Sunday, June 1, 2008

Worldwide Gas Prices

Consumers, gas retailers and governments are wrestling with a new energy order, where rising oil prices play a larger role than ever in the daily lives of increasingly mobile people. But as the cost of crude mounts, the effect on the price at the pump varies startlingly — from Venezuela, where gas is cheaper than water, to Turkey, where a full tank can cost more than a domestic plane ticket. Taxes and subsidies are the main reasons for the differences, along with lesser factors such as limited oil refining capacity and hard-to-reach geography that push up prices. "I don't know why it is but... it hurts," says Marie Penucci, a violinist filling up her Volkswagen at an Esso station on the bypass that rings Paris. As she pumped gas worth $9.66 a gallon she looked wistfully at a commuter climbing onto one of the city's cheap rent-a-bikes, an option not open to her since she travels long distances to perform. High taxes in Europe and Japan have long accustomed consumers to staggering pump prices, which now are testing new pain thresholds — and it could have been even worse, if a strong euro hadn't cushioned some of the blow. As a result, plenty of European adults never even bother to learn to drive, preferring cheap mass transit to cumbersome cars. Subsidies in emerging economies such as China and India, meanwhile, shield consumers but hurt governments, which must find a way to afford rising market prices for oil. Increasingly, they can't. Indonesians are staging protests against shrinking gasoline subsidies in a nation where nearly half the population of 235 million lives on less than $2 a day. And there are now 887 million vehicles in the world, up from 553 million vehicles just 15 years ago, and on track to nearly double to a billion by 2012, according to London-based consultancy Global Insight. In Europe, taxes are often the focus, since the high tax burden means crude itself is a smaller part of the burden. "The pain of a rise in prices is much less in Europe, because we may be paying a lot more here, but the rise in a percentage sense is a lot smaller," said Julius Walker, oil analyst at the Paris-based International Energy Agency. The United States, with its relatively low taxes, is considered to have retail prices closer to what energy data charts call the "real cost" of gasoline — which is closely linked to the price of oil. So as oil prices have soared, average U.S. prices have gone up 144 percent in the past five years — from $1.67 in May 2003 to $4.02 a gallon this month, according to the U.S. Energy Information Administration. Over the same period, gas prices in France went up 117 percent to $9.66 a gallon. Proposals by U.S. presidential candidates John McCain and Hillary Clinton to suspend federal gas taxes this summer would lower the price tag — but have little effect on the underlying oil price. French President Nicholas Sarkozy has urged the EU to cut value-added tax on fuel. French fishermen and farmers, who need fuel for their trawlers and tractors, say their livelihoods are threatened by soaring prices and have blocked oil terminals around France and shipping traffic on the English Channel to demand government help. Italian, Portuguese and Spanish fisherman joined them and went on strike Friday. British and Bulgarian truckers are staging fuel protests, too. Russia is proof that big oil-producing nations are not in any better shape when it comes to gasoline prices. Gas in the world's No. 2 oil producer runs about $3.68 a gallon — nearly that in the United States, where the average wage is about six times higher. Much of the Russian cost comes from taxes, which run between 60 and 70 percent. Limited refining capacity and the costs of transporting gasoline across the country's vast expanse also push up prices. Turkey faces similar problems — and even higher prices — $11.29 a gallon, which for a full tank in a midsize car can reach nearly $200, enough for a domestic plane ticket. In China, government-mandated low retail gasoline prices have helped farmers and China's urban poor but also have hurt conservation. In the first four months of 2008, gasoline consumption was up 5.5 percent from the same period last year. Venezuela, too, is a gas-guzzler's wonderland. A gallon costs just 12 cents and consumers are snapping up SUVs even as Americans are shunning them. Thanks to long-held government subsidies and plenty of oil, Venezuelans see cheap fuel as a birthright. Some policymakers in less oil-flush nations look to Brazil's use of ethanol as a potential solution. Ethanol from sugarcane is widely available in the world's No. 1 sugar producer and its 190 million people. Eight out of every 10 new cars sold are flex-fuel models that run on pure ethanol, gas or any combination of the two. The price for ethanol in Sao Paulo is currently running about half the price of gas, which runs $5.67 per gallon. In Japan, gas station owners say some customers aren't filling up their tanks all the way. "It's been tough. I had to switch to regular gasoline from premium class," said Hiroyuki Kashiwabara, a company employee in his 50s whose monthly spending on gasoline has increased by nearly 10,000 yen ($96) over the last couple of months. "My salary doesn't change and I can't cut back on my spending on food or anything else." Americans, too, are beginning to trim their hearty gas appetites. "We're beginning to see a slowdown in the U.S. in gasoline demand in particular. That's not so visible in other parts of the world," the IEA's Walker said. Jean-Marc Jancovici, a French engineer and co-author of a philosophical treatise called "Fill It Up, Please!" despairs rising thirst in the developing world for shrinking oil resources. "The real question is ... how to save peace and democracy in this context," he asks. His answer? To rich-country consumers, at least, he says: Pick up your bike and "stop being petroleum slaves."

For information on how to cut the cost of rising fuel costs visit http://fuellegacy.com/Tasuvus

Way of Life Will Not Change

As much as I’d like to see differently, higher gasoline prices are not going to change the way American metropolitan areas are organized — at least not for a long time. Here are two reasons why not:
1. Gasoline prices in the US are only now reaching levels that were “normal” for many years in other parts of the world. And in many of those places (think Canada, Australia, etc.) people still drove a lot and suburban living was popular. The main difference was they used smaller, more fuel efficient vehicles.
Already sales of the big SUVs are down so much that manufacturing of them has nearly halted.
2. There is too much invested in the current system culturally, economically, politically and physically (the infrastructure).
The automobile culture with great shopping malls and power centres is a way of life for millions. The American economy revolves around automobile based consumerism as well as around suburban business parks as employment centres. Politically, the suburbs have clout; even if the population declines relative to inner cities it will take a while for the political weight to catch up. Finally, the billions or trillions collectively invested in road infrastructure invites motor vehicle travel.
***
All this said, I do think that other forces are also challenging the suburban way of life. Everything from climate change concerns to a renewed interest in living close to places of work, entertainment and shopping to a desire to have more free time are pushing people to re-think whether they need a large suburban house. Gasoline prices are also one small factor in this equation for many people.
But, for those who want to live the suburban, automobile oriented lifestyle — and there will be millions in this category — there will continue to be affordable options. More fuel efficient vehicles will be available. The burst housing bubble will generate less expensive houses and mortgages. Suburban families may choose to save money elsewhere — eat out less, skip the movies, etc. (The “latte factor” will be less influential if there isn’t a latte nearby.)
While I’d like to see differently, gasoline prices have a long ways to rise before it will challenge the American suburban “way of life.”

For information on how to cut the rising cost of fuel visit http://fuellegacy.com/Tasuvus

Oil Prices in the News

VIENNA, Austria _ Oil prices spiked a new trading high Tuesday, sweeping past US$129 a barrel as supply concerns intensified the momentum buying that has lifted crude deeper into record territory.The June contract for light, sweet crude traded as high as $129.31 in electronic pre-opening trading on the New York Mercantile Exchange before settling back to $128.75, up $1.70.Prices are currently being driven higher by supply concerns. This latest surge comes after OPEC´s president was quoted as saying his organization won´t increase its output before its next meeting in September.The imminent expiration of the June contract is adding to the volatility. The contract will end at the close of trading Tuesday.The contract reached a new closing high of $127.05 Monday after Algerian Energy Minister Chakib Khelil, the current president of the Organization of Petroleum Exporting Countries, was quoted by a government newspaper as saying OPEC won´t increase its output during the U.S. summer driving season, which begins this weekend. OPEC´s next meeting is scheduled for Sept. 9.Concern about supply has recently become the primary driver of the market, replacing earlier worries about a weakening dollar, and not even Saudi Arabia´s promise last week of an additional 300,000 barrels of crude a day could alleviate those new concerns.Despite that pledge from the world´s leading oil producer and the U.S. move to temporarily stop filling government stockpiles, prices have shown no indication of stopping their record run.Through Monday´s close, the front-month contract has hit nine trading or closing records in 11 sessions. Analysts have said speculative buying has also contributed to oil´s record high run.In other news lifting prices, independent refiner Holly Corp. said a key unit at its New Mexico refinery was shut down for repairs, cutting estimated May gasoline production by as much as 756,000 gallons per day. The occurred while the fluid catalytic cracking unit was being brought back online from a previous May 7.The refinery in Artesia, New Mexico, is Holly´s largest.As oil prices reach new heights, so have gasoline and diesel costs."Average gasoline prices in the U.S. rose for an eighth straight week and for the 15th time this year, up 1.8 per cent or 6.9 cents to a record $3.791 a gallon," noted Stephen Schork in his Schork Report. "Gasoline at the pump is averaging 28.5 per cent above last year´s pace."Drivers in some parts of the U.S. are paying considerably more, however. Gas pump prices in parts of California have been stuck above $4 a gallon for weeks now.In other Nymex trading, heating oil futures rose 0.14 cent to $3.7665 a gallon while gasoline prices rose 4.89 cents to $3.2855 a gallon. Natural gas futures rose 17.9 cents to $11.133 per 1,000 cubic feet.

For more information on how to lower your fuel consumption costs visit http://fuellegacy.com/Tasuvus

Myth versus Fact

Myth vs. fact on 'high' gasoline prices
This one is for Prefab Sprout. From the morning e-mail comes this missive on gas prices by contrarian law professor Bob Hardaway:
By Robert Hardaway
For those confused by the political rhetoric and demagoguery blurring our understanding of gas prices, the following reality check may be helpful.
ASSERTION: Gas prices are high by historical standards
FACTS: The present average price of $3.77 per gallon reflects an annual average increase of real gas prices of less than 1 percent a year since 1981 when gas sold for an inflation adjusted price of $3.04 a gallon. Compare this to a 345 percent increase in educational costs since 1985, and medical costs which have increased at a rate approximately 10 times the rate of increases in gas prices.
ASSERTION: U.S. gas prices are high compared to other developed regions such as Europe.
FACTS: Gas now costs as much as $8 and $9 a gallon in European countries.
ASSERTION: Big oil companies make obscene profits
FACTS: The gross profit margins of oil companies are less than for many other industries, including beverages, electrical equipment, chemicals, and computers.
ASSERTION: If we imposed special high taxes on oil companies, the price of gas would fall.
FACTS: Oil companies earn between 10 and 13 cents a gallon, much of which is recycled back into searching and developing for new sources of oil. If politicians confiscated ALL of big oil's profits, the price of a gallon would fall from $3.77 to $3.65 (assuming that investors would continue to invest capital for a guaranteed return of zero, all oil company employees would agree to work for free, and new sources of oil would be discovered without any effort or expenditure.)
ASSERTION: Oil companies collude in order to set the price of gas at a high level
FACTS: The price of crude oil is set by a world market in oil. Cartels of oil producing countries do engage in blatantly anti-competitive behavior, such as agreeing to restrict production in order to reduce supply and thereby increase the price-behavior which would be criminal if conducted by a corporation in the U.S. However, the member nations of OPEC are not subject to U.S. anti-trust laws.
ASSERTION: At a price of less than half that paid by Europeans for gas, Americans have an incentive to conserve gas, drive smaller and more fuel efficient cars, and carpool.
FACTS: Gas consumption increased last year despite an increase in gas prices.
ASSERTION: The best way to impose an extra tax on oil companies is to place a special tax on its profits.
FACTS: A direct tax on profits increases the cost of production. Since price reflects total costs, such a tax would necessarily result in a proportionate rise in the price of gasoline. A far more efficient tax on oil companies would be a tax imposed at the pump-money which would otherwise go directly to the oil company's coffers. This is called a "gas tax", and European governments impose it to the tune of about $4-$5 a gallon, thus raising the cost of a gallon of gas to $8-$9 a gallon. If politicians think imposing such a tax would win votes, let them say so directly rather than obfuscating the issue by using such euphemisms as "a windfall profits tax on big oil".
ASSERTION: High gas prices would hurt the economy
FACTS: In the short run, higher gas prices would cause economic dislocations. In the long run, a $9 gas price would help our economy as much as it has helped the European economies by providing an incentive to buy and drive fuel efficient cars, renew interest in public transportation and alternative fuels, encourage car-pooling, and reduce our reliance on foreign sources of oil. The revenues from such a tax could be redistributed to taxpayers, particularly the poor, in the form of a reduction in income taxes, leaving everyone better off than before the tax was imposed.
Hardaway is Professor of Law at the University of Denver Sturm College of Law.
Comments?

To learn more about how you can increase your gas mileage visit http://fuellegacy.com/Tasuvus

Exceeding the $4 Threshold

The futility of President Bush's visit to Saudi Arabia on Friday has been underscored by a new benchmark: $4 for a gallon of gasoline. The Lundberg Survey tallied 7,000 retail gasoline prices around the nation last week and found an average price of $3.79, up 17 cents in the last two weeks. In Chicago and on Long Island, prices reached $4 a gallon for the first time. And $4 could soon be the national average, she said. Gas consumption typically increases significantly after Memorial Day."The refinery margin on gasoline is so poor, I think the upward pressure on the refining margin will push up the price at the pump, even if crude oil does not," she told Reuters.Crude-oil prices continue to climb today, approaching $128 a barrel. On Friday, President Bush asked the Saudis to produce more oil. The Saudis say they have been pumping 300,000 barrels more a day in response to demand from buyers since early May, but that increase is not expected to have any impact on prices. Here is a snapshot of gasoline prices in some other markets, from CNN:
Tucson, Arizona: $3.48 a gallon
Denver, Colorado: $3.64
Houston, Texas: $3.65
Minneapolis, Minnesota: $3.71
Portland, Oregon: $3.77
Atlanta, Georgia: $3.78
Washington, D.C.: $3.82
Hartford, Connecticut: $3.98
San Francisco, California: $3.98

For more information on how you can reduce the cost of fuel visit http://fuellegacy.com/Tasuvus
CAMARILLO, Calif. -- A national survey says the average price for regular gasoline rose about 17 cents in the last two weeks.

The average price of self-serve regular gasoline on Friday was $3.79 a gallon. Mid-grade was at $3.91, and premium was $4.02.

That's according to the Lundberg Survey of 7,000 stations nationwide released Sunday.

For the first time, the survey found average prices for regular gas surged above $4 a gallon in two metropolitan areas: Chicago and on Long Island in New York.

Of the cities surveyed, the cheapest price was in Tucson, Ariz., where a gallon of regular cost $3.48 on average.

The highest average price was in Chicago, at $4.07.

For more information on how you can reduce the cost of fuel visit http://fuellegacy.com/Tasuvus

Sunday, May 11, 2008

Gasoline is Going to Cost Over $7.00 per Gallon



I was watching the news the other night and happened to hear that gasoline prices could reach 7.00 a gallon...WHAT? So, I looked up the news article that reported this amount here. What would happen if that actually happened?

Obviously transportation costs will skyrocket for transporting food and goods to stores...and certainly they will pass this cost to us. I cannot imagine what things will cost then???

Once again, savings will be the mantra, but I don't believe that will be enough. We must find alternative ways to do things...conservation at the top of the list....everything from gas to food, water to electricity, etc.

What would you do to conserve?

To learn more about how you can increase your gas mileage visit http://4ourfuture.com/Tasuvus

Missouri Gas Prices

With no end in sight Congressman Carnahan
urges Congress and the President to act.

In 2001, the average price of a gallon of gas in Missouri was $1.38; now it's approaching $4.

Gas prices have hit new record highs for more than two straight weeks. Despite the urging of the Democratic Congress, the White House has not taken action. The President says "the cost-benefit analysis" of immediate action for consumers has not persuaded him and has chosen to do nothing.

Congressman Russ Carnahan has urged the President to stop filling the Strategic Petroleum Reserve to lower gas prices. The reserve is 97% full now—enough to meet our security needs—and has been tapped before by President Bush and former Presidents Clinton and Bush. Experts project this could lower gas prices by 5 to 24 cents per gallon. In 2000, just the announcement of a reserve moratorium dropped oil prices in the market from $30 a barrel to $20.

Congressman Carnahan and Democratic leadership have also called on the President to urge the Federal Trade Commission to enforce the law--acting on market manipulation authority enacted in the Energy Independence and Security Act of 2007.

Repealing subsidies to Big Oil earning record profits – including Exxon's $10.9 billion quarter - and re-investing in renewable energy is necessary to alleviate the price at the pumps for the long and short-term.

For more information on how you can fight the increasing prices of gasoline in todays society visit http://4ourfuture.com/Tasuvus

U.S. Mail Affected by Rising Fuel Costs

The higher price of gas will affect more than just the cost of food and consumer goods.

Now higher fuel costs are going postal.On Monday, May 12, 2008, the US Postal Service (USPS) will raise postage prices.

The cost to mail a U.S. First Class one-ounce letter will increase to 42 cents while the postcard will increase to 27 cents.

This postage increase covers higher operating expenses.

USPS has incurred higher operating costs due to rapidly escalating fuel prices, as well as rising medical, transportation and other higher expenses.

A one-cent increase in fuel costs USPS more than $8 million in higher fuel costs per year.

USPS receives no tax dollars for its operations and relies on the sale of postage, products and services to cover its costs.

For more information about how you can cut down on the rising cost of fuel visit http://4ourfuture.com/Tasuvus

Saturday, May 10, 2008

What if Gasoline Grew on Trees?

Researchers have made a breakthrough in the development of "green gasoline," a liquid identical to standard gasoline yet created from sustainable biomass sources like switchgrass and poplar trees.

Reporting in the cover article of the April 7, 2008 issue of Chemistry & Sustainability, Energy & Materials (ChemSusChem), chemical engineer and National Science Foundation (NSF) CAREER awardee George Huber of the University of Massachusetts-Amherst (UMass) and his graduate students Torren Carlson and Tushar Vispute announced the first direct conversion of plant cellulose into gasoline components.

In the same issue, James Dumesic and colleagues from the University of Wisconsin-Madison announce an integrated process for creating chemical components of jet fuel using a green gasoline approach. While Dumesic's group had previously demonstrated the production of jet-fuel components using separate steps, their current work shows that the steps can be integrated and run sequentially, without complex separation and purification processes between reactors.
While it may be five to 10 years before green gasoline arrives at the pump or finds its way into a fighter jet, these breakthroughs have bypassed significant hurdles to bringing green gasoline biofuels to market.

"It is likely that the future consumer will not even know that they are putting biofuels into their car," said Huber. "Biofuels in the future will most likely be similar in chemical composition to gasoline and diesel fuel used today. The challenge for chemical engineers is to efficiently produce liquid fuels from biomass while fitting into the existing infrastructure today."

For their new approach, the UMass researchers rapidly heated cellulose in the presence of solid catalysts, materials that speed up reactions without sacrificing themselves in the process. They then rapidly cooled the products to create a liquid that contains many of the compounds found in gasoline.

The entire process was completed in under two minutes using relatively moderate amounts of heat. The compounds that formed in that single step, like naphthalene and toluene, make up one fourth of the suite of chemicals found in gasoline. The liquid can be further treated to form the remaining fuel components or can be used "as is" for a high octane gasoline blend.

"Green gasoline is an attractive alternative to bioethanol since it can be used in existing engines and does not incur the 30 percent gas mileage penalty of ethanol-based flex fuel," said John Regalbuto, who directs the Catalysis and Biocatalysis Program at NSF and supported this research.

"In theory it requires much less energy to make than ethanol, giving it a smaller carbon footprint and making it cheaper to produce," Regalbuto said. "Making it from cellulose sources such as switchgrass or poplar trees grown as energy crops, or forest or agricultural residues such as wood chips or corn stover, solves the lifecycle greenhouse gas problem that has recently surfaced with corn ethanol and soy biodiesel."

Beyond academic laboratories, both small businesses and Fortune 500 petroleum refiners are pursuing green gasoline. Companies are designing ways to hybridize their existing refineries to enable petroleum products including fuels, textiles, and plastics to be made from either crude oil or biomass and the military community has shown strong interest in making jet fuel and diesel from the same sources.

"Huber's new process for the direct conversion of cellulose to gasoline aromatics is at the leading edge of the new ‘Green Gasoline' alternate energy paradigm that NSF, along with other federal agencies, is helping to promote," states Regalbuto.

Not only is the method a compact way to treat a great deal of biomass in a short time, Regalbuto emphasized that the process, in principle, does not require any external energy. "In fact, from the extra heat that will be released, you can generate electricity in addition to the biofuel," he said. "There will not be just a small carbon footprint for the process; by recovering heat and generating electricity, there won't be any footprint."

The latest pathways to produce green gasoline, green diesel and green jet fuel are found in a report sponsored by NSF, the Department of Energy and the American Chemical Society entitled "Breaking the Chemical and Engineering Barriers to Lignocellulosic Biofuels: Next Generation Hydrocarbon Biorefineries" released April 1 (http://www.ecs.umass.edu/biofuels/). In the report, Huber and a host of leaders from academia, industry and government present a plan for making green gasoline a practical solution for the impending fuel crisis.

"We are currently working on understanding the chemistry of this process and designing new catalysts and reactors for this single step technique. This fundamental chemical understanding will allow us to design more efficient processes that will accelerate the commercialization of green gasoline," Huber said.

For further information on how you can cut the cost of fuel consumption by increasing your gas mileage visit http://4ourfuture.com/Tasuvus

More on Gasoline Prices

CBO released a study today on consumers’ responses to the substantial upward trend in gasoline prices that began in 2003.

Many drivers have responded to higher gasoline prices in the way that they drive, but overall the response has been very small.

Freeway-driving motorists have adjusted to higher prices by making somewhat fewer trips and by driving somewhat more slowly.

CBO used data collected at a dozen metropolitan highway locations in California, along with data on gasoline prices in California, to identify changes in driving patterns: On weekdays in the study period, for every 50 cent increase in the price of gasoline, the number of freeway trips declined by about 0.7 percent in areas where rail transit is a nearby substitute for driving; transit ridership on the corresponding systems increased by a commensurate amount; and on weekends median speeds on uncongested freeways declined by about 0.75 miles per hour.

After increasing steadily for more than 20 years, the market share of light trucks (including SUVs and minivans), relative to all new passenger vehicles, began to decline in 2004. As a result, the average fuel economy of new vehicles has increased by more than half a mile per gallon since 2004 (because light trucks tend to be less fuel efficient than cars). Stricter fuel economy standards for light trucks have also contributed to that increase.

Used-vehicle prices have shifted, reflecting changing demand, particularly with respect to fuel economy: The average prices for larger, less-fuel-efficient models have declined over the past five years as average prices for the most fuel efficient automobiles have risen.

Total U.S. sales of midgrade and premium gasoline have declined gradually since 2000, even as consumption of the less expensive regular formulations has increased. Although consumption of the different grades of gasoline depends strongly on what kinds of vehicles consumers drive (and on manufacturers’ fuel octane recommendations for those vehicles), it also might have been influenced by the general increase in gasoline prices since 2003.

The study notes that the response of consumers to higher gasoline prices has important implications for policies that affect gasoline consumption, including CAFE (Corporate Average Fuel Economy) standards for cars and light trucks. Because higher gasoline prices increase the demand for vehicles with better fuel economy ratings, they reduce the economic costs (and fuel savings) of adopting more-stringent CAFE standards. At the same time, to the extent stricter CAFE standards improve fuel efficiency beyond what consumers would choose in the absence of such standards, they reduce the per-mile costs of driving — which would partially reverse some of the effects of higher gasoline prices discussed in this study. The federal tax on gasoline, by contrast, reinforces rather than neutralizes the behavioral and vehicle choice effects of higher gasoline prices. It also immediately affects all motorists’ incentives to reduce gasoline consumption, whereas CAFE standards primarily affect motorists only after they replace the vehicles they were driving at the time the standards were implemented.

David Austin, an economist in CBO’s Microeconomic Studies Division, wrote the report. In addition to his work on gas prices and CAFE, David has done research in the areas of liability policy and toxic emissions; Clean Air Act regulations; consumer benefits of new technologies; and allocation of emissions controls, and research and development in the pharmaceutical industry. He has been at CBO for six years; prior to that was at Resources for the Future for eight years. He received his undergraduate degree from Stanford University and his economics Ph.D. from UC Berkeley. He also has a master’s degree in statistics from Yale University. And he has an impressive track-and-field record, including a mile best of 4:19.

For information on how you can cut the cost of your fuel consumption click on http://4ourfuture.com/Tasuvus

Americans Using Less Gasoline

U.S. drivers are doing something they haven’t done for nearly two decades — consume less gasoline.

Gas consumption so far this year is down about 0.2 percent compared to last year, according to the Energy Information Administration.

The federal agency is predicting that gasoline demand will be down 0.4 percent this summer and 0.3 percent for the year.

That may not sound like much, but it would be the first time since 1991 that there’s been a decline in annual gas consumption.

And it would be only the eighth year since 1951 in which demand for gasoline has declined.The federal agency noted that the decline was occurring in part because of a slowing economy. But it also said that higher gas prices were having an effect on demand.

“Sustained higher gasoline prices are beginning to show up in lower gasoline consumption,” said Tancred Lidderdale, an analyst for the Energy Information Administration.

Both gasoline and diesel prices are now at record levels.Here are two charts from This Week in Petroleum to show where retail prices are:Notice that instead of falling in the winter, both gas and diesel prices remained at high levels.

I think this is an important contributing factor to the slowdown that occurred in the fourth quarter.

Also consider the following graph of oil prices:Oil has been in a rally for almost a year and a half. Notice the market has continually advanced through previous resistance levels, consolidated gains and then moved higher.

However, we're moving into the summer driving season when demand typically increases:
Since last fall, the average U.S. retail price for regular gasoline has been close to or above $3 per gallon in large part due to high crude oil prices.

High crude oil prices are expected to remain an important reason why retail gasoline prices are projected to stay above $3 per gallon for some time to come.

As the chart below indicates, we are now in the “time of the season” when gasoline demand begins to increase.

As seasonal demand increases, prices tend to rise as well, all else equal. Even though U.S. gasoline demand has been lower than year-ago levels so far this year, EIA still expects that rising gasoline demand over the next few months will drive retail prices higher.

So, while gasoline prices have risen above $3 per gallon mostly due to high crude oil prices, increasing gasoline demand will likely take retail gasoline prices to $3.50 per gallon and above, even if year-over-year gasoline demand is negative.

The simple fact that more and more gasoline will be used over the next few months will probably be enough to cause retail gasoline prices to increase, even if crude oil prices begin declining, as EIA is currently projecting. Additionally, the cost of making “summer-grade” gasoline (“summer-grade” gasoline produces less smog) is significantly more than making “winter-grade” gasoline, helping to raise retail prices even further during the summer months, all else equal.

Finally, I have two words: India and China. Simply put, US demand is no longer the only driving force of the oil market.

There are now over 2 billion more people who've seen their standard of living increase.

To learn how you can cut down on the cost of your fuel consumption visit http://4ourfuture.com/Tasuvus

Last Years Gas Prices Around The World

To learn more about how you can cut the cost of fuel visit http://4ourfuture.com/Tasuvus

Assumptions about Gasoline Prices

I think there is an unspoken assumption among our citizenry that the government runs the oil business. We seem to think that the government controls gas prices (sort of like the Federal Reserve controls interest rates), and we interpret fluctuations in gas prices as a measure of the government's ability to manage world affairs. In truth, gas prices are simply the short-term indicators of a constantly fluctuating free market.

Fluctuations in price are natural. The spike due to the Chavez crisis in Venezuela had nothing to do with the economic health of the country. Yet it probably bummed out millions of people, making them wonder if the world was indeed going to hell.

Thus, the price of gasoline is to "Main Street" what the Dow Jones/Nasdaq indices are to Wall Street: rather meaningless figures by themselves, which are taken as reflective of something much more than they are.

The daily gasoline consumption by the U.S. is around 360 million gallons a day, which (using an estimate of 100 million households) comes out to about 3.6 gallons per day per household. The 360 million gallons is not a direct measured figure, but is an estimate obtained by taking 43 percent of the daily crude oil consumption of 19.5 million barrels, since 43 percent is supposedly the fraction that winds up as gasoline.

What Muslims Think About Gasoline

In an interesting article in the Los Angeles Times, Jeremy Rifkin — who is writing a book about hydrogen power — reported that many Muslims see oil as the Great Equalizer.

"Many younger Muslim fundamentalists view oil as 'a soft loan from Allah.' They see oil as the great equalizer, a spiritual as well as geopolitical weapon that, if Islamized in the service of Allah, could lead to the second coming of Islam."

What Christians Think About Gasoline

"Fossil fuels are one of the Creator's greatest gifts to humankind."
Let's run with that idea. God apparently gave the U.S. enough oil to get us all hooked on the stuff, but he gave the Muslims a lot more so that they'll have plenty of it to sell us when we run out of our stocks. Nice little power play. Whose side is God on?

To learn more about how to cut the cost of fuel visit http://4ourfuture.com/Tasuvus

Friday, May 9, 2008

TAKE CONTROL OF RISING GAS PRICES: DON'T LET YOUR MONEY EVAPORATE

Here are some gas saving maintenance and driving tips that really work:

Vehicle gas caps - About 17 percent of the vehicles on the roads have gas caps that are either damaged, loose or are missing altogether, causing 147 million gallons of gas to vaporize every year

Under-inflated tires - When tires aren't inflated properly it's like driving with the parking brake on and can cost a mile or two per gallon.

Worn spark plugs - A vehicle can have either four, six or eight spark plugs, which fire as many as 3 million times every 1,000 miles, resulting in a lot of heat and electrical and chemical erosion. A dirty spark plug causes misfiring, which wastes fuel. Spark plugs need to be replaced regularly.

Dirty air filters - An air filter that is clogged with dirt, dust and bugs chokes off the air and creates a "rich" mixture - too much gas being burned for the amount of air, which wastes gas and causes the engine to lose power. Replacing a clogged air filter can improve gas mileage by as much as 10 percent, saving about 15 cents a gallon.

Fuel-saving driving tips include:

Don't be an aggressive driver - Aggressive driving can lower gas mileage by as much as 33 percent on the highway and 5 percent on city streets, which results in 7 to 49 cents per gallon.

Avoid excessive idling - Sitting idle gets zero miles per gallon. Letting the vehicle warm up for one to two minutes is sufficient.

Observe the speed limit Gas mileage decreases rapidly at speeds above 60 mph. Each mph driven over 60 will result in an additional 10 cents per gallon. To maintain a constant speed on the highway, cruise control is recommended.

Combining errands into one trip saves gas and time. Several short trips taken from a cold start can use twice as much fuel as a longer multi-purpose trip covering the same distance.

Avoid carrying unneeded heavy items in the truck. An extra 100 pounds can cut fuel efficiency by a percent or two.

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