We keep hearing on the news that oil prices are slipping, but when you go to fill up your car, the price of gasoline is higher.  Why?

According to USA Today, refiners are to blame:

• Refiners are cutting back on production
• Performing maintenance to reduce equipment utilization
• Decreasing the supply of gasoline on the market

The refiners are squeezing supply to match the reduced demand resulting in increased profits.  It is hard to blame them, since every other business would try the same thing, but we are all paying for it.  This just underscores how little control we, the consumer, have over the price of gasoline.

Between the refiners and then the speculators bidding up the price of oil futures, what are we to do?  Well they have control over the supply side, so our control can come from reducing demand.  Aggressively pursuing alternative energy and increased conservation are our only defense.  How do you plan to cut your gasoline consumption this year?

photo credit: Jacob Garcia

On Tuesday, Secretary of Interior Ken Salazar announced that they are adding a longer period of public review to the Bush offshore drilling program.  In a wise decision, the government wants to take more time to do the proper analysis before expanding this type of exploration.  There is more detail in this story entitled “Drill Baby Drill? Not so Fast: Interior Dept. Scraps Bush Offshore Drilling Plan”.

By adding 5 months to the review process, are we just delaying the inevitable increase in offshore drilling or is this a true change in direction away from this risky proposition?  In this story entitled “The Future Of Offshore Oil”, Dan Shaply cites the many dangers ocean drilling.  Hurricanes over the last several years have ruptured oil platforms and pipelines causing hundreds of thousands of gallons to be released into the ocean.  This along with oil spills from tankers present a serious threat to our oceans.

When gas prices were soaring to record levels, most people thought that offshore domestic drilling was a necessary evil.  Now that oil prices are way down, this option looks even less attractive.

We all understand the grim ecological objections against this type of drilling, but what is the alternative?  Should we, in the words of T. Boone Pickens, continue with the “greatest transfer of wealth in the history of mankind” to foreign countries that hate us?  Given this ugly option, I would definitely consider offshore drilling.  If you do not like either option, then you must embrace more aggressive conservation efforts to reduce our insatiable appetite for crude oil.

You may have seen these facts before, but they are well worth repeating again and again until we do something about it:

• We have 4% of the world’s population
• We consume nearly 25% of the world’s oil
• We only produce about 10% here in the U.S.

If we are going to protect our oceans for future generations then we need to take action now to break our addiction.  Let’s follow the government’s lead and put the brakes on our gluttonous consumption of this dwindling resource.  So instead of “Drill Baby Drill”, we should “Conserve Baby Conserve”.  Not too catchy, let me know if you have a better one.

I read an interesting article on The American Prospect web site this weekend.  The article entitled “How the Stimulus Screws Commuters” makes the argument that Congress is missing a big opportunity by not putting enough funding into public transit.  By spending most of the transportation money on highways, they are not doing enough to help the environment.

Currently there is $27 billion proposed for highway projects that will create new jobs and address our aging roads.  Now I wrote a post last month called Transportation Headaches that examines how massive spending is not the answer to our problems.  This will create jobs, but I have a tough time with the argument that we will “save” money with this kind of spending.

The stimulus package also wants to allocate 11.5 billion in tax incentives for automobile purchases.  I understand the desire to help the Big 3 Automakers, but I don’t think putting more cars on the road is really the answer.  If the automakers had invested more research on alternative fuels, maybe they would be offering better cars today.  They were happy making big profits on SUV’s and we were too happy to buy them, but times have changed and they need to change with them.

Yes, the primary goal of the stimulus package should be to stimulate the economy.  So while road work and automobile purchases could provide a spark, they will not light a fire to long term growth.  I would rather see more money put into projects that would help our economy and our ecology.

When gas prices rose, so did transit ridership.  Investments in mass transit, alternative energy and reducing traffic should be our main focus.  We could boost the sagging economy while also addressing climate change.  That is the type of spending I could support, what about you?

photo credit: Mike Licht, NotionsCapital.com

Saw an interesting story this week entitled Public Transportation 2.0 by Tara Brown.  She shines a light on how web technology can improve our experience with public transit and keep us informed of any alerts.

The story highlights some of the recent innovations in the Bay Area, but this must also be happening elsewhere.  They are using Twitter to send text messages directly to your phone.  The messages can be about delays on your train or the arrival time of the next bus.  This is a great way to apply new technology to an old problem.

Now the story does not end there.  Apparently another writer at this blog, Mark Pritchard, was also inspired by Tara’s story and he posted Public Transportation 2.1 as a response.  He makes a very good case for small battery powered autocabs to supplement trains and buses.

On his daily commute, he could take the train into the city, but then how does he travel the last 2 plus miles to his office?  It is too far to walk and a bus would double his total commuting time.  So, he like most commuters just drives his own car every day.  Now here is someone who wants to take public transportation, but it is just not convenient for him.

He then goes on to detail the problem of there not being enough taxis and why they don’t really fit for these short ad hoc rides.  He has an idea for autocabs that works because one of these can replace many cars and solve the parking dilemma in most cities.  They would nicely fill the gap in getting you to a transit hub from your point of origin and then from another transit hub to your destination.

I think Pay4Rides could also greatly benefit from a texting service.  Imagine a host site that could accept ride requests and text drivers for availability.  The driver could text back to accept the request and the host server could text the rider with a confirmation.  Now instead of developing a fleet of battery powered autocabs, we could just employ the autos that are already on the road.

WIBNI (Wouldn’t it be nice if)?

photo credit: numberstumper

Last Tuesday was the presidential inauguration and downtown DC braced for a very large crowd.  But a funny thing happened, there was no traffic.  In this story, they examine how over four times the number of daily commuters entered the city on this day.

This proves that if people just work together using mass transit and ride sharing that we can have a dramatic impact on our daily commutes.  On inauguration day, an estimated 1.8 million people got to their destination with more ease than the typical 400,000 daily commuters.  So even with most of the bridges closed to traffic, four and half times as many people entered downtown DC.

On normal workdays in Washington, 40% of the commuters or 160,000 people drive alone.  Single passenger vehicles are the biggest contributor to our nations gridlock problems.  Getting more people to utilize mass transit, group rides, bike and walk would improve everyone’s daily commute.

I know the current thinking is that we need to greatly enhance our nation’s roadways and build more lanes.  While this will help, it is going to cost us billions and billions of dollars as you can see in the stimulus proposal.

Last Tuesday was a historic day in many ways.  In the spirit of cooperation and national unity, we saw a great number of people avoid the nasty traffic that plagues us every single day.  I would like to see this type of togetherness become the rule, instead of the exception.

photo credit: acnatta

On Monday night, I saw a story on my local Fox news explaining a proposal by Mayor Bloomberg for Shared Cab Rides Coming to NYC.  This would allow riders to share cabs so they each pay less while the cabbie actually earns more.  So instead of just providing one ride for $25, the driver could charge 2 riders $20 each or maybe 3 riders would pay $15 each.  And don’t forget the tips.

By permitting cab drivers to pick up additional fares, they could attract new riders who might not choose a cab if they had to pay the full fare themselves.  The Mayor said that a shared-ride system is a win-win for the city.

Think of all the people landing at NYC area airports who need rides to the city.  Grouping riders not only makes financial sense, but would also reduce traffic, cut gasoline consumption and help the environment.  Is there anything not to like?

The only problem is many people do not like to share, they prefer their privacy.  I can understand this, but wouldn’t all of these benefits offset the slight inconvenience of losing some personal space?  Most cab rides are relatively short, so it should not be that hard to tolerate another passenger.  If you do not want to talk, plug in your iPod and listen to some of your favorite music to pass the time.

So maybe next time you hail a cab, you will have some company for the ride.  Think about it, wouldn’t sharing a ride make the trip in a cab fair?

photo credit: timpearce4816

As President Obama continues to build his cabinet, I don’t like what I am hearing from his nominee to the Transportation Department.  In this Wall Street Journal story, they say that he is making the case to give a bigger role to the private sector in rebuilding our roads and bridges.  Here is a quote from the story:

“There’s not going to be enough money,” Mr. LaHood told the Senate Commerce Committee. “I think we do have to think outside the box.”

Now I agree that there is not enough money for all the necessary transportation projects, but how is this thinking outside the box?  Allowing private investors to build, operate and maintain new toll roads and bridges is very dangerous to our economy.

In another story, Mr. LaHood gives his endorsement for more toll roads.  This is such a short sighted strategy to “fix” our long term transportation problems.  State governments are desperate to make up their budget gaps and these large upfront payments look very attractive.  Unfortunately, as time goes, by the private investors enjoy steady returns on their investment from hard working commuters.

Here is one such example where a foreign corporation contributes less than $350 million to a $1.9 billion taxpayer funded project, yet they are set to enjoy 80 years of profit from the tolls.  The private company will build High Occupancy Toll lanes on the Capital Beltway in Northern Virginia.  Once the lanes are completed in 4 years, drivers will be charged $1 a mile during rush hours.  Are you kidding me, who can afford this on a daily basis?

I have written a few other posts on how much I despise tolls.  They are one of the most inefficient ways to fund a road and they greatly contribute to traffic, accidents and additional carbon emissions.  Once erected, they never come down and the prices rise with little or no control from the people who actually use the roads.

Since when is building more tolls and sticking commuters with the bill considered “thinking outside the box”?  The answer can not be to just build additional transportation infrastructure since we continue to always exceed the capacity of our roadways.  Real innovative thinking will produce solutions that cut our consumption and conserve energy.  Don’t you agree?

photo credit: richardmasoner

Here is a story that caught my attention earlier today; Oil cost hedging is not fail-safe, as airline and consumer experience shows.  In an effort to eliminate their risk, United Airlines and a Metro-New York City housing complex wound up losing a lot of money.

The price of oil was so unpredictable last year, that some analysts were projecting $200 a barrel.  Trying to be proactive, United Airlines attempted to control fuel costs with hedge contracts to control soaring prices.  If prices continued to rise, they would be covered, but they did not anticipate the price collapse in the second half of 2008.  So instead of benefiting with cheap oil, they were locked in at the now higher rates.

Here are some very educated analysts who got it completely wrong.  You see, hedging does not eliminate risk, it simply minimizes it.  The exposure comes when markets move wildly against you, then hedging can lead to loses.

Normally you would think of hedging as a safe play and usually you would be right.  Unfortunately the volatile price of oil destroyed a smart plan that was just trying to protect against loss. This proves that we can not reasonably plan or predict the future of oil.

Are you willing to continue betting our economy on oil when we obviously have such little control over price?  We need to spread our risk over many other energy alternatives.  Now that is how we can properly hedge our bets going forward.

photo credit: stoneflower

Today was a historic day in many ways and we welcomed a new president.  There is so much coverage of this event that I do not have much to add.  I just wanted to highlight one line from President Obama’s speech:

“… each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.”

If you agree with this statement then you know we need to make significant changes in our energy consumption.  In the spirit of cooperation, please share any ideas you have on how to make Pay4Rides a reality.

This week T. Boone Pickens announced a new program that will report our monthly foreign oil purchases.  This is a great way to focus our attention on this vital problem by using real numbers to track progress in reducing imports.  We can set goals and then meet our objectives.
 
How significant is our oil dependence?  The numbers are staggering:

• Spending nearly $20 billion on 380 million barrels in December 2008
• We spent approximately $475 billion on imported oil in all of 2008
• Every minute we send $432,000 overseas to feed our addiction

The transfer of wealth is wrecking our economy while foreign countries realize the benefits.  This is taking money away from our domestic programs at a critical time.  Wouldn’t you rather see this money spent on roads, schools and government projects here in the United States?

Last July, Pickens unveiled a plan to increase the use of wind power and natural gas to cut U.S. dependency on foreign oil.  This would create millions of jobs building out our wind capacity and upgrading our national electric grid.  All of this would have a very positive effect on our economy.

Developing oil alternatives is just one half of the puzzle with the other half being conservation.  Gradually changing our sources of energy would be nicely complimented by all of us just consuming less.  Attacking this problem from both sides will result in dramatic reductions of imports.  I look forward to getting these monthly updates as a yardstick to measure our progress.  Will you be watching?