[Wumpus]

That sucks, I wonder why the reduction in refining isn't affecting the rest of us? Don't most places get their gas from the refineries in the South?

I think a lot of it is self-perpetuating -- they think there is a gas shortage so people are showing up with gas cans and topping off tanks which leads to a real shortage so when people find gas they are filling up gas cans and topping off which leads to...

 

[ire]

Around here most of the refining is done locally... right about here.

I guess the hippie state even has one

 

[Wumpus]

I haven't heard of any shortages in Texas and haven't seen any lines at any of the stations around here.

 

[pigboy]

I haven't heard of any shortages in Texas and haven't seen any lines at any of the stations around here.

I'm pretty sure you guys are still short one village idiot. But I hear he'll be coming home in January.

 

[Wumpus]

I'm pretty sure you guys are still short one village idiot. But I hear he'll be coming home in January.

Loco went on vacation?

 

[jimmydean]

Get a good deal on a new car!

Ford Motor Co., Toyota Motor Corp. and Chrysler LLC all posted drops of more than 30 percent.

Ford sales also were hurt as buyers continued to favor small fuel-efficient cars over trucks and sport utility vehicles. Truck sales were down 39 percent, while car sales dropped 19 percent.

When will they learn?

 

[Wumpus]

When will Ford learn?

Never.


The 65 mpg Ford the U.S. Can't Have

 

[jimmydean]

Never.


The 65 mpg Ford the U.S. Can't Have

I posted that in the alt trans thread.

<edit> I would rock one, too.

 

[Toshi]

this is how it will happen.

http://www.nytimes.com/2008/10/05/magazine/05Green-t.html

Kleiner&#8217;s partners largely shared this view. &#8220;Our overarching thesis,&#8221; Bill Joy says, &#8220;was that a lot of stuff had already been developed, but there were things that were not yet commercialized because they had been frozen by the low price of oil. The innovation had occurred, but they hadn&#8217;t been deployed.&#8221;

Cliffs Notes: venture capital firms such as Kleiner Perkins Caufield & Byers have come to the conclusion that there is money to be made in "green tech," in no small part due to the rise of oil prices. working in concert with government regulations (ie, carbon cap and trade systems) some of their bets will pay off. and if they pay off, they may pay off spectacularly.

just a few of the public technologies mentioned, with the "stealth companies" still keeping their wares under wraps:

- Bloom Energy fuel cells: a few Watts to 5MW to 100MW, take your pick, running on your fuel of choice
- Ausra (pic below): electricity production via steam created by concentrating solar energy on pipes using mirrors, with the test installation in Bakersfield, CA already up and running
- Amyris: through handwaving and "genetically modified yeast" seeking to create cheap biofuels. this is the fabled diesel from sugar cane.
- Th!nk: the norwegian electric city car originally funded in part by Ford (! iirc), with a target of 2010 and < $30k.

Ausra:

 

[BMXman]

Get a good deal on a new car!

Ford Motor Co., Toyota Motor Corp. and Chrysler LLC all posted drops of more than 30 percent.



When will they learn?

yeah right now our local Nissan dealer is offering a free Nissan Versa if you buy a fully loaded Nissan Titan

 

[Toshi]

i may get my wish yet:

Pirates Briefly Rattle Oil Market

Do pirates have the ability to move oil markets?
If only for a few hours, it seems that they can. Oil futures spiked Monday morning just as news broke that Somali pirates had nabbed a Saudi Aramco-owned super tanker named Sirius Star off the coast of Kenya. The huge ship can carry up to 2 million barrels of oil.

somalian pirates == francisco d'anconia?!

 

[Toshi]

Time to raise the gas tax [Fortune magazine]

NEW YORK (Fortune) -- The big game in Washington these days consists of running around dealing with the problems of the Detroit Three automakers, formerly the Big Three.

But all the to-ing and fro-ing about how (or whether) to keep General Motors (GM, Fortune 500), Ford (F, Fortune 500) and Chrysler out of bankruptcy is ignoring the elephant in the room - lower gasoline prices. As you doubtless know, they've fallen about 50% from the record levels they reached in July, making them one of the few bright spots in our economic picture.

So let me fulfill my traditional role of skunk in the garden party, and suggest that these lower gas prices aren't an unalloyed good thing. Let me also suggest that we jack them up, sharply, by adopting a big honking tax on gasoline.

[...]

 

[Toshi]

there may be hope yet for my high-gas-prices utopia:

Steven Chu, who will be Obama's Energy Secretary, is a member of the Pigou Club.

The Pigou Club is described as "an elite group of economists and pundits who have publicly advocated higher Pigovian taxes, such as gasoline taxes or carbon taxes."[1] A Pigovian tax (also spelled Pigouvian tax) is a tax levied to correct the negative externalities (negative side-effects) of a market activity. Typically these pundits and economists also advocate lowering other taxes, such as the income tax or the corporate tax. These ideas are also known as an Ecotax or green tax shift.

larry summers, who will head the national economic council, is also a member.

In a sign of one major internal difference, Mr. Chu has called for gradually ramping up gasoline taxes over 15 years to coax consumers into buying more-efficient cars and living in neighborhoods closer to work.

"Somehow we have to figure out how to boost the price of gasoline to the levels in Europe," Mr. Chu, who directs the Lawrence Berkeley National Laboratory in California, said in an interview with The Wall Street Journal in September.

But Mr. Obama has dismissed the idea of boosting the federal gasoline tax, a move energy experts say could be the single most effective step to promote alternative energies and temper demand.

 

[Toshi]

those of you who feared that cheap gas would lure american consumers back into the glistening, plump arms of SUVs and pickup trucks were thankfully overly pessimistic. Dec 2008 vs. Dec 2007 sales figures:

VW Touareg sales down 56.7%. Audi Q7 sales down 23.4% for the month, 36.2% for the year. (incidentally the Rabbit, another option that is less economical than its Japanese peers, is down 53.4%.)

FoMoCo SUVs down over 50% (including the Lincoln Navigator). Taurus X down 79%. Even the brand-new F-150 is down 24.5%.

Honda car sales down 30.4% for the month (0.8% down for the year), truck sales down 40.0% for the month (17.9% down for the year). (Fit sales were only down 1.5% but Civic Hybrid sales were down by 67.9%, barely topping the precipitous 65.7% decline in S2000 sales.)

GM truck sales down 34.8% compared to cars being down 24.9%. HUMMER down 59.3%, good lawd. all this and 872,000 unsold vehicles! going to be a bloodbath, bailout or not.

Chrysler sales down 53% in the retail arena, with a 63% decline in fleet sales as rental car companies pull back. Dodge Nitro sales down 72%.

Toyota sales down 36.7% overall, with the Land Cruiser down 65%, the Scion xB down 52.6%, and the Tundra down 52.2%. (the Corolla was "only" down 19.4%, and the soon-to-be-replaced Prius was down 44.7% on the month, 12.6% on the year with supply constraints.)

Nissan sales down 30.7%, with the Quest minivan down 74.7%. (1730 Nissan GT-Rs sold this year so far! awesome. the redesigned Murano actually sold well, on the other hand, up 54%.)

 

[SkaredShtles]

Yeah... I'm not sure those numbers are due to anything other than the economy being in the toilet. If things were still going gangbusters people would be buying Hummers again with $1.25 gas.

Of course gas would still be $4/gal if things were still going gangbusters.

 

[DaveW]

I hate it when I agree with SkaredShtles.

 

[Toshi]

Yeah... I'm not sure those numbers are due to anything other than the economy being in the toilet. If things were still going gangbusters people would be buying Hummers again with $1.25 gas.

Of course gas would still be $4/gal if things were still going gangbusters.

i think the economy is more in the toilet than you or i realize, in particular chapter 18 - environmental data and chapter 19 - future shock

 

[jimmydean]

Hyundai just announced a new program:

Loose your job within a year, you can give your car back.

 

[Toshi]

Hyundai just announced a new program:

Loose[sic] your job within a year, you can give your car back.

hmph.

http://money.cnn.com/2009/01/05/autos/hyundai_assurance/index.htm

As defined by Hyundai, life changing events include involuntary job loss, personal bankruptcy if [and only if] self-employed, getting transferred overseas and accidental death.

 

[Crashby]

Toshi, Ive enjoyed your posts.

If you want/forecast such an increase in gas (ergo oil), have you looked into making money off your call?

Among other things, I trade equities, ETF's, ETN's and options. Lately, I have put almost all my energies into Oil.

Here is what I see:
1. The economy remains in the sh!tter for 5 years and geo-political conditions remains in a state of relative peace. = Price of oil declines or stagnates at these levels
2. Housing and unemployment figures start to improve and that will drive an overall improvement in economic conditions which will drive up demand and usage for oil. = Price of oil increases
3. Inflation starts to kick in due to the trillions of government injections (stimuli...) = Price of oil increases

The key here is when. My take is that the overall stock market will rise into and perhaps slightly after inauguration of Obama. Then, reality will set in that we are indeed going to 9-10% unemployment and we will test old or set new lows in the indexes around April-May time frame. That may give us a bottom for a slow rise into 2010.

Here is what I'm looking at. Its an ETN (Exchange Traded Notes are debt securities whose performance is based on an underlying index) that basically is a double weighted measure against oil futures. Not exact, but if the price of todays oil goes up 5%, you can see a 10% rise in this ETN:
DXO Chart

For a 'safer', non leveraged vehicle, you can go with OIH (generally 1/2 the returns or losses of DXO)

So... what does this all mean? Well, if you prescribe to points 2 and 3 above, then it makes sense that w/in the next 6-18 months, we will see $50-$70 oil again. This will put the price of DXO at around $10. This is an increase of around 350% from todays current price. Note that if we do see oil go back down to $25 or so, DXO can go below $1 so again, this is a matter of timing.

* Do not trade with this advice... just throwing some of my thoughts out there.

 

[ire]

The key here is when. My take is that the overall stock market will rise into and perhaps slightly after inauguration of Obama. Then, reality will set in that we are indeed going to 9-10% unemployment and we will test old or set new lows in the indexes around April-May time frame. That may give us a bottom for a slow rise into 2010.

I doubt we're going to see a new bottom on the market....stocks are currently priced for doomsday and at worst (I suspect) will remain flat. Most of the stocks I watch, and have purchased, bottomed around mid November.

 

[dante]

good points Crashby. A couple others to note would be USO which tracks the price of a barrel of oil, or a royalty trust like BPT, which is BP's Prudhoe Bay royalty trust. They pump out oil at a cost of $19/barrel, and anything above that gets transferred to trust holders. Only 2 problems, though, 1) at some point it will use up its reserves and be worth zero, and 2) it's dividends are taxed as income (at your marginal tax rate) as opposed to 15% like normal dividends. You can avoid #2 by holding it in an IRA or 401k (I *think*) but you do have to keep an eye on how long it's going to last (BPT is estimated to last for at least the next 20 years or so).

 

[Toshi]

there may be hope yet for my high-gas-prices utopia:

Steven Chu, who will be Obama's Energy Secretary, is a member of the Pigou Club.

larry summers, who will head the national economic council, is also a member.

chu has been neutered. bummer.

http://thecaucus.blogs.nytimes.com/2009/01/13/steven-chu-eases-up-on-the-gas-price-pedal/?hp

Steven Chu, the Nobel laureate scientist who is President-elect Obama’s choice to be energy secretary, said in testimony prepared for his Senate confirmation hearing Tuesday that high oil prices were a threat to the economy, backing away slightly from statements made in his last job, as director of the Lawrence Berkeley National Laboratory, that gasoline prices should be higher.

Mr. Chu, who was expected to get a friendly and brief review by the Committee on Energy and Natural Resources, said in prepared testimony that “last year’s rapid spike in oil and gasoline prices not only contributed to the recession we are now experiencing, it also put a huge strain on the budgets of families all across America.’’ He called for a “greater, more committed push towards energy independence, and with it a more secure energy system.’’

He had told the Wall Street Journal last September , “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” a statement likely to give some commuters a case of road rage.

 

[dan-o]

It's never pretty when Idealism and Reality collide.

 

[dante]

It's never pretty when Idealism and Reality collide.

 

[Toshi]

things are moving in the right direction but i still think my dream is some years away from realization... unless we see sustained double digit inflation. (but in that case my original premise, of a gas price increase/effective carbon tax greater than inflation, would be violated.)

govt data comparing 2008 and 2009:

one random dude's gas price history (anal retentive much?):

a different historical perspective:

 

[Knuckleslammer]

effects, my dear l'opie. i think the correct order of the world is when transport costs are not negligible: things should be built, grown, and consumed locally.

Word Toshi !!! I agree.

However on an extremist note, consumerism, greed and the like are going to cause the forces at be to hit the reset button. Think I'm nuts, remember this when it happens. 2012? 2009? Who knows. However we come from the same place and need to help each other. The me me me attitude is going to cause God to wipe the slate clean.

All I really need is 1 guitar and a 4' circle of space, food and water a place to sleep and some clothing and loved ones.

 

[jimmydean]

All I really need is 1 guitar and a 4' circle of space, food and water a place to sleep and some clothing and loved ones.

...and this lamp, and this paddle ball, and this chair...

 

[Toshi]

Weeden and Co.'s Senior Energy Analysis predicts $300/barrel oil by 2020.

Good read, and not just for that headline future. Peak oil soon. Peak natural gas later, then peak uranium 100 years down the road. I don't think anything will change our ways besides the price pressure of the global market, and the good FSM knows that there's no way a comprehensive energy bill/carbon tax will fly in America's political climate... but change is a-comin' anyway, like it or not.

 

[dexter]

You sir are an idiot. For example: There are a lot of people that live in very rural areas that have to drive long distances with vehicles that can haul a lot of stuff, or people who travel long distances for work and need to take boats/ trailers/ other vehicles/ etc with them.

20 bucks a gallon would put most farmers and local businesses that transport their goods out of biz.

 

[SkaredShtles]

You sir are an idiot. For example: There are a lot of people that live in very rural areas that have to drive long distances with vehicles that can haul a lot of stuff, or people who travel long distances for work and need to take boats/ trailers/ other vehicles/ etc with them.

20 bucks a gallon would put most farmers and local businesses that transport their goods out of biz.

Poppycock. Gas WILL get to $20/gal and guess what? Life will go on...

 

[IH8Rice]

gas will get to $20/gallon but not in 9 years

 

[stevew]

You sir are an idiot.

let's see.....he's a doctor.....and your claim to fame is no footed 360's....

 

[dump]

let's see.....he's a doctor.....and your claim to fame is no footed 360's....

Hahaha... way to bring up old stuff We haven't forgotten dexter

I'm almost mad that I have that useless memory lodged in the back of my mind. Hadn't brought that to the forefront in about 7 years.

 

[CBJ]

let's see.....he's a doctor.....and your claim to fame is no footed 360's....

 

[dante]

You sir are an idiot. For example: There are a lot of people that live in very rural areas that have to drive long distances with vehicles that can haul a lot of stuff, or people who travel long distances for work and need to take boats/ trailers/ other vehicles/ etc with them.

20 bucks a gallon would put most farmers and local businesses that transport their goods out of biz.

Nope. $20/gallon for farmers would mean that the cost would get passed along to consumers. People have to eat, although there might be more of an emphasis on locally grown food as opposed to shipping peppers into the US from Israel and cucumbers from Argentina. As for towing boats/trailers/etc, if you have the $20,000 ($100,000?) for a boat, guess what, you'll have to figure in the gas prices when you buy it, or find somewhere to berth it so you don't have to drag it back and forth. People will change, they won't have a choice.

 

[KavuRider]

Nope. $20/gallon for farmers would mean that the cost would get passed along to consumers. People have to eat, although there might be more of an emphasis on locally grown food as opposed to shipping peppers into the US from Israel and cucumbers from Argentina. As for towing boats/trailers/etc, if you have the $20,000 ($100,000?) for a boat, guess what, you'll have to figure in the gas prices when you buy it, or find somewhere to berth it so you don't have to drag it back and forth. People will change, they won't have a choice.

Its funny...when I was growing up, I had a lot of people think it was strange for me to not want to get a license, to ride my bike everywhere.

Those same people have been encouraging me lately. The shift in attitudes is already starting, albeit very slowly. I still grocery shop/run errands on my bike when I can, as I drive a full size ford van and with how much gas it consumes, might as well be $20/gallon.

Makes me wonder how a city like Phoenix will able to be sustainable - its so spread out in the Valley, plus virtually nothing is "local". I grew up in Vermont, we lived fairly isolated out in the country, we lived on food we grew or raised ourselves, barter with neighbors for supplies and services. I much prefer that way of living to "city living".

Misc ramblings before coffee.

 

[5150dhbiker]

I hope not! Gas for one of the planes I fly is already $5.75/gallon and that plane burns 10gal/hr and the other one burns 18gal/hr oh and when I'm doing my twin flying... that's a total of 32gal/hr. If only I made that much....stupid part time jobs trying to pay for flight training

 

[ire]

I hope not! Gas for one of the planes I fly is already $5.75/gallon and that plane burns 10gal/hr and the other one burns 18gal/hr oh and when I'm doing my twin flying... that's a total of 32gal/hr. If only I made that much....stupid part time jobs trying to pay for flight training

Take up a cheaper hobby......like riding a bike

 

[Toshi]

The Tragedy Of The Gas Tax, By Edward Niedermeyer, posted on thetruthaboutcars.com

In the most basic sense, not increasing the gas tax is bad for America’s physical body. Our roads, which circulate the lifeblood of commerce (OK, enough with the metaphor), are literally crumbling. Again, a phrase we may have become desensitized to, but literally true.

Another downside to undertaxed gasoline, which explains the broad industry support for a gas tax hike, is that America’s cheap gas makes life hell for automotive product planners. [...] Recent history teaches us that the rate of increase or decrease in the price of gas, rather than the price itself, drives the market to the extremes of high and low fuel efficiency (as evidenced by he fact that last month’s hybrid sales fell despite gas prices hitting their 2008 price levels). Industry planners would rather see the price of gasoline taxed to a state to create sustainably steady price increases, eliminating some of the speculative swings in pricing, than to plan for lower efficiency and higher profits only to be caught flat-footed by a price shock. Also, bringing US gas prices into line with the rest of the world will help US market-dependent manufacturers develop truly global products. Finally, a gas tax increase would eliminate the need for the complex, loophole-ridden CAFE regime, which industry lobbyists say “only about six people in the US actually understand.”

And then there’s the issue of “externalities,” or the unborn costs of cheap gasoline. One commonly-cited “hidden cost” of cheap gasoline is the US’s huge overseas military presence. Though the link between America’s military adventures and our low price of gas isn’t always obvious, our intervention in Libya shows how expensive interventions are often undertaken out of fear of a gas price shock. Since the cost of military action isn’t built into the price of gas, this amounts to a hidden cost. Furthermore, the military’s intensive use of gasoline has a multiplying effect on those costs, forcing Pentagon planners to seek ever-greater efficiency simply to maintain existing overseas deployments.

Like military interventions, the cost of health problems caused by pollution is largely born by taxpayers… another “hidden cost” that some estimates place at over a trillion dollars per year.

But the final externality is one that should stop the populist resistance to a gas tax in its tracks: if we don’t pay for our gas with more money, we will do so with our privacy. Going back to the Highway Trust Fund, we find that the only alternative to an increase in the tax itself is the “Vehicle Miles Traveled” tax, a scheme that would require the government to track every single vehicle in the United States and tax it based on the miles traveled. Though in many ways a more fair system than a gas tax alone (as it apportions costs based on use of the infrastructure, without filtering it through the efficiency level of each individual car, the VMT tax scheme is an Orwellian nightmare waiting to happen. Though privacy is not at the height of its popularity at the moment, those who oppose any increase in the gas tax would do well to consider the implications of this alternative (Who does the data belong to? Will law enforcement get access? Will others be able to track you by piggy-backing onto the system?). Especially since no other alternative is even being seriously considered.

Like the auto bailout, sacrificing long-term principles based on short-term fears betrays a lack of faith in America’s ability to innovate its way out of challenges. What’s the principle at stake here? Market function, for one thing, which is fundamentally perverted by willfully hidden externalities. How about the historically unprecedented mobility offered by our interstate system, not to mention the ability to enjoy that mobility without government surveillance? Global equity in an increasingly multipolar world, and environmental justice are other fine principles, if you’re into that kind of thing. Oh, and did we mention America’s swamped fiscal situation that is the backdrop to all of this?

Sadly, the reason a gas tax increase hasn’t happened isn’t because people don’t understand these issues. This isn’t a problem that can be solved by op-eds like this one. Taking on this issue will require a fundamental shift in how the gas tax and gas prices more generally are seen inside the beltway, and based on President Obama’s recent decision to release strategic oil reserves, that leadership is as AWOL as ever. And with an election looming, we’re more likely to see a gas tax holiday (as we did during the last presidential election) than any proposal for an increase in gas taxes.

I agree with the above for all the pragmatic reasons outlined above, even if I'm not out to save the world any more by getting people to drive less and produce less CO2 emissions.