Gas prices: Above $2, and rising
Gas prices have risen 5% in just nine days, above $2, and they will continue inching higher despite the battered economy.
Motorist group AAA reported gas prices rose 2.3 cents to $2.009 on Thursday, rising above the $2 mark for the first time since Nov. 20.
Thursday's report caps a nine-day streak of increases in which gas prices have risen 5.2%.
The steady increase in prices at the pump recalls the previous year's wild ride when gasoline hit a record-high of $4.114. While prices are expected to continue climbing in 2009, the superspike seen in July seems unlikely.
It's a marathon, not a sprint
Prices traditionally increase in the spring and summer - but this year the climb "will be a jog, not a sprint," said Tom Kloza, publisher at the Oil Price Information Service.
"The market is moving up because of the season, not because of fundamentals," he said. "It's a trend, but this is not going to be a year of apocalyptic pricing."
This year will see a slow increase in prices, unlike the fluctuations of the last three years, he said.
Gas prices started 2009 around $1.61 a gallon, which Kloza expects will be the low for the year. Prices will probably peak at $2.25 for the first six months of of the year, he said.
Then hurricane season begins, and storms in oil-production areas can affect prices in unpredictable ways, Kloza said.
Gas prices are susceptible to world events, which make forecast difficult, said Robert Sinclair, spokesman for AAA New York.
"Any crisis, real or imagined, across the globe can make prices go crazy," Sinclair said. "Whether it's a major world event, government actions, or the weather, it's difficult to tell what will come up this year."
Regardless, gas prices will stay relatively low until the U.S. economy begins to stabilize.
Kloza pointed to still-low diesel prices as an indication of the commercial sector's continued suffering. A prolonged jump in the unemployment rate could also lower gas prices, Kloza said.
Though gas prices are off their recent lows, motorists will still save about $100 on gas in July 2009 over July 2008, he said.
Oil
Oil prices settled up $1.58, or almost 3%, to $53.44 at the close of trading Thursday. That's the highest since Nov. 28.
The Energy Information Administration released a mixed inventory report Wednesday, showing soaring oil supplies but lower-than-expected gasoline stockpiles.
Oil prices remained lower but recovered from earlier losses on Wednesday as news of the Treasury Department's bad-bank plan, which pleased investors, outweighed the supply report.
Source
Motorist group AAA reported gas prices rose 2.3 cents to $2.009 on Thursday, rising above the $2 mark for the first time since Nov. 20.
Thursday's report caps a nine-day streak of increases in which gas prices have risen 5.2%.
The steady increase in prices at the pump recalls the previous year's wild ride when gasoline hit a record-high of $4.114. While prices are expected to continue climbing in 2009, the superspike seen in July seems unlikely.
It's a marathon, not a sprint
Prices traditionally increase in the spring and summer - but this year the climb "will be a jog, not a sprint," said Tom Kloza, publisher at the Oil Price Information Service.
"The market is moving up because of the season, not because of fundamentals," he said. "It's a trend, but this is not going to be a year of apocalyptic pricing."
This year will see a slow increase in prices, unlike the fluctuations of the last three years, he said.
Gas prices started 2009 around $1.61 a gallon, which Kloza expects will be the low for the year. Prices will probably peak at $2.25 for the first six months of of the year, he said.
Then hurricane season begins, and storms in oil-production areas can affect prices in unpredictable ways, Kloza said.
Gas prices are susceptible to world events, which make forecast difficult, said Robert Sinclair, spokesman for AAA New York.
"Any crisis, real or imagined, across the globe can make prices go crazy," Sinclair said. "Whether it's a major world event, government actions, or the weather, it's difficult to tell what will come up this year."
Regardless, gas prices will stay relatively low until the U.S. economy begins to stabilize.
Kloza pointed to still-low diesel prices as an indication of the commercial sector's continued suffering. A prolonged jump in the unemployment rate could also lower gas prices, Kloza said.
Though gas prices are off their recent lows, motorists will still save about $100 on gas in July 2009 over July 2008, he said.
Oil
Oil prices settled up $1.58, or almost 3%, to $53.44 at the close of trading Thursday. That's the highest since Nov. 28.
The Energy Information Administration released a mixed inventory report Wednesday, showing soaring oil supplies but lower-than-expected gasoline stockpiles.
Oil prices remained lower but recovered from earlier losses on Wednesday as news of the Treasury Department's bad-bank plan, which pleased investors, outweighed the supply report.
Source
Comments (1)
Raise Gasoline Taxes—really!
| gas
By Ken Martens Friesen
Want to make someone hate you really quickly? Tell them you wish gas prices would go back up, and you think we should ask our legislators for a $1.00/gallon consumption tax on gasoline. That should lose you a few friends. Yet this seemingly illogical proposal might make a lot of sense right now, as America tries to move rapidly towards energy independence and a fossil-fuel free future.
What is the logic of paying more for gas when we may be in the midst of a recession, and the only good thing on the horizon is the possibility of cheaper gas prices for months or years to come? With $4/gallon gas, consumers were starting to buy more fuel-efficient vehicles, driving fewer miles and generally becoming more energy conscious. The last time that happened was in the 1970s (1973 and 1979), when oil embargoes hit and we were faced with dramatically higher gas prices. Do you see the trend here? Oil prices up, we use less oil; oil prices down, we consume more oil.
The 1980s and 1990s, dominated by low energy prices, brought us to our current dependence on foreign fossil fuels and the rapid increase of carbon dioxide in our skies. In 1973 we imported 30 percent of our oil; by 2006 we imported 60 percent. Between 1985 and 2005 the average fuel economy of American cars and light trucks actually went down. Higher oil prices have been the most effective way of making our country increase energy efficiency and reduce reliance on foreign oil. It happened in the mid 1970s, and was beginning to happen over the last two years. It is likely that if cheap gas prices continue consumers will be lured again into buying larger vehicles and driving more.
Why a $1/gallon gas tax now? We need to make our economy more green, reduce global warming and become more efficient and competitive with Europe and Asia. The tax would fund clean alternatives to fossil fuels, especially wind and solar, plug-in hybrids, all-electric cars, light rail, high-speed rail and second generation bio-fuels that actually help the environment. Both presidential contenders were united on the need to move towards energy independence and tackle global warming. A gas tax would make certain this would happen in the most efficient manner possible. The money would go straight from being part of the problem to being part of the solution.
Why a $1/gallon gas tax now? We are very familiar with $4/gallon gas prices and it would be easier to live with higher prices now than having to try to adjust once again to high prices in the future. To have any chance of locking in the positive effects of high gas prices, we need to keep prices high enough for change to take effect. European countries tax gas at a much higher rate than in the U.S. Consequently, prices throughout most of Europe and Japan are nearly double those of the United States, and those countries, not surprisingly, are much more energy efficient, and are promoting alternative energy much more than the United States.
Why a $1/gallon gas tax now? With the economy hurting and job growth at a standstill, what the country desperately needs is an effective and environmentally responsible way to jumpstart the economy. The billions the $1/gallon gas tax would raise would go a long way towards starting new industries and getting the economy moving again.
Why a $1/gallon gas tax at all? No one likes more taxes. But a tax like this has a proven record: we often tax a perceived social problem and use the funds towards a solution. Taxes on cigarettes fund anti-smoking campaigns. Taxes on alcohol fund drunk-driving awareness campaigns. A tax on gas would work immediately towards ending two persistent problems related to fossil fuel consumption: global warming and dependence on foreign sources of energy. And the tax is equitably borne out: you pay based on how much you consume.
Will it be easy or popular? Of course not. But the best examples of America’s history are those where we see past our own selfish interests and strive for a greater good. In this case paying $1/gallon more in gas will help us, our children and many generations to come live lives less dependent on foreign sources of energy and more dependent on renewable energy. So go ahead and make your neighbor angry. Call for a gas tax now!
Ken Martens Friesen teaches political science and history at Fresno Pacific University. He drives a car that runs entirely on waste vegetable oil.
Want to make someone hate you really quickly? Tell them you wish gas prices would go back up, and you think we should ask our legislators for a $1.00/gallon consumption tax on gasoline. That should lose you a few friends. Yet this seemingly illogical proposal might make a lot of sense right now, as America tries to move rapidly towards energy independence and a fossil-fuel free future.
What is the logic of paying more for gas when we may be in the midst of a recession, and the only good thing on the horizon is the possibility of cheaper gas prices for months or years to come? With $4/gallon gas, consumers were starting to buy more fuel-efficient vehicles, driving fewer miles and generally becoming more energy conscious. The last time that happened was in the 1970s (1973 and 1979), when oil embargoes hit and we were faced with dramatically higher gas prices. Do you see the trend here? Oil prices up, we use less oil; oil prices down, we consume more oil.
The 1980s and 1990s, dominated by low energy prices, brought us to our current dependence on foreign fossil fuels and the rapid increase of carbon dioxide in our skies. In 1973 we imported 30 percent of our oil; by 2006 we imported 60 percent. Between 1985 and 2005 the average fuel economy of American cars and light trucks actually went down. Higher oil prices have been the most effective way of making our country increase energy efficiency and reduce reliance on foreign oil. It happened in the mid 1970s, and was beginning to happen over the last two years. It is likely that if cheap gas prices continue consumers will be lured again into buying larger vehicles and driving more.
Why a $1/gallon gas tax now? We need to make our economy more green, reduce global warming and become more efficient and competitive with Europe and Asia. The tax would fund clean alternatives to fossil fuels, especially wind and solar, plug-in hybrids, all-electric cars, light rail, high-speed rail and second generation bio-fuels that actually help the environment. Both presidential contenders were united on the need to move towards energy independence and tackle global warming. A gas tax would make certain this would happen in the most efficient manner possible. The money would go straight from being part of the problem to being part of the solution.
Why a $1/gallon gas tax now? We are very familiar with $4/gallon gas prices and it would be easier to live with higher prices now than having to try to adjust once again to high prices in the future. To have any chance of locking in the positive effects of high gas prices, we need to keep prices high enough for change to take effect. European countries tax gas at a much higher rate than in the U.S. Consequently, prices throughout most of Europe and Japan are nearly double those of the United States, and those countries, not surprisingly, are much more energy efficient, and are promoting alternative energy much more than the United States.
Why a $1/gallon gas tax now? With the economy hurting and job growth at a standstill, what the country desperately needs is an effective and environmentally responsible way to jumpstart the economy. The billions the $1/gallon gas tax would raise would go a long way towards starting new industries and getting the economy moving again.
Why a $1/gallon gas tax at all? No one likes more taxes. But a tax like this has a proven record: we often tax a perceived social problem and use the funds towards a solution. Taxes on cigarettes fund anti-smoking campaigns. Taxes on alcohol fund drunk-driving awareness campaigns. A tax on gas would work immediately towards ending two persistent problems related to fossil fuel consumption: global warming and dependence on foreign sources of energy. And the tax is equitably borne out: you pay based on how much you consume.
Will it be easy or popular? Of course not. But the best examples of America’s history are those where we see past our own selfish interests and strive for a greater good. In this case paying $1/gallon more in gas will help us, our children and many generations to come live lives less dependent on foreign sources of energy and more dependent on renewable energy. So go ahead and make your neighbor angry. Call for a gas tax now!
Ken Martens Friesen teaches political science and history at Fresno Pacific University. He drives a car that runs entirely on waste vegetable oil.
Five Reasons You Should Consider Generating Your Own Green Energy
Over the past six months, oil prices have plunged more than 50 percent, renewable energy company asset values have taken an even bigger dive, and financial institutions have collapsed completely, leading to a worldwide credit crunch.
Is this really the best time for your company to be thinking about generating renewable energy onsite?
Before answering, consider these forecasts by the International Energy Administration (IEA) in its recent World Energy Outlook 2008:
-- Energy is going to get more expensive, with oil reaching $200 per barrel by 2030.
-- Carbon-intensive energy, which comprises well over half of the energy in the United States, is going to get much more expensive-in part due to a cap on carbon that could reach $180 per ton.
-- The price and supply of fossil fuels will continue to be volatile.
In that context, it's clear: Companies can't afford not to think about investing in renewable energy, especially those with high energy-to-raw-material cost ratios, such as firms in agriculture, food processing, metal refining, paper manufacturing, and chemicals.
What follows are five key reasons why you should consider generating renewable energy onsite to power up your business.
Renewable Energy is Beating the Grid
In some regions, the cost of generating onsite renewable energy is already beating electricity bought from the grid. This "grid parity" is currently happening in places like California, Hawaii and Japan, where electricity costs are high and renewable resources are abundant. By 2012, Australia and Italy will likely achieve grid parity, and by 2015 much more of the United States will as well.
Threatened Supply and Hungry Demand Build the Case for Self-Production
Oil production is expanding to regions with increasingly unstable governments and crippling poverty, such as Iran, Russia, and Qatar, which together hold 56 percent of known new oil reserves.
On the demand side, the world is hungrier than ever: Even with the extremely high per-capita oil needs of OECD countries, fully 80 percent of projected new demand is coming from China, India, and the Middle East, while 1.6 billion people around the world still go without any electricity. As for logistics, the bulk of oil moves through international waters where there is growing banditry, such as the $100 million oil tanker heist by Somali pirates that is still unresolved. The result: The fossil fuel supply chain poses tremendous uncertainty on both price and physical delivery.
Carbon Legislation is Pushing Up Costs
Carbon cap-and-trade regulations, in some form or another, are descending on economies around the world. Already underway for several years, the European Union Emission Trading Scheme charges European heavy emitters $21.39 for every ton of carbon above their cap. In October, the U.S. inaugurated its first cap-and-trade program, the Regional Greenhouse Gas Initiative (RGGI), which regulates utilities in the Northeast with a cost of $3.07 per ton. Regulation is just around the corner for other parts of the U.S., as well as for China and Canada. The IEA, an energy policy advisor to 28 member countries, predicts that by 2030, the average carbon prices will climb to $90 or even $180 per ton.
In addition to cap-and-trade regulations, low-carbon product standards and border tax adjustments also will put pressure on supply chains and buyer demand. All this means that carbon-intensive energy is a growing liability, whether at your own operations, upstream with suppliers, or downstream with the use of the products you sell.
Incentives for Onsite Renewables Production are Rising
"Feed-in tariffs," which require utilities to connect small, onsite renewable projects to the grid and pay their generators for surplus energy generated, are gaining traction. Countries such as Germany and Spain have adopted such policies successfully, and others like the U.S. (in California) and China are in the midst of implementing and scaling them up.
Creative Finance Options Abound
There are numerous ways to gather the resources to make onsite projects happen. Thanks to the grid, energy service companies can provide some or all of the financing needed. The grid also enables creative partnerships. For example, in partnership with Xcel Energy, Colorado's Aspen Skiing Company recently financed $1.1 million for a 147-kilowatt solar energy array. Of the energy produced, a third goes to a local school, and two-thirds is sold back to the grid, with profits given to Aspen Skiing Company.
There is a good chance you will find financing for onsite renewable energy projects by exploring partnerships with foundations or exploring funding available in carbon markets for carbon-offsets projects.
With the energy crisis likely to outlast the current economic crisis, investing in onsite renewable energy generation can insulate your company from the shocks, scarcity, and rising prices of energy. And with recent political discussions about a "New Green Deal" and a climate change "Manhattan Project," it's even possible that governments will add to or reconfigure the $300 billion in energy subsidies around the world.
So, in response to the question we started with: Is this really the best time for your company to be thinking about generating renewable energy onsite?
Yes, now more than ever.
Source
Author, Ryan Schuchard
Ryan Schuchard is Business for Social Responsibility's environmental research and development associate.
Is this really the best time for your company to be thinking about generating renewable energy onsite?
Before answering, consider these forecasts by the International Energy Administration (IEA) in its recent World Energy Outlook 2008:
-- Energy is going to get more expensive, with oil reaching $200 per barrel by 2030.
-- Carbon-intensive energy, which comprises well over half of the energy in the United States, is going to get much more expensive-in part due to a cap on carbon that could reach $180 per ton.
-- The price and supply of fossil fuels will continue to be volatile.
In that context, it's clear: Companies can't afford not to think about investing in renewable energy, especially those with high energy-to-raw-material cost ratios, such as firms in agriculture, food processing, metal refining, paper manufacturing, and chemicals.
What follows are five key reasons why you should consider generating renewable energy onsite to power up your business.
Renewable Energy is Beating the Grid
In some regions, the cost of generating onsite renewable energy is already beating electricity bought from the grid. This "grid parity" is currently happening in places like California, Hawaii and Japan, where electricity costs are high and renewable resources are abundant. By 2012, Australia and Italy will likely achieve grid parity, and by 2015 much more of the United States will as well.
Threatened Supply and Hungry Demand Build the Case for Self-Production
Oil production is expanding to regions with increasingly unstable governments and crippling poverty, such as Iran, Russia, and Qatar, which together hold 56 percent of known new oil reserves.
On the demand side, the world is hungrier than ever: Even with the extremely high per-capita oil needs of OECD countries, fully 80 percent of projected new demand is coming from China, India, and the Middle East, while 1.6 billion people around the world still go without any electricity. As for logistics, the bulk of oil moves through international waters where there is growing banditry, such as the $100 million oil tanker heist by Somali pirates that is still unresolved. The result: The fossil fuel supply chain poses tremendous uncertainty on both price and physical delivery.
Carbon Legislation is Pushing Up Costs
Carbon cap-and-trade regulations, in some form or another, are descending on economies around the world. Already underway for several years, the European Union Emission Trading Scheme charges European heavy emitters $21.39 for every ton of carbon above their cap. In October, the U.S. inaugurated its first cap-and-trade program, the Regional Greenhouse Gas Initiative (RGGI), which regulates utilities in the Northeast with a cost of $3.07 per ton. Regulation is just around the corner for other parts of the U.S., as well as for China and Canada. The IEA, an energy policy advisor to 28 member countries, predicts that by 2030, the average carbon prices will climb to $90 or even $180 per ton.
In addition to cap-and-trade regulations, low-carbon product standards and border tax adjustments also will put pressure on supply chains and buyer demand. All this means that carbon-intensive energy is a growing liability, whether at your own operations, upstream with suppliers, or downstream with the use of the products you sell.
Incentives for Onsite Renewables Production are Rising
"Feed-in tariffs," which require utilities to connect small, onsite renewable projects to the grid and pay their generators for surplus energy generated, are gaining traction. Countries such as Germany and Spain have adopted such policies successfully, and others like the U.S. (in California) and China are in the midst of implementing and scaling them up.
Creative Finance Options Abound
There are numerous ways to gather the resources to make onsite projects happen. Thanks to the grid, energy service companies can provide some or all of the financing needed. The grid also enables creative partnerships. For example, in partnership with Xcel Energy, Colorado's Aspen Skiing Company recently financed $1.1 million for a 147-kilowatt solar energy array. Of the energy produced, a third goes to a local school, and two-thirds is sold back to the grid, with profits given to Aspen Skiing Company.
There is a good chance you will find financing for onsite renewable energy projects by exploring partnerships with foundations or exploring funding available in carbon markets for carbon-offsets projects.
With the energy crisis likely to outlast the current economic crisis, investing in onsite renewable energy generation can insulate your company from the shocks, scarcity, and rising prices of energy. And with recent political discussions about a "New Green Deal" and a climate change "Manhattan Project," it's even possible that governments will add to or reconfigure the $300 billion in energy subsidies around the world.
So, in response to the question we started with: Is this really the best time for your company to be thinking about generating renewable energy onsite?
Yes, now more than ever.
Source
Author, Ryan Schuchard
Ryan Schuchard is Business for Social Responsibility's environmental research and development associate.