The U.S. has its hypermiling. Europe has its hyperkilometreing. In a European orderly fashion, of course. Germany has its Sprit-Spar-Meisterschaft, formerly sponsored and dominated by Volkswagen, now sponsored and dominated by Toyota. France has the Peugeot Eco Cup.
This is a competition in which different Peugeot (surprise, surprise) models are driven by everyday drivers to see if they can meet or beat official fuel consumption figures. The cars were driven 1000km on French and Swiss roads in wintery conditions (that must have been a picturesque drive). The results of the 2010 Peugeot Eco Cup are in (via The Auto Channel). Read More >
You don’t want to be traveling in or to Europe these days. In Germany, Lufthansa’s pilots went on strike this morning, grounding 3200 planes. “The largest strike in the history of German aviation” (Die Welt) paralyzed German air traffic, and caused jams on the ground as travelers switched from planes to trains and automobiles.
Meanwhile next door in France, a nation is running out of gas. Workers at the six refineries owned by the country’s biggest oil group, Total, have been striking for more than a month. The work stoppage threatens to spread “to the two French oil refineries owned by US group Exxon Mobil, where strikes are planned for Tuesday,” reports the BBC.Read More >
While the world is trying to come to grips with pedal-gate, tiny Hong Kong is attempting an exorcism of its own gremlins: 18,000 (mostly Toyota Crown) taxis and 2,000 minibuses are propelled by LPG, liquefied petroleum gas. The gas is lugged around in a large tank housed in the trunk of the taxis, much to the chagrin of suitcase-schlepping tourists. The real problem is: The LPG mobiles are breaking down in wholesale fashion, China Daily reports. Hundreds a month.
The Hong Kong government set up a special task force to investigate. Nobody is blaming Toyota – this time. Read More >
The problem we have is, Congress wants to pass a very robust transportation bill in the neighborhood of $400 billion or $500 billion, and we know the highway trust fund is just deficient in its ability to fund those kinds of projects. The highway trust fund was substantial at one time but now with people driving less, and driving more fuel-efficient cars, it has become deficient. To index the federal fuel tax, that’s something Congress is going to have to decide. As we get into the reauthorization bill, the debate will be how we fund all the things we want to do. You can raise a lot of money with tolling. Another means of funding can be the infrastructural bank. You can sell bonds and set aside money for big projects, multibillion-dollar projects. Another way is (charging a fee to motorists for) vehicle miles traveled. The idea of indexing the taxes that are collected at the gas pump is something I believe Congress will debate. When the gas tax was raised in 1992 or 1993, in the Clinton administration, there was a big debate whether it should be indexed. At that time, they thought there’d be a sufficient amount of money collected. Now we know that isn’t the case. That is one way to keep up with the decline in driving, and more fuel-efficient cars.
Fresh off its widely-copied “Assurance Program,” Hyundai is reaching into its bag of tricks for a new gimmick. And found inspiration in Chrysler’s 2008 gas-price guarantee promotion. Automotive News [sub] reports that Hyundai will offer customers who buy or lease a new Hyundai between July 1 and August 31 the opportunity to lock in a $1.49 per gallon price for gasoline for one year or 12,000 miles. According to research publicized by Hyundai North American President John Krafic, “40 percent of potential new car buyers were staying on the sidelines due to uncertainty over gas prices.” But Chrysler’s promotion didn’t save the farm a year ago when gas price anxiety was at an all-time high. After all, at three dollars a gallon, the estimated savings on a base, four-pot Sonata aren’t likely to top $725. Has Hyundai’s success at selling cars based on America’s insecurities peaked?
Two recent developments have tarnished whatever green reputation ethanol has left. First, the news that corn-derived ethanol requires up to three times more water to produce than previously thought has cast a spotlight on the industry, especially in the dry west and southwest. A new study published by the American Chemical Society reports that previous estimates of water used to produce ethanol are inaccurate. The article’s abstract:
Don’t worry. The economy won’t hurt you. It just wants you to have some fun. To prove it, the price of gas continues to fall, now averaging $1.66/gallon according to USA Today. Officially, the last time prices were this low was in 2004, and prices are still dropping after hitting an all-time high this June at $4.11/gallon. The government’s weekly gas and fuel price update shows prices are at their lowest in the Gulf Coast and Rocky Mountain regions. Diesel prices are falling as well, hitting a national average of $2.42/gallon. Help keep downward pressure on fuel prices by finding the lowest local prices (with help from your federal government) here. And if you’ve got a dime you can listen to your V8 tonight. Freaky!
OPEC’s threatened 2 million barrel/day output cut has done nothing to halt oil’s collapse. The AP reports that Wednesday’s futures market dipped below $40/barrel for the first time since 2004. Markets are spooked by the realization that even mighty China is in a world of growth hurt at the same time as an unprecedented continued fall in US demand. US “demand for gasoline over the four weeks ended Dec. 12 was 2.7 percent lower than a year earlier.” “‘There’s just so much oil in inventory out there right now,’ said Michael Lynch, president of Strategic Energy & Economic Research. ‘Nobody wants to buy this stuff.’” Read More >
The AP reports on the ongoing oil price collapse. “OPEC said at an emergency meeting Friday that it will slash oil production by 1.5 million barrels to stem the ‘dramatic collapse’ of oil prices, but crude prices plunged 7 percent anyway as financial markets spiraled downward across the globe.” In the face of OPEC’s proclamation, oil opening below $64/barrel this morning; down over half from the $140 highs of just a few short months ago. Even with the growth in China, India and the rest of Asia, the US still consumes a fourth of the world’s oil burn, and “U.S. demand is down nearly 10 percent during the past four weeks year on year.” OPEC hopes to talk Russia into playing along with a supply squeeze, but Russia has problems of it’s own and typically goes her own way on these matters. Other oil producers are singing the blues (’cause they never thought they’d lose). “Iran, Venezuela and other OPEC members having suggested that for them, selling oil under $80 was a loss-maker, and Iraq on Thursday said it would have to rethink next year’s national budget if prices remain under that level.” OPEC’s El-Badri is unsympathetic: “OPEC cannot bail out the problems of others.” Words to live by.
The Wall Street Journalis calling attention to the massive cash piles sitting around the offices of big oil re: falling stock prices. The solution to this problem? “Mr. Flannery argues that Big Oil will need to put cash into acquisitions to restore the battered share prices.” ExxonMobil alone is sitting on $39b despite buying back its own stock at a rate of $8b per quarter (it’s repurchased $218b of its shares over the past several years). General Motors’ total market capitalization of under $5b, and falling, makes it a target. OK, they have a few liability “issues.” But what’s good for GM is good for ExxonMobil. By deferring two months of its own stock buy backs ExxonMobil could gobble-up the world’s once and future king of cars. Think of the synergy! From exploration through production, marketing and finally right out the tailpipe; a truly global and integrated oil monster. Chevron, never one to be outdone by its sister company (both were once part of Standard Oil), is said to be eyeing Ford. With plunging demand dragging oil prices from $140 per barrel down to around $90, something must be done! Or not.
Say what you want about oil tycoon-cum alt-energy evangelist T. Boone Pickens, the man has some instincts on him. Wal-Mart has been studying ways to reduce its energy usage (for purely altruistic reasons, of course) and Pickens smells blood in the water. Reuters reports that the Texan CNG honcho has convinced Wal-Mart CEO Lee Scott to consider retrofitting its entire diesel truck fleet with CNG power as an energy-saving, cost-cutting measure. Wal-Mart currently operates some 8,500 diesel trucks in its supply-chain network, and a presentation by Pickens to a Wal-Mart associates meeting has convinced Scott to consider the retrofit. According to a weekly Pickens email, Scott was “impressed by the Pickens Plan.” The email continues, “to have America’s largest retailer looking into shifting their trucking fleet to run on natural gas is a major step towards our country’s energy independence.” And a major step towards making Mr Pickens a boatload of cash. Pickens has invested his oil fortune in wind power and CNG, and a Wal-Mart retrofit could mean a huge contract and increased media exposure for CNG as a transportation alternative. Like Pickens though, every decision at Wal-Mart comes down to dollars and cents. We still don’t know how much a CNG fleet conversion would cost or save Wal-Mart. Until we do, there’s no telling whether Pickens’ CNG revolution will get off the ground.
From a crowd-pleasing chant at the Republican National Convention to op-eds at the New York Times, the refrain “Drill, Baby, Drill” is looming large in the American psyche. In the Gray Lady’s pages, Robert Hahn of the American Enterprise Institute and Peter Passel of the Milkin Institute (motto: Milkin’ The Issues) investigate the idea of penetrating mother Earth for more of that sweet, sweet dino juice. Opponents of drilling offshore and oil extraction in the Arctic National Wildlife Preserve (ANWR) argue that the benefits would be marginal. Hahn and Passel don’t necessarily disagree. They reckon 7b barrels could be pulled from ANWR, with another 11b available offshore, Hahn and Passel estimate the U.S. could thusly increase output by six percent, resulting in a 1.3 percent drop in worldwide prices. Meh. But the two argue that at $100/barrel, that oil would be worth nearly $2t not including the benefits of reduced pump prices for consumers. Development costs including environmental clean-ups would cost only $400b, making drilling an “economic no-brainer.” Hahn and Passel estimate the “non-use value” of ANWR at “only” $11b. The authors could “imagine a political bargain in which several hundred billion dollars went into a fund with a charter to preserve wilderness in the United States, or climate-stabilizing rainforests in Africa and Latin America.” In short, to protect the environment we must defile the environment. In reality, drlling is one of those idealism vs. pragmatism issues where win-win is a no-no. As long as the “Drill, Baby, Drill” refrain is still echoing out of St Paul, this kind of compromise is a long way off.
Tropical Storm Gustav, which some experts say will be the worst Gulf of Mexico hurricane since Katrina, is projected to hit the Louisiana Gulf Coast early next week. After the Katrina fiasco, you can count on three things: 1. Residents of New Orleans will evacuate when they're told to; 2. FEMA will be on full alert; and 3. Gasoline prices will go up. Bloomberg reports Royal Dutch Shell Plc, BP Plc and ConocoPhillips are already cutting production and evacuating workers from their off-shore platforms along the Louisiana coast. If Gustav follows the predicted path (there's a 70-75 percent likelihood it will), it could halt production of 1.2m barrels of crude per day. Crude oil for October delivery has already gone up 1.5 percent; overall, oil has gained 3.3 percent since Gustav formed on August 25. The price of natural gas for September delivery also went up, with a 4.9 gain so far. Even if Gustav changes course, it could still affect prices because 42 percent of U.S. refining capacity is located along the Louisiana and Texas Gulf Coasts. Hold onto your wallets, folks. It's going to be a bumpy ride.
GM CEO Rick Wagoner and his Motown pals maintain that "nobody could have predicted" the recent surge in gas prices. You know, the price hike that's driven a stake through the heart of their high profit light truck biz. Never mind the fact that TTAC and others were bemoaning The General's re-investment in their GMT900 trucks back in '03. Well, guys, here's an article in The New York Times that says that nationalization of oil resources around the globe could lead to a drop in supply. (Maybe we should drill nearer to home? Nah.) OK, it's kind of funny (ironic) that the Gray Lady's piece paints Big Oil as the good guy. But that's not the point. Now pay attention: this trend could mean oil prices will go up again. Which would raise the price of gas. Now there's many a slip between the well and the ship, but do NOT tell us that you're surprised if pump prices go up again. That is all.
According to the Bible, God toppled the walls of Jericho, parted the Red Sea and made the sun move backwards in the sky. Now He's taken a few minutes out of working on world peace and a few other projects to drop the price of gas in the U.S. by 20 cents a gallon. Rocky Twyman, described by BBC News as a "veteran community campaigner," has been holding "Pray at the Pumps" meetings all over the country since April. Twyman told BBC when they prayed in Huntsville, Alabama, "immediately the owners came out and changed the gas prices. They brought it down." They're not resting on their laurels, though. They plan to continue their prayer meetings to drive gas prices down even more. Hopefully the group won't stop until gas is back down around $1/gallon. Only then can every American exercise their God-given Constitutional right to drive the biggest, gas-suckingest SUV or pickup the automakers can screw together. Then we can all say with the poet, "God's in his Heaven – All's right with the world." Can I get an "Amen"? [thanks to KatiePuckrick for the link]