Gas Woes (or Whoas) - Texas Style

Yet another wrinkle of the never ending upward spiral of gasoline prices. Texans living along the Mexican border are crossing over to buy gasoline because it's dramatically cheaper in Mexico.

Nothing new there right? Consumers are going to find the products they want or need for the cheapest possible prices. Well, apparently the gas Americans are buying there, is refined here. From the Chronicle.

With his sales down 40 percent and talk of border residents filling up in Mexico, Laredo Shell station owner Manuel Arechiga took his diesel pickup across the border to see what the story was.

Sure enough, he was able to fill his tank for about $70, as opposed to about $145 at his own station in Texas.

The kick is that the fuel is being refined in the United States and trucked across the border to Mexico, only to be sold at prices subsidized by the government there to protect the Mexican consumer prices that are now cutting into his business.

That's right, gas exported to Mexico from the U.S. is being consumed by U.S. citizens driving to Mexico. It's enough to make your head spin. But don't get to happy South Texas drivers, it might not last as the subsidies cost the Mexican government up to $20 billion annually, and there are calls for them to end.

"It is best to gradually reduce the subsidy of these products to salvage the population's standard of living," Mexican Energy Secretary Georgina Kessel said in a news conference.

If they can figure out a way to do it without throwing their country into chaos that is. Heck, ours too. With prices as high as they are, folks in Laredo and Brownsville might just join in any riots if their access to the cheap stuff is curtailed.

An interesting dilemma indeed. In a related story, there are still no suspects under arrest in the killing of a fuel tanker truck driver in an apparent robbery attempt. The reward for information has been increased.

The possible reward has been boosted by $10,000 in the effort to find the man who killed a fuel truck driver on June 8 at a north Houston gas station.

Crime Stoppers already had offered up to $5,000 for information leading to an arrest and charges in the slaying of Jorge Hernandez.

Hernandez's employer, Petroleum Wholesale, has added to the amount so that the total reward could be as much as $15,000, Crime Stoppers officials said today.

It's a shame that fuel truck drivers may be required to have armed protection sooner rather than later. Gasoline has been elevated to the level of precious commodity that I'm sure brings a premium price on the black market. I suppose it's just a sign of the times.

$4.00 Gas? Get Used To It

Gas has now settled in at over $4.00 per gallon, and if you know in any better, don't expect it to come down anytime soon, if ever.

This is the new reality, and it's changing things as we know them. Truck production lines are shutting down, people are driving less, and everything costs more. The effects are felt differently in different parts of the country, as this article in today's NY Times illustrates.

With the exception of rural Maine, the Northeast appears least affected by gasoline prices because people there make more money and drive shorter distances, or they take a bus or train to work.

But across Mississippi and the rural South, little public transit is available and people have no choice but to drive to work. Since jobs are scarce, commutes are frequently 20 miles or more. Many of the vehicles on the roads here are old rundown trucks, some getting 10 or fewer miles to the gallon.

This article goes on to say

They warn that the high cost of driving makes low-wage labor even less attractive to workers, especially those who also have to pay for child care and can live off welfare and food stamps.

“As gas prices rise, working less could be the economically rational choice,” said Tim Slack, a sociologist at Louisiana State University who studies rural poverty. “That would mean lower incomes for the poor and greater distance from the mainstream.”

It can also mean more crime, as some people do what they have to do to survive, and others take advantage of the current situation, as evidenced by what happened here in Houston last night.

A gasoline tanker driver was fatally shot while delivering fuel at a north Houston convenience store late Sunday night during what police believe was an attempted robbery.

The truck driver, who was approximately 30 years old, was delivering fuel to a Mobil gas station in the 9000 block of North Freeway near West Gulf Bank around 10:45 p.m. when his girlfriend came by to deliver his dinner, said Houston Police Department Homicide Division Sgt. Patrick LeBlanc.

It's understandable that an armored truck needs armed guards, but we're rapidly approaching the point where these fuel truck drivers are going to need the same type of protection. They present too tempting of a target with gas prices as high as they are right now.

I don't know how this situation is going to turn out, but I know the next President will have a huge mess on his hands to clean up. The silver lining is that maybe, just maybe, Americans are slowly warming up to ideas that will break this gasoline addiction, like alternative energy sources, and mass transit.

Did I just say mass transit in Houston, the city built with the pickup truck in mind? Well, if informal surveys of my SUV driving friends are any indication, the idea not only has merit, but some are already implementing it by using van pools. What they are all doing is driving a lot less, and trying to dump their now worthless SUV's for whatever they can get that doesn't leave them in debt. People are also buying small cars and hybrids, or scooters, or riding the bus, all anathema just a few short months ago.

It is truly amazing how fast things have changed, but I have the feeling it's going to get worse before it gets better. After all, summer's just arriving with it's sky high cooling bills for our part of the world. Wait till you see those bills.

So hang on.

Gas Guzzlers And Geos

I drive a mid-size vehicle and gas prices are killing me, having hit an average an average of $3.78 for regular this week here in Houston. That's up .11 from last week. But lately I've been trying not to think about myself so much. Instead, my empathy goes out to the legions of SUV and huge pickup truck drivers here in Houston and the state of Texas. Have you watched the pain on their drivers faces as they fill up lately? It's a terrible thing.

As bad as it has to be paying so much for gas itself, the fact that it's now easier to sell Florida swamp land than to get rid of their gas guzzlers, has to make the mental torture even worse. And it's not just drivers, dealerships are having an equally hard time getting rid of them.

The really large ones with V-8 engines that can get as little as 12 miles per gallon in the city -- like the Cadillac Escalade, Ford Expedition and Chevy Suburban -- are dropping in value by the thousands.

The No. 1 reason for the sales slump is soaring gas prices, says Peter Brown, the executive director of Automotive News, the trade newspaper for the North American car industry.

For the first four months of this year, truck and SUV sales are down a collective 24.8 percent. SUV sales plummeted 32.8 percent while pickups dipped 19.9 percent, he says.

Man, that has to hurt. The article goes on to say that the major auto manufacturers are retooling their production lines away from trucks and SUV's towards smaller cars. To add further insult to injury, a lot of the old cars many of these people got rid of to buy their now unwanted gas guzzlers, have seen their resale values go through the roof. This is due in part to that fact that many of those old vehicles get mileage close to or better than that of newer hybrid vehicles.

Americans seem to absolutely refuse to learn from history. Fuel shortages precipitated by the Arab-Israeli war of 1973 and the Iranian Revolution of 1979 led to the purchase of a lot of fuel efficient vehicles from foreign automakers who were already producing them, and an emphasis on their production by automakers here. However as soon as prices stabilized, American auto production moved right back into oversized vehicles. This lack of foresight on the part of the industry and consumers now has us at a competitive disadvantage, again, to foreign automakers who've never stopped producing smaller, more fuel efficient cars. Not to mention our continued reliance on imported oil and it's wildly rising, 'market-driven' prices.

So what are we going to learn from this crisis? The technology has been in place for decades to produce ultra fuel efficient or alternative fueled vehicles, but between the automobile and oil industries, and the politicians dependent on both no real effort has been made to reduce our dependence on oil as a fuel. I'm hopeful this latest round of super high oil and gas will spur some real movement on that front.

But I'm not holding my breath waiting. Anybody trying to sell their used 1993 Geo? Let me know.

Brother, Can You Spare A Gallon (of Gas)?

I'll bet you wish gas prices were as "low" as those in the picture right about now.

Has there been a disruption in the oil supplies somewhere that I haven't heard about? A drop in production? Maybe consumption has risen so much in India and China over the past few months that the constant increases in the price of gasoline is justified. But somehow I doubt it. Whatetever the reason, the price keeps going up.

The AAA Texas survey found regular self-serve averaged $3.68 per gallon in the 11 cities covered by the survey — 15 cents higher than last week's record high.

Nationally, the average price rose 13 cents to a record of $3.78 per gallon.

Auto club spokeswoman Rose Rougeau said that could mean a change of plans for some drivers who had intended to hit the road for the coming Memorial Day holiday.

Actually, that could mean a change of plans for some drivers planning on going to work everyday. I'll bet every designed for the automobile city west of the Mississippi are dusting off mass transit plans again. I hope so anyway, because something has got to give. As to the rationale, a little over a year ago, I wrote when prices were just settling in over $3.00 per gallon

...the routine seems to be to use whatever reason that's handy to justify jacking up oil prices. Of course the price then "drops" to some point higher than it was selling before the latest crisis, and that becomes the benchmark for the next crisis/price increase. Now, with gas having settled in above $3.00 per gallon on average, we really haven't heard much of a peep from the American consumer.

Well .68 cents later, the powers that be aren't even bothering to invent a "crisis" anymore. Nor has the record profits for the oil companies led to any type of employment boom for regular folks anywhere, and that includes here in oil capital of the world Houston. Contrast now with the boom times of the 70's and you'll see what I'm talking about.

I remember the good old days of 2001, when we first moved to Houston and gasoline was .97 cents per gallon. Since then the price has risen by approximately 350%, and remarkably that rise has coincided with the Bush presidency.

That's really such an amazing coincidence isn't it?

Gas Price Woes (or Whoa!)

OK, I can understand (kinda) the price of gas going up when we invaded Iraq, or after Katrina struck, but I don't understand the twenty cents per gallon increase over the past two weeks. Is this the best explanation we can can get?

...the recent increases are due mostly to refinery problems.

...One of the nation’s largest refineries, a BP PLC plant in Indiana that processes more than 400,000 barrels of oil per day, will not be operating at full capacity for several months due to unexpected repairs.

Or;

...a 470,000 barrels-per-day plant in Texas City operating at less than half capacity. read more...

What? Half-capacity? Why? It seems like whether you have an "emergency" BP Alaska pipeline shutdown like last year; or last years high tensions with the Iranians, or anti-Terrorist activities in Saudi Arabia, or the latest crisis with the Iranians, the routine seems to be to use whatever reason that's handy to justify jacking up oil prices. Of course the price then "drops" to some point higher than it was selling before the latest crisis, and that becomes the benchmark for the next crisis/price increase. Now, with gas having settled in above $3.00 per gallon on average, we really haven't heard much of a peep from the American consumer.

My question is when are we going to call this what it is, price gouging. The excuses given for the increases have become flimsier and flimsier, to where I don't think they're really even trying to fool anyone anymore.

I saw an email a few weeks ago calling for a gas boycott of the two biggest oil companies (Exxon, Chevron?) on May 15th to try and force them to bring their prices down in hopes that the rest of the oil majors will follow suit. That seems like a good idea, but what would be better is to reduce consumption overall by a lot of people not driving for a sustained period of time, say 30 days or more unless absolutely necessary. Kinda like what this guy just did in Louisville, KY.

LEO staff writer Stephen George gave up his car for a month to prove getting around Louisville without your own ride isn't as hard as it seems.

I know, that's real hard to do, but my point is that a 1 day boycott of the largest producers won't influence their price gouging ways, but a sustained reduction of automobile usage by a lot of people likely would help drive prices down and may have an impact on energy policy decisions as well. That might just be worth it, even in a place as sprawled out as Houston. I'm just saying...