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Gas prices start to rise again, and drivers notice

Oil Gas prices are on the rise again, and consumers, who barely had time to enjoy their savings over the past few months, are taking notice.

“It’s still low by our standards,” Pete Diaz of San Jose told the Mercury News. “I’m not complaining — yet.”

Diaz paid a little less than $2.20 a gallon when he filled up Friday at an ARCO. That was actually a bargain: On Monday, according to AAA’s Daily Fuel Gauge Report, the average in San Jose was $2.636 for regular gas, up from $2.443 a week earlier.

The national average Monday was $2.177, up from $2.056 a week earlier.

Los Angeles-based Gas Buddy reports that, over the last week, the proportion of stations selling gas for under $2 a gallon has shrunk from more than 50 percent to 27 percent.

Stories are popping up all over the country about rising gas prices: from Maine to New Jersey to Texas to Arizona.

Oil prices dropped by 60 percent between June and January, a trend analysts spectacularly failed to predict. But in a four-day span between Jan. 30 to Feb. 3, oil surged 18 percent.

Gasoline prices, in turn, went up in an instant, a clear example of the market volatility that makes it nearly impossible to plan household budgets, much less a career. The latest round of job cuts was just announced by Weatherford International, one of the world’s largest oilfield services companies. It will lay off 5,000 employees, 85 percent of them in the United States.

Prices might keep on rising. Major media outlets reported Monday that oil was still on the rise, based on OPEC forecasting higher demand in 2015.

Other factors contributing to the price increase include:

The looming seasonal switch to “summer blends” of gasoline. As Gas Buddy notes: “As air temperatures warm, refineries also begin the progressive switch to cleaner variations of gasoline, which also adds to cost.”
Refineries are undergoing maintenance to prepare for the summer switch.
Refinery workers around the country are striking for better health benefits. It’s the largest such walkout since 1980.

Now it’s your turn to tell your story. How does the day-to-day price of gas affect you and your business?

NYT columnist: Gas really isn’t all that cheap

January 27, 2015/in Economy, What's The Buzz staff /by Fuel Freedom Staff

It’s about time somebody pointed out that gas, while cheaper than it’s been in the past few years, isn’t all that cheap, really. If you look at history.

New York Times business columnist David Leonhardt did just that, pointing out that the national average for regular unleaded — $2.03 per gallon — is “still more expensive than nearly anytime in the 1990s, after adjusting for general inflation. Over a 17-year stretch from the start of 1986 to the end of 2002, the real price of gas averaged just $1.87.”

Leonhardt notes that the era of cheap gas coincides with the “great wage slowdown.”

One of the surest ways to end the great wage slowdown would be for the United States to make sure it’s entering a new era of cheap energy. “It’s the proverbial tax cut,” says Daniel Yergin, vice chairman of the research firm IHS and author of a Pulitzer Prize-winning history of oil. If energy costs remain at current levels, it would put $180 billion into Americans’ pockets this year, according to Moody’s Analytics, equal to 1.2 percent of income and a higher share for lower-income households.

That’s why taking virtually every step to push oil costs even lower — “drill, baby, drill,” as the phrase goes — would make a lot of sense, so long as oil use did not have harmful side effects.

Ah, but it does have side effects. Leonhardt adds:

It leads to carbon emissions, which are altering the world’s climate. Last year was probably the planet’s hottest since modern records began in 1880, and the 15 hottest have all occurred since 1998. Oceans are rising, species are at risk and some types of severe storms, including blizzards, seem to be more common.

More oil production, then, involves enormous trade-offs: a healthier economy, at least in the short term, but a less healthy planet, with all of the political, ecological, health and economic downsides that come with it.

Leonhardt writes that it’s possible, in part, to retain the benefits of increased oil output without the drawbacks. Hydraulic fracturing is less carbon intensive than conventional oil drilling, although fracking comes with other issues. “Clean energy” offers a good solution, he says, “if it could become even cheaper.”

Obama mentions oil, Keystone in State of the Union

January 20, 2015/in Environment, What's The Buzz staff /by Fuel Freedom Staff

President Obama touched on several aspects of the energy debate during Tuesday night’s State of the Union Address, including:

Imported oil:

More of our kids are graduating than ever before; more of our people are insured than ever before; we are as free from the grip of foreign oil as we’ve been in almost 30 years.

Ramped-up U.S. oil production:

At this moment — with a growing economy, shrinking deficits, bustling industry, and booming energy production — we have risen from recession freer to write our own future than any other nation on Earth.

Consumers savings from cheap gasoline:

We believed we could reduce our dependence on foreign oil and protect our planet. And today, America is number one in oil and gas. America is number one in wind power. Every three weeks, we bring online as much solar power as we did in all of 2008. And thanks to lower gas prices and higher fuel standards, the typical family this year should save $750 at the pump.

The debate over the TransCanada Keystone XL pipeline:

21st century businesses need 21st century infrastructure — modern ports, stronger bridges, faster trains and the fastest internet. Democrats and Republicans used to agree on this. So let’s set our sights higher than a single oil pipeline. Let’s pass a bipartisan infrastructure plan that could create more than thirty times as many jobs per year, and make this country stronger for decades to come.

And something else about solar power:

I want Americans to win the race for the kinds of discoveries that unleash new jobs — converting sunlight into liquid fuel …

As The New Republic noted, it was the first time in his six SOTU Addresses that Obama mentioned Keystone:

It’s not surprising he’d weigh in now, given how Keystone has dominated the first few weeks of debate in the new Republican Congress. Lately, Obama has sounded skeptical of the pipeline’s economic benefits, but we still don’t have many clues as to how he will decide Keystone’s final fate in coming months.

(Photo: WhiteHouse.gov)

Poll: Most Americans think gas prices are going up

January 14, 2015/in Economy, What's The Buzz staff /by Fuel Freedom Staff

Give the American consumer credit: They know gasoline prices are volatile, and that there’s no guarantee that this vacation from expensive gas will last.

According to a phone survey by Rasmussen Reports:

Ninety percent (90%) of American Adults say they are paying less for a gallon of gas than six months ago, but 69% think it’s at least somewhat likely those prices will go up again over the next six months … Just 19% believe they are unlikely to be paying more in six months’ time. These findings include 40% who say it’s Very Likely a gallon of gas will cost more and only three percent (3%) who say it’s Not At All Likely.

Better start pocketing all that money you’ve been saving with every fill-up.

But how can we make low gas prices sustainable for the long term? If only there were a high-quality documentary that lays this all out in a tidy 127 minutes.

Yossie to Hannity: ‘We can bankrupt terrorism’

January 13, 2015/2 Comments/in FFF in the News, Updates from Fuel Freedom staff /by Fuel Freedom Staff

Fuel Freedom Foundation co-founder and chairman Yossie Hollander was interviewed on Sean Hannity’s radio show on Jan. 13 about oil money and how it funds extremist groups and terrorism. Read more →

Want to keep gas prices low? Watch PUMP

January 13, 2015/in Economy, Over a Barrel Blog, Updates from Fuel Freedom lhall /by Landon Hall

We’re all watchers of the gas-station “flip sign” now.

They call it that — the flip sign — because it has replaceable plastic numbers, or electronic ones, that “flip” as the price fluctuates. For months the national average for a price of regular unleaded has been flipping in a downward direction, from $3.68 a gallon in June to $2.11 on Tuesday.

We keep track of such details because (relatively) cheap gas means more money stays in our pockets. Depending on where you live, how far you drive, and whether your chariot sips gas or guzzles it, you’re saving $50, $75, $100 a month that can be used for other purposes.

Low fuel prices are great for consumers, but we shouldn’t expect the windfall to last. American drivers deserve the cost certainty of permanently low prices, and the best way to achieve that is through fuel choice, so gasoline isn’t the only alternative when we fill up.

How do we get there? The documentary film PUMP has the answers. And it’s available on iTunes, starting today, to buy or rent.

PUMP, narrated by Jason Bateman, played in theaters in more than 40 cities last fall, receiving favorable reviews from critics and high marks from audiences. Check out PUMPtheMovie.com to watch the trailer, view a photo gallery and read bios of the stars, including Elon Musk.

PUMP traces the century-long history of how gasoline, refined from crude oil, came to monopolize transportation in the United States. It shows how dependent we’ve always been on oil, to the detriment of the country’s economic well-being, national security, health and environment.

The solution is to diversify the U.S. fuels market by allowing other types of fuel to compete on an even footing with gasoline. Technological innovation has brought us cars that can run on multiple types of fuel, including ethanol and methanol (made from a variety of “feedstocks,” including plants, natural gas and landfill waste). Other vehicles are powered by compressed or liquefied natural gas, hydrogen fuel cells, and of course, lithium ion batteries.

The choices are practically endless, and yet the vast majority of drivers are stuck with only one choice: gasoline.

Creating the market conditions that will lead to a diversified fuels market will produce a variety of benefits, but for the moment let’s get back to the economic benefit. No one saw the oil-price drop coming, and experts have been consistently wrong every step of the way. But reasonable people have predicted that prices, inevitably, will rise again. We know this because it’s happened again and again in recent American history.

Fuel choice will ensure that you lock in your monthly savings for the long term, instead of enjoying only short-term relief.

If permanently cheap gas sounds like attractive, watch PUMP. The solutions are in there.

The Economist: Benefit of cheap gas depends on ‘sheiks vs. shale’ tussle

December 5, 2014/in Economy, What's The Buzz /by Fuel Freedom Staff

Cheap gasoline provides an overall economic benefit, The Economist writes in an article titled “Sheikhs vs. shale.”

The price drop of some $40 since June (from above $110 to about $70) has shifted “some $1.3 trillion from producers to consumers. The typical American motorist, who spent $3,000 in 2013 at the pumps, might be $800 a year better off—equivalent to a 2% pay rise.”

But will oil stay cheap? That’s the big question. How long the economic benefit of depressed prices lasts depends on:

” … a continuing tussle between OPEC and the shale-drillers [in the United States]. Several members of the cartel want it to cut its output, in the hope of pushing the price back up again. But Saudi Arabia, in particular, seems mindful of the experience of the 1970s, when a big leap in the price prompted huge investments in new fields, leading to a decade-long glut. Instead, the Saudis seem to be pushing a different tactic: let the price fall and put high-cost producers out of business. That should soon crimp supply, causing prices to rise.”

In short, gasoline is cheap now. We need to ensure it stays cheap.

Read more at FuelFreedom.org and PUMPtheMovie.com.

(Photo credit: Dan Weinbaum, posted to Flickr.com)

Low gas prices mean Americans want bigger vehicles

December 3, 2014/in Economy, What's The Buzz /by Fuel Freedom Staff

It was inevitable: The drop in gasoline prices means Americans are buying more gas-guzzling vehicles, according to an analysis by Bloomberg.

U.S. vehicle sales rose 4.3 percent in November, on track for 17.2 million sold for the year. That’s the quickest pace for a November since 2003.

Gal Luft: Key to energy security is fuel competition

November 14, 2014/in What's The Buzz /by Fuel Freedom Staff

Gal Luft, an advisor for the U.S. Energy Security Council, and a member of Fuel Freedom’s board, explains a great deal about energy security in this interview with China Dialogue.

Energy security requires two things, essentially: availability and affordability.

In order for energy to be affordable, there must be competition, so that one form of energy — say, power generated by oil — doesn’t have a monopoly. Here’s an excerpt:

The key for energy security is to have fuels that can compete against each other. In 2008, for the first time in Brazil, less gasoline was sold than ethanol (many cars used in Brazil are multi fuel efficient). The economy is then much more resilient. With competition over price, the pricing will then eventually reach equilibrium. There are many other options to create competition for the running of transportation, such as electric vehicles, bio fuels, CNG. Both China and the US are able to reduce their reliance on oil. China is the largest producer of methanol, while the US is the largest producer of ethanol – this would however, require flexible fuel vehicles.

Gasoline will average $2.94 in 2015, feds predict

November 14, 2014/in Economy, What's The Buzz /by Fuel Freedom Staff

Are low gas prices going to stick around for a while? The U.S. government thinks so.

The federal Energy Information Administration issued its monthly report on Thursday, and it predicts that gasoline will remain below $3 a gallon throughout 2015.

Specifically, gas prices will average $2.94 in the new year, 45 cents cheaper than this year. That will let consumers keep a total of about $61 million in their collective pockets.

According to AP:

That may not seem like a lot in the context of a $17.5 trillion U.S. economy, but economists say it matters because it immediately gives consumers more money to spend on other things. Consumer spending accounts for 70 percent of the U.S. economy.

“It would be a reversal of the trend over the last few years where consumers can’t stretch a dollar far enough,” says Tim Quinlan, an economist at Wells Fargo.

Quinlan says the price of gasoline is one of the three big drivers of consumer confidence, along with stock prices and the unemployment rate. “Lately all three are moving in the right direction,” he says.

Energy analyst Michael Lynch, writing in Forbes, acknowledges that “Some will scoff at the drastic change in the forecast, arguing that such a big revision cannot be credible, and that an economic recovery next year should bring higher prices.”

But analysts usually make predictions based on the current price of oil, and don’t predict wild swings one way or the other. However, increased global supply should keep prices down in 2015, according to Lynch’s own analysis:

A strong global economy next year, combined with slowing shale oil production growth and/or instability in Libyan production should tighten markets, but might not raise prices much, certainly not to $100 a barrel. And a diplomatic agreement with Iran that ends sanctions, combined with rising Iraqi and Kurdish production, will probably turn $80 into the new price ceiling. Longer run, I remain an outlier with a firm belief that even $80 a barrel cannot be sustained in the wake of rising global oil supply.