housing provided by a benefactor. Supplies are often available at lower cost than For Profit business and may be donated. Some staff may be volunteers including fund raisers, officers of the Board of Directors, a speakers bureau who make presentations on behalf of the Non-Profit, and the professional volunteers mentioned above. It is important to hire staff who have expertise in the service which constitutes the core mission of the Non Profit. This means that the quality of the service provided will be top notch. Many Non Profits have a group of dedicated volunteers who have helped the organization for many years. Without these volunteers the organizations would not survive.

It is uninformed to imply that the many Non Profit organizations which are run very competently by a small, dedicated staff and loving volunteers could improve if they adopted the business standards which are rampant today. Perhaps business should consider imitating Non Profits. Being dedicated to a service which is provided could transform many businesses.

When businesses saw their role in the community as very important – important enough to consider the effect of closing the business on the town where it was located, for example – they received more respect and may have been more stable. The employees and town folk are more likely to support such businesses. This same spirit could transform our communities and businesses where profits are the only motive leading to the demise of both.

Imagine the country economy today if the standards of Non-Profits were combined with those of For Profit businesses to the betterment of all!

Maggie Sadler, Retired Non Profit Manager, Teacher and wife of Presbyterian pastor. Worked over 40 years in Non Profit organizations. Recognized by United Way as a successful Non Profit Manager. Most recently Executive Director of a Foundation with net worth of $18 million.

How to Save a Ton of Money on Your Energy, Power, and Electricity Bill!

We all would like to save more energy each month. Sometimes we are just so busy with are lives that we tend to forget the little things that can save us hundreds of dollars on our energy and electricity bill. As energy rises up during different seasons like the summer and winder, it is important that we save this energy doing seasons like fall and spring. So here are some tips to help you do this!

1) Never run the heater or AC on when no one is home!

2) Always make sure all your air filters are clean!

3) Use the heater and AC only when in occupied rooms (Do this by closing room windows and doors)

4) Use florescent lighting which saves about 50% of your lighting energy bill!

5) Always shut off lights that you’re not using!

6) When buying new appliances, look for the energy star symbol as it is a good indicator of sufficiently saving energy compared to other appliances that don’t have that symbol!

7) If you can use ceiling fans instead of AC, do it! (it is equivalent to lowering the air temperature to a couple degrees)

8) Always close the refrigerator door! (a typical family spend about $10-$20 a year just by opening it 40-60 times per day).

9) Always turn off your computer when not in use! (this can save more than $100 per year)

10) Finally, shut off all other electrical equipment when your not using them!

Hope these ten tips can help you save the earth as well as help you save a ton on your money on your monthly bills! Good luck!

This is Why Bush’s 700 Billion Dollars Bailout Plan Will Fail

Not long ago, the President stood before the American People to make his case for the massive bailout plan that Congress is now working to approve. With the sincerity and the passion that characterize him, President Bush made it clear that “this time is an extraordinary period for America’s economy”. He then went on to explain why he is urging Congress to support his plan to rescue Wall Street.

According to the President, his bailout plan represents the best we can do to solve the financial crisis and stop the mortgage meltdown.

In his plan, the Federal Government would take over bad assets from Wall Street since these assets cannot be bought or sold. They cannot be sold because they cost essentially more than what they are worth.

In other words, when banks issued loans to homeowners with their homes as collateral, they also converted these loans into financial products called mortgage-backed securities. These mortgage-backed securities were then sold to other financial institutions, therefore allowing banks to get the funds they need to issue more loans. As long as this cycle was repeated, the financial market was moving well.

Then, homes’ values started to go down.

When homes’ values go down, they make mortgage-backed securities become less attractive. This is because the collateral against these mortgages is now worth less than what banks want to borrow or sale the securities for. Here resides the key to the financial crisis.

The President’s plan is to buy those mortgage-backed securities to allow banks to have more money.

The theory behind this is that if banks have more money and less risky assets, they will be more willing to lend to credit-seekers.

The main limit with this approach is that while the bailout may in fact put more money in banks’ hands, homeowners will not see their problem solved. They will not be rescued.

Backers of the President’s plan forget that we are in this crisis because homeowners defaulted. They defaulted because they could no more afford payments. At the same time, they could not refinance their mortgage to get better deals because their home was worth far less than what they owed. This created the feeling of insecurity that is now dragging our economy down. And there is even more…

Supposing that after taking over these bad assets Government allows homeowners to make lower and affordable monthly payments; the economy will still face at least one serious challenge:

Assets removed from the market by Government will still be worth less than their face value. The same will be applied to most of the other assets not necessarily concerned by this bailout plan.

As a consequence, most of the mortgage-backed securities remaining on Wall Street will be, in a certain way, less attractive.

Investors will then continue to prefer non mortgage-backed securities since they not only present prospects of better revenues; but they also provide the security that investors want. Examples of options with prospects of good revenues and security are commodities like crude oil…

And when that happens, our economy will collapse dramatically. This is because the housing market is at the heart of America’s economy.

This is the reason why I think that the President’s plan to bailout Wall Street is a very risky plan that will only delay the collapse of our economy.

I believe that what this economy needs is a more efficient plan capable of solving this financial crisis at the root.

I propose a Program that will reduce homeowners’ debt to 80% of their homes’ market value.

How will this work?

On behalf of homeowners, Government will pay all amounts needed to reduce homeowners’ debt to 80% of homes’ market value.

These loans will be issued against promissory notes signed by homeowners.

Rescued homeowners will be required to make relatively low minimum monthly payments.

In addition to this, Government will be allowed to deduct a percentage of homeowners’ Federal and State tax refunds (if available) to help reduce loan balance. Agency in charge of this program will report accounts to credit bureaus on a monthly basis.

The destiny of America’s economy will be placed, once again, in the hands of those who are more able to make it work again: The American People.

Adopting this plan will do 3 things:

First, when Government pays back part of homeowners’ debt, Wall Street will eventually receive the funds that are so badly needed to continue fuelling our economy.

Second, homeowners’ debt will be reduced to 80% of their homes’ market value, therefore making them eligible, once again, to shop for better rates and affordable deals. Paying less for their homes will free some funds that can be used to purchase more goods.

Third, America’s housing market will be back on track, again. The market will be ready for new buyers and sellers, therefore sealing the revival of our economy.

However, this plan can only produce its best results if Congress complements it with a strong regulation that keeps the market under control. Otherwise, greed will once again destroy us.

Ben Modo is an Accountant, a Management Professional and a Financial Consultant. He has earned degrees in Business and Public Administration and he is the author of many published articles in economics and politics. Ben Modo was born in Cameroon and is married to Lydia. Together, they have two children, Stan and Dave Modo. Ben and his family live in the Washington metropolitan area.
Source

Forget Bailout – Here is My Plan

Anyone facing foreclosure knows that in most cases that they have been snookered. Funny how mortgage contracts will adjust for increasing payments, but none adjust down if the economy goes bad.

Now the government is going to give Wall Street a 700 Billion dollar bailout plan. Now this plan is suppose to help the homeowner. It does not address unemployment and loss of jobs, the adjusting of mortgage rates that are the root causes.

Let us think about this:

• Gas prices are higher than ever
• We spend billions of dollars per month in Iraq
• Unemployment is high
• Food Prices have increased
• Most homes have lost value leaving little to no equity
• Utilities such as gas and electric are higher
• Credit is scarce and refinance market is dead
• Average family income is down
• Bankruptcies are high

Who wins?

• Oil companies recording record profits
• Brokers, who have taken money from the stock and equity markets
• Retiring executives from most markets with golden parachutes
• Those who are operating the banks and brokerage firms

Those responsible will not suffer; the good old taxpayer is coming to the rescue. Okay, so we bail them out and have our government, buy the homes that have lost their value in many ways. Now the government will also have to absorb the cost in foreclosure. That is an additional expense.

Here is the major question, with banks and other institutions having dumped all their bad paper on the government, what is next? The answer to that is who knows.

Here is a solution, when you wean a baby off the bottle; you just take it away from the baby. That is what we have to do to the financial institutions. This has to be fixed in part by government but with a ground floor view.

If you want to help those homeowners and reverse the economy here is the plan

• A 6-month freeze on all foreclosures and those up coming for the next year
• A $ 10,000.00 grant to all unemployed homeowners that need to get back on their feet
• An audit on all mortgage companies that financed the sub-prime market
• Allow modification of mortgage contracts on all distressed property
• Allow 6 months for homeowners to get gainful employment (if they are unemployed)
• Invest 100 billion for new “green” energy jobs
• Invest 100 billion in full scholarships in community colleges for new high tech or “green” jobs
• Financial Institutions that hold vacated property will keep them
• Those pending foreclosures will be turned over to the government
• The government will then administrate the process of implementing the above points.
• The mortgagee when employed will modify their contract with the governmental agency.
• Let the private sector sell the vacated properties through auction or other means

This is what I call trickle up economics. The intention is to assist those who are facing financial distress in most cases this will allow the homeowner to pay off their real estate taxes, allow them to find gainful employment. They will also buy food, pay utility bills, and help offset the price of gas. It is a terrible thing when you must commute 20 to 30 miles and do not have any money for gas. You must go to where the jobs are.

There are three types of people affected here, the employed, the unemployed and the multiple dwelling homeowners. The employed would need a modified contract. The unemployed would need a moratorium and financial aid if not eligible for unemployment. Then there are those who have multiple dwelling units which the economy does not directly effect their primary residence.

Implementation can be administered by HUD, the first action that needs to be taken is an instant moratorium on all forecloses and real estate tax liens.

• Set Up Special Temporary Branch under HUD to implement program
• HUD takes all the recorded default notices
• This program will be voluntary to homeowners
• Residents affected will contact a 1-800 number for the financial grant
• HUD will verify the information given
• Homeowner will fill out application and send to HUD via internet, fax or mail.
• HUD will release half of the $ 10,000.00 grant and in 30 days release the other half.
• If Homeowner is collecting unemployment benefits HUD will reduce the scheduled unemployment benefit amount from the HUD payments for the 6 month period
• Homeowner has 6 months to find gainful employment.
• Within the 4 month period Homeowner will contact HUD for mortgage contract modification
• Homeowners who are employed will contact HUD for assistance in mortgage modification
• When mortgage modification is approved by HUD then the Homeowner will start making payments to the mortgage holder of record.

Mortgage holders are not bailed out, but will be allowed have the distressed properties temporarily moved off their balance sheets into a holding company account. This will relieve their balance sheet on a temporary basis, which will allow them to qualify for appropriate credit. They will report to the SEC (if a public company) and HUD the information on the holding company, with complete details. No other transactions other than that of distressed real estate are to be post to this holding company.

When a homeowner starts to make payments on the modified mortgage contract the mortgage holder will transfer from the holding account the original value back to the mortgage holder’s original balance sheet.

In this way everybody wins, the mortgage holder, the homeowner and the government. This plan will result in more jobs; mortgage holders’ credit restored and distressed properties relieved. Of course, there are more details to work out but overall I believe my plan can be implemented in very little time.

John Tebar Certified Life Coach, Author and Entrepreneur sign up for weekly Ezine at http://holisticlifeplanningandresearch.com

Forget the Recession – There is More Than Enough to Go Around!

This is a frightening economic time, not just for the United States, but for the world as a whole. Everyone seems to be in a panic and perhaps rightfully so. It seems like every time you turn around some seemingly stable company is filing Chapter 11 or being acquired in a hostile takeover.

The only thing that seems certain at all about our fiscal future is that it is uncertain. Or is it?!

Perhaps I should rephrase that and say, should it be?

People seem to be under the impression that there just isn’t enough money now. Somehow, somewhere the money disappeared and there just isn’t enough to go around. They couldn’t be more wrong. The money is there, it just isn’t moving (and when it is, it may be going to different places than we are used to).

The reality is that there is plenty of money to go around. Enough money to boggle your mind. So much, in fact that most people couldn’t even fathom the riches that are out there and potentially available to them.

To add some substance to this point let’s just look at one individual: Bill Gates- or more specifically, his net worth. Okay, so Bill Gates is not your “typical guy”. Of course not, he currently ranks third on the list of the worlds richest people with a net worth of $58 Billion (yes, that’s billion with a “B”).

$58 Billion is an awful lot of money, don’t you think? As of September 2008 the estimated world population was 6.725 billion which means the Bill Gates has enough net worth that he could share over $8.6 Billion with each and every person on the face of the earth. One man could potentially turn every person in the world into a billionaire.

Now take into account that there are over 1,000 billionaires on the world list. Just in this group alone there is well over one trillion dollars of net worth and this doesn’t even account for all of the multi-millionaires out there today.

The average person is struggling to get by with a modest income probably somewhere south of $100,000 and can only hope to gain some level of fiscal comfort. Their reality probably even puts off the thought of being a millionaire. There is enough to go around! Most people just don’t know how to go about getting their share.

Most people are pigeonholed by their limiting beliefs and the jobs that they have as a result of that. There is only so much room for advancement and pay increases. The volatile nature of the markets and the uncertain economic climate make most corporate companies squeamish by the very thought of dolling out any more money than they have to.

If you want to get ahead you have to take control of your financial future! Fortunately people today have opportunities that were once held for the rich and not the masses. Today, because of the abundance of possibility in the home-based business arena, every person has the ability to take a grasp of their future and to start building their wealth and fortune. And they can do it NOW!

Finding an opportunity with quality products, a proven and easily duplicable system, training and leadership is paramount. Once this is found, success is only a short while away.

Go grab your piece of the pie. No one is just going to hand it to you.

Brian Pray is one of the truly “good guys” in the home business industry. Fueled by an unyielding desire to help others achieve great success he believes that his prosperity comes as a byproduct of this. He has built his foundation on very simple values and beliefs and knows that truth, integrity and character have made him the person he is today. More information on Brian Pray is available at http://www.AllYouWantInLife.com

Crush the US Dollar and Increase the Debt?

I asked in one of my earlier posts if the US Dollar has bottomed or will the US Dollar crash? What I find fascinating… is that common logic …that the US Dollar should have gotten crushed over the weekend. Well it is 5 am and I am drinking my coffee and looking at the CME Globex…and yes the US Dollar is down…but not CLOBBERRED?

Aren’t we all in this together? Isn’t Western Europe having the same issues as the US? One can’t miss the news and see that Russia closed their markets…eventhough they rebounded almost 25% with last weeks feel good rally.

I assume the US Dollars problem is everyone’s problem.

It is clear the Fed is trying to restore confidence, but it is not rocket science to realize that spending $700 billion dollars on tainted all flavored mortgages and $400 billion on money market funds will boost the national debt even further and put us more into debt.

It is PRINT AND TAX time!

Isn’t or Wasn’t the US Dollar the BASTION of security? Maybe it still is regardless of the fact of all our economic problems. It is extremely unsettling that people who paid their bills ..Saved their money in US Dollars and now stand the potential of losing purchasing parity due to the GREED of Wall Street and the banks.

Where were the regulators restricting banks from lending to speculators who would buy a house with no money down…and look to sell it to potentially other investors?

Ok …let’s say the regulators missed that… which is possible… If someone wants to make a stupid loan… Ok great…that is their issue.. But why should we the tax payer, the hard working saver have to bail the banks out for their GREED?

The dollar fell against 14 of the world’s most-traded currencies on Sept. 19 when the FED unveiled their restructuring plan. The feel good rally of the Standard & Poor’s 500 Index of 4 percent maybe was just that.

FEEL GOOD!

Confidence building!

But for who?

I will feel good once we have a strong nation again and a responsible govt who supports the US dollar instead of bailout for the most stupid bankers of this century (probably all time).

How many of you realize that this unprecedented government intrusion into the markets will increase the US debt ceiling by 6.6 percent to $11.315 trillion.

Another nice thought in order to protect our money and hoping to get a return of money……not a return on money.. …that just by putting our money in short term US govt interest rate vehicles we are losing money due to inflation and taxes.

Will the Feds plan end the US Dollar rally that began in June and drove the U.S. currency up 10 percent versus the euro, 2 percent against the yen and almost 13 percent compared with Brazil’s real? I have no idea…However. I would not be surprised if people start looking at the Brazilian Real which has a higher interest rate and in many ways a self sufficient economy.

Andrew Abraham

Who is to Blame For High Gas Prices?

With only the possibility of John McCain and Barack Obama, I would say that whose to blame for high gasoline prices has been the most played news story across every media network over the last month or two. The national average for gasoline peaked earlier this month around $4.11 per gallon or regular 87 octane and has recently come down to about $4.03 per gallon. This obviously is a stark increase from the price range around ~$2.50 that we had seen during 2006 and 2007. The issue becomes even more important than “just an extra” $2.53 per gallon as our economy and lifestyle are based on the consumption of gasoline for transportation. The biggest question on everyone’s mind is who is to blame and how can we fix the problem? Like many other questions concerning energy, the answer is not nearly as simple as the media would have you believe. Warning: The information you are about to read may be completely foreign to you as none of the 6 major media networks have ever reported truthfully on this topic in the past.

It must be the E&P companies, right?

Not as much as you would think. While it is true that the exploration and production companies have to make some profit, when you look at the numbers the results are not as horrifying as you may have previously thought. Let’s take a look at the profit margins of some of the larger E&P companies (all of the numbers are for the trailing twelve months):

* Apache Corp. APA – 29.95%

* Anadarko Petroleum APC – 3.78%

* EnCana Corp. ECA – 14.77%

* Occidental Petroleum OXY – 29.2%

* Suncor Energy Inc. SU – 17.98%

* Microsoft Corp. MSFT – 29.26%

Now its time to play the which one of the above is not an oil and gas E&P company game? If you guess Microsoft, you probably have a bright future ahead of you and I wish you my sincerest congratulations.

This is only one example, Goldman Sachs GS has a profit margin of 23.68% and Intuitive Surgical ISRG has a profit margin of 24.68%. Many of the energy companies actually have lower profit margins than companies in other sectors. They are not the ones that are charging you too much for the goods you rely on, they are just participating in the free market economy and helping you achieve economic satisfaction more so than most of the other companies in the world.

Well then it has to be refiners?

This is definitely the last person who is causing your wallet to thin. The refiners (excluding the major integrated companies that incorporate refining and marketing activities into their overall business structure) bring the least to the bottom line when compared to the other sub-sector of the energy universe. The problem with the refiners is that since they do not produce the oil, they are reliant on spot market prices for the input of their product. This difference is called the crack spread. The crack spread is the margin refiners make when the take a barrel of crude oil and “crack” it into another form, either gasoline, heating distillate, diesel, or a number of other products. Generally crack spreads are quoted in the 3:2:1 ratio, or 3 barrels of crude are cracked into 2 barrels of gasoline and 1 barrel of heating distillate. Recently the crack spread has been in a state of free fall as highlighted by the stock prices of Valero Energy Corp. VLO, and Tesero Corporation TSO falling more than 45% each while the rest of the energy sector rallied.

Gas station owners, thats it!

Unfortunately for gas station owners, they fall into a similar category as the refiners. They do not produce the gasoline, so their input prices are out of the control. Because there is a high level of competition and a bunch of stingy consumers, they are not able to raise prices as quickly as they would need to in order to maintain historical profit margins. More than 1,000 gasoline stations closed in the United States last year, many of which were actually losing money every time they sold you a gallon of gasoline because of the rate at which gasoline spot prices were rising over the last year and a half. You should expect more gas station closing through 2008 and maybe into 2009. The business has become so unprofitable that Exxon Mobil Corp. XOM has recently announced that they are planning to sell at least 2,500 of their company owned gas stations in the United States during the next year, mostly likely at steep discounts to their worth even 3 months ago.

What about the government?

If you read my article concerning McCain’s Gasoline Tax Holiday you would know that the government sponsored gasoline tax really has little to no effect on the price of gasoline that consumers pay at the pump. The government definitely has an indirect effect on the price of gasoline due to the current drilling policies. If all United States territory was opened, not only would the markets discount this news into the future and lower energy commodity spot prices but the supply that would come online within 2-3 years would cause the price to be pushed downward in the long run. There is also a counter argument that some day we may actually need those reserves for something truly important, not just saving you a few dollars per fill up. That type of ethical issue is one that is difficult to address because facts will not allow either side to be completely “right” or “wrong” no matter how long the topic is argued. I’ll let you make your own decision on that one.

Wait a second, it can’t be my fault can it?

Actually, yes it can. The unfortunate news is that we as consumers are the cause for almost all of the rise in gasoline price. It is not just “us,” it is actually consumers all around the world who are driving up the price. Because crude and gasoline trade on global exchanges, it is not just the United States thats affects the prices, contrary to popular belief. Increased demand from India and China as well as the rest of the developing world is one of the major factors contributing to the price inflation. For example, an American used 25 barrels of oil per year while the Chinese only use 3 barrels per person per year and the Indians only use 1 barrel per person per year. Gasoline prices could become really frightening if the rest of the world would demand even 25% of the consumption that we have grown accustom to over the past century.

Another important factor is worldwide inflation. Inflation rates are growing at historically fast rates around the world. The United States has year-over-year inflation growth of 5% (if you believe the government data which many experts are suggesting you should not), China is over 8%, Russia is over 9%, so on and so forth. With all of this extra money, it is easy to see that a good portion of the price appreciation is do to the fact that people have more nominal dollars to spend, even if each one is worth less and less every day.

Our modern American economy is so heavily based on petroleum products to function that there is only a certain amount of demand that can be destroyed at these low levels of gasoline prices (I know that sounds ridiculous to say, but bear with me). Children have to go to school and adults must go to work, no matter the price of gasoline. Use yourself as an example. Would you quit your current job because of gasoline prices? At what price would you consider quitting your job? At what price would you have no choice but to quit your job? For most of you, these numbers are going to be much higher than the current price of gasoline. Many of you would be shocked to believe that gasoline spending per capita is actually only half of the historical high percentage that was reached during the 1910s and the 1980s. Do not believe for any moment that gasoline prices cannot or will not appreciate from here.

So what can we do? Are we doomed?

We are not doomed. I for one am long on the idea that the United States will be able to innovate and solve this problem. The solution won’t come from the government, but from the free markets. Only time and extreme necessity can drive us closer to the solution, but I assure you that one day it will come. I will discuss the solutions in another later article, but you should not feel as if there is no hope for America because there most certainly is going into our bright future.

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Making Biodiesel at Home – What Exactly is It?

Petroleum prices are rising across the globe. Escalated prices are giving nightmares to common man. Consequently some people are looking towards substitutes. An excellent alternative to fossil fuel in this category is biodiesel. Biodiesel is a clean burning fuel and more importantly, it is a renewable energy source. Environmentally this fuel has proven to be a much less pollutant than its counterpart, the standard diesel. The regular diesel has components such as sulfur and aromatics. This fuel is made out of vegetable oil and costs considerably lesser than the conventional fuel. Because of this property it is easy to make biodiesel at home.

Biodiesel is outcome of the process called transesterification. In this method the fats are removed from the vegetable oil thus leaving behind byproducts like glycerin and biodiesel. In view of the fact that biodiesel does not contain sulphur and aromatics, it burns cleaner leaving very few traces of contaminants. These characteristics make biodiesel surpass the conventional petroleum fuel.

The most fantastic feature about biodiesel is that you can make biodiesel at home. The equipment required for the entire process is simple and can be accessed at any local store or even from your garage. You would require steel or plastic drums, a pipe, a valve, a motor and a temperature gauging instrument.

Initially you should manufacture little amount of oil so that when you become acquainted with the process, you can make biodiesel at home at a larger scale.

The compounds needed for the reaction to take place are vegetable oil, lye (caustic soda) and Methanol. Lye has to be mixed with methanol first. This mixing should be done quickly because lye absorbs water from the atmosphere. This water content can produce impurities in the entire process. Methanol and lye combine to yield sodium methoxide. Now add vegetable oil to the blend and shake it with the help of a motor. Once the blending has taken place, the mixture is set aside to stand for at least 8-12 hours. This way the glycerin will sink underneath and biodiesel will emerge on top of it. The reason behind this phenomenon is the difference between the specific gravities of the two compounds. The glycerin can be removed from the bottom with the help of a pipe whose flow is controlled by a valve. Glycerin can further be utilized in making soaps and biodiesel for your vehicles.

Using the process mentioned above you can effortlessly make biodiesel at home.

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