First-time readers, this blog is set in the future (sometime after the year 2020).  Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution.  More about Revenge Revolution and author, Entry #1.  List and general description of entries to date.  Annual assessment whether Revolution plausible.

Note: most characters appear in a number of entries, with many entries building on previous conversations.  Profile of characters.  You’ll catch on quickly.  Thanks for your time and interest…and comments. 

Scene: Jordan still in Charlotte while recovering from prostate surgery. Earlier Jordan and POTUS began conversation about rebuilding US manufacturing and the middle class. Series starts #177; conversation with POTUS, #179.

Jordan: (Phone rings) “Jordan Abel.”

021214_1242_24Resultsof1.gifPOTUS: “Jordan, POTUS. Sorry to bother you. Gotta couple of minutes?”

Jordan: “Absolutely, Mr. President.”

POTUS: “Good. I read your email on reconfiguring US manufacturing. Like the positioning – to make US smarter and more competitive. Forwarded the email to the staff for review and comments.”

TurtleneckJordan: “What else may I help with?”

POTUS: “Oil and gas production.”

Jordan: “In what way?”

POTUS: “The US has spent many years and billions of dollars trying to increase domestic oil production and free ourselves from OPEC. Now, OPEC continues to pump oil and deflate prices. As a result a bunch of US oil companies are ready to declare bankruptcy. They’re upside down on the cost of production for many oil and gas fields and running out of cash.”

oil-clip-art-2589801-illustration-of-oil-rigJordan: “So, the concern is if these companies go BK and US production declines, then the country will again become more dependent on OPEC.”

POTUS: “Exactly. Long-term we can solve the problem with other energy sources but long-term is 25-30 years. I’m looking for ideas how to balance national security and ensure domestic oil and gas production continues, even if oil is $30-35/bbl.”

Jordan: “One approach – and I know this will create angst with certain Republicans – is a national oil tax.”

POTUS: “How much and used for what?”

Tax CutsJordan: “Tax would be enough to bring oil up to at least $60/bbl immediately and $100/bbl longer term.”

POTUS: “That’s a big tax.”

Jordan: “Yes, but recall oil was $140 sometime in what CY2014 and then near $100 for a number of months after. And what happened to the economy? It continued to grow.”

POTUS: “OK, so let’s say we target $100 as the long-term price. Now what do we use the tax revenues for?”

metro-north1Jordan: “Two primary uses. #1 is the email your staff is reviewing — reconfiguring US manufacturing and infrastructure to become more competitive and spur economic growth. The country has lots of highways, railroads, airports and waterways to fix…plus we need to expand high-speed internet. And #2 is…”

POTUS: “…don’t tell me, subsidize the cost of oil and gas production?”

Jordan: “You got it.”

POTUS: “Subsidizing oil companies is such bad PR. No one likes oil companies other than people in Texas and Oklahoma…and some conservative groups. You feeling OK?”

Jordan: “I feel fine and yes, I know all the crap that’s going to fly. But the cost of funding of drilling and operating a new well can easily exceed $50/bbl. People forget the land owner gets 20-25% right off the top. States are not shy about taxing oil and gas production. Plus, you have to transport the stuff to a refinery.”

POTUS: “Point well taken. I’m not shedding tears for the oil companies but we’ve got to keep the US free from OPEC.”

Jordan: “There’s a bunch of oil available in the US. I’ll bet the amount of oil available on shore – not off shore – is 5x what’s been produced so far.”

PigsPOTUS: “That’s encouraging to hear. I know the drilling cost can be high but somehow we need to control the subsidies. We don’t want to oil companies thinking they’re at an ‘all-you-can-eat’ feeding trough.”

Jordan: “If we cap the market price at $100/bbl and limit imports, then the oil companies will have an incentive to continue to find new oil. We also need to encourage the companies to use newer technology for exploration and production.”

POTUS: “Like what?”

questionJordan: “First step would be more integration of software, updated drilling techniques and electronic sensors. Based on my thimbleful of knowledge of the oil and gas industry, they need to think more about how to incorporate newer technologies.”

POTUS: “So the companies that incorporate more technology to find oil…and to minimize environmental damage…would become the winners.”

Jordan: “Call it a ‘modified’ free market. But a market that encourages responsible production and reaps the benefits of lower cost.”

POTUS: “What about developing alternative energy – wind and solar?”

Jordan: “Both of those sources are free and independent of any foreign source. Some of the incentive dollars – oil-tax dollars – should be directed at solar and wind.”

POTUS: “I can hear the Republican protests now. ‘More government subsidies.'”

Jordan: “Maybe it’s time you had a heart-to-heart talk with the American people about fdr_~Fdrwho’s really getting subsidies. You know, an updated version of FDR’s fireside chat.”

POTUS: “Like explaining subsidies to defense contractors, followed closely by farmers. You mean like that?”

Jordan: “I’m not suggesting we stop such subsidies. What people need to understand is why such subsidies exist and how much the subsidies really cost.”

POTUS: “Defense contractors and farmers are needed for national security.”

Jordan: “And so is energy production needed for national security. To make the idea of subsidies more palatable, why not create an institute of technology…but one that’s focused on energy production.”

POTUS: “An institute of technology. (Laughing) Just don’t name the institute of technology for Texas or Sam Houston. People in Washington would have a field day with those acronyms.”

Jordan: “Those names would be funny. I’m certain your staff guys can come up with a good name.”

POTUS: “Let me think about your idea. I’ve got yet another meeting I’m off to. By the way, Jordan, are you back in town soon? We need to sit down away from the maddening crowd and have coffee.”

Jordan: “Should be back in a couple of weeks.”

POTUS: “Good. Let me know when and we can meet. Thanks for your time.”

Jordan: “You’re welcome Mr. President.”

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