No word yet on how bad it is.

Sounds like the infrastructure's getting a bit creaky up there.

http://www.snopes.com/politics/gasoline/gasout.asp

http://community.livejournal.com/peak_oil/

Never before seen online.

Govt likely to benchmark fuel prices

NEW DELHI: Cost-Plus and Administered Price Mechanism (APM) days may come back as a ghost from the past for Indian refiners if the present moves by the finance ministry is anything to go by.

Indian refiners, who have been selling fuel at globally benchmarked prices since April '02 when the APM was formally dismantled, may have to start looking at operation costs as a criteria for fixing fuel prices. The finance ministry is preparing a Cabinet note to look into a new pricing structure that could be a shift from the current regime where the refining company sells fuel at the global benchmarked price.

The new proposal, which is sure to face stiff opposition from the oil industry, proposes to take into account the costs of operating refineries and the margins earned on the products based on current pricing regime. Oilcos used to sell fuel at cost-plus prices during the APM days when the returns to the oilcos was fixed at 12% post-tax.

RR

Interest in carpooling, buses rises

Drivers are finding relief from high gas prices.

INDIANAPOLIS -- With gas prices inching toward $3 per gallon, interest in carpooling and bus service is on the rise as Hoosier motor-ists seek out ways to hold down their fuel costs.

In Indianapolis, city officials predict that a growing number of people will sign onto an IndyGo carpooling program that matches commuters for car pools.

Since September, the number of participants in the carpooling service, called Central Indiana Commuter Services, has nearly doubled, to about 4,000.

Nigeria: Power Reform And Increasing Darkness

... Our fervent hopes that changes would occur with the new nomenclature had turned into a nightmare. Today, electricity outage has metamorphosed into total darkness in most parts of the federation. In Satellite Town where this writer lives in Lagos, the situation is simply terrible. This elite surburb has power supply for barely three hours per day and this comes only at night. During the daytime, no light is visible. Artisans who depend on electricity to eke out their livelihood wait endlessly for it like manna from heaven. Computers serve no useful purpose in this vicinity because there is no power to operate them. Television sets and other electronic equipments have become objects of household decoration since they are left dormant as long as the power outage lasts. Several artisans who are self employed have in desperation embraced the motor cycle commercial business as Okada riders to keep body and soul together and feed their embattled families. One of the armed robbery su spects recently arrested confessed that he had to join a thieving gang when he could no longer work as a refrigerator mechanic due to perpetual power outage in his slum residence at Ijegun on the outskirts of the Lagos metropolis. The temptation to wield guns at midnight was too much in the wake of penury and crippling hunger.

Those who nicknamed NEPA Never Expect Power Always or National Economic Paralyzing Agency, cannot be wrong. The situation has gone from bad to worse and indeed is degenerating everyday even in the rising political tension of the third term syndrome and the intense climatic heat of the dry season. Medical practitioners who recently cried out about the dangers of another pandemic of celebral meningitis especially in the Northern regions deserve to be listened to before it becomes too late. We must not compound our problems of disastrous bird flu with another session of debilitating diseases.

...The latest excuse, obviously predictable, is the ongoing unrest in the oil-rich Niger Delta where some militants blew up two gas pipelines. The two pipelines, the Alabiri and the Escravos are conduits used to convey gas to power the thermal power stations. According to the Managing Director of the Power Holding Company of Nigeria Joseph Makoju, the situation is beyond their control. The Minister of Power and Steel does not help matters by his never ending promises of improved performance which is never fulfilled. Rather than getting better, the crisis of electricity supply continues to worsen.

There is absolutely no way they would drop prices to the level requested in the letter.

1. consumers are notorious for having a short attention span
   
2. in the "gas wars" even a nickel or dime cheaper is enough to get people to stop at your station instead of a competitor (or a penny, some days), so why on earth would anybody drop the price of gasoline below cost?
   
3. it is below cost, right?  Once you add in taxes, delivery, etc. to the price of the fuel itself, it has to be, right?  (I'm not a gasoline person, obviously)

I posted this morning to the Sunday open thread a link to Qatar pledging $50 million to the Palestinians.  Clearly, between Qatar and Iran, only one is a huge ally.  Will this cause US action?  Is it just hot air (a pledge but no intention to actually deliver the money)?  Will others join in solidarity?

1. The boycott idea is asinine, infantile, and ignorant of the nature of commodity markets.

2. As a shareholder in XOM, CVX, COP, HAL, etc I am PISSED OFF at the executive compensation racket. Hire an "independent" salary consultant, who recommends an exorbitant salary, the boards approve it because half of them are in the same situation using the same clique of compensation consultants, meanwhile the "consultant" is getting busines from all of them and/or side business in another area from the same firm, and the average shareholder has zero ability to influence it. And to top it off, my dividends are ridiculously low. Why do I hold shares other than as a pure O&G price play.

But, since it's relevant enough I'll point you to Paul Krugman's op-ed in the NY Times today about another reason to consider not handing cash monies to Exxon: Times Select version (behind the NYT pay wall); also available: somewhat shortened version at Economist's View blog, which usually seems to provide Krugman's op-ed pieces in near-entirety.

Excerpt:

Enemy of the Planet, by Paul Krugman

Lee Raymond, the former chief executive of Exxon Mobil, was paid $686 million over 13 years. But that's not a reason to single him out for special excoriation. Executive compensation is out of control in corporate America as a whole, and unlike other grossly overpaid business leaders, Mr. Raymond can at least claim to have made money for his stockholders.

There's a better reason to excoriate Mr. Raymond ... he turned Exxon Mobil into an enemy of the planet. To understand why Exxon Mobil is a worse environmental villain than other big oil companies, you need to know a bit about how the science and politics of climate change have shifted over the years.

But what does this do to address global warming which is already costing us plenty and is going to cost plenty more?  And what about the day when we really do run out of petroleum, or at least that petroleum which takes less energy to extract than it yields? According to many, the day of collapse is coming faster than those giant corporations want us to believe, and by continuing to fixate on keeping prices low, we put off getting serious about developing long-term solutions.

In his book, "Plan B: Rescuing a Planet Under Stress and a Civilization in Trouble", Lester Brown says that if the price of gasoline truly reflected what it costs to deliver it to your car, it would be over $11 per gallon.  One has to include the cost of supporting corrupt regimes in places like Saudi Arabia, making war on Iraq, and committing other mischief around the world to secure the oil to support our highly wasteful lifestyle.  If that squares with our values, then God help us.

Shifting ourselves to serious conservation initiatives while working to build a sustainable way of living is the best way to thumb our noses at the giant oil producers.  If the 300 million people that the author of this message hopes to reach took conservation to heart, Exxon and Mobil would be in the solar and wind energy business tomorrow.

Oil was up >$1/barrel
Gasoline up> $.06/gallon

And thats just the front months.  Prices out through August are much higher.

FORBES: Well, it's interesting. And about $15 a barrel on the price of oil today is worry about Iran, that crisis.

HOST: So, without Iran, the price of oil would be $15 less per barrel is what you're saying.

FORBES: Yes, it would. There is real uncertainty, huge producer. But the bottom line with Iran is, when we have the confrontation, which we will have, we can really deal with that crisis. Then the price of oil will come down. The longer we let it fester, the higher the price of oil will stay.

Not incl in the web version but of note to TOD'ers this month:
a) The monthly global production record for OIL was tied in December @ 84.7-mbd.
b) The modern day record for monthly global prod'n for OPEC was set in December @ 29.9-mbd.  
c) The quarterly global prod'n record for OIL was tied in 2006Q1 @ 84.4-mbd.

Doesn't sound like Peak Oil or Plateau to me!

(Overheard at the health club today.  I'm very curious what 'the masses' think about PO, if at all...)

'Did you hear Bush has a new fitness plan?'   'It's called WALK - gas is $3 a gallon..."

which lead to...

'They're all a bunch of crooks - Bush, Cheney...'  (At least they got that right)

which lead to...

'There's plenty of oil, (agreement all around) it's just a conspiracy!  They own the oil companies and they're getting rich.'

and finally (the solution):

'We should annex Mexico, they've got lots of oil and they all want to be Americans (sic) anyways; and we should exploit those tar sands in Canada!'

That's where the public is at.

On a slightly differnet note,  I'm wondering if the proportion of heavy / sour crude could be tracked indirectly by looking at historic and current pricing for asphaltic cement, tar and bitumen.  Ive worked on a lot of road / airport projects and while asphalt pricing is always changing according to supply and demand as well as normal fluctuations in construction activity, I would think that if there was a sudden increase in the amount of heavy / sour crude comming into refineries, then there should be a corresponding increase in the heavier components of oil - and possibly a decrease in cost compared to previous years.  This would be very indirect and may not really help much, but it might shed a bit of light on the heavy /sour crude question.  Anyway, I'll let you all decide if its a worthwhile exercise and as always keep up the good work.

thomas  

Just my thoughts..

Outsourcing critics says U.S. is giving away too many jobs

Tuesday, April 18, 2006
By Anya Sostek, Pittsburgh Post-Gazette

Three years ago, Ron Hira "was practically laughed out of the room'' when he warned Carnegie Mellon University graduate students and faculty that high-level engineering jobs were moving overseas to places such as India.

Tomorrow night, the 37-year-old electrical engineer and public policy professor at the Rochester Institute of Technology expects a more sober reception when he makes another speech on outsourcing, this time at the University of Pittsburgh.

The CMU engineering undergraduate, who has testified before Congress twice on the subject and recently published a book called "Outsourcing America," estimates that tens of thousands of engineering jobs have left the country in the three years since he spoke to the CMU audience.

Dr. Hira became interested in outsourcing of white-collar jobs as he pursued his graduate studies in public policy at George Mason University.

While doing his dissertation on electronic commerce and supply chain management, he was besieged at engineering conferences with tales of engineers who had lost their jobs, often after they had trained their international replacements.

At the same time, Dr. Hira, who is ethnically Indian, saw his relatives in Bombay getting jobs as computer programmers.

In his book, co-written with his brother, Anil, Dr. Hira openly challenges those who present a positive view of outsourcing, calling New York Times columnist and author Thomas Friedman "the voice of the elite."

He tries to separate out the arguments over outsourcing's global effects to focus on the impact on the American economy and American workers.

"I'm happy that my cousins are benefitting," he said, "but the idea that they're benefitting and we're better off on the U.S. side is wrong."

Many economists and policymakers dispute that statement, arguing that outsourcing makes the U.S. economy stronger by improving efficiency. They also point to "insourcing" -- jobs that foreign corporations such as Toyota and Sony have created in the United States.

But Dr. Hira doubts that the engineering and computer software jobs sent overseas will be replaced by jobs paying equivalent salaries.

"While the total number of jobs might be OK, we don't know what that new mix is going to be like," he said.

In his book, he recommends that the United States consider making changes to its trade policies, government procurement practices and visas for foreign workers.

Dr. Hira will speak about his book, "Outsourcing America: What's Behind Our National Crisis and How We Can Reclaim American Jobs," at 7 p.m. in the auditorium at Benedum Hall at Pitt.

Admission is free, and the speech is sponsored by the Institute for Electrical and Electronics Engineers, Ascent Systems Inc., Pitt and the University of Pittsburgh Book Center. Those interested can call 412-795-4444.

http://www.post-gazette.com/pg/06108/682890-28.stm

Changed U.S. economy more tolerant of oil prices

Tuesday, April 18, 2006
By Len Boselovic, Pittsburgh Post-Gazette

Argus Research economist Richard Yamarone can remember warning that the U.S. economy would suffer if oil prices stayed at $35 a barrel for a sustained amount of time.

Although he was on safe ground in making the prediction -- most energy price spikes since World War II led to a recession -- thus far he's been wrong.

"That was one I don't brag about too much," Mr. Yamarone dryly observed yesterday after crude oil futures closed at a record $70, double the level that had him worried.

These days, he and fellow practitioners of the dismal science are offering a host of plausible explanations for why sharply higher energy prices haven't inflicted more damage: the economy is less energy intensive and more fuel efficient; rising energy prices are the product of strong global economic growth, not embargoes by the Organization of Petroleum Exporting Countries; low long-term interest rates have kept consumer spending strong; and the economy is more impervious to energy price spikes because of the bang-up job central banks have done fighting inflation since the energy crises of the 1970s.

Whatever the reason, the U.S. economy remains resilient, growing at a healthy 3.5 percent clip last year after a 4.2 percent advance in 2004. Job growth remains strong, unemployment is low, consumers are still spending and -- most importantly -- inflation remains in check.

The next government report on consumer price inflation comes tomorrow, but so far the news has been good. Consumer prices, including volatile energy and food costs, were up 3.6 percent in February from year-ago levels. Excluding those two sectors, inflation was 2.1 percent.

Global Insight economist Nigel Gault believes the growth of the information and service economies is one reason why the impact of higher energy prices has been so benign.

"We've been changing the structure of the economy, so energy-intensive activities aren't as important as they used to be," he said.

What remains of the manufacturing economy is more efficient. For example, in 2004, it took U.S. steel mills 11 million BTUs to produce and ship a ton of steel versus about 34 million BTUs in 1975, according to the American Iron and Steel Institute.

The progress is mirrored in the nation's gross domestic product, a broad measure of economic activity. Last year, it took only 54 percent of the energy it took in 1975 to create the same amount of GDP, Mr. Gault said.

Low long-term interest rates have helped blunt the impact. Although they only recently began moving higher as a result of the Federal Reserve's prolonged campaign to increase short-term rates, low long-term rates have encouraged consumers to take equity out of their homes by refinancing their mortgages.

"That's given them a source of funds to keep spending," Mr. Gault said.

Many analysts expected higher energy prices would change consumer behavior. To a limited extent, they have. The Port Authority cited higher fuel prices as one reason for a 3.2 percent increase in weekday ridership last year.

But Mr. Yamarone says that while lower-income consumers have changed their habits,higher income consumers haven't.

"Consumers are not about to abandon putting their kids in these gas-guzzling SUVs," he said. "Baby boomers think their kids are safer in an SUV than a fuel-efficient compact car."

Mr. Yamarone now says a sustained period of $70 oil will shave "a few tenths of a percent off economic activity."

http://www.post-gazette.com/pg/06108/682965-28.stm

...over at Morgan Stanley's Global Economic Forum ( http://www.morganstanley.com/GEFdata/digests/latest-digest.html ), Stephen Roach's latest posting (April 18) is titled "Oil and Bonds." A few quotes:

• "The higher gasoline prices arising from the recent back-up in crude oil markets unleashes a classic negative income effect on the consumer that, by Dick Berner's reckoning, could knock about $60 billion, or 0.6%, off disposable personal income this summer (see his dispatch in today's Forum, "Risks for the Consumer")."

• "China is also heavily exposed to oil.  Its oil consumption per unit of GDP is literally twice that of the average developed economy.  While a subsidy structure limits the direct impacts of higher oil prices on Chinese consumers, that simply means the pressures bear more on the fiscal finances of the central government.  Consequently, the confluence of rising oil prices and bond yields hits China with a double whammy of its own."

One. Billion. Cars. 2020.

That's one for every 6½ people on the planet - and over 25 percent more vehicles than we have today.

If we really want to reduce energy prices in this country, we should actually develop a nationwide comprehensive energy plan. A plan would actually promote diversification in our energy sources making us less dependent on any one source.

Arriving home you quickly scan the newspaper to see what excuse the oil companies have trotted out this time, as they attempt to justify this latest increase to a very skeptical public.

Damn it you say as you read the front-page story concerning the compensation paid to the chairman and chief executive officer of the world's largest oil company-Exxon Mobile. There it is in black and white for all to see, not only is this increase needed by this oil company but all previous increases can be easily explained as we read what this man has received in compensation over the past thirteen years.

This man, Lee Raymond received $144,573 for each and every day that he has been in his present position as head-honcho of this oil company for a total of $686 million for the period 1993-2005. The details of his retirement package are also part of this story but even those of us with cast iron stomachs are beginning to feel rumbles from down under as we try to comprehend how any man regardless of his title, position, etc can justify this obscene compensation package to that $6-7 per hour gas attendant.

I remember trying to explain to my late father a number of years ago what  "free enterprise" meant and how it supposedly worked when we were discussing the demise of the cod fishery in Newfoundland.  Obviously I was not overly successful in my attempt to do this, having patiently listened to what I had to say, he was silent for a few seconds and then said, "sounds to me like your talking about good old-fashioned greed".

Enough said.

Nova Scotia, Canada

The EPA is offering a research grant opportunity that I believe is a perfect fit for this idea.  I have sent an e-mail to a hand picked list of university professors who have experience with government research projects.  I'm looking to form a research team to apply for the EPA grant, conduct a social-economic experiment and surveys to determine to what extent the American public will support it, project the economic potential of WPH, and identify logistical, social and political obstacles as well as opportunities.

All government grants are awarded based on merit of the proposed research.  I believe WPH has merit but your help is needed to verify it. You can help by posting your feedback.  Let the professors and the EPA know what you think about WPH.  Do you think this idea is worth pursuing? We need to know if Americans will support a plan like this.

Do you have any ideas to improve the plan?

Share any and all of your thoughts.

Tell your friends and family about this Blog post and ask them to post their thoughts on WPH

http://wepayhalf.org

Thank you

Craig