Valve ReportEnergy Development Could Energize 2013 EconomyBy Morris Beschloss FEBRUARY 2013

With the November 6 Presidential and Congressional elections resulting in a political Washington, D.C. split power base, it appears that the U.S. early 2013 economy will remain dormant while the energy sector could promise an upward swing going into early 2013. However, the pipe-valve-fitting sector could set new records, depending on the machinations of the Environmental Protection Agency’s stumbling block.

Since the Obama administration will set the tone for governmental initiatives to maintain a nominal growth of two percent, much of the potential of America’s $15.5 trillion gross domestic product growth will depend on the reaction of independent businesses that control two-thirds of the employment potential, estimated at 140 million.

Currently, these hundreds of thousands of independents, also categorized as small businesses, though ranging between below $1 million and over the low billions, are leery of pending Federal regulations, especially the “patient affordable care” (Obamacare) taxes and strangulating Dodd-Frank financial regulations, plus 144 new EPA regulations.

All of these are due to kick in early in 2013. In the meantime, the vast majority of these mainstay businesses of America’s free enterprise system have limited their capital expenditures, generally to internal upgrading though technological improvement, repair and maintenance, just-in-time inventory, and a full-time employment reduction by replacement with part-time and temporary workers. This trend toward keeping full-time employment at a low-ebb will result in little improvement, if any, in America’s current unemployment rate of eight percent.

With the global economic picture continuing to be subdued, especially with the greater part of the European community in recession, even America’s corporate giants such as GE, Caterpillar, Ford Motor, Boeing, and a myriad of component manufacturers, plus banking, U.S. technology, entertainment, tourism, and food service will find their international activity subdued.

This will almost certainly inhibit America’s fast-growing export sector, which surprisingly reached an excess of $2 trillion annualized, with an all-time monthly peak in September. Despite the impact of the 2008-10 “great financial” recession the practically doubling of American export activity had been one of the two major economic segments that allowed the 2012 U.S. Gross Domestic Product to keep its head above water (1 ½ - 2%) as the year of 2012 was in its final stages.

However, the greatest outburst of America’s potential growth could come from the pipe-valve-fitting sector that enjoyed a major breakthrough in oil and natural gas production in the past year through the cost-effective and technologically advanced hydraulic fracturing (fracking) breakthrough. Although potentially available for decades, the international Brent Crude oil price of over $100 per barrel has made it viable on a national scale with a number of functioning areas such as the Dakota’s Bakken Belt, the Pennsylvania/New York Marcellus Shale, and Texas’ Eagle

Ford developments are just the beginning. Its future contributions to America’s energy independence revenue generation and budget balance could be incredible— barring the possible interference of a hostile Environmental Protection Agency, out to bankrupt coal and lessen dependence on all fossil fuels, including oil and even natural gas.

The latter is now in the process of awaiting the construction of shipping docks that could transform the U.S. into the world’s largest distribution of natural gas, worldwide. With natural gas prices in the United Kingdom, central Europe, and Japan far higher than the American price of under $5 per 1 million BTU’s, due to the huge supplies in storage, both natural gas and crude oil surpluses will add to refined energy derivatives, which already supply 60% of Mexico’s gasoline and other refined oil products.

Construction will hold to 2012 levels in commercial and industrial construction, but should show improvement in a revived residential sector by a continuing major switch to leasing and renting. This is becoming a nationwide phenomenon, also benefitting from repair and maintenance, as well as increased expansion onsite. This will provide additional employment for construction workers. This largest unemployment sector could find itself in a shortage position if the hoped-for infrastructural programs get underway.

Based on President Barack Obama’s inauguration remarks, broad climatological initiatives, including a major expansion of renewable energy developments, will herald his bias in favor of wind power, solar panels, geothermal and biofuels, while containing the potential of unlimited oil, natural gas, and coal.

Since the Trans-Canada XL oil pipeline is still in a holding pattern, despite a final approval by Nebraska’s governor of the controversial transit, traversing a previously opposed segment in that state, the final OK or turndown by President Obama will be an early indicator of the White House’s approach toward major expansion of oil and natural gas development.

Also critical will be the upcoming appointments of new Cabinet secretaries heading the Environmental Protection Agency, Departments of Energy, the Interior and Commerce. Early indicators point to candidates ready to implement the climatological bias of the Administration. The outcome of these decisions will likely bring to a head the early direction of the energy showdown that could impact America’s economic viability for the immediate years to come.

If the President confirms his preference for renewables, while restraining the ultimate potential of fossil fuels, the optimistic energy scenario within the nation’s economic grasp would be severely downgraded. This would include tens of thousands of employment opportunities, billions in additional revenues, and a beneficial impact on the out-of-control debt and the annual trillion dollar deficits.

(cont. on page 2)

With the November 6 Presidential and Congressional elections resulting in a political Washington, D.C. split power base, it appears that the U.S. early 2013 economy will remain dormant while the energy sector could promise an upward swing going into early 2013. However, the pipe-valve-fitting sector could set new records, depending on the machinations of the Environmental Protection Agency’s stumbling block.

Since the Obama administration will set the tone for governmental initiatives to maintain a nominal growth of two percent, much of the potential of America’s $15.5 trillion gross domestic product growth will depend on the reaction of independent businesses that control two-thirds of the employment potential, estimated at 140 million.

Currently, these hundreds of thousands of independents, also categorized as small businesses, though ranging between below $1 million and over the low billions, are leery of pending Federal regulations, especially the “patient affordable care” (Obamacare) taxes and strangulating Dodd-Frank financial regulations, plus 144 new EPA regulations.

All of these are due to kick in early in 2013. In the meantime, the vast majority of these mainstay businesses of America’s free enterprise system have limited their capital expenditures, generally to internal upgrading though technological improvement, repair and maintenance, just-in-time inventory, and a full-time employment reduction by replacement with part-time and temporary workers. This trend toward keeping full-time employment at a low-ebb will result in little improvement, if any, in America’s current unemployment rate of eight percent.

With the global economic picture continuing to be subdued, especially with the greater part of the European community in recession, even America’s corporate giants such as GE, Caterpillar, Ford Motor, Boeing, and a myriad of component manufacturers, plus banking, U.S. technology, entertainment, tourism, and food service will find their international activity subdued.

This will almost certainly inhibit America’s fast-growing export sector, which surprisingly reached an excess of $2 trillion annualized, with an all-time monthly peak in September. Despite the impact of the 2008-10 “great financial” recession the practically doubling of American export activity had been one of the two major economic segments that allowed the 2012 U.S. Gross Domestic Product to keep its head above water (1 ½ - 2%) as the year of 2012 was in its final stages.

However, the greatest outburst of America’s potential growth could come from the pipe-valve-fitting sector that enjoyed a major breakthrough in oil and natural gas production in the past year through the cost-effective and technologically advanced hydraulic fracturing (fracking) breakthrough. Although potentially available for decades, the international Brent Crude oil price of over $100 per barrel has made it viable on a national scale with a number of functioning areas such as the Dakota’s Bakken Belt, the Pennsylvania/New York Marcellus Shale, and Texas’ Eagle

Ford developments are just the beginning. Its future contributions to America’s energy independence revenue generation and budget balance could be incredible— barring the possible interference of a hostile Environmental Protection Agency, out to bankrupt coal and lessen dependence on all fossil fuels, including oil and even natural gas.

The latter is now in the process of awaiting the construction of shipping docks that could transform the U.S. into the world’s largest distribution of natural gas, worldwide. With natural gas prices in the United Kingdom, central Europe, and Japan far higher than the American price of under $5 per 1 million BTU’s, due to the huge supplies in storage, both natural gas and crude oil surpluses will add to refined energy derivatives, which already supply 60% of Mexico’s gasoline and other refined oil products.

Construction will hold to 2012 levels in commercial and industrial construction, but should show improvement in a revived residential sector by a continuing major switch to leasing and renting. This is becoming a nationwide phenomenon, also benefitting from repair and maintenance, as well as increased expansion onsite. This will provide additional employment for construction workers. This largest unemployment sector could find itself in a shortage position if the hoped-for infrastructural programs get underway.

Based on President Barack Obama’s inauguration remarks, broad climatological initiatives, including a major expansion of renewable energy developments, will herald his bias in favor of wind power, solar panels, geothermal and biofuels, while containing the potential of unlimited oil, natural gas, and coal.

Since the Trans-Canada XL oil pipeline is still in a holding pattern, despite a final approval by Nebraska’s governor of the controversial transit, traversing a previously opposed segment in that state, the final OK or turndown by President Obama will be an early indicator of the White House’s approach toward major expansion of oil and natural gas development.

Also critical will be the upcoming appointments of new Cabinet secretaries heading the Environmental Protection Agency, Departments of Energy, the Interior and Commerce. Early indicators point to candidates ready to implement the climatological bias of the Administration. The outcome of these decisions will likely bring to a head the early direction of the energy showdown that could impact America’s economic viability for the immediate years to come.

If the President confirms his preference for renewables, while restraining the ultimate potential of fossil fuels, the optimistic energy scenario within the nation’s economic grasp would be severely downgraded. This would include tens of thousands of employment opportunities, billions in additional revenues, and a beneficial impact on the out-of-control debt and the annual trillion dollar deficits.

(cont. from page 1)