Ouch.
Consumers can expect retail gas prices to rise to $4 a gallon soon but whether they stay there depends on the long-term damage to oil facilities from Hurricane Katrina, oil and gas analysts said Wednesday.
"There's no question gas will hit $4 a gallon," Ben Brockwell, director of pricing at the Oil Price Information Service, said. "The question is how high will it go and how long will it last?"
He expects consumers in the Southeast and Northeast to be pinched first, following the impact of Hurricane Katrina on the Gulf Coast region. Katrina forced operators to close more than a tenth of the country's refining capacity and a quarter of its oil production, which sent gasoline prices surging.
Just in time for Labor Day. And the airlines are in big trouble.
TrackBackThe USA's already staggering airlines were dealt a crushing double blow by Hurricane Katrina, as jet-fuel prices soared 22% in two days. The killer storm also closed off airlines' avenue to bargain jet fuel. Historically, jet fuel refined in the Gulf Coast region has been cheaper than fuel refined on the West or East coasts. But Katrina has eliminated the gap and diminished the ability of airlines to save money by filling up in the South. Gulf Coast jet fuel soared to $2.30 a gallon at the close Tuesday, up from $1.89 when trading opened on Monday, said tracker Oil Price Information Service. [...]
"All the major airlines, Southwest excepted, will be in Chapter 11 bankruptcy sometime in the next five years," said veteran industry consultant Darryl Jenkins, a visiting professor at Embry-Riddle Aeronautical University in Daytona Beach, Fla. "But for those already leaning on the edge, this makes it a very simple decision for them." Delta, American, Northwest and Continental are the big airlines not now under bankruptcy-court protection.
Last night on the BBC World News the announcer was explaining the whole gas-prices-going-up-in-the-US and he read the statement, "Gas will likely soon be at $3/gallon - or 45p a liter." Considering that gas is nearly a pound a liter in England ($1.80 a liter acc. to today's currency conversion), I swear I could also hear the announcer softly whisper afterwards, "Pussies."
Posted by: KJ at August 31, 2005 11:06 AMThe Colonial pipeline, which supplies some of the petroleum products to the Eastern seaboard, has been shut down due to electrical failures.
And retailer petrol-fuel prices on not regulated in North Carolina (any price controls have to come from the Governor's office).
This is a recipe for shortages and gouging, ergo high prices.
I was at a workshop last week listening to a presenter from the Energy Information Administration (DOE's data collection arm) swear up and down that there is "still plenty of spare refining capacity". Even though his own numbers showed US refineries were already operating above 90% capacity (this is adjusted for "true capacity", i.e. allowing for refinery down time and maintenance).
Everything is lipstick on fucking pigs with this administration.
shorter: Welcome home chicken!
Posted by: Sterling at August 31, 2005 12:35 PMAmen, KJ. When Josh and I were tooling around Scotland in a Ford Ka, which had a tank the size of a milk saucer and got about a gazillion miles to the ounce, gas was 1 pound/liter. At that time, that was like $6.80/gallon. This was 1998.
I (who own and drive a Jeep Cherokee, so I am not exactly saving the Earth and I don't want anyone to think I'm trying to be all high-and-mighty fry-oil-fuel-using Mr. Man over here, looking down my nose at all the dorks with their anachronistic cars or anything) feel absolutely no pity for any of us for paying something more realistic than we always have for gasoline. $4/gallon is still cheap compared to the rest of the world, and maybe it'll help wean us off the stupid crap like suburban sprawl and our attitude that mass transit is somehow a tool of the unwashed.
Posted by: Robust McManlyPants at August 31, 2005 04:19 PMUnfortunately, a good many of the unwashed drive cars, too.
And they get pretty screwed when the cost of living goes up that much (cause you pay for gas when you buy anything).
Not that I disagree that prices have to be such that consumption is brought in line with, you know, reality. I'm just saying- there are a lot of single Moms who might offer up an Ef'you, Rob, if they heard or read that kind of argument (and you aren't the only one to make it).
Posted by: Sterling at August 31, 2005 06:42 PMI would like to thank my 1997 self for having the foresight to buy a Geo Metro.
Posted by: Uncle Mike at August 31, 2005 10:10 PMThey're not for everybody, but motorcycles get great mileage.
Posted by: Gaijin Biker at August 31, 2005 11:54 PMSterling, I will readily admit that higher gas prices adversely affect everyone, and that the relative harm is much higher at the lower end of the economic ladder than it is at the top. My expressed attitude conveniently ignores the reality of that, but you can't get everything right on the first try and, let's face it, that my fixed-income parents can probably no longer afford to drive one of their vehicles (at least for a while - my father's pickup has an eighty-eight gallon tank and gets mileage in the single digits) does not change the reality that we will have to alter our societal ways sooner or later. None of the means of doing so will be pleasant for anyone, you, me and everybody else included.
I do not wish to suggest that anyone being forced to sacrifice their livelihood because they literally can no longer afford to drive to their shitty $7/hr job is a good thing, or a necessary sacrifice to save the environment of the future, but neither do I wish to pretend that we should just muddle through the next 10 days, or 10 weeks, or however long the spike is expected to last and then, when prices drop a notch, claim that everything is better now. If we're concerned for those single moms - and I think they're a very valid concern - we need to figure out how to get them paid enough to make it to work or we need to figure out a better way to get them there. Suggestions would be sincerely welcome.
Posted by: Robust McManlyPants at September 1, 2005 12:07 AMWell, I hear that less than 1% of the Triangle uses public transportation. (I happen to be one of them, as I live in Hillsborough and work way out in the Park.) Maybe we should figure out why and work with it.
Posted by: John Johnson at September 1, 2005 06:51 AMRobust MMP-
Sounds like what we need is some real political leadership. Someone who can say "we didn't act soon enough to curtail our use of petroleum, but this crisis clearly shows that our dependency on it threatens our national security.". Such a leader could ask us for sacrifices, rather than asking us to go shopping or put little American flags on everything to show that no one can force *US* to do *ANYTHING*.
Something about the "no pity" thing rubbed me wrong- I suffer from self-righteousness, like all liberals (right?). I know that the only way to control consumption- which must be done- is through prices. That is how we make our decisions.
The problem is that this administration is convinced we can drill our way out of the problem- did you know there is a $3 per barrel tax incentive for oil from marginal wells in the JOBS creation act (because oil in marginal wells quickly reached the point of diminishing returns).
We are literally subsidizing another economic depression with this kind of f#$%ing bullsh$t.
I think GajinBiker has a point- motorcycles do sound more fun...
Posted by: Sterling at September 1, 2005 10:20 AMWhat's weird is that here in Norway the gas dropped by a Kroner from yesterday to today (thats about 15 cents I guess).
Of course it is still 6 bucks, so...
Posted by: platosearwax at September 1, 2005 11:13 AM"North Carolina has laws against price fixing, which can occur when competitors agree together to raise or fix their
prices. Any consumers who has evidence of price fixing by gas stations in their area are encouraged to file a
complaint with the Attorney General’s office. Consumers can download (or file) a complaint form at www.ncdoj.com under
“Consumer Protection” or can call 1-877-5-NO-SCAM to receive a complaint form in the mail."
"Price gouging—or charging too much in times of crisis—is against North Carolina law, but that law only applies
when a disaster has been declared by the Governor. No declaration of disaster for North Carolina is now in effect."
I suffer from self-righteousness, like all liberals (right?).
I am entirely certain that I never suffer from self-righteousness. To borrow a bit of phrasing from an otherwise stupid bumper-sticker, I enjoy every minute of it.
;)
I agree, Sterling - what it's going to take is someone who can figure out the way to sell us on a serious lifestyle change. I don't think that everyone needs to give up cars - they'll pry the gas pedal from my cold, dead foot, etc. - and many people need them in their work, but I'd like to see a political culture in which it's okay for someone to talk about how to maximize public transportation in urban centers, how to extend public transportation to suburban areas, how to control the viral spread of such suburban areas to begin with, etc.
The auto is an important icon of the liberties we're supposed to enjoy as Americans, and I don't want to take that away. What I want is to figure out a way to give us all that same freedom of movement and independence but make better use of our resources, face facts about the limited nature of many of those resources, etc. I'd love nothing more than for this guy to figure out how to stuff chicken bits in all our tanks and solve the whole problem, but until then, we as a society are going to be helping no one until we suck it up and change our ways to some degree or another. The problem is, every politician we have, as far as I know, is too afraid of pissing off Ma & Pa down on the farm by claiming they should be paying $4/gallon for the gas they put in the tractor in order to keep yahoos like me off the interstate every morning of the week.
Posted by: Robust McManlyPants at September 1, 2005 11:43 AMOn a related note, for the whole biodiesel scenario, is it possible to mod a regular ol' unleaded-only engine to use an alternate energy source? I see alot about pouring straight vegetable oil in diesel engines but nothing about what those of us with non-diesel engines can do (and I'm kind of "stuck" with my civic--which i love--as it's still pretty new and i wont be able to afford another car for a loooooong time).
Posted by: Karyn at September 1, 2005 03:27 PMWhat I am thankful for at the moment is the work-from-home gig that I have - I moved to TN in late July and have only filled up (fully filled mind) TWICE since I got here. I get average about 350mi to the tank (on 11.2 gal tank). The miles that I have driven are mostly exploratory miles to find shops, places to hang out, etc.
I wish more employers would be able to pursue work-from-home or other flexible options - heck, a lot of what I was doing when I had a "real" job could have been accomplished from home, given the right technology.
Posted by: KJ at September 1, 2005 03:32 PMKaryn, I wouldn't suggest putting straight oil in a gasoline engine.
The jury is out on straight recycled oil in diesel engines (although vegetable oil is what Rudolf Diesel had in mind). The problem is the glycerides. Many alternative fuel advocates would prefer to see the recycled oil refined into biodiesel (this requires a catalyst, but strips the glycerides). It can certainaly be done, though. And there are definitely two camps on the biodiesel front- the pro-soybean biodiesel manufacturers association, and the grassroots, which usually prefer recycled feedstock.
Any domestic gasoline powered engine can run off of a 10% blend of ethanol or methanol and gasoline. Good like finding a retailer though...
Posted by: Sterling at September 1, 2005 04:47 PMI think RMMP has the right answer to everyone's question's and he didn't even know it.
...what it's going to take is someone who can figure out the way to sell us on a serious lifestyle change. I don't think that everyone needs to give up cars - they'll pry the gas pedal from my cold, dead foot, etc. - and many people need them in their work, but I'd like to see a political culture in which it's okay for someone to talk about how to maximize public transportation in urban centers, how to extend public transportation to suburban areas, how to control the viral spread of such suburban areas to begin with, etc.
Planners, like myself, have been wrestling with this for years. We see the problem. We analyze the problem. We carefully illustrate the problem and get political buy-in to devise a fix. We spend billions to build the fix. Then no-one uses it. The ROI on these types of projects (be they public transportation, restrictions on suburban sprawl, enhancements to urban centers, or whatever) is horrible. The urban growth pattern in the United States is the DIRECT RESULT of our desires and our financial capability.
You have asked for a political solution. There is no such thing because the government is us. There may be a financial solution. When we can no longer afford this development style, it will stop.
Never fear, though. I will continue to be employed by those that will continue to look for a solution. My job is secure. That way I can continue to make a good living so so that I can say...
they'll pry the gas pedal from my cold, dead foot, etc.=;^)
And that, VARM, is why I can't feel terribly sorry for many (not all, as Sterling rightly points out) of us over the thought of $4/gallon gas. As he quite rightly suggested, the only way we'll break the habit of draining wetlands to put up more McMansion-go-rounds and then wonder why the icecaps are melting is by pricing ourselves out of being able to do so.
KJ, you are totally right. The tools and technologies are, in many areas, already there. Companies can't get past their fear that employees do absolutely nothing when no one's watching them, though. When I worked at NewSouth and I could telecommute more or less at will, I found I got more done when I was sitting at home with no one around to distract me.
Posted by: Robust McManlyPants at September 1, 2005 06:34 PMSterling wrote:
I think GajinBiker has a point
That may be the first time anyone has said that around here. I'm so proud.
Posted by: Gaijin Biker at September 1, 2005 07:28 PM