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Location: Pantego, Texas, United States

Thursday, March 19, 2009

Obama's carbon cap and trade system is a pending disaster for the United States. Here is an article that estimates that the carbon cap and trade system will increase costs for the average American family by 42000 to $5000 per year. I think it could be more tan that. Estimates are that the scheme will add about $1.50/gal to the price of gasoline and diesel fuel. If the average family uses 1000 gallons of gas per year, that is a total of $1500. Jim Rogers, CEO of Duke Energy (and an Obama supporter) estimates that home owner's electric bills will increase by 40%. It seems reasonable to assume heating bills will also go up 40%. If a family currently spends an average of $400 per month on electricity and heating, then that represents an increase of about $2000 per year. This gives a total of $3500 per year. But, Kroger will also have higher electricity and heating and transportation costs. So, it is reasonable to assume that the price of groceries will also go up. Another thing to consider is that these cost increases will also be reflected in the capital cost of "green" energy, so it is likely that the cost of carbon credits will have to be increased even more to make "green" energy competitive with fossil fuel. So, prices will necessarily spiral upward. The Obama team recognizes this, and so they are working to limit drilling for oil in the US to drive up the price of fossil fuel. We now know from recent experience that in the age of Obama Congress passes laws that they haven't read, so they may not concern themselves with the implications of the carbon cap and trade system.

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