Gas Prices Steadily Climb Again – What Have We Done To Stop It?
Take a look at this graph of average gas prices courtesy of GasBuddy.com and you’ll see that prices continue to rebound from the “crash” of 2008… which shouldn’t be a shock to anyone.
Not much has changed as far as our “oil addiction” since the “crash”. Looking back, it seems that Cash for Clunkers was the only national attempt at dealing with oil’s monopoly since the collapse, and the merits of that program as an energy policy are laughable.
It took a global economic collapse to undercut the oil gouging, something we can not afford to repeat. (I continue to assert that the uncertainty of affordable fuels contributed to the economic tsunami that brought world markets to their knees that summer.)
What are we going to do to shift oil from a strategic political and economic weapon to just “another” commodity that must compete with alternative sources?
1. I’ve long been a proponent of Flex-Fuel vehicles, since they offer the simple option to use purely petroleum based gasoline or alternative alcohol-blended (up to 85%) gasoline replacement fuels. Manufacturers “promised” to add Flex-Fuel capabilities into much of their fleets by 2010, yet most only add the systems to the most inefficient models, taking “credit” for making their fleet more efficient instead. Having Flex-Fuel vehicles on the road in great numbers will be an incentive for stations to carry more alcohol-blends, and at the same time allow motorists to travel far and wide without worry that they won’t find a filling station specific to their vehicle while the network of supply is created by the opportunity to serve this demand.
2. Small efficient diesel engines are hot sellers in Europe – 50% of all new car sales across the pond are diesels. Why? Because they are clean, quiet, powerful, last a long time, and get upwards of 65 to 80 MPG every day of the week. Plus you can fuel them with bio-diesel, and reduce the amount of petroleum based diesel fuel. Again, you can travel far and wide, taking advantage of bio-diesel when available – an incentive for stations to carry the product. Since bio-diesel is made closer to home, distribution is cheaper, jobs are created locally, and competition controls costs.
3. Hybrids are great technology for getting slightly better mileage from a gallon of gas – but they are all still 100% petroleum-dependent. Flex-Fuel Electric or Diesel Electric hybrids would allow motorists to offset even more of their oil addiction to alternatives, not just kick the can down the road a little further.
4. 100% electric vehicles are still not a replacement for the family car in most cases. High costs, limited range, and long recharging times limit options and create a situation where drivers must change habits (and hardware) to participate. Plus there is the battery problem, making exotic metal ore addiction the replacement for oil addiction.
5. Conservation (aka: eco-driving) is first-aid remedy immediately available for free (better than free when you consider the money savings) available to everyone right now. With modest changes to your driving habits, you can increase your fuel mileage 5% to over 25% no matter what you prefer to drive (including Hummers and Hybrids). And while “ecodriving” sounds like “hypermiling” to some people, in fact eco-driving is easy, courteous, and safer driving. It does require you to pay attention to operating your car (shouldn’t you be?), but relieves you from the urge to compete against those other drivers around you, and instead compete against the gas pump.
In the end, as we approach the future still addicted to oil we limit our geopolitical power and remain at the mercy of markets we do not have much control over politically. We have been at war for years thanks to oil, with no end in sight. While our planets poorest nations are prime real-estate for several bio-fuel industries that could lead them from poverty to prosperity, the “powers that be” lobby and maneuver to protect their monopoly on your mobility.
What are you doing to make progress? What do you see as our future?
The Great Geopolitical Battle Over Energy Transit Routes
The Great Geopolitical Battle Over Energy Transit Routes
by Philip H. de Leon
As we all live in the present, it is very hard to fully assess the future implications of decisions supported or made by political and business leaders. An extraordinary game of geo-strategy is under way to lock in long-term agreements, notably in the energy sector. At a global level, the transit routes of future oil & gas pipelines become the object of a power struggle involving not only the suppliers and end-users but also the transit countries. Intensive courtships are under way where a ménage à trois, or more, may be the best option to prevent any country from being in a dominating position to rule a region and exercise political or economic pressure.
Let’s take a practical example and look at some of the dynamics behind the Nabucco pipeline and at the different interests involved.
The Untapped Energy Riches of Uzbekistan
The Untapped Energy Riches of Uzbekistan
by John C.K. Daly
While many Western investors remain fixated on somehow acquiring a slice of Turkmenistan’s natural gas riches, despite a recent scandal over the country’s actual reserves, there is another country further east whose energy and mineralogical reserves have been overlooked – Uzbekistan.
While a number of factors are responsible for this oversight, including relative geographical isolation (Uzbekistan, along with Liechtenstein, is one of the world’s doubly landlocked nations, requiring crossing two other nations to gain access to the oceans), which currently limits energy exports available for the global market, there are a number of pluses that the country has for investors willing to “think outside the box.”
With a population of 27 million, Uzbekistan is Central Asia’s most populous and dominant power. A conservative fiscal policy since 1991, including inconvertibility of the national currency, the som, has shielded its citizens from the hyperinflation that ravaged other former Soviet republics, but the policy previously diminished potential foreign investment.
Since the global recession that began a year ago, however, Uzbekistan’s fiscal conservatism, previously dismissed by the foreign investment community, has looked more and more like a pragmatic policy that isolated the country from the worst aspects of the recession in stark contrast to other post-Soviet states that fervently embraced free market capitalism like Lithuania, whose economy contracted 18.1% this year and is expected to shrink further by 3.9% in 2010. In a move certain to be welcomed by foreign investor Uzbekistan is slowly moving towards making its currency convertible but whenever it happens, for the present the country offers a fiscal stability unmatched by many of its more free-market neighbors.
Houston We Have a Problem – Feedback?
Back in June I took a first look at a new movie called “Houston We Have a Problem” – now there is an updated theatrical trailer (see below) and some recent screenings in select cities and film festivals (right now at the Austin Film Festival).
Houston We Have A Problem is about America’s ferocious appetite for oil from the insider’s perspective of the Energy Capital of the World – Houston Texas. The film explores our dangerous addiction to oil through candid insights from the Barons, Wildcatters, CEO’s and Roughnecks that comprise the world of Big Oil. Oilmen on oil addiction.
Has anyone been able to see the film? What did you think?
Fuelishness! Feed: Oil prices cloud recovery; When the Clunker Is Greener; Chevy Volt to Get 230 MPG; A 5-Stroke Engine; Diesel as alternative fuel in US
- Economic outlook: Oil prices cloud recovery hopes - The nascent recovery in global economic activity could yet be derailed by rising oil prices, with Brent crude hitting $76 a barrel last week, its highest levels of the year to date.
- When the Clunker Is Greener – Policies that encourage purchases of energy-efficient products may also increase, rather than decrease, energy use by confusing efficiency with consumption.
- Chevy Volt to Get 230 Miles per Gallon in the City, GM Says – If the figure is confirmed by the EPA, which does the tests for the mileage posted on new car door stickers, the Volt would be the first car to exceed triple-digit gas mileage, Posawatz said.
- Ilmor Engineering Creates a 5-Stroke Engine – The engine operates by using low- and high-pressure cylinders and a similar setup for the camshafts. The two high-pressure cylinders operate as a conventional 4-stroke engine does and alternately exhaust into the third, low-pressure cylinder, where the burnt gases perform more work.
- Diesel play catch up in alternative fuel race with help of German automakers – With a fuel efficiency boost that some claim can approach 40 percent over gas-powered counterparts, diesel is at least starting to make more and more sense from a cost perspective to the consumer.
Mexican cartels smuggle stolen oil into U.S.
Mexican drug cartels are skimming oil from the government owned pipelines an selling it to several U.S. refineries.
In a surprising public acknowledgment, Mexican President Felipe Calderon said last week that drug cartels have extended their operations into the theft of oil, Mexico’s leading source of foreign income which finances about 40 percent of the national budget.
At least one U.S. oil executive has pleaded guilty to a conspiracy that involved what prosecutors said was about $2 million in stolen Mexican oil, U.S. Justice Department officials confirmed to The Associated Press.
Fuelishness! Feed: U.S. gasoline prices hover around $2.66; Have gas prices peaked for summer; States Consider Gas and Oil Levies; IEA slashes oil demand forecast
- U.S. gasoline prices hover around $2.66/gallon: survey – The average price of a gallon of gasoline in the United States remained virtually unchanged from two weeks ago as crude oil prices hovered at about $70 per barrel, according to an industry analyst.
- Have gas prices peaked for summer? – After running up every day for nearly two straight months, gasoline prices have fallen this week — as they typically do a little before or after the Fourth of July holiday.
- States Consider Gas and Oil Levies – Cash-strapped states are considering raising taxes on oil production to plug yawning budget gaps, but they face strong resistance from oil companies, which warn the moves could lead to lost jobs and higher energy prices.
- IEA slashes oil demand forecast – The International Energy Agency on Monday cut sharply its medium-term forecast for oil demand because of economic recession, but said the threat of a supply crunch had only receded, not gone away.
- Nigerian militants say attack Shell despite amnesty – Nigeria’s main militant group said its fighters had attacked an oil facility belonging to Royal Dutch Shell in the Niger Delta on Monday, days after President Umaru Yar’Adua proposed an amnesty.
First Look: Houston We Have a Problem [Movie Trailer]
Here’s a first look at the trailer for a new film Houston We Have a Problem – a feature documentary about America’s ferocious appetite for oil from the insider’s perspective.
Exploring our dangerous addiction to oil through candid insights from the Barons, Wildcatters, CEO’s and Roughnecks that comprise the world of Big Oil. This film is an inside look into the culture of oil that explores the history of our dependency that has led us to our current ENERGY CRISIS.
We learn how the perceived perpetrators of this critical American problem understand its complexities better than anybody. These seasoned professionals and New Wildcatters are presenting innovative strategies with a systemic shift to renewable, sustainable energy sources.
For too long, the energy policy of this country has been dictated by lobbyists and knee-jerk political decisions but now, politicians and business are finally joining together for a solution
The film premiered at the AFI Dallas International Film Festival earlier this year. Unfortunately, I wasn’t lucky enough to be there. There is, however, an interesting interview from the festival with director Nicole Torre and producer Eric Mofford where they talk about how the motivation for the film developed out of a conversation where two people, representing two distinctly different political and social perspectives, were able to overcome the obvious obstacles and discuss real solutions to the shared crisis.
I talked briefly with the film’s director Nicole Torre yesterday who told me they are still shopping it around for national theatrical distribution, and the screening schedule and DVD release date is not yet available.
You can learn more about the film Houston We Have Problem and it’s schedule at their website, or on the film’s FaceBook page.
Fuelishness! Feed: Iran Removes Oil Chief Torkan Amid Political Unrest; Iran’s oil supply and potential for disruption; [Flashback 2006] Why Iran oil cutoff could be suicidal
Some fresh Fuelishness!
- Iran Removes Oil Chief Torkan Amid Political Unrest - The sudden dismissal could raise concerns that political unrest in the second-largest member of the Organization of Petroleum Exporting Countries may be spilling over into the country’s oil industry.”If his removal is for political considerations, it is sad to bring in politics into the oil industry,” Manouchehr Takin, an analyst covering Iran at the U.K.-based Centre for Global Energy Studies. “He was considered a ‘doer’, someone getting things done. He got projects moving.”
- Iran’s oil supply and potential for disruption - Disruption to Iran’s oil exports would drive up the oil price as refiners that buy the Islamic Republic’s oil would be forced to buy elsewhere. Strikes in the run up to the Iranian revolution in 1978 stopped the flow from the southern fields, and the country’s capacity has never recovered to the 6 million bpd of before the revolution.The disruption was keenly felt by top oil consumer the United States, which had to ration fuel. The shortfall ruptured global supply lines, sparked panic-buying and saw a sharp rise in oil prices that contributed to the U.S. recessions of 1980 and 1981.
Iran now pumps around 3.8 million barrels per day, or about 4.5 percent of global supply.
- [Flashback 2006] Why Iran oil cutoff could be suicidal – Iran’s nuclear standoff with the United States, Europe, and other nations has led to considerable speculation of $100-per-barrel oil and $4-per-gallon gasoline in the US. Such high prices might kick off a worldwide energy crisis and recession.
Breakdown: Oil’s monopoly on transportation sector will hold beyond 2030, says EIA
Refer to the following charts and an estimate from the Energy Information Administration looking ahead twenty years.
Again, charts from the recent API report Energizing America:
Click image to enlarge.
Take a look at transportation – 96% of the energy we consume leading our modern mobile “just in time” lives is derived from one sole source - oil. In no uncertain terms, that’s a monopoly.
According to the Annual Energy Outlook 2009 (AEO 2009) from the Energy Information Administration, not much is due to change in the next 20 years. They outlook for 2030 shows oil slipping it’s grip only slightly – down just 9% to still monopolize our transportation sector at 86% in 2030.
In 2030, oil will cost anywhere from $50/bbl to $200/bbl – depending on various factors, but the AEO’s best guesstimate settles somewhere around $130/bbl:
In the AEO 2009 reference case, world oil prices rise to $130 per barrel (real 2007 dollars) in 2030; however, there is significant uncertainty in the projection, and 2030 oil prices range from $50 to $200 per barrel in alternative oil price cases. The low price case represents an environment in which many of the major oil-producing countries expand output more rapidly than in the reference case, increasing their share of world production beyond current levels. In contrast, the high price case represents an environment where the opposite would occur: major oil-producing countries choose to maintain tight control over access to their resources and develop them more slowly… (read more…)
Astonishingly enough, the forecast calls for no growth in oil consumption during this time, which I find very hard to believe. Consumption will be curbed thru a mix of high prices and regulation.
Total U.S. demand for liquid fuels grows by only 1 million barrels per day between 2007 and 2030 in the reference case, and there is no growth in oil consumption. Oil use is curbed in the projection by the combined effects of a rebounding oil price, more stringent corporate average fuel economy (CAFE) standards, and requirements for the increased use of renewable fuels… (read more…)
Will we suffer through high gas prices for the next 20 years? Or longer?
- or -
Will pragmatic innovators lead the world beyond oil, into a future where seeking energy sources no longer dominates our time and politics, or limit so much of our human potential?
What do you think? Comments are open and greatly appreciated.
Where does your gas money go?
There’s an outstanding report from American Petroleum Institute (API) called Energizing America. I’m going to cherry pick some of the best and most informative info-graphs from this report and highlight them over the next few weeks. You can download a free copy of their report from their website.
Click image to enlarge.
The API report wants to emphasis that oil companies only make a 5.5% margin on each drop of oil the buy, refine, and transport to your local filling station.
More interesting are the taxes; nearly a quarter of the money consumers spend at the pump gets fed back to local, state, and federal governments. Any idea why every administration since the 1970’s oil crisis has so far failed to solve our oil addiction? Anyone?
What to do about a most Inconvenient Double Hockeystick Graph?
I write a lot about the price of oil because it is the single most important indicator of coming hardship and suffering for those of us surviving on the thinnest margins. Those of us who are “scraping by” and have to go without other things in life to put gas in the tank, or work hard at a job that barely pays enough to justify the drive in each day, or those small business owners who are fighting to keep their dream alive – their employees working – and their deliveries and service calls on time.
I maintain that hyper-inflated fuel prices contributed to and certainly compounded last year’s global economic collapse. Yes, there were (are!) deep systemic problems with toxic mortgages being traded by Freddie, Fannie, and the rest - and the system had been failing (with warnings) for some time.
But the promise of oil prices skyrocketing at a dizzying speed well into the foreseeable future pushed the teetering economy off the cliff. Citizens and businesses didn’t know how they would survive in a world of $5/gal, $6/gal or $10/gal gasoline. We didn’t know how to plan for our future, so we did the only thing that made sense – we stopped spending money – on everything - including houses and cars.
It took a global economic meltdown to stop oil from reaching $5/gal, $6/gal or $10/gal in the US.
A few weeks ago I wrote about the oil-price hockey stick with a hook. Today I’ve updated the chart to include the last few months where oil continues to climb again at a dizzying pace.
So, what are you going to do about it?
I promise you it really is possible for you to spend 10% to 25% less for gas – while driving the same distances you normally do, without buying anything to add to your gas or bolt in to your engine, and without become a road hazard or nuisance to others around you.
The “trick” is to adopt some very practical and efficient eco-driving habits - and leave inefficient aggressive driving habits behind. You are leaving up to 25% of your gas money “on the table” when you drive aggressively, in a rush, competing to get to the next stop light, only to arrive at your destination in about the same amount of time.
You bought that gas with money you’ve already paid taxes on, and being thrifty with your after-tax money is akin to giving yourself a “virtual” pay raise roughly equal to the money you saved plus your tax bracket (around +33%). Saving gas money is even more satisfying, because those virtual pay raises are paid by the oil companies.
How much of a pay raise do you want to give yourself today?
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