When Solar Parity is reached - when the price for a British Thermal Unit or a Watt is the same regardless of whether it came from coal, oil, gas, solar, wind, geo-thermal or hydro electric is the crucial moment in time for all alternative energy development.
As long as geo-carbon energy sources are less expensive, alternative energy development will be stifled. If we do not force alternative energy development ahead through government action, when we truly need to have the alternatives in place to take the place of geo-carbon sources, it will be too late. It is likely that fifteen years of robust development and deployment will be needed, before alternatives will be able to shoulder a substantial portion (half or more) of the energy demand in the United States.
In as much as, the supply of oil is unlikely to last more than 40 years and that the price of oil will climb back up to $140 per barrel again and higher within a few short years, it is clear that now is the time to push forward.
To both spur development and to fund development of solar energy, the U.S. government needs to place a tax on all geo-carbon energy sources. Beginning with 2009, a tax of $.25 should be placed on each 100,000 Btu's of geo-carbon energy. Every year after, the tax should be raised an additional $.25 per 100,000 Btu's until the cost of energy from geo-carbon sources reaches parity with energy produced from the capture of solar energy.
It takes time for the economy to adjust to the increases in the costs of fundamental resources. Increases should be spread over a reasonable period of time. These small, yearly price increases will allow the overall economy to adjust without absorbing all the disposable income in the economy.
The money received as tax on geo-carbon should all be used to fund alternative, (primarily solar energy), development. None of it should be mixed with the general tax revenues. And the money collected should be loaned, not given, to be paid back from the money earned or saved from the energy projects that the tax money funds.
In this way, the Federal Government can begin to develop alternative energy facilities, manufacturing, and systems without waiting for the price of energy to skyrocket again.
Nov. 15, 2008
To: President-elect Obama
Re: Real National Security With The Development Of A National Energy Plan and A Method To Finance It With out Resort To Tax Revenues
'United Stated Energy Bonds' and 'United States Energy Stamps'
Immediate funding for the new national alternative energy infrastructure
Immediate funding for millions of jobs in the least possible time
Dear Sir:
Within every problem lies an opportunity. We can immediately take advantage of this truth and greatly benefit our country by addressing several problems simultaneously.
We need a large number of new jobs for the people of America, (millions of jobs ASAP).
We need to raise a trillion dollars a year in capital for the next ten or so years to build a new alternative energy base for our country.
We need to raise this enormous sum of money, to the greatest extent, without recourse to the financial industry, which is in turmoil and is likely to remain so for a long time, or to the country's general tax revenues, of which there are not nearly enough for all the other demands already being made upon them.
The government is fiscally stretched, with huge deficits and it will be difficult to fund programs that will put people to work, without fueling inflation.
An old idea, modernized: Liberty Bonds can solve all these problems.
United States Energy Backed Financial Instruments are an excellent alternative solution, that will generate enormous amounts of capital without upsetting other areas of the economy. There is a huge pool of money available within our country and around the world that could purchase these instruments. These instruments can be offered within a very short period of time, 60 to 90 days after you are sworn in.
Energy bonds will very quickly generate hundreds of billions of dollars, and eventually as the loans are repaid and the funds reloan, create a capital fund of several trillions of dollars.
United States Energy Backed Financial Instruments would be placed with the citizens of our country or citizens of the world. They would pay a modest interest and would be repaid from the money that is saved or earned from the energy projects both small and large, that are funded with the money raised through them.
The money raised with Energy Bonds should be legally segregated from the general funds raised through taxes and other revenue procedures of the Federal Government, allowing the energy fund to build to the tremendous level that will be required to redevelop our energy generation and energy use infrastructure. These funds should not be commingled in any way with other government funds. This money should be loaned or in rare instances, used for loan guarantees. The money would never be given or granted. With time, as this pool of money grows, enormous amounts of money will be available to help launch the many large alternative energy projects the business and industrial sectors of United States must build: (high mileage autos, solar thermal generators, solid state power panel manufacturing and other facilities to produce all the necessary equipment and systems)and also, to capitalize the very great amount of work, the people must do, (home energy improvements, water and air heating systems, heat pumps, distributed end use solar electric systems, et c.), to re-found our country on a new secure energy base.
Eventually, in ten or twenty or thirty years, when the new alternative energy infrastructure has come into existence, and when the enormous pool of funds is no longer required, the money might be turned over to the social security administration to help offset the enormous cost of social security and other entitlement programs. The U.S. is facing huge funding deficits for these social programs, daunting problems that have no apparent solution at this time. The future Energy Bond Fund, having served it's intended purpose, might also help solve these deficit problems at that time.
In conclusion and summary,
(1) that Energy Backed Securities would be unique revenue instruments that would only fund projects that could pay the interest and repay the principal using the money from the sale of the energy produced or saved by those projects.
(2) that the money raised with these instruments would be raised apart from Wall Street. In this way, the shortage of ready credit in the financial community will have little or no effect on the raising of money needed to finance a new alternative energy infrastructure.
(3) that these funds would be raised apart from and with out resort to, the general tax or other revenues of the U.S. government, which are already inadequate to meet other demands.
(4) that rebuilding and re-founding our energy generation and use infrastructure will generate millions of new jobs across the U.S. and in accomplishing these things, as many as fifty million jobs will be created and recreated during the next fifteen or so years. This undertaking will be the primary engine of growth for the economy of the United States for the foreseeable future.
(5) that financing that infrastructure with funds raised with Energy Bonds and similar energy backed instruments, will accomplish this more quickly than any other alternative.
(6) that the Economy will boom as all this money flows into the hands of our people.
(7) that the unique repayment situation with United States Energy Backed Securities will make them the most secure financial instruments on earth.
In these ways, many problems and many opportunities can combine to create many excellent solutions.
There are several other benefits to using Energy Backed Securities, but time and space are limited.
I hope you see value in these securities and are able to quickly implement their use.
Thank you for your time and attention.
Sincerely,
James Flaherty
Guilford, Ct 06437
