Oil And Gasoline Prices

LR Fuel Prices 28 Feb 2011

LR Fuel Prices 28 Feb 2011

Higher Res version as I think it turned out rather nice and you can zoom in to look at the textures in the tree bark and the red leaves on the hedge… ;-)

Well, we’re over $4 / gallon for super at the Car Wash. They are still holding the line at $3.99 / gallon at the non-carwash stations in the area (though not in other areas).

It’s a bit of a “hoot” hearing the folks on TV talk about $3.25 / gallon gas and what might happen “IF” gas reached $4 a gallon…

But, there it is.

The “E-85″ is 85% Ethanol (only station in the area that has it as near as I can tell) while the Biodiesel at B-5 is basically a blending credit gimmick. B-20 starts to be interesting and I like B-99 better. (Folks don’t sell B-100 as you don’t collect the blenders credit… welcome to Government “managed” markets…)

As most of the run up in crude has not yet made it through the refinery delay, I expect prices to keep on climbing for a few weeks. Expect $5 / gallon in “exotic” places (like that lone gas station at the end of the long mountain climb to the remote park… or near expensive and exclusive neighborhoods.)

“Coal to Liquids” can make gasoline for about $2.75 / gallon. Just a thought…

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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13 Responses to Oil And Gasoline Prices

  1. oldtimer says:

    In the UK the other day, I paid 130 pence per litre to fill my wifes car with petrol; that price x 4.546 (litres per UK gallon) equals £5.91 per UK gallon; £5.91 x 1.63 ($:£ fx rate) equals $9.63 per UK gallon. About two thirds or more of that is tax – excise tax plus VAT on top of that. Diesel is c5p per litre more expensive where I live.

    Excise duty is due to go up again about the end of March. This is described as a green tax. But many expect the government to have cold feet and postpone it until oil prices drop again. If they do not, I expect the road haulage industry will, again, be out in force to block the roads in protest. That will do the job to persuade the government to back down if they decide to be stupid enough to remain on their present course.

    If memeory serves me correctly, I believe that US and UK gallons may not be the same.

  2. H.R. says:

    @oldtimer
    1 U.S. gallon = 0.83 Imperial gallon.

    I’ve wondered now and then, when news reports here in the U.S. discuss the superior miles/gallon for U.K. autos; have the journo-geniuses taken the difference into account?

  3. pofarmer says:

    Don’t worry, the NCGA insists Ethanol will save us.

  4. R. de Haan says:

    South Africa is self sufficient in coal to liquid gasoline production.
    The current price is 0.82 per liter which is perfectly in line with the E. M’s assessment.
    http://money.cnn.com/pf/features/lists/global_gasprices/
    How low fuel prices can go can be seen at this web site which provides an actual overview of gasoline prices.

    The prices for Germany and the Netherlands are correct if they are in Euro’s but I’m not sure.
    http://www.nationmaster.com/graph/ene_gas_pri-energy-gasoline-prices

    Today in the German news it was stated that Allied fleets are steaming up to the coast of Libya for a possible no fly zone enforcement or hit an run assaults to neutralize Gaddafi’s air capability.
    http://groups.yahoo.com/group/stopnato/message/49118?l=1

    and this article from Debka which will soon disappear behind their pay wall:

    US weighs hit-and-run raids to disable Qaddafi’s air capability
    DEBKAfile Exclusive Report February 28, 2011, 10:52 PM (GMT+02:00) Tags: US Pentagon Hillary Clinton Libya Qaddafi

    USS Kearsarge to be “repositioned” off Libya
    The US is repositioning its naval and air forces around Libya, Pentagon spokesman Col. David Lapan stated Monday, Feb. 28, indicating possible military steps to break the standoff between Muammar Qaddafi’s army and rebel forces in the fighting for control of the towns commanding the roads to the capital Tripoli where Qaddafi is barricaded. The reported rebel capture of the key towns of Misrata and Zawiya is technically correct. In fact, they are both surrounded by Libyan troops who control their road links with Tripoli. In Misrata, the army has a valuable edge over opposition forces in its control of the local airfield.
    The Pentagon spokesman’s indeed remarked that there are “various contingency plans” for the North African country where Muammar Qaddafi’s forces and rebels in the east “remain locked in a tense standoff.”
    Most military observers interpreted his remark as referring to potential US military intervention in Libya to break the stalemate. It was strengthened by the imminent redeployment off the Libyan coast of USS Enterprise from the Red Sea and the amphibious USS Kearsarge, which has a fleet of helicopters and about 1,800 Marines aboard.
    This US naval movement appeared to be running ahead of US Secretary of State Hillary Clinton who, speaking in Geneva, Switzerland, earlier Monday said “nothing is off the table” but added “there is no pending naval action planned against Libya.”
    DEBKAfile’s military and intelligence sources report that the presence of the two US warships opposite Libya gives Washington and its allies a flexible option for military intervention should Qaddafi be seen to prevail over the opposition or if the standoff lingers too long. Among the 1,800 marines aboard the Kearsarge are units especially trained for guerrilla or covert raids behind enemy lines. They would have air cover from the Enterprise to protect them from Libyan air and helicopter strikes. They primary mission would be to disable the Libyan air force and put its air fields out of commission. The rebels would not then be stalled by the Libyan ruler’s ability to bring in fresh troops and drop them at any point and give them a better chance of carrying the day.
    The other “contingency plan” in discussion between Washington and European allies is creating a no-fly zone to protect the people from air assault. The American UN Ambassador Susan Rice said later that Washington is discussing militlary options with its allies but a determination is premature.
    On the sanctions front, the US government Monday blocked a record $30 billion in Libyan assets, the largest amount ever frozen, in line with the Obama administration’s decision to impose unilateral and multilateral sanctions on Qaddafi.
    End of article.

    This will trigger the inevitable opposition of Iran and only the rhetoric has the potential to further boost gasoline prices.

    There is also this claim that Saudi Arabia is lying about it’s reserves and it’s ability to compensate for the production loss of Libya.
    http://www.freerepublic.com/focus/f-news/2681453/posts

    Unfortunately the fuel prices at the pump reflect the reality of the day.

    This reality for now is based on fear only because Libya is responsible for only 2% of the world oil output.

  5. John F. Hultquist says:

    In the UK, where do all the taxes on gasoline go?
    Mostly in the US it was supposed to go to highway construction and maintenance. By 2009 about 27 percent went to non-highway expenditures; such as bike lanes, intercity passenger rail (mass transit). [S. R. Staley, “Transportation-Policy Crossroads,” NATIONAL REVIEW, March 7, 2011]
    If the USA imposed UK sized taxes our gas would cost about $12 per US gallon. Unless about 80 percent of that money was returned to folks in a near direct pass-through manner there would be severe disruptions. Many people now drive 50 to 100 miles (round trip) each day to work. House location and work location adjustments would have to follow a 4-fold increase in travel costs. For some, this could be done without a major disruption, but where a couple both work and home is in the middle between work points there would be no good solution.

    The argument can be made that more dense living and mass transit could solve many of the issues. The problem with that is after a couple of hundred years of hardening of the city’s arteries (not my coinage) it is not possible to quickly change the layout of vast spread-out regions. Streets, utilities, schools, sewer systems and on and on . . . cannot be abandoned and replaced in a year or two or ten.

    If you have a few minutes, try this exercise:
    Copy and paste these coordinates into Google Earth:
    47.594123, -122.320948
    Make sure “Photos” is checked in the Layers panel of Google Earth. Look for the image titled
    “congestion of the intersection of the I-90 and I-5 corridors in metropolitan Seattle”
    This photo is taken from (almost) over the downtown of Seattle. The view is to the southeast and the intersection of I-5 & I-90 is in the center. This is the western terminus of I-90.
    Click the photo off. Then zoom out just a little and trace this highway east across Washington State. Cross the Cascade Mountains via Snoqualmie Pass and keep going. Zoom in and out repeatedly to see the local trees, farms, and towns. These coordinates
    47.12949, -119.806843
    place your view in an irrigated (center pivot type; each 0.5 mi. diameter) agricultural region in the middle of the dry interior of Washington. Zoom out and keep heading east.

    Cross into Idaho, then Montana. At Billings, switch to I-94.
    At these coordinates;
    46.046422, -105.852397
    You have reached Miles City (~8,000 folks). Keep going until you enter North Dakota. Straight line distance across Montana is about 550 miles, about the same as between Venice and Paris.
    In central Wisconsin switch back to I-90 again (I-94 heads to Milwaukee) which takes you more directly to Chicago, around the south end of Lake Michigan. New York City is still over 700 miles farther east. If you trace out this route and think you have gone from the Pacific Ocean to the Atlantic Ocean – not quite. The start in Seattle is about 100 miles from the ocean “as the crow flies” and about twice that by highway.

    Thanks, for going on the trip with me!

    If you have zoomed in at a dozen or so locations in WA, MT, ND and elsewhere you can see the long distances between places – and remember the interstate highways actually were designed to connect the population centers so if you go north or south of those highways you will find fewer inhabited places.

    How I wish our leaders (Administration and all executive branch heads, Senators, and Representatives) in Washington, D.C. could be put on a dozen buses and follow the route on the ground. It won’t happen but they would learn much about the USA they do not now seem to know.

    Here is a link to a different sort of map for comparison:
    http://goeurope.about.com/od/europeanmaps/l/bl-country-size-comparison-map.htm

  6. You are not yet enjoying real prices, as we do in Peru, SA: supreme: US$5.80 per US gallon (the difference it´s a tax….which you will also need for balancing your budget….though you use to export your inflation)

  7. BTW: You have to share the blessings of the “open society”: VAT=19-20%, 30% income tax, flat, etc,etc….just to properly feed the Government beast. This is the world of the future.

  8. E.M.Smith says:

    @R de Haan:

    Yes, the Saudi’s are lying about reserves ( ALL of the OPEC countries have been, ever since they decided that each OPEC member would have their allotment of the quota set proportional to “reserves”. In the year or two that followed most of them ‘found’ vastly more ‘reserves’ … and without the need to drill any new wells either… )

    But to say they can’t still be ‘swing producer’ and pump more oil is not quite right. As much as I love Jim Rogers, and as much as he is generally correct, he often leaves out some technical stuff (that matters) in his press conferences.

    In particular:

    The Saudis DO have “spare capacity” of a “few” Billion BBL / day. The had a load of rigs go over and drill out some more of a secondary field a few years ago (last time when oil spiked to $120 / bbl).

    The problem is that it’s a heavier oil. Everyone who is presently getting Libyan oil is set up for “light sweet”.

    Converting a refinery is not particuarly easy or cheap. Once converted, you can run the heavy sour for a couple of more bucks / bbl, but before that, you are kind fo stuck. (Like running your car on Diesel instead of Gasoline… you can do it if you change the engine, but otherwise… it’s going to crap up the works.)

    We had this same circumstance when we hit $120. Saudi was saying “We have oil on offer, no one is buying.” And that was true… (though widely reported as not true).

    It all comes down to “keeping a tidy mind” and remembering that all things called “oil” are not the same.

    Oh, and per “it’s only 2% so not Libya, only fear”. The reality there is a bit more complex too. Oil is a very inelastic demand product short term. That means a way over 2% price change from a 2% demand change. How much? I don’t know at the moment. But it can easily be in the 10% to 25% range. It all depends on how much that guy with a load of frozen chickens in his semi-truck is willing to let them rot rather than buy that Diesel and how much you’all are willing to tell the boss you won’t come to work today…

    At the same time, the folks at hedge funds will be contributing their bit to price escalation too. US Oil is in Contango, so a load of more storage is being built at Cushing Ok. as you can make money buying now and providing at a higher price later (as futures contracts mature). Storing some oil takes it off the market NOW. This continues until the storage is full and someone stops buying ( then we enter “backwardation” and folks start selling oil into the spot market like crazy as they will be paid less for it in the future…)

    Right now, the storage is darned near full in the USA. Not a lot of more room to wiggle there. Don’t know about tankers used as floating storage in the ROW…

    BTW, I suspect that some of the Oil Producing Countries may use various hedge funds to mask such manipulation via storage (“See, my right hand continues to produce!… ignore my left hand buying for storage via GS or my private Hedge Fund”…) but can not find evidence.

    @John F. Hultquist:

    I’ve taken my family on 2 cross country driving vacations just so they would “have clue”…

    The other fun one is to look at the Suburbs. You can drive 20 miles and never get anywhere near an employment site (other than the mini-mart and gas station). Your choices are either:

    1) Tear down part of the homes and build some industry near the survivors (that nobody wants there, btw).

    2) Build massive bus / rail systems into the suburbs (and it will only take you about 6 hours a day to get to / from work… I’ve tried.)

    3) Build apartment blocks near the existing industry and “if you build it they will come”. (Which our more looney out here have tried… resulting in largely empty apartments as folks LIKE living in suburbs with a lawn and no industry next door. Heck, we’re even moving our most offensive industries to China…)

    The housing density is too low to support rail or even effective buses (and they do not have a significant fuel advantage over a compact Diesel car… the numbers quoted are for ‘packed full’ busses and most of the day they are ‘nearly empty’).

    Destruction of housing stock is NOT creating wealth. Nor is destruction of existing industry to ‘relocate it’ nearer to housing. And if you DID relocate, it would be to China, not “suburban San Francisco”.

    Now you just have to find a way to get folks to WANT to live next door to a loud smelly and potentially toxic industrial plant… (Here in Silly Con Valley, chip foundries have tanks of some of the most toxic stuff in the world. Phosgene and Arsine come to mind, but don’t forget the lead and elemental arsenic for making gallium arsenide…)

    @Adolfo:

    It’s not the world of the future, it is only a transitional form. Any time the total “Government Take” goes over 50% the society collapses. Takes a while, but it happens. The kids start to decide that it’s easier to not bother getting that Engineering Degree or working 12 hour days as a doctor and just go into “Art” class… and on the dole. Then slowly things grind to a halt. Remeber the USSR? “The pretend to pay us and we pretend to work”? Even China has run away from the “Great Leap”…

    The only “bad thing” is that it typically takes generational change, so it is a 1 or 2 lifetime process.

  9. PhilJourdan says:

    Hey! I bought a tank at $3/gal in California a week ago!

    (I had to rent the car and buy the full tank when doing so however!).

    I cam back to the cheap stuff – only $3.25 back here (the old Dominion).

  10. dearieme says:

    “In the UK, where do all the taxes on gasoline go?” General government expenditure – so overwhelmingly on the supplicant class whose votes the previous government was so keen to buy, and the various parasites who make a living off those people.

    Plus, oddly for a bunch of socialists you might think, they doled out a large whack to the banksters. Hey ho.

  11. pascvaks says:

    I’m reminded of a children’s story: The Three Little Pigs. But… I can’t seem to find the little pig that built his home with brick. Oh well, two out of three.

  12. E.M.Smith says:

    @Dearieme:

    Socialists are very fond of handing government money to other socialists who are running the “right” companies.

    That was the creation of the Fascists with their “Third Way” and the use of “Corporatism” to foster the Socialist Agenda.

    So the Banksters are given a pile of cash to lavish on themselves and “approved” others; in exchange for tightening the social control on money by the central government… and generally also control of the lending / housing markets too.

    Vis “Fanny & Freddy” and the Community Redevelopment Act…

    @Pascvaks:

    I’m somehow pushed to the vision of a 4th little pig with a ferrocement undergrounded bunker… I think we’re gonna need it before all this is over.

  13. PhilJourdan says:

    Socialists are very fond of handing government money to other socialists who are running the “right” companies.

    That was the creation of the Fascists with their “Third Way” and the use of “Corporatism” to foster the Socialist Agenda.

    Interesting! But what came to mind (other than the “agencies” you listed) was GM and GE.

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