# NWA Letter I received



## MrFSS

*Dear XXXXXX XXXXXXXX,*

 

An Open letter to All Airline Customers: 

 

Our country is facing a possible sharp economic downturn because of skyrocketing oil and fuel prices, but by pulling together, we can all do something to help now. Visit www.StopOilSpeculationNow.com. 

 

For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers. 

 

Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation. 

 

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs. 

 

Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper. 

 

The nation needs to pull together to reform the oil markets and solve this growing problem. We need your help. Get more information and contact Congress by visiting www.StopOilSpeculationNow.com. 

 

Robert Fornaro

Chairman, President and CEO

AirTran Airways

 

Bill Ayer

Chairman, President and CEO

Alaska Airlines, Inc.

 

Gerard J. Arpey 

Chairman, President and CEO

American Airlines, Inc.

 

Lawrence W. Kellner

Chairman and CEO

Continental Airlines, Inc.

 

Richard Anderson 

CEO

Delta Air Lines, Inc.

 

Mark B. Dunkerley

President and CEO

Hawaiian Airlines, Inc.

 

Dave Barger

CEO

JetBlue Airways Corporation

 

Timothy E. Hoeksema

Chairman, President and CEO

Midwest Airlines

 

Douglas M. Steenland

President and CEO

Northwest Airlines, Inc.

 

Gary Kelly

Chairman and CEO

Southwest Airlines Co.

 

Glenn F. Tilton

Chairman, President and CEO

United Airlines, Inc.

 

Douglas Parker

Chairman and CEO

US Airways Group, Inc.


----------



## jackal

Some discussion of this over in the Alaska Airlines forum on FlyerTalk (I'm sure it's posted elsewhere, too, but this is the one I saw):

http://flyertalk.com/forum/showthread.php?t=843536


----------



## the_traveler

I got the same letter from United Airlines.


----------



## GG-1

Aloha

United Also sent one to me.

Commodities trading has existed for a long time, so much thought must occur if there are to be changes.


----------



## Green Maned Lion

Its astounding, really. Smart men and women start pointing their hands in all directions looking for solutions, and when some idiot comes up with one that sounds on-the-surface plausible, they all are off like race horses running with it.

For every problem, there are solutions that are quick, cheap, simple, easy, and wrong. Speculation regulation is an example when it comes to oil prices.

Does it escalate the price? Sure. It always has. It has raised the price since time immemorial when they conceived the idea of trading commodities back when everyone thought there was a god for everything. Were I to take a guess, I'd say its responsible, as it always has been, for about 5-10% of the cost of oil. The paper increase in speculation has more to do with changing definitions and a slightly re-structured purchase system than a massive wave of people raising the price of oil.

Also, a lot of people don't understand what speculation is. Speculation doesn't operate on the concept of increased price, but instead movement of price. You can make just as much money in a market with declining value than with a market with increasing value.

I can understand Tom, Dick, and Larry believing this garbage. It pains me that CEOs of large corporations believe this. They should know better.


----------



## George Harris

This whole thing is simply a way to try to say our increase in fares are somebody else's fault. GML has it right. There is a sudden change so they want to change the system, when what they are wanting to change is a minuscule part of the problem.


----------



## transit54

I'm really shocked that Dave Barger's name is on there. I worked for JetBlue until Tuesday and really followed a lot of what Dave had to say on the oil issue. And he made it very clear that he believes (as I do) that oil is not going down and this is not a temporary phenonemonon by any means. This _is_ the new operating environment.

I'd only have to guess that he was pressured into it by some industry group.

That being said, it's great to be out of the airline industry. JetBlue was a fantastic company to work for and I do miss it, but there's nothing like working for an organization that benefits from high oil prices.

And this country doesn't need to "pull together to reform the oil markets and solve this growing problem." It needs to develop a coherent transportation strategy that isn't based around short haul flights and single occupancy vehicles.


----------



## Joel N. Weber II

rnizlek said:


> And this country doesn't need to "pull together to reform the oil markets and solve this growing problem." It needs to develop a coherent transportation strategy that isn't based around short haul flights and single occupancy vehicles.


I think there are really two underlying issues you're getting at there: oil dependency (where the fundamental problem is that there is a shrinking supply of oil), and capacity of land based transportation infrastructure.

Our current highway, rail, and airport infrastructure are all overburdened in some parts of the country. Rail may end up being the most cost effective place to invest money in the future, but meeting this aspect of our transportation needs fundamentally requires throwing money at it. (Maybe there's an alternative in convincing people to use buses instead of automobiles to reduce highway congestion, but I somehow don't expect that to work.)

Then there's oil dependency. Getting people out of single occupancy vehicles certainly can help. But why aren't we investing more effort in getting people to stop wasting limited diesel fuel heating their homes when we could have wind farms delivering cheap electricity to accomplish the same thing? Electric heat generated from wind power is much easier than getting quality mass transportation to places that have not been built with the density to support mass transportation. (That electricity would be cheap because wind farms tend to be more effective at generating lots of power on cold days, and if enough large wind farms are built at all, wind farm owners will prefer to sell electricity cheaply for that purpose than to not sell that electricity at all, so wind farm owners will naturally set prices lower than home heating oil or coal based electricity.)

Are we at risk for having our oil supply cut off completely if things fall apart in the Middle East? Is there a national security argument for having plenty of freight and passenger track with catenary, so that transportation can keep operating without oil?


----------



## Green Maned Lion

Joel, electric heating is the most expensive and inefficient way available to heat a house. If you want to talk about, say, geothermal heating, you may have more to your thoughts.

Second, people never sell things cheaper than the traffic will bear except when attempting to create traffic. Its just the way of life. "Wind-Farms" are an idea thought up by college professors with no concept of space utilization. Wind and solar power have their place, I admit. On the roof of buildings, powering that building, for instance. I'm not talking about self-sufficient, but one that harnesses some of the energy it needs, therefore cutting its draw on the system.

But wind farms? Those are the pipe dreams of wind-turbine manufacturers. No more.


----------



## MrFSS

Green Maned Lion said:


> Joel, electric heating is the most expensive and inefficient way available to heat a house.


Not where I live where we have TVA electricity. It is half the cost of natural gas. Very few homes here are built to use anything but electricity. and with two heat pumps (milder climate than where you are) it is very reasonable, even in winter.


----------



## PetalumaLoco

Green Maned Lion said:


> Joel, electric heating is the most expensive and inefficient way available to heat a house. If you want to talk about, say, geothermal heating, you may have more to your thoughts.
> Second, people never sell things cheaper than the traffic will bear except when attempting to create traffic. Its just the way of life. "Wind-Farms" are an idea thought up by college professors with no concept of space utilization. Wind and solar power have their place, I admit. On the roof of buildings, powering that building, for instance. I'm not talking about self-sufficient, but one that harnesses some of the energy it needs, therefore cutting its draw on the system.
> 
> But wind farms? Those are the pipe dreams of wind-turbine manufacturers. No more.


Wind-turbine manufacturers and this guy.


----------



## John Bredin

Green Maned Lion said:


> But wind farms? Those are the pipe dreams of wind-turbine manufacturers. No more.


Huh? :huh: 

There are already plenty of Wind farms in places like Texas already. Yes, Texas, where there are presumably no issues of space utilization. (Hint: the whole United States is not like New York or New Jersey.)



> "Wind-Farms" are an idea thought up by college professors with no concept of space utilization.


----------



## Green Maned Lion

You don't follow me. Building them to serve our energy needs is a pipe dream. Building them to build them happens, but its hilarious. It is, conceptually, similar to using a spoon to eat a steak, a knife to eat soup, and an SD90MAC to pull a single Comet car. All of the above are very useful devices, and the activities they are attempting to perform are valuble. But they are being ludicrously misused.

A Wind Turbine has a draw back, and an advantage, based upon their basic design. The advantage is that they have a very small footprint. The disadvantage is that to generate electricity such to power a large town, you need a lot of them. The proper place to utilize a wind turbine is in close proximity to the specific item it serves. For example, a wind turbine at a central point in a block of houses, powering those specific houses.

I guess the analogy closest to it is the SD90MAC one. SD90 is a very powerful engine, very capable in long intermodal trains. Its great- its power allows it to do the job of several weaker engines. But putting all that horsepower and torque to moving a single passenger car is a waste- you are ignoring its abilities, its advantages, and its purpose.

The ideal location for a windmill is near the customer- it cuts transmission loss, minimizes the amount of space wasted, and practically eliminates the possibility of cascading-systems-failure blackouts.

Either I am the only person on the planet smart enough to realize this (and thats not likely) or the people building windfarms are doing a thing similar in concept to something we are very familiar with- a study of train service. It looks like they are doing something, but its not practical, and won't help much.


----------



## gswager

Windfarms are not for every places. If a place has a good winds, then wind farms are used. If the location is very poor, don't use it.


----------



## Green Maned Lion

There are better uses for the land than windfarms, regardless. Agriculture, for instance. Wind mills, on the other hand, can be comfortably positioned on the tops of sky-scrapers.


----------



## Joel N. Weber II

Green Maned Lion said:


> There are better uses for the land than windfarms, regardless. Agriculture, for instance. Wind mills, on the other hand, can be comfortably positioned on the tops of sky-scrapers.


Aren't there parts of the country that have plenty of wind but not so much water?


----------



## Joel N. Weber II

Green Maned Lion said:


> A Wind Turbine has a draw back, and an advantage, based upon their basic design. The advantage is that they have a very small footprint. The disadvantage is that to generate electricity such to power a large town, you need a lot of them.


To provide personal automobile transportation for a large town, you probably need an awful lot more automobiles than you would need wind turbines to provide electricity for the town.

When I was looking at the numbers a few weeks ago, I came to the conclusion that building a couple thousand copies of Cape Wind ought to put a nice dent in our country's coal consumption.



Green Maned Lion said:


> The proper place to utilize a wind turbine is in close proximity to the specific item it serves. For example, a wind turbine at a central point in a block of houses, powering those specific houses.


Actually, thanks to intermittency, I don't think that works well at all. You need the grid to supply power when the local wind dies down.


----------



## Neil_M

Green Maned Lion said:


> Joel, electric heating is the most expensive and inefficient way available to heat a house.


Its alright for you to say that, you have a unlimited natural supply of hot air to heat your house, the rest of us have to use gas or electric......


----------



## Green Maned Lion

Joel, my eyes are hurting from staring at 1970s' trains schedules for too long, but you just hit upon another problem with windpower. Since its output is variable, either enormous capacitors must be installed, or other forms of plants must be lying around in over capacity to kick in when the wind power fails.


----------



## GG-1

Green Maned Lion said:


> or other forms of plants must be lying around in over capacity to kick in when the wind power fails.


Aloha

This is the advantage of a nationwide power grid, it gos from excess generation to heavy demand regardless of source


----------

