Mar 9, 2022 11:22:56 AM | 14 Min Read

California Dreaming, California Folding

Posted By Bay Cities
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California Dreaming, California Folding

I love living in California.  I am a native of this wonderland and started my life right down the street from Knotts Berry Farm. My dad was Walter Knott’s doctor and I sometimes wondered who he loved more, Walter Knott or his family, because during the Watts riots, he spent his time marching around Knotts with a medical kit and an M1 carbine. He truly cared about his family as he taught all of us to be survivalists and expert marksmen — plus, he knew we could take care of ourselves in any situation. Back then Knotts Berry Farm didn’t even have a fence, so friends of the Knotts helped protect the Buena Park California’s iconic treasure.   

 As kids, we would hitch hike to the beach 32 miles each way almost every day.  California is beaches, deserts, mountains, wineries or breweries within 2 hours of anywhere.  We could actually surf in the early morning and be up skiing before noon.  Yes, we also have earthquakes, but they are very few and far in between.  This is where Earnest Hemmingway called Lake Tahoe, the most beautiful place on the earth.  Oddly enough, the happiest place on earth (Disneyland) is located in Anaheim, California.  We (the U.S.) are the sixth largest country in the world and masters of agriculture, technology, entertainment and did I mention wine —one can see why I love this place. 

Because this place is so beautiful, we have always been known as trendsetters, continuously influencing environmental policies here in the “Golden State” and in much of America.  Much of what we do here is for a real good reason, yet many would find these policies out of control.  I believe radical policies are needed, however here in the Peoples Republic of California, we tend to move too fast in executing policy.  Unfortunately, many policy makers in DC have adopted this speed to conservation that isn’t always thought through.  What could be a great idea…that idea becomes weakened due to the fact we don’t consider the cause and effect in full.  Thus, when we act quickly with pushing these policies forward, we do not consider the strategic implications and outcomes here in California, across the U.S. and as we are a giant influencer in the world, across nations. 

 Last time we talked, I brought about the study of oil in America and how it is only 7% of our economy but runs 93% of our economy.  Due to the policies in DC, we have all but declared war on oil.  So, it is a great idea to move to alternative sources here in the U.S.  Tesla and Elon Musk are driving the world with EV technology.  This is a great idea, however the switch from the gas-powered car to the battery powered car will take at least 10 years to make a big dent in what we drive.  In California we love our cars; there are more Teslas here than one can imagine.  We need this transition as 50% of fossil fuel (oil) is used to power our cars.  Great idea but we have gone way too far, when we chop off the head, the body will die.  So, let’s look at what’s going on today.  We have spiraling inflation built on Covid-driven demand spikes from free money from the Feds, labor shortages, transportation shortages, trucks, transportation ships and commodity prices rising like a rocket.  Now we sprinkle in a war in Ukraine, and everything spirals higher.  Oil is at $130 a barrel.  I filled up my car at $5.65 a gallon.  What’s worse is Putin can get away with this war pretty easily.  This war in my mind is a war crime and Putin should be arrested and tried for his disregard for human life.  But I say once again, he can and will get away with this atrocity.  It is wrong that he can get away with this war, but he will because of the California influence in DC policy and the world’s reliance today on Russian oil. 

 So how can this be happening?  Simple, we in the U.S. declared war on U.S. made oil a year ago.  We stopped the Keystone pipeline that would have provided Canadian crude oil to refineries in the gulf to produce gasoline.  We also removed the sanctions on Nord Stream 2, a Russian pipeline that intends to supply more Russian natural gas to Europe. What’s more, in the middle of February of this year our own FERC (Federal Energy Regulatory Commission) created new policies that will block new U.S. natural gas pipelines.  Why is this blunder of wonder so important?  These pipelines are needed to carry U.S. natural gas to LNG (liquid natural gas) facilities so they can create LNG and ship it across the ocean to Europe and all over the world, which will reduce the dependency on Russian natural gas.  Europe gets most of its natural gas from who else but Vladimir Putin and Russia.  So, what’s up with California and why is the west coast not connected to the world’s largest oil fields here in the U.S. by any pipeline?  

  In 1985 California produced 394,002,000 barrels of oil.  In 2020 we went down to 143,114,000 barrels according to the U.S. Energy Information Administration.  Then Gov. Gavin Newsom put a halt to drilling oil in California claiming, “this is about morality.”  So today the U.S. imports daily 672,000 barrels from Russia.  The Wall Street Journal reports “roughly half of that oil goes to the west coast.”  How far are we from Russia?  In 2020 the U.S. was the #1 producer of oil and natural gas.  Given the influence of California on Washington’s policies regarding oil, we are influencing Russia to solve the West’s energy needs.  Notice also that there are no sanctions on Russian oil and Nord Stream 1.  If there were, the EU would take a huge hit to their economy, especially in Germany who is 100% dependent on Russian oil and gas.  If the U.S. wanted to get tough on Russia, we would stop the purchase of Russian oil. We could jump on building natural gas pipelines and create LNG for Europe and the rest of the world.  Elon Musk tweeted last week, “it’s time to produce oil in the U.S.”  This is the leader of electric vehicles.  He knows we can’t switch to EV’s overnight. He is also crying out for America to help the rest of the world with our vast supplies of oil and natural gas. 

 

Here are some facts: 

The U.S. Energy Information Administration reported February 2020 that electric power generation in the U.S. is driven by: 

  • Renewables 20.1%
  • Nuclear 18.9%
  • Coal 21.8%
  • Natural gas 38.3%
  • Other   0.9% 

We cannot switch to renewable supplies of energy fast enough to meet our demand, even today.  It is not yet reliable to produce electricity 100%.  The U.S. has a tremendous amount of oil and gas reserves, we should put it to use in the U.S. and for the rest of the world to reduce the dependence from a bad player Putin.  We will have inflation for a long time just with our blunderbuss oil policies here in the U.S. We have to keep a clean environment and reduce global warming. However, these steps take time, and we must act strategically when we set these regulations in place. We are all interdependent, not only here in the U.S. but in around the world as well. 

So how can we at Bay Cities help reduce inflating packaging costs? We know paper is skyrocketing right now. 

  1. Get working on basic weight reductions certified by ISTA testing.
  2.  Look at all packages with fillers and inserts and utilize our ISTA certified performance testing to reduce overall packaging.  This is the basis of Amazon’s core initiatives which is spilling into other retailers.
  3. Reevaluate interior packaging to reduce labor in your assembly area.  We know this well as we are experts in packout, and fulfillment and we design our packages to be less labor intensive.
  4.  Move to utilizing digital printing to reduce costs in tooling, changes overs and inventory.  With packaging costs. labor and inventory carrying costs skyrocketing, digital printing is a natural and sustainable solution for anyone using packaging. 

By the way, I know this blog is a long one full of real facts.  I apologize for California’s policies and their effects in Washington.  They are good in concept; however, they just need to be strategically planned for wise adoption. I still love this state I call home – and today God bless Ukraine; wish them well and keep them in your prayers. 

Greg Tucker

Chairman/CEO

 

Topics: Ukraine, Oil, Economy, Russia

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