Blast from the past

And I mean 'blast' quite literally. I was rereading some old posts looking for something and stumbled across this post from January 2007 entitled "What you pay for when you pay for gas":

Well, it's certainly not even a minimal amount of safety, neither for the giant BP gas company's own employees nor the environment. Here's the results of a damning report on BP's systematic shortchanging safety at its refineries - one of which blew up killing 15 people. And then there is the Alaska pipeline that BP allowed to deteriorate to the point it burst.

The Texas City plant was not the only refinery in need of greater company spending. The panel said that many hourly workers interviewed at BP's Whiting, Ind., refinery reported that as a result of underfunding, "preventive maintenance was seldom practiced, the refinery had a 'run until it breaks' mentality, and the workforce had a great deal of experience running equipment with 'Band-Aids.' " A survey of people working at a Toledo refinery showed that 33 percent of operations managers, 44 percent of maintenance technicians and 63 percent of health-and-safety employees disagreed with the statement that "process safety programs . . . have adequate funding."

After a consultant hired by BP urged bigger refinery budgets, BP increased spending somewhat. But in late 2004, weeks before the explosion, BP headquarters had asked its refineries to trim costs by an additional 25 percent. "It is not clear to the Panel why the U.S. refineries did not receive greater funding," the Baker report says.

Remember the billions in windfall profits BP and other companies raked in when your gas prices went up to $3 a gal? The price spike that ended, oh, just before the last election?

Well, the Good Book is right: there IS nothing new under the sun.

Enjoy your next fill up.

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Why we need a stiff gas tax

It's not to be green, nor to feel good and virtuous. It is a vital issue of national defense. Why empower our worst enemies? Here is what is happening now that folks are no longer buying gas at their usual rate (due first to high gas prices, now to the fact we all fear poverty):

But Russia's budget for 2009 requires oil to sell at $95 a barrel to break even, Venezuela at $60, Iran between $55 and $60. Many producer states, it seems, have fallen into an old trap, expecting booms to last longer than they actually will. Let it be granted that those forecasts seem modest given the $147 high witnessed last summer.

...
it's difficult to imagine these states taking more aggressive tacks then those that which they're already on. I wonder if we might, ironically, see the opposite: domestic aggression combined with a softening toward the international society.

Or as Bill Maher once put it, "When you drive alone ... you drive with Osama!" So keep conserving that gas and support a tax on gasoline.

I'm still trying to save by not going to work, but it doesn't seem to be a viable plan.

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Exxon and GM

In this post and this one I asked why Exxon didn't just bail out GM by giving each and every employee and every member of their family a brand new top of the line fully loaded SUV. After thinking about it I now know the answer:

1) Americans are still going to drive the same number of cars the same number of miles, so from the perspective of Exxon, what difference would it make?

2) They know GM is going to tank no matter what so why waste the money?

3) They are confident that Uncle Sam will do it anyway.

Take your pick, though I like each and every one.

Following in Clemens' wake

A few posts back I suggested that the Exxon with its unimaginable billions help bail out the auto industry. Now I read this on andrewsullivan.com from Margaret and Helen:

So the oil companies are once again boasting record profits and yet the auto makers are asking for some government cheese. Does anyone else see the irony here? So I’ve got a little trickle down theory of my own. As long as Detroit continues to make cars for the Gas-Capades let the oil companies bail them out.

Personally, I see it as a match made in heaven. Wonder why no one else is picking it up?

A Modest Economic Proposal

In an effort to help the economy get back on track ... anything short of actually, you know, spending my own money ... I propose the following.

Since Exxon Mobil's vast earnings are closely tied to the health of the automotive industry it should use some of its huge and expanding profits to buy each and every one of its employees, and every member of their family whether they can drive or not, a top of the line, fully loaded SUV made in America. Driving it would be optional.

For myself, I might try a diesel version of the Ford Fiesta if Ford survives long enough to bring it to America.

ta-dahh! No. No need to thank me. I can toss out these brilliant ideas all day long.

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Weird little cars

Make that very old weird little cars. I have noticed a strange phenomenon here on the highways and byways of the uplands. Since the surge in gas prices a few months ago (which has not abated much up here - gas is still $3.75 a gal) I have seen an odd assortment of cars on the road that I thought had gone to the automotive equivalent of the elephants' graveyard years ago.

Old beat up Geo Metros, ugly old Ford (actually Kia) Aspires, and even one or two Ford (nee Mazda) Festivas. This morning I even saw an electric green Metro that looked like it had just rolled off the showroom floor. Where have they been keeping these things all these years? They seem to be popping out of the woods around here.

What do they have in common? It certainly is not design or build (well, except for the Festiva).

They all got, or get, 35 mpg or more.

I rented a Metro once. It was like driving a "foreign car" from the late 60s.

We have no more gas!

Here in Western North Carolina, for reasons that make very little sense, many of the filling stations have run out of gas. I first heard of it when one of my more responsible students e-mailed that she would not be able to make it to class because she could find no gas for her car. She was down in the Hickory area. Then today at work people made the same comment, including Maire. No gas.

I couldn't figure it out but when I drove from Boone to Wilkesboro this evening I looked at the gas pumps and their handles were all wrapped in plastic. No gas.

Carmen had the official explanation straight from the governor. Here it is:

Gov. Mike Easley announced Wednesday (yesterday) evening that substantial additional gasoline supplies have been released to North Carolina.

“The major oil companies have agreed to make additional gas supplies available to hard hits areas of our state, particularly western North Carolina,” said Easley. “We are getting tankers from Wilmington, Tennessee and South Carolina terminals to bring hundreds of thousands of gallons of gas to those most in need.”

The governor said the additional gallons of gas will be available over the next two days

“I am grateful to the oil companies for trying to get gas to our people. They do not have to make these changes in their delivery routine and I have no power to make them. They have agreed to do this voluntarily,” Easley said.

“I have a lot of staff working very hard on this and am asking people to be reasonable and cooperative with each other. Conserve for a few more days and we will be fine. We are going to continue to work hard to get every possible gallon of gasoline to the locations where it is needed.

The gas shortage that was caused by refinery shutdowns during Hurricanes Gustav and Ike has been worse in rural areas of North Carolina because those areas tend to have more independently-owned gas stations. The independent stations typically do not have long term contracts for gasoline delivery, while stations that carry major brand names do have contracts. The independents run out of gas first, consequently it is important that the brand companies have come through with extra fuel for the state.

If I understand this right, it is a gas shortage caused by the unwillingness of gas companies to ship gas to independent dealers who didn't have long term contracts. But I should be grateful to them for shipping extra gas to their own company owned stations so they can sell all they want at $3.99 a gallon?

Or did I miss something?

but at least our gov is on the case. I feel so much better.

UPDATE: The Washington Post has been investigating. It's a slightly different case apparently than the governor's explanation. Oh well.

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SUVs: It started with chickens

Yep. Chickens.

At least according to Eduardo Porter writing for the NY Times. It's tied into the story of tariffs for light trucks as Porter explains. You should read it.

But the Ford F-Series pickup did not rule the roost as the nation’s best-selling vehicle, on an annual basis, from 1981 to last year [!!] just because gas was cheap. Its ascent required a helping hand from Uncle Sam. As Washington scrambles for a policy to achieve the incompatible goals of making fuel cheaper and making Americans use less of it, it might consider the twisted tale of how four-wheel-drive gas hogs became Detroit’s best sellers.

Of course, my taste in cars has always been a bit idiosyncratic, but I always thought there was much more than simple customer demand behind what Detroit could build and sell. I've also felt that the SUVs, whatever their virtues (and around here in the wintertime I can see their virtues) were usually the wrong type of vehicle for an urban family. Minivans and old fashioned station wagons made more sense.

Well, my next car will be something weird, like a SmartCar or a Ford Fiesta ... though NOT, I am afraid, the 65 mpg Fiesta I would really like.

Why Ford will ask for a bail out

Well, not exactly a bailout, but guarantied loans backed up by money supplied by you and me.

You may remember that I speculated that Ford had a car that got over 65 mpg but probably wouldn't import it. Just a gut instinct based on the Occam's Razor of History: if confronted with two equally plausible explanations, always go with the one that assumes the maximum amount of stupidity on the part of those involved.

Bingo. Ford won't import it because they KNOW the American public will not buy it and they would have to charge too much for it. If you read a bit further, you will see that Ford really believes it couldn't make enough on each copy to make it worthwhile.

Meanwhile the out of date Focus soldiers on, with a restricted line-up and a dwindling customer base.

Gas prices: Coolest map ever

Depressed by the fact that gas costs about $3.75 a gal? This little map showing you how much it costs elsewhere will show you that by world standards the American oil companies are practically giving it away! [thanks, once again, to Andrew Sullivan for the link].

I can't understand why the oil companies (and the Republican party) haven't used this in their ads.

If Ford is in so much trouble....

Well, already aol.com has a news story suggesting we will be paying $3 a gal for gas pretty soon. No, not because of offshore drilling, or perp walking a few oil speculators or any of that. Good ol' supply and demand. As in ... demand is dropping.

Anyway, I am sure that when demand picks up again prices will rise ... probably sometime around, oh, at a guess, the end of November. In any case, our auto companies are suffering. Ford in particular seems to have no game plan to deal with the fuel shortage, while GM is hurling itself full steam ahead on a plug-in hybrid, the Volt.

So what does Ford plan to do? No word, as far as I know, though they might consider importing something like this.

Oh wait. That IS a Ford. Wonder why we won't see it over here?

Exxon Mobil update

Interesting take on offshore drilling and Exxon over on Salon.com. It tries to explain why Exxon, with record breaking profits, is desperate for offshore drilling. It seems their ability to pump oil has been decreasing all around the globe (ie Congress is not to blame - it's a worldwide problem).

Offshore drilling will have only a trivial influence on the price of gas and will not decrease U.S. dependence on foreign oil one whit. Only a massive reduction in demand and the development of alternative sources of energy will achieve such a promised land. But even just the prospects of increased production could do wonders for the share price of Exxon, should the oil company get some new leases.

Exxon's executives must currently be tearing their hair out at their inability to increase production when the price of oil is at an all-time high. Because, as the events of the past few weeks have demonstrated, when the price of oil gets high enough, demand destruction follows, and the price inevitably drops. And suddenly, $11 billion in quarterly profits is ancient history.

From that point on the post becomes an ugly rant against the energy policy of the Bush admin and I certainly wouldn't want to be a party to that.

it's too easy, for one thing.

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And working hard for every penny of it!

Exxon-Mobil. Top of the heap.

But I am sure they want to thank all the little people out there who helped make their success possible.

Automotive Artifact from the Past

I have often mentioned my fondness for weird little cars. As a sign of that, I was reading an old Edmund's review of the 2001 Toyota Echo. They really hated the car. It was too expensive, too weird, too... well, they just hated it. But the Echo remained pretty much unchanged until 2005 when Toyota retired the little beastie and used it innards for the Scion and the Yaris.

Here is what I find fascinating as an historian: Edmund's final sneering put-down.

In European and Japanese city centers, where the Echo is called the Vitz and is purchased by people with fewer and more expensive parking spaces to utilize than dwellers of Manhattan, this car makes perfect sense, particularly when overseas fuel prices are factored into the equation. It is a wonderful little low-speed, high-mileage, no-fuss urban commuter. But in America, where it takes three or four full days of high-speed motoring on some of the cheapest gas in the world to get from one side of the country to the other, Echo is ill-suited to the driving most of the people do most of the time.

Notice how the high mpg is of no interest to a REAL American. And most of us are going to drive across country? Maybe, but most of us, really, spend most of our time driving less than 35 miles round trip, usually on our daily commute and our trips to Wal-Mart.

BTW, the EPA mileage they are so smarmy about was 34/41. How much would you like one now that gas is $4? For a slightly more appreciative review, read this.

so here's my plan. Buy a low mileage base version of the 2005 model, the one with standard transmission and no AC. Then cut the back seats out, and anything else that isn't absolutely necessary. Ought to get almost 45 plus mpg.

Pickens and Wind: the movie

Here is a clearer presentation of T Boone Pickens' plan for replacing the natural gas component of our electrical power with wind power. For an old guy, he makes a great presentation in front of the class.


so there 's hope for me yet.


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How much petroleum is left?

I think that gas prices may drop before long. But only by a little bit, and not for very long. Then they will stabilize if we are lucky, or continue to climb if not. Most commentators seem to think that prices will go up in the long term. Up by how much is trickier to say.

Now T Boone Pickens, an oilman from way back, puts forward his opinion, and it is not reassuring for those who want to keep on using petroleum and claim that there is plenty of untapped oil out there, somewhere. Here's some of what he has to say:

Let me share a few facts: Each year we import more and more oil. In 1973, the year of the infamous oil embargo, the United States imported about 24% of our oil. In 1990, at the start of the first Gulf War, this had climbed to 42%. Today, we import almost 70% of our oil.

and

Consider this: The world produces about 85 million barrels of oil a day, but global demand now tops 86 million barrels a day. And despite three years of record price increases, world oil production has declined every year since 2005. Meanwhile, the demand for oil will only increase as growing economies in countries like India and China gear up for enhanced oil consumption.

Of course, T Boone has a plan. Tap the vast reserve of wind power in the midwest to run our power plants and use the natural gas that currently fuels them for our cars.

Don't know about the solution, but I think he see the problem clearly.

Tough love about Petroleum

The life blood of our civilization. Without it, we die, at least as a civilization as we understand it. Yet ... we are going to have to adjust. Consequently for all the suffering it will cause to the deserving and undeserving, I agree with this post from Andrew Sullivan:

Megan notes greater efficiency from costly energy:

"If the price of oil does come down, we'll emerge from this substantially more productive - good for us, good for our descendants, good for the planet."

$4 a gallon is the best news this country has had in a very long time. Here's to $5. It's the only way Americans will ever learn.

On a brighter note, it does seem as if the public at least is rapidly adjusting its driving habits and at least some of its expectations. Now, could our political elites do the same, please?

Update: I suppose I should note that Sullivan does not drive. Does not know how, in fact. I would point out this is positively un-American but he is not an American.

WHERE we spend the most on gas

The high cost of gas is hitting everyone and I am doing my best to conserve, but the real pain is not how much the gas costs at the pump, but how much of your daily income goes to pay for it. On that principle folks in the poorer parts of the rural south are hurting the worst. People in the big urban areas: not so much. Californians, who pay the highest prices in the country, seem to be doing fine. I assume this is because so many are turning to public transport and car pools.

To help visualize the problem, check out this map from the New York Times.

I love a good map. It can tell you so much. My first permanent job was drawing maps for an unnamed state to our south.

Update: I should have pointed out the obvious. The main reason the Californians are paying a smaller percentage of their income is because compared to the poorer folks in the south and west, they are making a LOT more money.


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A possible solution to the gas crisis?

This little video about Tysons Corner in Northern Virginia, my homeland, is the most encouraging news I've read for a long time about American urban planning. It is a necessary part of any long term solution to the energy crisis. Instead of fearing and resisting such developments one should remember how vibrant and livable Manhattan can be (note: I didn't say cheap).

And I can still remember vividly when Tysons was nothing but open farm land. Those days are gone with the wind, I am afraid.

Do NOT shop at Exxon/Mobil

Have you, perhaps, noticed that the prices at the pump keep going up? Want to know who to blame? Well, so would most of us, but the big oil companies keep telling us they have nothing to do with it. Even though they are making record breaking profits, that is simply an unintended consequence of market forces that the oil companies simply can't control.

If you want to know just how much bullwhaah this is, read this article in The Washington Post. It explains how Exxon Mobil, the biggest of big oil, uses computer price tracking to make sure that while the company is rolling in money, its station owners do NOT benefit at all. Exxon allows them to make about 8 cents a gallon no matter what. If the owners raise the price by even a penny, then Exxon raises the wholesale price by exactly that penny, often by the next day.

Read this:

Major integrated U.S. oil companies -- which produce crude oil, own refineries and sell gasoline -- have been reaping billions of dollars in profit from high oil prices over the past two years, but they are still working to extract every penny they can from the marketing end of the business. Exxon Mobil doesn't break out its earnings from marketing alone, but its 2007 profits in worldwide refining and marketing -- known as the downstream part of the oil business -- reached $9.6 billion, 43 percent of that coming from the United States.

And if weren't enough, Exxon has started raising the rent on the land the stations are on by roughly a third over the next three years.

But let's get back to Exxon's fine tuning of the prices. One station owner interviewed by the Post for the article owns five different stations in Northern Virginia, yet Exxon charges him different amounts depending on unstated variables in the market. But ..

... he still cannot fathom how the oil company can charge him different wholesale gasoline prices for each of the five Northern Virginia stations he owns. The stations all sell the same Exxon-branded gasoline, delivered from the same terminal in Newington, where it arrives via the same pipeline. Sometimes, Daggle said, it's even dropped off by the same truck and driver hours apart on the same day.

The only thing that's different is the price, which can vary by 35 cents per gallon, Daggle said. "If I could have driven a truck to Gainesville and drive the gas from there to Shirlington, I could have made 50 cents a gallon."

So, part of that nearly $4 a gallon you are paying is fudgable; by as much as 35 cents at the whim of the oil company. So what explains that 35 cents?

G.R.E.E.D.

Every time you and I fill up our tank, we are sending money to a bunch of people who bear us no good will whatsoever and only see us as a bunch of dupes who will pay endlessly for a product whose supply they control. This is as true of the folks who run Exxon Mobil as it is of Hugo Chavez or the Saudi royal family or the mad mullahs of Iran.

And two of our three presidential candidates think it is a good idea to lower our gas tax so you can continue doing this. These clowns have to go. All of them.