US Gasoline Prices Spur Telework 512
coondoggie writes "The price of gasoline may finally be changing the way many people commute and communicate. Anecdotal evidence says teleworkers are growing rapidly as a direct result of the cost of driving. The article links a survey indicating that in Q1 2007 the 19 largest US cable and telephone providers (representing about 94% of the market) acquired over 2.9 million net additional high-speed Internet subscribers, to a total of about 56.2 million. That can be attributed in part to more employees taking advantage of telework programs, experts say. Just this week the House Judiciary Committee's antitrust task force opened the first of a series of hearings on the oil industry. Its chairman noted that gasoline prices have soared well above $3 a gallon and asked, 'How did we get into this mess?'"
It's very simple... (Score:1, Informative)
You got into this mess because the mileage of the average vehicle in the USA is its lowest point in 20 years.
It is low because many congresses & presidents (both republican & democrat) refused to increase the CAFE (corporate average fuel economy standards) for more than twenty years.
Further, the popularity of SUVs exploded, and since SUVs are "trucks" they have far lower standards (fuel economy & safety) than "cars".
Then, on the supply side, how many new gas refineries opened in the last 20 years?
How many cities have viable public transit?
It's not rocket science.
Re:We were warned. (Score:5, Informative)
Re:Gas Price in Europe is $10 Per Gallon (Score:3, Informative)
Bob
Re:Congress! (Score:5, Informative)
The big problem this summer is refining capacity. We've already seen the spike in oil prices into the $60/bbl range caused by increased Chinese demand for oil, and that hasn't really budged a whole lot since last year. Oil inventories have been good since then. The reason prices are so high right now is because of gasoline supply concerns, i.e., post-refining, and while I'm in favor of expanding drilling operations into both the eastern Gulf of Mexico and ANWR to offset worldwide demand increases (and thereby obtain price relief from increases over the last couple of years), this year's gasoline increases have nothing to do with that.
There were already a number of scheduled refinery maintenance shutdowns, and then BP had a major refinery go down for "unscheduled maintenance". Personally, I'm a bit suspicious of any unscheduled refinery maintenance. One of Enron's tactics to manipulate the electricity market was to create artificial shortages by calling up power plants and asking them to shut down temporarily. Hopefully, that's what Congressional hearings will be looking into. If there are no shenanigans going on at that level, then really there's nothing punitive they can do about it. What you're seeing is simple supply and demand combined with smart moves by speculators who bought gasoline low and are now selling it high. In fact, I wouldn't be surprised if some gasoline retailers are buying a small portion of their supply at higher-than-retail just to keep their gas stations in stock.
Refiners are stuck with expanding current operations, which is generally limited to technology updates and expanding into whatever surrounding land they have available. Unfortunately, it's late enough in the game now that refiners are going to resist the urge to build new large-scale refining capacity even if they could get a license to, because ethanol is starting to gear up, and by the time the refiners could actually get a new plant built (including the years upon years of environmental impact studies), the demand for gasoline will already be dropping in favor of alternative fuels (probably increased ethanol-gasoline blends, but that's still less gasoline being needed).
Re:Gas Price in Europe is $10 Per Gallon (Score:5, Informative)
In much the USA, many Americans refuse to use public transportation because they want to get to work in a half-hour rather than spending four hours hopping from bus to bus to train to bus. That is certainly the situation in the San Francisco Bay Area. I am not exaggerating those times, either; a few years ago, I had a contract in Pleasanton, about 35 minutes by car from my home in Sunnyvale. My car needed to be in the shop for a few days so I decided to take public transit. How bad could it be, right? Pretty damned bad, [511.org] is the answer. (The bus stop at the start of that route is about a 10-minute walk from my house; there are none closer. And note the price, too, though a monthly transit pass would cut that way down for a regular user.)
Who I was sitting next to was not the issue; the issue was that it took so damned long to get to the office that, if I had to do that every day, I'd be doing literally nothing but riding the bus/train, working, and sleeping. That's why you mostly see poor people on the bus: people with enough money to buy and operate a car would rather spend several extra hours a day with their families.
One root cause, in this area at least, is idiotic zoning policy that makes it illegal for most people to live close to where they work. The cities around here are divided into residential areas with the occasional convenience store or restaurant, and industrial/commercial areas with no housing other than the occasional programmer sleeping under his desk after an all-nighter. As a result, there is very little of interest within walking distance from most people's homes. And since those same zoning laws generally prohibit buildings more than a couple floors high even in the commercial areas, everything is spread out so far and wide that it's utterly impossible to design good public transit systems like those of higher-density cities. (Well, you *could* design one, but it would cost so much to operate that people would find it cheaper to drive their own cars.)
Re:Gas Price in Europe is $10 Per Gallon (Score:5, Informative)
If only our government would spend more of the money they take from us, and spend it back on us. Instead, what I see is them taking my money so they can go bomb some people. The worst part is? I have to live with the knowledge, that I, for my part, am working hard every day to help pay for those weapons.
Gas is too expensive at $3? HA! Lower the damn income tax rate, and tax the gas consumption. A responsible government would do this. Unfortunately, if there are heavier taxes brought on gas, our income tax wont fall to compensate, we'll just be paying for more missiles, and guns.
Just imagine. For a minute.. impossible as it may seem. If $6/gallon were levied as a gas tax in all counties with a population density over a certain threshold, to pay for a public transport system for that county. To make it faster, cleaner, safer and more convenient. I'd gladly pay $9 a gallon to gas my car up then.
Re:I've been riding my bike (Score:3, Informative)
There's this article about how unsafe SUVs are for their occupants [gladwell.com] and there was a whole thing about how much better it is to be in an accident in a (tiny, by American standards) BMW Mini vs a huge Ford F-150 [google.com].
Pure size does not equal safety the same way that raw megahertz don't equal performance.
Re:How? (Score:5, Informative)
Re:Gas Price in Europe is $10 Per Gallon (Score:3, Informative)
So no, not $10 per gallon, but well over twice the price of the US.
Bob
Drilling in ANWR? You're kidding, right? (Score:3, Informative)
According to the CIA World Factbook of 2007 [nationmaster.com], the US is currently consuming 20.7 million barrels of oil per day. Let's suppose that "the amount of technically recoverable oil in the ANWR 1002 area 'is estimated to be between 4.3 and 11.8 billion barrels ... with a mean value of 7.7 billion barrels.'" [mediamatters.org]
Quick, do the math. 7.7 billion divided by 20.7 million per day gives us ... 371 days -- just over a year's worth. And it will take about 10 years [nrdc.org] for the drilling to come online.
Personally, I don't think it's worth it -- but I'm not an oil investor. ;)
Re:How? (Score:0, Informative)
Re:Why do you live 100 miles from where you work? (Score:2, Informative)
Re:How? (Score:5, Informative)
Re:How? (Score:2, Informative)
Wikipedia says that it could supply 5% of U.S. oil for a period somewhere between 15 and 30 years. That's a fantastically huge amount of oil, but not all that much compared to current global consumption:
http://en.wikipedia.org/wiki/Arctic_Refuge_drilli
http://en.wikipedia.org/wiki/Petroleum#Top_petrol
Re:Gas Price in Europe is $10 Per Gallon (Score:3, Informative)
The city planning was carried out fairly well and the suburbs aren't too sprawled compared to other US cities and everything's pretty decent.
From the transit plan I have seen for the wasatch mountain area, they plan on eventually having commuter rail going from Provo to Ogden, starting in Ogden first. They are also planning on expanding light rail out to west valley and other 'suburbs'.
I served an LDS mission in SLC (from 1999-2001) and would always use the light rail to get downtown to the temple every monday (our 'day off'). In general, I found the public transit system in the salt lake valley very good. I never understood why the mission office gave almost every LDS missionary a car when our areas where at most 4 blocks and could be transversed by foot in under an hour.
Re:US populace is bipolar (Score:3, Informative)
$80 a month will break a lot of middle class families, or at least make life a lot more uncomfortable. Remember how we've been hearing about record levels of consumer spending, record levels of consumer debt, and a savings rate of about 0% among working families?
At some point, the American consumer breaks. When that happens, the whole world's economy will feel it.
(That said, I take the bus every day to work. My wife and I save at least $100 a month doing that. That's a couple of iPods a year!)
Re:How? (Score:1, Informative)
Let's not overlook ethanol (Score:2, Informative)
There are several problems with ethanol. The sudden increase in demand (due to the new mandate) has led to a major price jump in ethanol as well as corn. The livestock industry is very unhappy as are food processors like Coca-Cola who rely on corn byproducts such as corn syrup. Mexico has faced widespread protests since the price of corn tortillas (one of their basic food staples) went up over 30%. And now it is an increasingly more expensive component of gasoline.
Ethanol doesn't transport easily. We can't ship it through pipelines, so we have to transport it by truck. Yep - we burn off large amounts of gas just trying to add this stuff to our fuel supplies. Add in the energy used to grow and harvest the corn, transport it to the ethanol plant, convert it into ethanol and then transport the ethanol to the gasoline processing plants and you can see what a boondoggle this has become. It takes over a gallon of gasoline to create a gallon of ethanol (best estimates put it at 1.29 gallons of gas per gallon of ethanol).
Ethanol can't store as much energy per gallon as gasoline does. So our MPG drops when we use ethanol blended fuels. Now we have to buy MORE gas to go the same distance which puts further pressure on the fuel supply, driving the price up even more.
So this mess doesn't seem to be the result of greedy oil companies as much as it is a byproduct of our Clueless Legislative Overlords.
Re:How? (Score:3, Informative)
Re:How did we get into this mess? (Score:4, Informative)
Dude, go take Economics 101 before you spout off nonsense in public, it might save you the embarassment.
The Tragedy of the Commons is a problem with a free market system, because the Commons is an externality: the users of the Commons don't pay the cost of the maintenance equally to the profit they gain from exploiting it, therefore they have an incentive to exhaust the Commons.
Collective action, either by taxation (so that the externality is reflected in the costs) or by outright rationing access to the Commons is the only thing that can stop the Tragedy occuring. And collective action to regulate access to a Commons is one of the defining characteristics of Socialism. Depending on how this is implemented it may be either old-fashioned authoritarian Socialism, Libertarian Socalism, or a mixed model like European-style Social Democracy, but the free market is definitely no solution here.
MartRe:Refineries (Score:3, Informative)
In other words, your post is completely incorrect.