Morris Beschloss 2013-04-04 06:45:43
Gaining strength Despite the amplification of obstacles strewn in the tortuous path of America’s hundreds of thousands of independent businesses by federal and state fiats, most of such “small” companies continue to inch forward. Although the governing leadership in California, Illinois and New York, all staunch advocates of “progressivism,” keep piling additional taxes on stressed individuals and corporate entities, these champions of unique American entrepreneurialism are utilizing creative measures to circumvent increased governmental attempts to strangulate their productivity, revenue generation and profitability. Most remarkable in these early months of 2013 is that such privately owned and managed businesses constantly are developing measures to neutralize the magnified burdens of health-care costs, unnecessary financial paperwork and strangulating regulations endangering the forward progress if not survival of a national sector that employs 70% of America’s potential jobs pool. Recent dialogue with scores of manufacturers, distributors, mechanical contractors and retailers detects a note of optimism as the year unfolds. But almost universally there appears to be a note of defiance against government interference and no indication of appreciation for initiatives stemming from Washington or the capitals of some of the nation’s largest states. It’s no surprise the only praise for positive government action comes from the Southeast, Texas, Virginia, Indiana, Wisconsin, Ohio and even New Jersey, where indiscriminate taxations have been conspicuous by their absence. The techniques generally employed by embattled independent businesses include a constant search for the latest technology to increase productivity on the shop floor and back offices. The maintenance of just-in-time inventories, whether finished products or components, and the utilization of temporary or part-time employees has become increasingly manifest. Gratuitous comments I have gleaned from my ongoing conversations since the beginning of the year indicate a staunch belief that the ability to produce more with less full-time employees is mandatory for the maintenance of an ongoing business enterprise. There also seems to be a general agreement that modestly priced available credit is easier to come by.Additionally, we’re hearing a more frequent concern for the unavailability of skilled and semiskilled employees such as engineers, and even tradespeople such as mechanics, machine operators and construction specialists. Employee-wanted ads generally seem to be ineffective in seeking out experienced personnel to fill production gaps. In my main area of expertise, the energy-dominant pipe, valves and fittings sector, the potential appears unlimited with only the dark clouds of the current federal government’s “climatological” bias barring the way to unlimited growth. This is ready now for unprecedented expansion in power generation, refining activities and pipelines badly needed to overcome the negligence of the past two decades. This implementation of the past two decades’ oversight would be a nationwide bonanza if not hamstrung by an obstreperous Washington officialdom. Energy derivatives instigate export achievement It may be puzzling to most that energy derivatives have become an increasingly significant factor in last year’s $2 trillion-plus all-time-record U.S. export results. It is even more perplexing when the cost of domestic gasoline has risen rather dramatically at a seasonal time Period that usually marks an annual price bottom. The answer lies in the fact America’s 144 refineries, the most productive and costeffective in the world, have increased their onsite capacity in the past decade. Utilizing the latest technology and discarding new startups as impractical in today’s energy turbulence, both major oil consortiums, such as Exxon- Mobil and Shell Oil, and independents such as Valero, have resorted to internal development. In doing so, America’s massive refining capacity has evolved from scarcity a short decade ago to surplus capability. The Gulf Coast refineries in southern Louisiana and in the greater Houston area have found ready markets for their derivatives in Mexico and other Latin American markets. In fact, U.S. refineries have become a steadily increasing factor for its southern neighbors’ gasoline demand, which now stands at 60%. Although there has been remarkably little dialogue because of its highly-charged political rhetoric, the controversial TransCanada Keystone XL oil pipeline could generate close to 900,000 daily barrels (and growing) to these refinery complexes that could readily absorb such input without further expansion at this time. This would result in immediate export increases, as well as providing oil derivative products to satisfy the needs for America’s intense usage throughout the Southwest.The rest of the country awaits infrastructural pipeline development, which has been badly lagging despite a 2009 near trillion-dollar stimulus ostensibly dedicated to this project. What has been consistently argued, but fallen on the deaf ears of climatological extremists, is the Canadian “oil sands” input would not be restricted by the inventory capacity limitation of the giant oil storage facility in Cushing, Okla., which this additional crude oil input would circumvent. In fact, it would relieve this roadblock to allow storage emanating from increased production from current and future fracking Sites. The “carbon footprint” excuse used by the agency heads now dominating the current administration is misplaced since America’s “climatic purity” doesn’t even come into play. Previous pessimistic interpretations of the current positive sounds coming from the newly-led John Kerry State Department will prove misleading. Since the current administration is totally in charge and not disposed to come up with a positive answer at this time, it is likely the Keystone XL pipeline will not be implemented in the forseeable future. Renewable energy gains Obama re-election reprieve As an avid fossil-fuel energy enthusiast, to me the recent election boiled down to a showdown between a dynamic upshot of oil, natural gas, life-support for coal and a rational minority status for solar, wind, geothermal and biofuels. The crony capitalism that has kept them alive should have put this confrontation To rest. Obama’s election victory was sweetly savored by the latter and poses new roadblocks for fossil-fuel advocates. Several telltale signs already have emerged to prove my point. Nobody expected extension of wind energy tax credits in the fiscal cliff year-end deal; especially after T. Boone Pickens, America’s No. 1 energy expert, wrote it off as a lost cause early last year.Another thumbs up for renewables’ new life came from President Obama’s re-inauguration acceptance speech, which heavily dwelt on new “cap and trade” legislation after its defeat during his first term. More ominous for the current fossil-fuel dynamics are the upcoming candidates for departments of Energy, Interior and the Environmental Protection Agency, all of whom seem aggressively partisan to extreme enforcement of clean air and water laws. The benefits of the former EPA commissioner’s abrupt resignation seem to have faded into oblivion. Since President Obama will likely put the “bully pulpit” heavily behind climatological improvement excesses, he surely will cite renewed global warming hysteria inflamed by Superstorm Sandy in the Northeast and the greater frequency of other climatic disturbances. Since the still Republican-controlled House stands as a bulwark against the type of rash legislation likely being prepared by the White House, pressure will be put on the handful of Republican recalcitrants needed to approve an even stronger bill than the one passed by the then House, but not the Senate in 2009. With the “wind” (pardon the pun) behind the Democratic Party’s back, and 2014 midterms beckoning, this turn of events should not be considered far-fetched. With the “renewable lobby” gaining new life and financial support, the aforementioned revitalization of renewables amounts to a huge setback for the benefits of an American fossil-fuel bonanza that seemed to Be emanating from higher oil costs and the fracking revolution. It also sounds the congressional death knell for the Electricity Freedom Act, which would have repealed state mandates requiring electric utilities to use renewable sources. However, several states, including Michigan, Maine, Ohio and Wisconsin, are questioning the current state guidelines and/ or percentages approved by 38 states and the District of Columbia. Get ready for the assault on “fossils” to begin this spring. Veteran industry analyst and writer Morris R. Beschloss is the industrial PVF columnist for Supply House Times and the American Supply Association’s industry analyst. Beschloss, whose career in the industrial pipe, valve and fittings sector spans more than five decades, was the recipient of the 2012 ASA Fred V. Keenan Lifetime Achievement Award.
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