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Constitutional Battle And Energy Investing

Personal Rapid Transit (NYSE:PRT) was identified by Congressional Office of Technology Assessment study PB-244854 as the solution to the 1973 Oil Embargo. The PRT 9 mile PRT network opened in Morgantown, WV in 1975 has delivered 110 million oil-free, injury-free passenger-miles. British, Dutch and Swedish PRT companies recently built operational systems in Europe and Middle East. I expect that American PRT company, JPods, Inc. (Disclosure: author is the founder and a major shareholder), will begin deploying solar-powered ultra-light railroad networks this year. JPods is currently:

JPods, Solar-powered mobilityRestoring communications infrastructure to a free market in 1984 required courts to make a Constitutional ruling that greatly affected investing. I believe a similar ruling about power and transport infrastructure will have similar sweeping affects on investing. The scale of consequences might be indicated by the miles of rails required as oil supply shocks impact:

  • Logistical arteries will be provided by the 140,000 miles of US freight rail lines (averaging 480 ton-miles per gallon).
  • Logistical capillaries will be provided by 500,000 miles of ultra-light railroads that must be built between now and 2020.

Following is our approach to using the Constitution to open this market.


  1. By April 15, 2013 enforce the Constitution so power and transport infrastructures are restored to State Sovereignty, so free markets can end Oil Famine -- the Federally mandated monolithic dependence on foreign oil for 50% of needs.
  2. By April 15, 2014 require the military and Federal agencies to cut oil use by 50%; security requires it be funded and powered within domestic resources. As a West Point graduate and 8 year Infantry veteran I know that this will be as hard to achieve as it is necessary.
  3. By July 4, 2020 power of urban transportation within usufruct, within a solar budget. Once the Federal monopoly is broken, 10x cost savings and profits will power this shift.

Usufruct and the Constitution
Usufruct, to use for profit without harm, is in the mission of the Federal government.

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

" the Blessings of Liberty to ourselves and our Posterity" mandates usufruct; we are at liberty to use whatever resources we deem necessary to profit and pursuit our happiness matched by the responsibility to restore it to like condition to support the inalienable right of our Posterity to life, liberty and the pursuit of happiness. If we need a resource, our Posterity will need it in like amounts.

Thomas Jefferson summarized our duty to usufruct in a Letter to James Madison, Sept 6, 1789, the Earth Belongs to the Living:

"Then no man can by _natural right_ oblige the lands he occupied, or the persons who succeed him in that occupation, to the paiment of debts contracted by him. For if he could, he might during his own life, eat up the usufruct of the lands for several generations to come, and then the lands would belong to the dead, and not to the living, which would be reverse of our principle."

"...nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19. years?"

America was founded and self-reliant, within a solar budget, for most of her history.

Enough solar energy hits the Earth every hour of every day to power all human economies for a year. As Thomas Edison noted in 1910:

"Sunshine is spread out thin and so is electricity. Perhaps they are the same, Sunshine is a form of energy, and the winds and the tides are manifestations of energy."

"Do we use them? Oh, no! We burn up wood and coal, as renters burn up the front fence for fuel. We live like squatters, not as if we owned the property.

"There must surely come a time when heat and power will be stored in unlimited quantities in every community, all gathered by natural forces. Electricity ought to be as cheap as oxygen...."

Enforce the Constitution so free markets can re-tool power and transportation, similar to how communication infrastructure re-tooled after the Federal monopoly ended in 1984.

Socialism: In the mobilization to fight World War I the Federal government seized control of the means of production in communications, power and transportation as "natural monopolies." It unconstitutionally taxed the people to "provide" corporate welfare by subsidizing infrastructure to support the sale of automobiles, oil and electricity with the unintended but foreseeable consequence of creating civilization killers of Peak Oil, Climate Change and Debt:

  • 1919: Federal monopolizing/socializing communications, power and transportation.
  • 1935-1952: The Federal government taxed the people to provide welfare in building the electrical grid. Unintended consequences:
    • The booming distributed energy industry, small manufacturers who made and sold 400,000 water and electric windmills against the headwind of the Great Depression, were bankrupted as subsidized electricity removed self-reliance as a market force.
    • Depletion of coal.
    • Air and water pollution tilts the balance of nature.
  • 1956: US Peak Oil was forecast for about 1970.
  • 1956: The Federal-Aid Highway Act of 1956 taxed the people to build the Interstate Highways to facilitate the sale of cars and oil. Unintended consequences:
    • Interstates are 1.3% of US roads that carry 25% of car-miles. They shaped cities into sprawl, mandating that Americans buy cars and oil to be economically competitive.
  • 1970: US Peak Oil at 9.6 million barrels per day (mb/d) depleting to 5.6 mb/d today.
    • Oil imports increased from 20% to 50% of needs.
    • National debt increased from $0.4 to $15.8 trillion.
    • Wars, including "no-fly missions," to protect access to foreign oil since 1990.
  • 1998 to 2008: Gasoline prices increased from $1.03 to $3.30; family disposable income decreased about $2,000 as more and more families were forced to choose between paying their mortgage and their commute. In Sept 2008 foreclosure collapsed the banking system, exposing bad government policies and banker greed. Life requires energy. Less affordable energy, less life. Disposable Energy, people's disposable incomes' ability to buy energy is crashing. The economy based on oil is going into depression. Disposable Energy
  • 1980 to 2012: Dramatic changes in Arctic multi-year ice indicates radical shifts in the balance of nature.
  • 2012: Drought indicates that pollution consequences will impact the availability of food. CNBC notes the risk of food crisis as crops wither in the warmest July in human history while food inventories are at historic lows.

Civilization Killers of Peak Oil, Climate Change and Debt

Life requires energy. Oil is finite. Economic FlywheelLife and nations based on oil are failing as less affordable energy decreases economic work being applied the Economic Flywheel.

It is going to sting to end the oil and debt addictions. Many Americans believe we benefit from cheap gasoline. We will likely lament Federal taxes being used to build infrastructure to support sales of cars, oil and electricity by mega-corporations; freeways that sprawled cities into farm land; collectivized farms that produced cheap oil-dependent crops; and, subsidized shipping of goods from overseas to big box stores.

Federalist #63: "So there are particular moments in public affairs when the people, stimulated by some irregular passion, or some illicit advantage, or misled by the artful misrepresentations of interested men, may call for measures which they themselves will afterwards be the most ready to lament and condemn."

Protecting Liberty by Setting Ambition Against Ambition:
Federal taxing of the people to fund infrastructure, favoring selected companies or industries, is unconstitutional; the mission of the Federal government is strictly limited to "promote" not provide welfare.

The Declaration of Independence, Articles of Confederation, Constitution and Bill of Rights document an intense 37 year effort [1754 French and Indian War to 1791 ratification of the Bill of Rights] to tinker with, understand and document how to match human nature with that of governments to establish and defend liberty. Divided government, of setting "ambition against ambition" was intended to prevent the harm we are experience from Federal encroachment into State Sovereignty. Providing welfare is a power of State Sovereignty:

Thomas Jefferson, Letter to Joseph C. Cabell, February 2, 1816

"The way to have good and safe government, is not to trust it all to one, but to divide it among the many, distributing to every one exactly the functions he is competent to. Let the national government be entrusted with the defense of the nation, and its foreign and federal relations; the State governments with the civil rights, law, police, and administration of what concerns the State generally; the counties with the local concerns of the counties, and each ward direct the interests within itself. It is by dividing and subdividing these republics from the great national one down through all its subordinations, until it ends in the administration of every man"s farm by himself; by placing under every one what his own eye may superintend, that all will be done for the best. What has destroyed liberty and the rights of man in every government which has ever existed under the sun? The generalizing and concentrating all cares and powers into one body."

Federalist #45 (Madison): "The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State."

Federalist #51 (James Madison) "It is of great importance in a republic not only to guard the society against the oppression of its rulers but to guard one part of the society against the injustice of the other part. If a majority be united by a common interest, the rights of the minority will be insecure."

Factions forming a majority and imposing tyranny on the minority was viewed as the greatest threat to the survival of republican, popular government.

Benjamin Franklin: "Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"

Thomas Jefferson: "A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine."

John Adams: "Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide."

Many factions in a large republic, having diverse commercial and other interests in the internal functioning of the States, was deemed essential to protecting Liberty from the ills of factions and the tyranny of the majority. It was in fact the adding of States that finally broke the corruption of slavery.

Federalist #10 (Madison): "AMONG the numerous advantages promised by a well constructed Union, none deserves to be more accurately developed than its tendency to break and control the violence of faction."

"Hence it is that democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and in general have been as short in their lives as they have been violent in their deaths... A republic, by which I mean a government in which a scheme of representation takes place, opens a different prospect and promises the cure for which we are seeking."

Federalist #9 (Hamilton): "I mean a CONFEDERATE REPUBLIC.

"This form of government is a convention by which several smaller STATES agree to become members of a larger ONE, which they intend to form. It is a kind of assemblage of societies that constitute a new one, capable of increasing, by means of new associations, till they arrive to such a degree of power as to be able to provide for the security of the united body.

"A republic of this kind, able to withstand an external force, may support itself without any internal corruptions. The form of this society prevents all manner of inconveniences.

"If a single member should attempt to usurp the supreme authority, he could not be supposed to have an equal authority and credit in all the confederate states. Were he to have too great influence over one, this would alarm the rest. Were he to subdue a part, that which would still remain free might oppose him with forces independent of those which he had usurped and overpower him before he could be settled in his usurpation.

"Should a popular insurrection happen in one of the confederate states the others are able to quell it. Should abuses creep into one part, they are reformed by those that remain sound. The state may be destroyed on one side, and not on the other; the confederacy may be dissolved, and the confederates preserve their sovereignty.

"As this government is composed of small republics, it enjoys the internal happiness of each; and with respect to its external situation, it is possessed, by means of the association, of all the advantages of large monarchies."

"The proposed Constitution, so far from implying an abolition of the State governments, makes them constituent parts of the national sovereignty, by allowing them a direct representation in the Senate, and leaves in their possession certain exclusive and very important portions of sovereign power."

State Sovereignty was not subordinate to Federal power. States were to tax for internal interests and Federal for defense interests. The ability to tax the people for two opposing spheres of interests helps protect liberty by setting "ambition against ambition."

Federal taxing for welfare and imposing Federal standards on the use of Federal funds directly undermined liberty, national stability and made States into colonies of car and oil companies. Consider Hawaii as an example:

  • Hawaii had a thriving, self-reliant culture before the Federal highway monopoly.
  • Hawaii has vast wind, sun and wave energy resources.
  • Driving speeds are typically 30 to 40 mph, yet it is only a couple hours from anywhere.
  • Hawaii is more than 2,000 miles from the nearest source of oil.
  • Honolulu is reported to have the worst traffic congestion in the nation. Congestion is an indicator of how unsuited a technology is to a use.
  • Instead of local manufacturers developing transportation tailored to Hawaii's characteristics and powered within a solar energy budget, the Federal government unconstitutionally taxed Hawaiians and mandated Hawaii comply with Federal automobile standards.
  • Federal corporate welfare mandates Hawaiians endure Oil Famine; monolithic dependence on a source of energy 100% outside their control that is thousands of miles away.

If you do not have oil wells and refineries in your economic community, you are equally exposed to Federally mandated Oil Famine.

Debt, the Tool of Tyranny
Debt is the tax on future labor -- an obligation against the liberty and a tax on the future labor of children. Debt that cannot be repaid in 19 years [Earth Belongs to the Living] is:

  • Tyranny of the Majority: Adults voting ourselves benefits to be paid against the labor of children (minority).
  • Taxation without Representation: Four year old children have seen the taxes on their future labor increased $1 trillion every year of their lives. Nineteen year olds have seen debt increase an average of $617 billion every year of their lives and lived in America at war for foreign oil their entire lives.

Federalist #57 (Madison): "...the House of Representatives, restraining them from oppressive measures, that they can make no law which will not have its full operation on themselves and their friends, as well as on the great mass of the society. This has always been deemed one of the strongest bonds by which human policy can connect the rulers and the people together. It creates between them that communion of interests and sympathy of sentiments, of which few governments have furnished examples; but without which every government degenerates into tyranny."

Worthy sounding Federal funding of welfare (in all its forms) for adults comes at the price of tyranny against children.

Blood for Oil
Since 1990, American soldiers have traded blood for oil to give the nation time to end our oil addiction and become self-reliant. As a West Point graduate and 8 year Infantry veteran, I understand willingness to serve the nation/government even when it is wrong and needs time to correct a mistake. Continued Federal subsidies to oil-powered infrastructure underscores the utter lack of Federal respect for the blood sacrifice on foreign battlefields.

Eight Presidents have declared imported oil a threat to national security, an enemy of the Constitution. Yet in that same period, Federal officials taxed the people and expanded oil-powered infrastructure that increased oil imports from 20% to 50% of needs.

Article III, Section 3 of the Constitution defines "adhering to their Enemies, giving them Aid and Comfort" as treason. Every politician who fails to cut oil use by 50%, to within domestic production, is intentionally committing treason. My recommendation is that the military and Federal agencies cut oil use by 50% by Dec 15, 2015. If we can win World Wars in 4 years, we can re-establish self-reliance in 4 years.

Federally provided welfare (in all its forms) gives the Federal government power over the will of the citizen.

Federalist #79: "In the general course of human nature, A POWER OVER A MAN's SUBSISTENCE AMOUNTS TO A POWER OVER HIS WILL."

States, being closer to the people, threaten liberty less by providing welfare. The diversity across many States enables people to see the justice or oppression of liberty in the several States.

Competitive Advantage of Free Markets:
Just as the Internet (1969) and radio telephone networks (1946) were stifled for years by monopoly central planning, there are radically safer and more efficient transport/power technologies that will emerge once the Federal monopolies are broken:

  • Freight railroads, privately funded, average 480 ton-miles per gallon.
  • The Personal Rapid Transit (PRT) network built in Morgantown, WV as a solution to the 1973 Oil Embargo has delivered 110 million oil-free, injury-free passengers-miles; in the same period the government highway monopoly has killed over a million Americans in traffic accidents. [Joseph Stalin: "One death is a tragedy, a million deaths is a statistic."]
  • Other modes that are unsafe on roads operated under Federal standards.

To illustrate the potential of free markets to re-tool power and transportation, I will use specific numbers associated with JPods. JPods is a version of Personal Rapid Transit (PRT) that operates at about 200 watt-hours per vehicle-mile or about 125 miles per gallon. Cost per vehicle-mile is cut from 56 cents for cars to 6 cents for JPods. The capital cost to build JPods is about 1/10th that of light rail. This 10x cost savings is enough to drive a paradigm shift.

Solar collectors over the JPods rails gather about 5 megawatt-hours per mile of rail per day; 25,000 vehicle-miles of power per mile of rail per day (5 million/200).

Net Energy is how much useful energy is available relative to the energy to get energy:

  • Solar Net Energy is 20:1.
  • Oil Net Energy of production has depleted from 100:1 to 3:1.
  • Applied in transportation, solar has a 6x advantage over oil (20÷3).

Net Energy

Once Federal subsidies and regulatory barriers are broken, solar-powered transportation will retool urban transportation with a 10x transport advantage and a 6x Net Energy advantage -- a scale of advantages similar to the Internet and cell phone networks over rotary telephone networks. The savings in lives will far exceed the savings in dollars and will preempt the causes of Oil Famine.

Transportation seems to have always been the catalyst for changing energy systems. Transportation innovations provide the 10x (ten times) benefits essential to driving a paradigm shift:

  • Paddle a canoe -> create a water wheel.
  • Sail a ship -> build a windmill.
  • Ride a horse -> plow a field.

Between 1850 and 1875 railroads were the catalyst for changing energy systems from biofuels (hay and wood) to fossil fuels.

Commercialization of Oil

In 1865 the price of a ticket from New York to San Francisco was $1,000; in 1869 the ticket dropped to $67 with the building of the Transcontinental Railroad in those four years. Railroads had a 10x cost savings advantage over other transport systems. This 10x cost advantage allowed railroads to afford extremely expensive coal and oil (in today's dollars, about $100 a barrel). With railroads as a large steady customer and the lower costs to ship coal and oil, the extraction industries scaled to commercial viability.

As JPods and other solar-powered transportation networks deploy, they will create a large, stable commercial demand for natural energy collection. Using the distributed nature of transportation networks to harvest distributed natural energy supports Thomas Edison observation,

"There must surely come a time when heat and power will be stored in unlimited quantities in every community, all gathered by natural forces. Electricity ought to be as cheap as oxygen...."


  • The Constitution mandates sustainability, usufruct. "Liberty" for "our Posterity" mandates that we may not deplete resources. We may use any resource so long as we capitalize all costs of use and restoration to assure like use by our Posterity.
  • Amendment IX of the Bill of Right protects the people from Federal taxing for purposes not enumerated in the Constitution.
  • Amendment X of the Bill of Right secures to the States duties not enumerated in the Constitution.
  • Federal debts cannot exceed those that can be repaid within 19 years.
  • Infrastructure is State Sovereignty. Federal funding of infrastructure is corporate welfare, unconstitutional and has created civilization killers.
  • Failure of Federal agencies to cut consumption of oil and debt by 50%, to within domestic capabilities, is treason. Recommend self-reliance by Apr 15, 2014.
  • Between now and Dec 15, 2015 capitalize all cost of use of oil and wars to protect access to foreign oil into the price of gasoline so free markets can adapt to true costs/values.
  • Net Energy of solar is 6x better than oil for urban transportation fuel.
  • PRT is 10x better than highway networks in urban transportation.
  • PRT has been injury-free while highways have killed over a million Americans.
  • 10x productivity gains are required to drive a paradigm shift.
  • Transportation is typically the catalyst for changing energy systems.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: Author is the Founder of JPods, Inc. that is used as an example.