Star-Telegram.com: Jack Z. Smith

High gas and oil prices have a benefit — encouraging innovation, exploration and conservation

Thu, 14 Aug 2008 22:50 CDT

JACK Z. SMITH

The same factors that catapulted oil prices above $147 a barrel have since sent them crashing.

Prices have tumbled more than $30 from the record high of $147.27 on July 11. On Thursday, oil closed at $115.01 in futures trading on the New York Mercantile Exchange.

Prices had skyrocketed for months primarily because of three factors — supply and demand, the U.S. dollar and speculation in the futures market.

Oil demand was heavy, with supplies fairly tight, and demand was expected to keep rising as a result of rapidly growing economies in China, India and other developing nations.

A second factor was the "weak" U.S. dollar, which fell in value against other currencies, notably the euro. That made dollar-denominated oil purchases cheaper for overseas buyers. Investors flocked to oil and other commodities as a hedge against inflation.

With oil prices in a spectacular upward march, speculators eager to make a killing plunged into the oil futures market. Energy analyst Daniel Yergin proclaimed oil "the new gold."

In recent weeks, those three factors have had a reverse effect on prices. Energy demand is weakening, the dollar has strengthened against the euro and speculators are fleeing the futures market.

Only several weeks ago, some analysts were forecasting $200-a-barrel oil. Now, some see prices falling to $80 or even lower. The truth is, no one knows where they’re headed.

It was nice to pay "only" $3.59 for gas six days ago — 39 cents less than the $3.98 I paid several weeks earlier. But even with that 39-cent drop, I still paid 3 1/2 times the average Texas price for regular near the end of 2001 — $1.01.

We’re not out of the woods on gas prices yet, and might never be.

We should keep running scared. We must think about that much-debated "peak oil" moment when global crude production reaches its zenith and begins an inevitable decline. Some say that day is already here, or soon will be.

I’m guessing it could be 20 years away. But even if that’s correct, we would be fools not to be preparing for it now.

One blessing of $4 gas is that it forced us to question our incredibly wasteful energy practices. Americans drove 12.2 billion fewer miles in June, a 4.7-percent decline from a year earlier. U.S. automakers, reeling from horrible earnings reports, are shifting production to small, fuel-efficient cars and accelerating development of alternatives to the traditional internal combustion engine — most notably, plug-in hybrid and electric cars.

General Motors is airing commercials about its new electric Volt car during the Summer Olympics and plans to begin selling it in 2010. GM has said that the Volt will cost $30,000 to $40,000 and that it expects to sell 100,000 annually starting in 2012, The Associated Press reported Wednesday .

Clean, renewable wind and solar power are making advances. Federal and state laws passed in recent years are, through mandates and incentives, leading us toward more energy-efficient cars, buildings, homes, appliances and light bulbs.

We should increase U.S. oil and gas production to heighten our energy security. But the biggest gains will be in energy conservation and development of alternative technologies such as electric cars and more-advanced nuclear power plants.

Holding the Olympics in pollution-choked Beijing has brought home another reality — even if we can afford fossil fuels, environmental and health concerns dictate curbing consumption.

A big drop in gas prices would temporarily help our pocketbooks. But if it caused us to abandon our fledgling energy revolution, it would be much more costly than $4 gas in the long term.

SMITH: The next president will be a slave to Bush administration fiscal woes

Thu, 07 Aug 2008 23:22 CDT

JACK Z. SMITH

The next president, whether it be Republican John McCain or Democrat Barack Obama, will be in handcuffs as he parades into the White House after his Jan. 20 inauguration.

He won’t be physically manacled. But he will be fiscally handcuffed from Day One as a result of the ideologically driven foolishness and sloppy excesses of President George W. Bush’s administration.

The White House is projecting a record federal budget deficit of $482 billion for the 2009 fiscal year that begins Oct. 1. Former Bush administration Treasury Secretary Paul O’Neill predicts a "mind-boggling number . . . upward of $500 billion."

For the current fiscal year, the White House forecasts a $389 billion deficit.

Longtime budget hawk and former presidential candidate Ross Perot Sr. of Dallas notes that the national debt of nearly $9.6 trillion "is increasing by over one billion dollars every day."

Perot’s observation is on a video on his new Web site, www.perotcharts.com. On it, he also offers this sobering observation: "We are leaving our children and grandchildren with a burden they cannot possibly manage."

That is Bush’s sad legacy.

As a father and grandfather, it rankles me.

Oh, but Bush — the nation’s first MBA president, mind you — had such grand plans! His tax cuts for the rich would foster economic growth and job creation, resulting in more tax revenues, and everything would be rosy. The string of budget surpluses rung up by the Clinton administration would continue unabated.

But look where we are in the twilight of Bush’s tenure. America has experienced seven straight months of job losses. The housing crisis is the worst since the Great Depression. Energy and food prices have soared. An almost-anything-goes regulatory approach has produced an epidemic of bad subprime loans, spiraling credit-card debt and a tsunami of property foreclosures and bankruptcy filings.

The wages of many Americans aren’t keeping up with inflation. Millions of middle-class households from Florida to California have seen their net worth (assets minus liabilities) wither as a result of falling home values, higher personal debt and a shrinking 401(k) hammered by a declining stock market.

Republicans’ once-logical claim to being the party of small government has been eroded by Bush’s presidency. While the Bush tax cuts continue to restrict government revenues, spending has soared for entitlement programs such as Social Security and Medicare (including a costly new prescription drug program), defense, education and other departments.

Interest payments on the national debt totaled an enormous $377.3 billion during the first nine months of the current fiscal year — the fourth-highest spending category in the budget.

Meanwhile, Bush and Congress have failed to address the scary long-term funding shortfalls facing Social Security and Medicare.

That’s the biggest reason for Perot lamenting about "leaving our children and grandchildren with a burden they cannot possibly manage."

Bush’s fiscal irresponsibility will handcuff the next president by limiting his options.

The new guy will have to spend much of his time just mopping up the mess.

Disappointingly, the policy positions espoused by McCain and Obama don’t provide the degree of fiscal sobriety that Washington must embrace. Neither candidate can deliver on all his promises, while simultaneously shrinking the deficits and meaningfully addressing Social Security and Medicare.

If you want the unvarnished truth about our fiscal foundering in Washington, you’d be better advised to turn to the Web sites of such budget watchdogs as the Concord Coalition or Perot.

McCain and Obama apparently don’t believe that they can get elected by fully prescribing the bitter medicinal cocktail — higher taxes and reduced spending — needed to cure the ills that Bush has foisted upon us.

SMITH: Pickens' alternative energy plan worth pursuing

Tue, 29 Jul 2008 09:21 CDT

JACK Z. SMITH

An inept, polarized Congress appears incapable of passing significant energy legislation this year despite the powerful political incentive provided by $4 gasoline.

Of course, we’re talking about the same body that took more than a decade to come up with a seriously overdue upgrade of vehicle fuel economy standards, finally approved in December.

Our underperforming "leaders" in Washington are being shown up by an 80-year-old Texan who is far more fast-acting and quick-thinking.

That’s T. Boone Pickens of Dallas, the billionaire hedge fund manager and one-time Amarillo independent oilman who made the covers of national magazines in the 1980s as a "corporate raider" (a term he hated) by pressing major oil companies to be more accountable to shareholders.

In a brief video viewable at www.pickensplan.com, Pickens outlines his ambitious new energy plan. While it faces tough hurdles, it’s more coherent and potentially significant than anything Congress has adopted this year on the energy front.

The plan

Here, in a nutshell, is Pickens’ idea to help free the United States from its increasingly burdensome reliance on imported oil, an expense he puts at a staggering $700 billion annually.

America should harness the breezes in its central "wind corridor" running from North Dakota to Texas, so that wind power generates at least 20 percent of the nation’s electricity, a level the U.S. Department of Energy claims could be achieved by 2030. Wind power currently generates only 1.5 percent of electricity, but is growing by leaps and bounds.

Achieving the 20 percent goal for wind power would free up much of America’s natural gas supplies (now used in electricity generation) to power vehicles ranging from cars to buses. (A parochial note: Virtually the entire bus fleet of the Fort Worth Transportation Authority, known as "The T", is fueled by compressed natural gas.)

Freeing natural gas to fuel vehicles would slash gasoline consumption and therefore reduce our need for oil, from which gasoline is made.

The result could be a 38 percent reduction in oil imports, shrinking our annual tab for foreign crude by roughly $300 billion, says Pickens, who presented his plan Tuesday to a congressional committee. He wants Washington to provide financial incentives to help make it happen.

Walking the walk

Pickens is putting his money where his mouth is. He’s spending $58 million to publicize his plan. He’s bought a natural gas-powered Honda Civic GX. He’s the largest shareholder in Clean Energy Fuels, which supplies natural-gas powered fleets such as buses and taxis.

Pickens’ Mesa Power is the lead investor in a massive $10 billion project to build the "world’s largest wind farm" — 2,700 giant turbines in thinly populated Gray, Roberts, Hemphill, Wheeler and Carson counties in the Texas Panhandle.

Barriers to success

Pickens’ energy plan would face enormous obstacles. Skeptics doubt that wind power can ever account for 20 percent of electricity generation, noting that in places such as West Texas, the wind often blows little on torrid summer days when power is most needed.

Others stress that conversion of natural gas to widespread vehicle use would require an enormous and costly network of natural gas fueling stations.

Those are realistic concerns. But wind power is growing dramatically, getting relatively cheaper compared with fossil fuels and could benefit from future technology.

There’s also little doubt that considerably more vehicles could be fueled by natural gas than the 142,000 nationally that Pickens says now use it.

He describes his plan as only a "bridge" to help America meet its energy needs over the next 20-plus years while transitioning to new technologies such as totally electric and hydrogen fuel cell vehicles.

JZSmith: Domestic automakers' survival vital to national interest

Sun, 13 Jul 2008 08:17 CDT

JACK Z. SMITH

U.S.-based automakers have no one but themselves to blame for their dilemma.

Had they long ago embraced rather than fought higher fuel economy standards, they might now have a larger and better-established base for manufacturing and marketing the small cars that are selling like hotcakes.

Instead, GM, Ford and Chrysler — the so-called Big Three — have been offering prospective car buyers ultra-deep discounts sometimes exceeding $9,000, zero-interest loans for up to six years and long-term help on gasoline bills in an attempt to shed an alarming oversupply of brawny SUVs and pickups. Simultaneously, the automakers are scrambling to meet surging demand for compact cars such as the Ford Focus and Chevrolet Cobalt.

The Big Three moved like molasses in response to a changing energy world. Oil and gasoline prices have been rising for several years. U.S. sales of full-size SUVs peaked in 2004 at 1 million and had already declined 25 percent by 2007, before $100-a-barrel oil.

In June, Chrysler’s U.S. sales were down 35.9 percent from a year earlier, Ford’s fell 27.9 percent and GM’s tumbled 18.5 percent. There’s even talk that GM, which turns 100 this year, could file for bankruptcy. On July 2, its stock fell below $10 per share, the lowest since 1954.

But you shouldn’t assume that the Big Three face an inevitable demise. They are still big players in the industry, with GM having finished in a virtual dead heat with Toyota for first place in worldwide sales last year. GM remains No. 1 in U.S. sales.

Long-ascendant Toyota is itself struggling with disappointing U.S. sales (down 21.4 percent in June). Sales of its popular gas-electric hybrid Prius have been limited by a battery shortage. Toyota will suspend production of both the Tundra pickup in San Antonio and the Toyota Sequoia SUV in Princeton, Ind., for three months beginning Aug. 8, because of weak demand.

Much has been written about Toyota’s advantage over U.S-based automakers in labor costs. But that gap is closing with the Big Three slashing payrolls, inking a labor contract allowing them to replace many higher-paid retiring employees with cheaper workers and dramatically lowering their liabilities for retiree health benefits, as Business Week reported in April.

Toyota’s labor costs have risen as its U.S. production workers age and reach top pay. By 2011, GM could have a labor-cost advantage of $108 per car over Toyota in the U.S., compared with Toyota’s current $1,394 edge, according to the Center for Automotive Research.

With Congress’ adoption of new fuel economy standards in December, U.S. automakers will have to make more fuel-efficient cars. Fortunately, the Big Three seem to have suddenly snapped to that reality, although they’re still complaining that the new standards could prove onerous.

GM is considering selling the tiny Chevrolet Beat mini-car (getting up to 40 mpg) in the U.S., rather than confining it to foreign markets. The company plans to sell the gas-electric, plug-in hybrid Volt by late 2010. Ford plans to build its new Fiesta subcompact in Mexico for sale in the U.S., where it hasn’t been marketed since 1980.

The competition could be brutal. Nissan plans to sell an electric car in the U.S. by 2010. Toyota announced Thursday that it will, in 2010, start producing the hybrid Prius in the U.S. for the first time, at a new plant in Mississippi. Fledgling electric-car maker Tesla Motors is to open a California factory in 2010.

I abandoned my long-term loyalty to Toyota in April by buying a new Chevrolet Cobalt because I liked the car and its modest price. It also reflected my recognition that the Big Three are building much-better small cars than they once did.

All Americans, regardless of whether they own a Honda or Hummer, should root for a resurgence of U.S.-based automakers. It’s critically important for us to maintain industrial know-how and a strong manufacturing base.

That brings to mind the vital role that American automakers played during World War II, switching production from cars to everything from B-24 bombers to cargo ships.

It would be inspiring to see U.S.-based automakers take a lead role in developing new automotive engine technologies: gas-electric hybrids; plug-in, rechargeable hybrids; totally electric cars; and hydrogen fuel cell vehicles. That’s what we’ll likely need in place of all those gas hogs rusting on car dealers’ lots.

JZSmith: Oil prices are probably going up no matter what we do

Sat, 05 Jul 2008 08:28 CDT

JACK Z. SMITH

On Wednesday morning, while walking near my home, I yelled, "Hi" to a neighbor. "Got a new car?" I said, eyeing a sleek little black sedan in his driveway.

"Yeah," he said effusively. His new fuel-sipping four-cylinder was a night-and-day contrast with his prior vehicle, a hulking pickup costing him $100 a fill-up.

I’m experiencing this with increasing frequency — people telling me how they’re countering the excruciating wallop to the wallet from paying nearly four bucks a gallon for gasoline.

While many are buying smaller vehicles, others are planning shorter vacations (maybe to the Texas Hill Country instead of Colorado) finding a job closer to home (my younger daughter, Amber Weaver, a schoolteacher, is shortening her round-trip commute from 50 miles to six by changing school districts); giving public transit a try (the bus or Trinity Railway Express); driving slower (at least close to the speed limit) or better organizing errands (hitting the post office, cleaners, car wash and supermarket in a single trip).

Most Americans are curbing fuel consumption. Sales of big SUVs and pickups have plunged despite deep dealer discounts. Highway miles traveled fell 4.3 percent nationally in March, compared to a year earlier. You therefore might assume that oil prices and, correspondingly, gas prices, would be falling (crude oil accounts for about 75 percent of today’s gas cost).

No such luck. Oil has zoomed to surreal levels, briefly hitting a record high of $145.85 a barrel in trading Thursday morning. That’s more than double a year ago, despite increasing fuel-conservation measures and a sputtering U.S. economy reeling from six straight months of job losses. The average U.S. gas price nationally for regular is a record $4.09.8.

But here’s what is really scary: Even though oil prices have been rising sharply for several years and that has encouraged additional drilling, the global supply of oil has increased only modestly. Output is actually falling in some substantial oil-producing nations as a result of declining fields, civil war or other issues.

The International Energy Agency, in a troubling new report, predicts that the supply-demand picture will worsen beginning in 2011, with spare production capacity falling "to minimal levels" by 2013. Global demand will grow from 86.9 million barrels per day this year to 94.1 million barrels by 2013, a sizable jump of 7.2 million barrels, the IEA forecasts.

That could put additional upward pressure on prices. Some analysts and government officials in foreign nations are warning that oil could hit $200 to $250 a barrel, with gas prices shooting to $6 or $7 a gallon. There’s an escalating fear that the world is reaching "peak oil," the level at which production will begin an inevitable decline as aging fields gradually peter out.

The supply-demand factor doubtlessly contributes to today’s high prices. But the weak U.S. dollar, heavy speculation in oil futures markets and the persistent threat of curtailed supplies from terrorist attacks or political disruptions are also cited as major factors.

With astonishingly high energy prices persisting, America should be alarmed — but not panicked.

We must dramatically accelerate a 21st-century energy policy focused on developing alternative vehicle engines (plug-in-hybrid, totally electric, hydrogen fuel-cell), creating better biofuels, greatly increasing energy conservation, expanding domestic oil and natural gas production and pushing hard for more cost-efficient wind, solar and nuclear power. We must ramp up now, because it could take 10 to 30 years to realize many of the benefits.

Meanwhile, do like my neighbor who ditched his gas-hog pickup for the little sedan — take steps on your own to ensure you aren’t wiped out by today’s unprecedented energy prices.

You want to be a survivor, don’t you?

Jack Z. Smith: Time for U.S. to investigate and regulate oil markets

Fri, 20 Jun 2008 01:31 CDT

Nearly eight months ago, when oil was selling for "only" $90 a barrel, I wrote that "something funny is going on" in the oil trading markets.

Here’s the specific suspicion I expressed in the Oct. 26 column: "It appears increasingly obvious that oil prices are being pushed into the stratosphere by speculators in a lightly regulated global trading market that has grown by leaps and bounds."

The day before, oil had closed at a then-record $90.46 a barrel in futures trading on the New York Mercantile Exchange. Since then, to my astonishment, prices have jumped more than 50 percent, nearly touching $140 at one point before recently receding moderately.

With the average U.S. gas price easily exceeding $4 a gallon, millions of Americans have reacted by buying smaller, more fuel-efficient cars and cutting discretionary driving to a minimum, but sky-high oil prices persist.

In October, I called for "stronger oversight and regulation of energy markets" and urged strengthening the Commodity Futures Trading Commission, which oversees trading of contracts in oil and other commodities Since then, the CFTC has taken some steps to tighten regulation at least moderately. But it hasn’t gone far enough.

An excellent article by Kevin G. Hall of McClatchy Newspapers in the business section of Thursday’s Star-Telegram ("How market speculators may be driving up oil prices") helped explain the problem. Hall queried Michael Greenberger, a University of Maryland law professor who formerly directed trading and markets for the CFTC.

Greenberger said speculators can drive up oil prices "because they’re allowed to trade in the U.S. in futures markets not overseen by U.S. regulators. Therefore, they are free to dominate these markets by taking huge positions within them. And there is an additional fear that, because of a lack of oversight, they may be engaging in manipulative practices— i.e., wash sales and false reporting that would be barred in a regulated environment."

Greenberger described a wash sale as "a prearranged trade between two or more parties in which there is no economic risk and the sole purpose of which is to give the appearance that the price of a commodity is going higher or lower in a way that does not reflect supply and demand."

The principal market outside of direct U.S. supervision, he noted, is the Intercontinental Exchange, dubbed ICE. What’s needed, he said, is "a thorough investigation to determine precisely what is happening on the Intercontinental Exchange, including who key traders are and the positions they are taking in these markets."

The CFTC has taken some limited steps toward tighter regulation of ICE, an Atlanta-based corporation that has been regulated by the United Kingdom because it bought a British petroleum exchange in 2001. But Greenberger insists that the CFTC should exercise its powers to "bring ICE under full U.S. regulatory oversight."

Given today’s situation, that sounds like a fabulous idea.

I have no trouble with legal operation of futures trading markets and businesses using them to hedge against potential swings in commodities prices. But today’s oil prices seem far out of kilter with the traditional market forces of supply and demand, which would appear to dictate prices of no more than $100 a barrel and perhaps considerably less.

Did you realize that we’re now paying about four times as much for gasoline as we did in late December of 2001, when the average price for regular gas in Texas was (can you believe it) $1.01 a gallon?

I guess it’s nice that a few oil speculators are getting filthy rich. But it’s a shame that most of America’s 304 million people are suffering the negative consequences through soaring prices for gas, food and other essentials.

As I wrote in October, "something funny is going on" in the oil markets. So why haven’t President Bush and Congress done something about it?

Overpopulation drives energy and food costs.

Fri, 20 Jun 2008 01:31 CDT

By Jack Z. Smith

Amid the furor over sky-high oil prices and $4 gasoline, the news media have given minimal attention to an increasingly significant factor contributing to rising energy prices: the relentless uptick in global population.

We're adding 77 million energy-consuming people to the planet every year. That increase is more than triple the population of fast-growing Texas, the second-most populous state in the world's third most-populous nation.

The bulk of the global population jump is in developing countries where energy consumption rates also are rising the fastest. That phenomenon not only is fostering greater worldwide demand for fossil fuels (oil, natural gas and coal), but also squeezing precious fresh-water supplies and steadily decreasing land available for crops at a time when food prices are soaring.

Given this backdrop, it was pleasing to see an article in Wednesday's Star-Telegram outlining Egypt's intensified efforts to rein in its rapid population growth at a time when the government is dealing with lengthy bread lines and riots over flour rationing.

In only about 25 years, Egypt's population has roughly doubled, to 81 million, making it the most populous Arab nation and the 16th most populous of the world's 200-plus nations. Egyptian President Hosni Mubarak has launched a new family planning campaign based on concerns that the nation's population would double by 2050 based on current growth rates.

The slogan for the $80 million campaign is simple: "Two children per family -- a chance for a better life."

Indeed, that's roughly the birth rate necessary to eventually stabilize the world's population.

That lower birth rate would reduce the growing pressure on the world's finite supply of fossil fuels, fresh water and arable land. It also would temper the damage that continued population growth is causing in terms of air and water pollution, destruction of rain forests and extinction of plant and animal species.

Population growth also accelerates concern about climate change (aka global warming). Can you believe we're facing the potential extinction of the magnificent polar bear as a result of melting Arctic ice?

As the United Nations Population Fund has noted, stronger family planning programs and increased formal education for women raise their living standards, lower their birth rates and reduce the number of unwanted children entering the world. The less that women face unwanted pregnancies, the lower the number of potential abortions.

Even if the world's birth rate were instantly lowered to two per woman, there would be continued population growth for a considerable time because many nations currently have a large number of women of child-bearing age.

Take China, the world's most-populous nation and a country well known for its governmentally mandated "one-child" policy. China is still gaining 7 million people annually as a result of natural growth (births exceeding deaths), according to demographer Carl Haub of the Population Reference Bureau.

Growth continues because China allows many exceptions to its "one-child" policy (resulting in an actual birth rate of about 1.6) and because the nation has many women of child-bearing age, Haub said.

The United States, with 304 million people, is the world's biggest energy glutton and is growing at nearly 3 million people annually, with immigration a major factor. In 2050, the U.S. is expected to have 420 million people, an increase of 116 million, and will retain its ranking as the world's third-most populous nation, according to PRB projections made in 2007.

It would be laudable if America spent far less money on ill-fated foreign adventures such as the Iraq war and instead focused overseas expenditures on family planning programs, reduction of poverty and disease, agricultural development, improving water systems and enhancement of women's rights. In a future presidential administration, that actually might happen.

World's most populous countries


Country	2007 population	Country	2050 population
China	1.318 billion	India	1.747 billion
India	1.132 billion	China	1.437 billion
United States	302 million	United States	420 million
Indonesia	232 million	Indonesia	297 million
Brazil	189 million	Pakistan	295 million
Pakistan	169 million	Nigeria	282 million
Bangladesh	149 million	Brazil	260 million
Nigeria	144 million	Bangladesh	231 million
Russia	142 million	D.R. of Congo	187 million
Japan	128 million	Philippines	150 million

Source: Population Reference Bureau

Online

Population Reference Bureau: www.prb.org

United Nations Population Fund: www.unfpa.org

'The fruition of a lot of hard work'

Fri, 20 Jun 2008 01:31 CDT

By JACK Z. SMITH

There they are, in a neat row: three brand-new brick homes in the 900 block of East Leuda Street, a five-minute drive from downtown Fort Worth.

The attractive bungalow-style residences symbolize a burgeoning renaissance in southeast Fort Worth, a chronically down-and-out area becoming increasingly alluring as a result of the city's tenacious central-city revitalization effort, $3.85 gas and the proximity of 70,000 jobs in the thriving downtown and medical district.

The dwellings were built by Neighborhood Homes, founded by Ron Hill, 56, of Arlington, a 23-year veteran of the homebuilding business. Hill epitomizes the entrepreneurial spirit needed in southeast Fort Worth as it rebounds from decades of decline.

Hill is working closely with Fort Worth developer Tom Struhs and former Cowtown Mayor Kenneth Barr, who have purchased 140 residential lots, virtually all vacant, in a portion of near-southeast Fort Worth east of Interstate 35W, south of Vickery Boulevard, north of Rosedale Street and east of Riverside Drive. Barr and Struhs are selling the lots to Hill, who is building homes.

His first three are just the beginning of a development dubbed Terrell Heights. Just imagine the striking and inspirational improvement that 140 new residences should bring to an area with numerous run-down structures and 700 vacant lots.

On Sunday, I ventured down Leuda to get my first look at Hill's homes. Fortunately, he was there and gave me a tour.

I was delighted to see homes with affordable prices ($110,950 to $115,950) and appealing features (hardwood floors, cultured marble vanities and front porches). Their exterior styles meshed well with nearby homes dating from the 1920s and 1930s.

The three-bedroom, two-bath homes are about 1,200 square feet. Hill plans to build homes ranging from 832 square feet (two-bed, one-bath, $97,950) up to 2,241 square feet (five-bed, three-bath, $189,950).

Terrell Heights should benefit greatly from the city's ambitious revitalization project at East Rosedale and Evans Avenue. A community plaza and public library are built, construction of a $6.4 million public health center is approved, and Cypress Equities -- affiliated with the real estate firm of former Dallas Cowboys quarterback Roger Staubach -- is eyeing commercial development there.

Here are snapshots of other southeast developments:

Near East Berry Street and South Riverside Drive, History Maker Homes has built and sold 63 homes ranging from $88,950 to $130,950 in the Sierra Vista development, sales representative Steven Garcia said. Most have gone to first-time buyers moving from apartments.

The development is to have 231 homes. Nearby commercial development is planned. Fort Worth developer Michael Mallick deserves kudos for initiating this area's transformation from a wasteland of 1,000 dilapidated, long-abandoned apartments into today's embodiment of the American dream of homeownership.

At the old Masonic Home and School property, Fort Worth developer Happy Baggett has assembled 74 acres for commercial development and 95 acres for single-family homes. The result could be $80 million to $100 million in commercial investment and at least 500 new homes, he said. Regarding commercial development, "we should have a pretty major announcement" within 60 days, Baggett said.

The property touches the Martin Luther King Jr. Freeway (U.S. 287). It's bounded by Berry Street on the north, Mitchell Boulevard (west), Wichita Street (south) and Vaughn Boulevard (east).

At the south edge of Texas Wesleyan University, in the 3000 and 3100 blocks of East Rosedale, a $2 million redevelopment is cranking up. New retail, restaurant and office spaces are planned in attractively restored old buildings, said Phillip Poole, an architect and urban redevelopment specialist whose firm is undertaking the project.

Barr and Fort Worth Mayor Pro Tem Kathleen Hicks said southeast Fort Worth is finally benefiting from being only a few minutes from downtown and the medical district. With gas prices soaring, workers such as nurses and medical technicians will find the southeast sector an increasingly enticing place to live, Barr said.

(Three new homeowners in Sierra Vista are nurses, Garcia told me.)

"Finally, a lot of things are coming together," said Hicks, who attended school and lived in the southeast sector as a child. "We are seeing the fruition of a lot of hard work, prayers and commitment."

The budding revival of southeast Fort Worth is great news for the entire city. It's going to be exciting to watch.

Oh, believe me, it can get worse

Fri, 20 Jun 2008 01:31 CDT

By Jack Z. Smith

The energy picture is scary and depressing, with the U.S. average price for regular gasoline soon expected to top $4 a gallon -- nearly quadruple the level of less than seven years ago. The days of Tod and Buz merrily cruising Route 66 in their fuel-guzzling Corvette appear long gone.

But the long-term energy outlook perhaps is even more frightening for America, the world's biggest energy consumer and largest importer of oil. Here's why:

The world's population, approaching 6.7 billion, is growing by 75 million annually and will hit 9.2 billion by 2050, a 37 percent increase, according to United Nations projections. That means 2.5 billion additional energy consumers, an increase more than eight times the current U.S. population of 304 million. India alone is expected to gain 300 million people between now and 2025.

The population increase will be largely in developing nations, where per capita energy consumption is rising rapidly as millions of people buy cars and other fossil-fuel-consuming goods for the first time. China's vehicle fleet is expected to reach 270 million by 2030, a stunning sevenfold increase from 2005. The International Energy Agency projects that China's annual vehicle sales will exceed those of the car-crazy U.S. by about 2015.

The IEA forecasts that world energy consumption will rise more than 50 percent by 2030, if current government policies continue. Approximately 74 percent of the increase will come from developing nations, with China and India accounting for 45 percent.

Global demand for crude oil, the raw product for today's increasingly precious gasoline, is projected to soar to 116 million barrels per day by 2030, a hefty jump of about 30 million barrels over current consumption levels. The more that demand rises, the greater will be the upward pressure on fuel prices.

Some developing nations are encouraging oil waste by heavily subsidizing gasoline. In Iran, the government has raised fuel prices more than 25 percent--to the equivalent of 38 cents a gallon.

U.S. control over world oil supplies will continue to diminish. Western oil giants such as Exxon Mobil, BP, Shell, Chevron and Conoco Phillips control only a small and steadily shrinking fraction of the world's oil reserves. In general, the big national oil companies -- such as those in Saudi Arabia, Russia and Venezuela -- are providing only limited access to Western oil firms and are demanding increasingly large chunks of production revenues. That bodes poorly for America's long-term energy security and its ability to avoid paying a king's ransom to foreign oil producers in the future.

The U.S. must ensure a more stable energy future by greatly increasing conservation (think small, fuel-efficient cars, expanded mass transit, greener buildings and homes, and development patterns that shorten work and shopping commutes); diversifying its energy supply (more nuclear, clean coal, wind, solar, geothermal, biomass); and expanding domestic oil and natural gas exploration, production and infrastructure (opening up more offshore areas and a limited portion of the Arctic National Wildlife Refuge to drilling, building an Alaskan natural gas pipeline and using improved technology to milk more production from existing fields).

Perhaps most important, we must develop new engine technologies (think gasoline-electric hybrids, plug-in hybrids, hydrogen fuel cell vehicles and electric cars).

New York Times columnist Thomas Friedman wrote this week, "Ultimately, we need to move our entire fleet to plug-in electric cars."

I'm not sure I agree 100 percent, but that's clearly the direction we must move in.

Otherwise, America could become far more vulnerable in the precarious energy world of the future -- to the point that $4 gasoline would be viewed nostalgically as a relic of the "good ol' days."

Online

International Energy Agency: www.iea.org

U.N. Population Fund: www.unfpa.org

Apparently we're in for a crude awakening

Fri, 30 May 2008 10:19 CDT

By JACK Z. SMITH

Whither oil?

That's the head-scratching question nagging everyone from beleaguered U.S. airlines and automakers to panicky motorists bracing for $4-a-gallon gasoline

Will record crude oil prices, which briefly topped $135 a barrel this week, continue soaring wildly into the stratosphere? Or will they finally come crashing back to earth, restoring sanity to energy markets?

One thing is clear: Today's almost unbelievably high prices are shaking virtually everyone's world to a degree that we haven't seen since oil prices shot from $3 to $35 a barrel from the early 1970s to early '80s.

On Wednesday, American Airlines announced plans to lay off thousands of employees, retire as many as 85 airplanes and charge customers $15 each way for the first checked bag. Those moves were engendered by ultra-pricey oil, the raw product for jet fuel.

As American CEO Gerard Arpey lamented: "This industry cannot continue under its current structure. It's not built for $125 or $130 oil."

On Thursday, Ford Motor Co. announced deep production cutbacks, citing plummeting demand for large trucks and SUVs. Demand is tanking because the average U.S. price for a gallon of regular gas is a Hummer-humbling $3.83. Prices exceed $4 in many locales and are nearing $5 in Alaska.

So what's causing these unbearably high oil and gas prices? Bear with me while I unpack a cornucopia of often-cited reasons:

■ Heavy world oil demand (86 million to 87 million barrels per day).

■ The weak U.S. dollar (which has encouraged speculative oil futures trading as a hedge against inflation).

■ Wall Street investment banks predicting that prices could escalate to $140 to $200 a barrel.

■ Disappointing production levels in oil-rich countries such as Russia, Mexico, Nigeria, Venezuela and Iraq.

■ Reduced access to bigger overseas oilfields for private-sector oil giants such as ExxonMobil, Chevron and Conoco Phillips. (National oil companies such as those in Saudi Arabia and Venezuela now are controlling most of the world's supply.)

■ Bans on U.S. oil exploration in many offshore areas and the Arctic National Wildlife Refuge in Alaska.

■ Soaring costs for drilling in an era when most of the giant, low-cost fields already have been heavily tapped.

■ Rising demand for diesel fuel in rapidly developing countries such as China, where the recent earthquake disrupted coal deliveries and hydroelectric power, thus boosting demand for diesel to power generators.

Even energy experts can't agree on where prices are headed. Some predict a retreat to $70 to $85 a barrel. Others say surreal prices of $200 to $500 eventually could become reality if "peak oil" theorists are correct in concluding that global production (1) already is at or near maximum levels and (2) soon will begin an inevitable decline -- this in a world where demand is mushrooming as a result of population growth and rising per capita energy consumption in developing nations.

So what can the good old U.S.A., the world's largest importer of foreign oil, do to help avert unrelenting pain at the pump?

Americans need to continue buying smaller, fuel-efficient cars and trucks, as we have done with increasing rapidity since oil topped $100 a barrel in February.

We must expedite the development of new engine technologies: gas-electric hybrids; plug-in, rechargeable hybrids; totally electric cars; and hydrogen fuel cell vehicles. The May 26 issue of Business Week has a fascinating story, "GM: Live Green or Die" -- it's about General Motors' frenzied effort to market the gas-electric, plug-in hybrid Volt by late 2010. It would sell for $30,000 to $45,000, cost $150 to $300 a year to keep charged and get 100 miles per gallon on longer trips, the magazine reports.