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  Energy is a hot topic. With the fluctuating gas prices, higher heating costs and increasing electric bills, people wonder what is really going on. There are many misconceptions about energy and its generation or production. Here CARE offers a sampling of the confusing comments being made with an explanation of the facts.

Misconceptions
Spent nuclear fuel is allowed to pile up unsafely on the property of nuclear power plants, and this spent fuel has become a potential target for terrorists who could steal it to make dirty bombs.
Spent fuel contains 95% of its original energy. This fact makes it “hot” and thus lethal to anyone who might try to steal it. Spent reactor fuel IS kept at the reactor sites that are scattered across America, however, in Europe spent fuel is continually reprocessed & re-enriched for continued use as reactor fuel. Reprocessing is undertaken in both France & Russia, and has worked for decades across various borders with no proliferation issues.

Oil & Gas Companies earn a huge profit that should be returned to the consumer.
We are seeing higher-than-ever crude and natural gas prices leaving consumers to think this all equates to huge profits by producing companies. In reality, the public and most politicians don’t understand basic accounting. When companies report “record profits”, the “profit” they report is net income, a funny accounting number upon which (unfortunately) most companies are measured by Wall Street. But it has nothing to do with actual cash in the door. That metric is “cashflow.” In reality, America’s independents, who drill most of the wells in the U.S., spent in excess of 130% of cashflow last year drilling wells. In other words, the industry borrowed money to drill. With this in mind, imposition of a windfall profits tax would further reduce the industry’s ability to spend money since it is a cash tax.

It must also be noted that all services & supplies needed to explore & produce this energy have skyrocketed as well. Additionally, higher than ever wage and insurance demands coupled with more and more federal & state regulations driving up the cost of business is making domestic companies suffer--which results in making America more dependant on foreign product.

Geothermal Power Plants are Ugly!
Geothermal power plants produce 10s to 100s of MWs of energy, powering millions of homes. The environmental foot print of a geothermal power plant is many, many times smaller than an equal amount MWs from solar or wind farms. The steam release of geothermal plants is simply water. Geothermal’s efficiency makes it beautiful by many measures.

The US Government subsidizes oil & gas companies when they are huge multi-national companies making record profits.
Every year, when an oil or natural gas company operates on federal lands or in US waters, they pay billions of dollars to the US & state governments in royalties, rents & bonuses. This money is the second largest revenue source to the US Treasury. Ninety percent of the US domestic oil and natural gas is produced by small, independent companies who have an average of 20 employees. While the oil industry is thought of as super, multi-national companies, 5000 smaller companies are doing most of the work finding American energy. These oil and gas producing companies are frequently portrayed as a blight on the landscape and atmosphere. In truth no industry has higher standards and has done more privately invested clean up and restoration projects. For example, in 1953 the State of New Mexico set up the Oil and Gas Conservation tax. This fund was dedicated for helping clean up and restore the natural landscape and water. Unfortunately, this fund has never been used for it’s intended purpose, and has been directed to other activities by the very people who are crying foul at those in the oil and gas industry that have faithfully paid this tax.

Back-up generation is needed for all wind turbines.
As no power plant is 100% reliable, all power plants back each other up. The electric grid is designed to have more generation sources than are needed at any one time. Wind is primarily an energy--not a capacity--source, therefore no additional generation needs to be added to provide back-up capability (provided that wind capacity is properly discounted in the determination of generation capacity adequacy).

The actual oil resources in ANWR are so limited that violation of wildlife habitats for domestic oil supplies is unwarranted.
The USGS has determined that ANWR holds between 5.7 & 16 billion barrels of oil. This could manifest as 36 million gallons per day of gasoline, jet and diesel fuel, heating oil, and other products. With ANWR, we can produce 20% of domestic need while reducing reliance on OPEC. The Department of Energy estimates that the USA consumers use about 178 million gallons of gasoline per day. So, with ANWR, we can produce 20% of this domestically while reducing reliance on OPEC for crude oil imports. Modern drilling techniques allow companies to protect tundra & the ecosystem, and employ directional & multi-lateral drilling to reach reservoirs with environmentally sensitive extraction practices.

The price of gas for American vehicles is rising due to capitalism in the USA which allows “windfall profits” and “gas-price-gouging” by cartels of privately-owned big oil.
Government intervention which controls amounts of profits for the oil industry can create more favorable prices for consumers like those prices found in less capitalistic countries. 50% of the cost of a gallon of gas is for the wholesaler of crude, not the retailer. 36% of the cost of a gallon of gas is for the refiner, distributor, and marketer. 14% of the cost of a gallon of gas is for local, State, and federal taxes. In 2007 published data for the second financial quarter showed the oil and natural gas industries earned 9.5 cents for every dollar of sales compared to 8.7 cents per dollar of sales for all U.S. manufacturing. Yet over the ten year period 1996-2005 the return on investment for the refining sector was 4.7% less for oil and gas industries than for other Standard and Poors Industrials. And more socialistic governmental intervention or less capitalistic governments have higher priced gas: London= $6.65, Paris= $6.62, Denmark= $6.51, Berlin=$6.42. These figures show that a state controlled economy is not the answer.

Oil company executives are rich.
In looking into the salaries of oil company executives, you cannot compare them to what the average person makes. You have to look at oil industry executives in comparison to key executives in other fields. Oil and gas execs are paid fairly, but no more so than any other executive group in other industries (insurance, healthcare, banking, software, computer hardware, etc.).

Energy executives have not only created wealth for themselves, but for their shareholders as well. But keep in mind that some of the largest investors in oil and gas companies are teachers retirement funds, pension funds, and mutual funds owned in employee 401K accounts. These are not faceless companies, they are owned by “little old ladies” who depend on dividends and pension checks to buy their groceries. And the largest component of most executive compensation is "at risk." In other words, if the shareholders do well (all those pension funds and little old ladies) then the executive does well.

Another interesting point, many environmental groups are funded by foundations who have their money invested in mutual funds that are heavy in energy stocks. (See CARE’s Energy Killer Profiles.)

Myths
The federal government is allowing oil and natural gas companies to run rampant over lands in the Rocky Mountains and all across the United States.
Oil and natural gas production occupies less than one percent of the 262 million acres of federal land controlled by BLM and the 192 million acres managed by the Forest Service.

Water pollution is primarily caused by oil leaks and other oil and gas activity. According to the National Academy of Sciences, offshore oil & gas operations account for the smallest percentage of any oil source in the oceans (2 percent). Natural oil seeps account for 8 percent, atmospheric pollution accounts for 9 percent; industrial & municipal runoffs is 36 percent and ships/marine transportation account for 45 percent. While major leaks are very newsworthy, most water pollution is naturally caused. Water leaches heavy metals from soil during rain runoff; biological organisms are picked up from animal waste; water treatment facilities introduce unnatural chemicals and are often unreliable.

Wind turbines can be dangerous for birds and bats.
Wind energy is one of the most cost-effective and environmentally benign technologies that we can deploy today. Overall impact on birds is extremely low compared with other human-related activities.

Gasoline combustion engines are the number one contributor to environmental damage.
Volcanic activity, forest fires, decaying vegetation, decay & emission from ocean life, and basic natural human & wildlife wastes are responsible for the largest percentage of “harmful” emissions including particulates, CO2, methane, sulfur, etc. It is estimated that these factors have, over the past year, each been responsible for more emissions than all the combustion engines over the past 100 years. Additionally, fossil fuel use in total is estimated to be responsible for less than 1% of the emissions deemed to contribute to global warming. Global conditions and interactions are so complex, there is little chance of reasonably modeling the impact of any particular component. Scientists cannot even agree whether there IS a global warming trend at this time, much less agree to its cause.

Oil and gas development is damaging to the environment and should be stopped.
The Oil and Gas industry has a long track record of environmentally responsible exploration and development. The industry has been actively drilling wells in America for more than a century, and has completed hundreds of thousands of wells. If today’s shrill environmentalist predictions of the consequences of oil and gas activities were accurate, the entire country should have been a toxic wasteland decades ago. But of course it isn't. In fact, there are many areas where large numbers of wells were drilled, produced, depleted, plugged and abandoned, and the surface reclaimed, with no evidence that there was ever any oil and gas activity. (See "Embrace the Earth~Embrace Energy" in CARE’s March 2007 Newsletter.) And today things are being done much better than they were in the early days of energy development! Yes, there are impacts associated with oil and gas development, but most are short-lived and can be mitigated onsite and offsite.

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