OIL: The Real Outlook

Much has been written about Solar Power:

• Benefit to the environment

• Global Warming

• Saving money on Electric Bills

• Government Support

• Government Funding

• Tax Incentives.

• And so on…

However, all of this had lead to little, if any, advancement in the field.

To make my point:

Dateline: 1964

Science Class

Teacher: Mrs. Hohman

Report: Solar Power.

That was 50 years ago.  In the past 50 years, little or nothing has happened. The reason for failure is that Government pays for activity, not for accomplishment.

Now let’s take the business approach.  This should go a long way toward my explaining why Big Oil should invest in Solar Power.

There are some sound business fundamentals coming to the fore.

• Rising Demand Curve

• Declining Costs

• Innovation

• Economies to scale

• Revenue growth curve

• Tax incentives

• Increasing return on investment

In addition, Solar Power is Clean Energy.
 

• Less Government Regulation

• Less Government Push-back

• Less Consumer Push-back

• Less Global Push-back

There is an incentive to do business in a country with a Solar Power Industry. (Invest in it)

Solar Power is an easy sell in a country that does not have domestic oil production and/or does not have the money to import oil. (Invest in it.)

Solar Power is a very cost-effective source of Energy. (Invest in it.)

Sunlight is the fuel for Solar Power Generators.

Sunlight is

• Free

• Globally Available

• In abundant Supply

• Unregulated

• Not Subject to Embargo

• Not Subject to Supply and Demand.

Of Course, there are a few problems attached to Solar Power.

Sunlight is

• Free

• Globally Available

• In Abundant Supply

• Et. Seq.

Bottom Line?  If the input is Free, the output is Profitable. The more people use, the more you make.

Then there are the home grown revenue enhancement opportunities—Plastic.  Plastic, the by-product of the Petroleum industry. (Another reason that Oil will never go out of business.)

When Engineers apply their skills to plastics, it will become less necessary to defoliate the landscape. Also...

Plastic Girders will 

• Replace steel in countries where it is cost-prohibitive or impractical or impracticable to use steel.

• Replace wood where wood will suffer from mold, rot, warping, infestation, cracked and breaking.

• Replace wood and steel where cost and weight and logistics make assembly, dis-assembly, construction and reconstruction become compelling factors for using plastic products.

• Everything from Archimedes’s Screw to bring water to a higher level to pipes to irrigate fields can be made from plastic.

Warmest regards,

Slim

Slimfairview@yahoo.com

Copyright © 2014   Bob Asken as Slim Fairview

All rights reserved.

Creating 3rd World Wealth

• 1.5 Billion people live on less that $1 a day. 

• 2 Billion people live on less that $2 a day.

• The Haves are increasing arithmetically. 

• The Have-nots are increasing geometrically

• The multitude may oppress the few, but the few may not oppress the multitude.  Not for very long, anyway.

To understand helping people in emerging nations, we must deal up front with two impediments.

1st:  Those who want to exploit people in emerging nations.

2nd: Those who believe they are helping people in emerging nations.

To have a clear picture, we need an economics lesson.  By Metaphor.

I have but two skills: an analytical mind, and the ability to speak in metaphors.  Here we go:

The biggest problem is the word wealth.

Some want to promise riches. Riches that never arrive.

Others define wealth a language for helping the rich get richer, but in fact, only keep poor people shacked to poverty by keeping poor people shackled to poverty programmes.

According to The Random House Dictionary, you can define wealth two ways.

A great quantity of money or property of value.

All goods that have monetary or exchange value.

To understand helping people in Emerging Nations, it is the second definition that will help us to better understand how to help people in Emerging Nations.

From The Definitions of Slim Fairview:

• Money: what you make.

• Wealth: what you have.

To a youngster who wants to mow lawns for pocket money:

• Money: what people will pay him to mow their lawns.

• Wealth: A lawn mower.

• Wealth: all goods having monetary or exchange value.

Here is the metaphor to explain the economics lesson.

NB  From the Bauhaus: Form follows function.

CAVEAT! 

This is an economics lesson.  Focus on the Economics ONLY!

Back in the day, a kid with a lawn mower could earn money mowing lawns.

With two lawn movers, he can

• Make money mowing lawns with lawn mover #1

• Make money renting lawn mower #2 to another kid to mow lawns.

• Hire another kid to 2work for him mowing lawns with lawn mower #2.

The question is, How much money can the first kid save up to buy the second lawn mower?

This leads us to a question of skill.

With mechanical ability, Kid #1 can buy a broken lawn mower, repair it, and put it into service.

Ultimately, the 2^nd kid gets paid for what he does. 

The 1^st kid gets paid for what he knows.

As demand for services rise, it will become necessary to buy more lawn mowers and to hire more kids to mow lawns.

If demand rises faster than growth, the kid will lose market share and revenue.

If the business grows faster than demand, money will be tied up in idle (unused) lawn mowers. This will reduce the return-on-investment.

Then there is Time Utility.

A lawn mower in May is worth more than a lawn mower in November.

Also, there are Threats.

Another kid with a lawn mower can penetrate the market and steal customers.

Two or three employees can pool their resources, quit and go into competition.

However, There are also Opportunities.  These are called Mid-term and Long-term Strategic Planing.

The1st kid can buy one riding mower instead of 3 push mowers and big for bigger and more lucrative jobs.

The 1^st kid, or his competitor can

• Invest in rakes for when the leaves start to fall.

• Invest in snow shovels for when the snow starts to fall.

• Invest in snow blowers. (Op. cit. riding mowers.)

• Invest in lawn mowers for when the grass starts to grow. (Op. cit. Time Utility.)

 

Now, having established the premise:

People in Emerging Nations neither need nor want charity.  They need and want capital investment.

From the Economics of Slim Fairview:

Capital Investment = Economic Development + Growth.

NB  

And when I say Capital Investment, I do not mean people from Industrialised Nations building lawn mower factories in Emerging Nations so poor people can earn low wages making cheap lawn mowers for people living in Industrialised Nations.

To elevate people in Emerging Nations from poverty, embrace the paradigm that has been used successfully in the past in:

• China

• Post War Germany

• Post War Japan

• Put people to work.

Now, here is a thought question:

• Your kid gets a job with a landscaper.

• You hire the landscaper to mow you lawn.

• The landscaper sends your kid to mow your lawn

• The landscaper pays your kid less money than you pay to the landscaper.

Does that make sense?  No…unless…you can’t afford to buy a lawn mower.

You have money to pay a landscaper, but you do not have wealth—a lawn mower.

To focus on the problem in Emerging Nations, ask yourself, How did the fist kid get the first lawn mower in the first place?

This is the predicament of the poor in Emerging Nations that is sustained with each new and failed initiative to help the world’s poor.  People cannot each symbolic gesture.

• Industrialised Nations

• Know what to do

• Know how to do it.

• Know where to do it

• Know when to do it  (Now!)

• Industrialised Nations have no excuse to fail to do it.  

• Industrialised Nations have No Excuse to Fail.

Warmest regards,

Slim.

Slimfairview@yahoo.com

Copyright © 2014 Bob Asken as Slim Fairview

All rights reserved.