Saturday :: Sep 3, 2005

That Jumpin' Stack O' Cash, Made O' Gas, Gas, Gas!


by pessimist

With the muddle that is the response of the Bu$hCo regime to the natural disaster that is their rule (not to mention Katrina's aftermath!), King George appears to be in a quandary:

Storm brews around Bush leadership

In a debate with Vice-President Al Gore, his rival in the presidential campaign of 2000, Bush commented that "natural catastrophes were a time to test your mettle". But he now appears uncertain whether to adopt his trademark ebullient style or a more understated approach.

Considering how 'well' he's done this week, where even CNN is taking potshots at his performance, I believe, based on what he's done - or not - that he's made his choice: Understated to the point of being totally non-verbal. It helps to draw away his participation in the biggest energy ripoff since 'Unka' Dick Cheney's 'energy task force' conspiracy.

Let's start with the worse news:

High Natural Gas Prices Predicted, PSC Urges Consumers to Prepare for Winter Heating Season

Forecasters are predicting higher natural gas prices this winter due to shut down of production in the Gulf of Mexico in the wake of Hurricane Katrina as well as increasing demand. This situation means the average residential heating bill could be more than 23 percent higher this winter than last year and prices are likely to go even higher. Demand for natural gas continues to rise as growing percentage of electric generation and residential heating comes from natural gas.

Forget about converting your furnace to electric:


Utility rates could soar

If natural-gas prices remain close to where they are now for two or three more weeks, typical home electric bills could go up by 20 percent or more, utility experts say. "They're going to have, perhaps, a doubling from years past of the price that they see on their [heating] bills," Victor Carrillo, chairman of the Texas Railroad Commission, which oversees the state's natural-gas industry, said. "There is speculation that there will be long-term damage to production facilities, and that could lead to long-term disruptions and therefore higher prices."

And it's all Katrina's fault, right Yore Hindne$$? Even in California???


Natural gas rate hikes likely after hurricane

The devastation of Katrina is already pushing up gasoline prices, but the bigger hit to Californians could be months from now when natural gas and electricity prices rise because of the hurricane, experts said this week. Predictions of rate increases come on top of already high prices: Pacific Gas & Electric Co. announced Thursday its intention to seek rate hikes of more than 10 percent next year for electricity. And earlier in the week it received approval from regulators for a 28 percent increase in natural gas rates over last month to cover high costs that pre-date the hurricane.

I wonder how Red Staters are going to like this news!


Forget the pump -- wait till you get the heat bill

Between gasoline and natural gas, Indiana families may pay $2,000 more for energy in the coming year. Carol Harpenau, Greenwood, wonders how long the high prices will last. She and her husband, Ted Harpenau, are delaying a replacement of the bedroom suite they've had for 40 years, and Ted has taken an accounting job closer to home to cut his commute. Their Chevy Impala and Malibu get nearly 30 miles per gallon, and their three-bedroom home costs just over $1,000 a year to heat.

I'll bet they could get a real good deal on a used house along the Gulf Coast, where it's much warmer (usually) than Indiana in the winter!

Now we'll go on to the merely bad news:

Arizona gas prices hit an average of $2.72 and Ten percent of gas stations in West Virginia are out of at least one grade of gas while Michigan gas highest: At $3.13 average, fuel costs most in nation.

Also, Katrina could cause propane prices to spike by 30 cents a gallon, ... [and] the price of lumber has jumped more than 7 percent.

But never fear! Bu$hCo is near! Prices could hit $4 a gallon in areas such as Chicago, New York, and California before spreading to other areas, especially since Gas prices may rise again over Labor Day weekend. Would this make a seer out of A Rocky Mount station owner who predicts the price of regular gas will reach $6 a gallon in the next week?

Still glad you voted for George W. Bu$h, Red Staters?

Based on this report, maybe you're not:


Fast-rising gas prices shock, anger drivers

Charles Priestley couldn't believe his eyes when he drove past the A Plus Mini Mart on Lyell Avenue on Friday afternoon. The posted price of a gallon of regular gasoline was $3.49. "This morning it was $3.09," the Rochester resident was saying Friday, a fact that was confirmed by an A Plus employee. "And (Thursday) morning, when I should have stopped, it was $2.67. That's a 62-cent jump in one day. I know everything that's going on, but that seems a little out of whack."

So out of whack, Priestley says, that he suggested to his girlfriend that she might have to change jobs. "She's working in Clarendon only making $150 to $160 take-home pay," he said. "My pickup truck gets about 17 miles a gallon, and it's about 26 miles from here to where she goes. That's 52 miles round trip."

Someone else isn't too happy, either - and he's suggesting taking action:


With the price of gasoline spiking over $3 a gallon at pumps across the Ocean State Wednesday, a city man is calling for a 3-day boycott on gas purchases, starting Sept. 11.

Calling it the Great American Gas Out, David Greenwood is calling on Rhode Islanders not to buy gasoline on Sept. 11, 12 and 13. "Between heating oil and gas prices, things are going up," Greenwood told The Times. "The American public has to speak up. In Rhode Island, people don't speak up until the worst is here."

Greenwood isn't sure the worst is here -- he sees pump prices shooting up to $4 a gallon. "It just keeps going up and our leaders -- the governor, the representatives -- aren't saying a word about it. Maybe they can afford it."

Someone who comes from a fairly wealthy family does understand, Mr. Greenwood:

"Gas prices have remained at record levels for more than three months," [Rep. Patrick] Kennedy said. "Consumers are being continually squeezed at the pump while the big oil companies reap record profits. Economists are also warning that rising gas prices could be new threat to the U.S. economy - boosting energy costs for industry, and airlines, as well as millions of drivers."

Greenwood, a member of the Reform Party of Rhode Island said Reform Party organizations in Virginia and Ohio are also pushing for a nationwide gas out. An e-mail The Times received from another source called for a gas boycott today, Sept. 1.

I have gotten these emails, mostly from my Good Orange County (CA) Republican co-workers. Despite my membership in the Reform Party of California, I do not support this proposed boycott, even though I understand and sympathize (to the tune of a 100 mile round-trip to work 5 days a week!) the emotion behind it.

But I digress.

Gas station owners claim innocence:


Gas Station Owners Speak On High Gas Prices

Gas prices have surged well past $3 a gallon in the wake of Hurricane Katrina, but station owners say they're not the ones cashing in. After stations pay a wholesale price, federal tax and delivery charges, the rest goes to several state taxes and fees. Gas station owners say they usually make a profit of about $.10 a gallon.

According to Kris Hughs, the President of Superior Oil Company, "The profitability at a gas station at the retail level is fairly low. Actually, the state of Michigan makes more money on gas than even we do. They make almost $.40 per gallon of every gallon that's bought."


But it is the gasoline retailer which is taking the revenge of the consumer:

Service station employee Jennifer Lyons said her Shell station in Sandusky has seen six driveaways in two weeks. "People wait until you get busy, then they come fill up and drive off," she said.

The consequences for some are not exactly in line with the (mi$)Admini$tration'$ boast of a 'booming economic recovery':


Gas prices force Brockton station to close

Trojan Gas on Centre Street closed Friday, citing skyrocketing gas prices that caused customers to flee to lower prices at self-service stations. Eleven employees, mostly part-timers, were left without jobs.

Tedeschi's Mobil, located across the street from Trojano, was selling regular gas for $2.95 a gallon and raised it to $3.17 a gallon later in the day. So when the tanks went dry Friday and the cost of gas from the supplier was higher than the pump price across the street, Trojano said they decided enough was enough. To have gas delivered to her station Friday, Trojano would have paid $3.38 a gallon for regular.

"This pushed us over the edge," owner Sharon Trojano of West Bridgewater said just hours after the price signs were ripped off and 'no gas' signs were posted at the station she and her husband Steven have operated for 15 years. "We'd been on the fence for a while, the self-servers were really doing a number on us," Trojano said. "We weren't selling gas and we were paying people to pump, it really wasn't worth being open."

Trojano said she is disturbed that she had to let her employees go. "That's probably the hardest thing about this," she said. "We had a great bunch of guys there, that's the reason our customers were so loyal — because they loved the guys that worked there."

The closing of the Brockton station follows the closing a week ago of a Halifax station.

Other businesses are feeling their pain:


Sharp jump in gas prices hurts retailers, construction

Retailers, in particular, are feeling the effects of soaring gas prices because heir customers are having to divert more of their disposable income to gasoline. Even before Katrina, “some retailers noticed decreases in shopper traffic,” said Ray Owens, an economist with the Federal Reserve Bank of Richmond, who specializes in business conditions in the bank’s five-state district.

That’s the message Dollar Tree delivered to investors last week when the Chesapeake-based chain reported its financial results for the May-through-July quarter. An increase in the average size of its customers’ purchases failed to make up for a falloff in traffic at its stores, said Bob Sasser, Dollar Tree’s president and chief executive officer.

Dollar Tree’s customers, he said in the report on earnings, “continue to feel the strain of rising fuel costs, and they are responding with fewer shopping trips.”

Many businesses including retailers and manufacturers are wrestling with a surge in their own fuel costs, and many are trying to pass along at least part of the additional cost to customers. Trucking companies, for example, have resorted to fuel surcharges for the goods they deliver.

Long after the pressure on fuel prices eases, Hampton Roads probably will feel the effects of Katrina’s destruction in Louisiana, Mississippi and Alabama. Rebuilding the homes, businesses, schools and other facilities destroyed or damaged by the storm will put significant pressure on the costs of plywood, lumber and other building materials, said the Richmond Federal Reserve Bank’s Owens. Because the scope of that reconstruction will be so broad, the costs will be felt nationwide, he predicted.

Virginia isn't alone. These effects are already being felt elsewhere in the nation:


Jump In Fuel Prices Has Impact On Many Aspects Of Living

This week's jump in fuel prices is affecting businesses and households throughout northern Vermont and New Hampshire and is raising the prospect of cutbacks in public transportation and increases in school budgets. Anxiety is also building about the ability of fuel assistance programs to meet the needs of low-income people and those on fixed incomes during the upcoming winter heating season.

The number of New Hampshire residents applying to the federal Low Income Home Energy Assistance Program (LIHEAP) is expected to exceed last year, but program funding is expected to remain the same, said state fuel assistance program manger Celeste Lovett.

Lisa Cleverly, a crisis fuel assistance worker for Northeast Kingdom Community Action in Newport, expects to see more people applying for help this heating season. Cleverly said the worst hit will be the working poor because they make just enough money to exceed the eligibility guidelines.

Meanwhile, the cost of home heating oil has increased by as much as 40 percent from last year.

But at a much slower rate of increase than the one experienced at this station:


Some Stations Close In N.C.

In the aftermath of Hurricane Katrina, gas prices surpassed more than $3 a gallon in North Carolina on Thursday, and some gas stations even closed. Fuel prices in Buncombe County in western North Carolina had already reached $4 a gallon Wednesday evening.

"I think it went up 21 cents since Wednesday," an employee at a BP in Benson said. The employee said he changed his sign twice before noon and then decided to leave the final cent column blank. "What's the use?" he asked. "At the end of the day I will. Right now, it's just too crazy."

That's an understatement! When will it get sane again? Not anytime soon!


Experts Say Katrina’s Damage Will Push Oil To $4 A Gallon

"There's no question gas will hit $4 a gallon," Ben Brockwell, director of pricing at the Oil Price Information Service, said. "The question is how high will it go and how long will it last?"

We might find some clues in this situation:


Gas prices soar after storm

Gas prices in the Gainesville area skyrocketed Wednesday, with regular jumping past the $3 mark at several places. Some stations increased their prices up to 30 cents a gallon.

"Gas stations are going up $1 to $2 a gallon," said Jonathan Harris, a customer service representative in Gainesville. "In North Carolina there is a station that is paying $4 a gallon, their cost. We see prices changing and moving up every 15 to 20 minutes."

One Gainesville station increased prices three times in an hour Wednesday afternoon, changing the price of regular from $2.70 a gallon, to $2.79 a gallon and then to $2.99 a gallon. The price was $2.60 on Tuesday. "I'm concerned it (gas prices) will go up to $5 a gallon," said Chelinda Chambers of Gainesville. "I use a lot of gas."

Chambers works two jobs in the Gainesville area. She fills her car up about twice a week, and says the high gas prices hit her budget hard. "I'm a single mom," she said. "And I could be spending this money on other things."

What's a mother to do??? Make some changes that will ease the expenses of living:


Consumers taking small steps to deal with gas prices

Drive less. Switch from premium to regular gasoline. Stay home instead of taking in a movie. Pass up a six-pack while watching a football game. Many consumers are making adjustments to ease pocketbook pain as gasoline prices continue to climb in wake of Hurricane Katrina, but longer-term changes such as conserving more and driving less may be more difficult to discern.

Because of a diverse blend of factors ... industry analysts believe it could take even higher prices to persuade Americans to alter their lifestyles permanently. "Up until this point we haven't see consumer changes that would result in less gasoline usage," said industry analyst David Portalatin of NPD Automotive, a division of NPD Group, a sales and marketing information organization. "The reality is 80% or so of consumers get up every day and get in their car and drive along to work alone. We're pretty committed to that lifestyle."

Portalatin believes there are two behavioral responses to rising gas prices — the increased awareness that prompts immediate budgetary steps and the longer-term changes. The first has begun, evidenced by big-box retailers such as Wal-Mart and Costco garnering 10.5% of the retail gas market share, up from virtually nothing five to six years ago, he said.

The second change, which would reflect longer-term conservation, hasn't materialized yet.

Oh?


AAA is urging motorists to conserve gasoline as gas prices continue to skyrocket in the aftermath of Hurricane Katrina

"AAA is calling for motorists to utilize their most fuel-efficient vehicles whenever possible and to ensure that every vehicle is properly tuned up for maximum gas efficiency," said Martha Mitchell, spokeswoman for AAA Mid-Atlantic.

Some, through personal experience, are getting that message:


Motorists see prices hit $3.45 a gallon

Tammie G. Ellis of Cosby was filing up at Food City on Dolly Parton Parkway, where the price of gas had quickly zoomed up to $3.29 per gallon for regular. "I have spent $33 on 10 gallons of gas," she said. "I used to be able to fill up for $10. This is unreal. It looks like people are going to have to start carpooling.

Carl Compton was filling up at Layman's Market and Grill, 1779 Newport Highway, where regular gasoline was selling for a relatively cheap $2.79 per gallon. This apparently didn't provide the Boyds Creek resident much comfort. "It sucks," he said. "It sucks really bad. I drive here and back usually. It was costing me $9 a day. Now it's going to cost me $14 to $15 per day."

Gena Rolen, Layman's Market manager, said the business will hold the line on gas prices as long as possible. "We price according to what we pay for it," she said. "We're getting a partial load today. We'll get a full load tomorrow. Within the hour, we'll be $2.79. I do not know what tomorrow is going to bring."

Whatever it is, it won't be calm and stability:


'It's a madhouse' as Metro gas prices soar past $3

Prices are above $3.50 a gallon in parts of northern Michigan, and distributors in Ohio have been rationing fuel. Station owners had to improvise to keep up with the quickly rising prices. The sign outside a Commerce Township Marathon station contained 3s handwritten in red marker, and a pair of 3s cut out of paper were taped to a Redford Township station's sign.

How much higher prices will go depends on how quickly electricity can be restored to Gulf Coast pipelines and refineries, analysts said. A significant amount of oil and gas production in the Gulf of Mexico remains shut. Flooding may have left some important refinery equipment submerged and it will likely be days before a full damage assessment is completed.

Bob Cleary, the Michigan Petroleum Association's vice president, said stations that don't have contracts with suppliers -- typically off-brand dealers that shop around for the lowest wholesale prices -- are struggling to find fuel at any price. They're being forced to pay as much as 50 cents more per gallon than their competitors just to stay open, he said.

Here in Southern California, I have seen signs of such pricing tactics. At one intersection in Santa Ana, Ca., I saw an independent station charging $3.17/gal - while the Chevron station across the street was selling it for $2.97.

Here's how it works:


Local gas prices Why so high?

Fluctuations in gas prices have kept consumers on a roller coaster ride all week ever since Hurricane Katrina’s passage Monday wreaked so much havoc along the Gulf Coast, including damaging or shutting down refineries, off-shore drilling and pipelines in coastal states affected by the storm.

“We don’t know until our truck gets in line what the fuel prices are going to be for that day or how much fuel we’ll be allowed to get,” said Glennie Bench, vice-president of Southwest Georgia Oil, “so we have accounts with all of the suppliers, like Motiva, Marathon, Chevron, or whoever may have fuel in the terminal at that time, and we try to get as much fuel as we can at the lowest prices available.

“Last night, we paid $3.25 per gallon for our fuel,” Bench said Thursday. “We are trying to keep fuel in the ground [tanks] so we don’t have to shut down our stores and we have set a quota at 10 gallons of gasoline per car and 50 gallons of diesel per truck for the same reason: We don’t want to empty our tanks and then have to send employees home because there is no gas to sell.”

Vivian Bishop, owner of the Bishop’s station near the Florida-Georgia line, said she buys her gasoline from the same terminal Inland uses and was able to keep her prices to $2.64 Thursday because her tanks still contained gasoline she had purchased at a lower price. But when the supply gets low, she said she will have to go up on her pump prices if she has to pay more at the terminal.

“I expect we’ll have to go up by 15 or 20 cents,” Bishop said. “We won’t know until we get our invoice how much we have to pay for this latest load.”
Professor David Barrett teaches economics at Bainbridge College and said he is concerned that higher gas prices in Bainbridge may be an indication that there is not enough competition in the area to keep prices lower. “Another word for what I see happening in Bainbridge is oligopoly, which is a state of limited competition in which a market is shared by a small number of producers or sellers,” Barrett said. “People will always go back to where they can get the best prices. If people refuse to pay higher prices and go only to the lowest priced stations, it might send a message to the higher-priced stores and they will come down.”

The idea that there is collusion behind these prices is spreading:


High Gas Prices Create Concerns of Price Gouging

Hurricane Katrina has sparked desperation, if not panic, among motorists. Drivers are lining up at stations to fill up. The record high gas prices have a lot of people crying foul, suspecting that there is some major price gouging going on. They've gone up 40 cents over much of Georgia.

Concerns are mounting over limited supplies of gasoline, including the possible return of long lines and scarcity reminiscent of the 1970s gas crisis.

If it isn't the gas station owners, is it the refineries? Someone else is asking this question also:


Schweitzer: Refineries are gouging consumers; Industry leader calls foul

Gov. Brian Schweitzer is criticizing Montana oil refineries, saying some have raised prices for gasoline as much as 50 cents a gallon since Hurricane Katrina, despite no evidence that their own production costs have risen. "Even though their cost of production hasn't gone up one penny, they're raising the price 30, 40, even 50 cents," he said. "I think that's an outrage."

The top manager of the Montana Refining Co. in Great Falls disputed Schweitzer's statements, saying his refinery's price increases barely cover its costs. Hurricane Katrina, which struck the Gulf Coast early Monday, caused major damage to oil-production facilities in the Gulf of Mexico and the South. Since then, gasoline prices across the country have been climbing steadily — in some areas by the hour.

Schweitzer, however, said refineries in Montana get most of their crude oil from Alberta, Wyoming and Montana, and the cost of that oil has not risen since Katrina struck. Montana refineries shouldn't be affected by developments in the Gulf, and therefore have no reason to raise prices so dramatically, he said. "I'm calling on them to be good neighbors and roll back prices to the same prices that (they) had last week," he said.

Teddy Roosevelt once had a saying that applied here:

"We demand that big business give the people a square deal; in return we must insist that when anyone engaged in big business honestly endeavors to do right, he shall himself be given a square deal." - Letter to Sir Edward Gray, November 15, 1913

As it appears that they have already supplied themselves, one state Attorney General is seeking to emulate another Rooseveltian motto: Speak softly and carry a big stick; you will go far.


Hatch Prods Feds To Investigate Gas

Attorney General Mike Hatch is urging the federal government to investigate the gasoline market for illegal price manipulation. Hatch said he backs a similar request from his counterparts in Illinois, Iowa, Michigan, Missouri, and Wisconsin.

I'd forget about asking the federal government to investigate energy price gouging:


Katrina tragedy is an absolutely perfect storm for oil companies

The very first thing George W. Bush did in response to Hurricane Katrina was to offer a helping hand—not to the people stranded on rooftops in New Orleans, but to his friends in the oil industry. These were the same people who gave him $52 million in his last campaign. The president released millions of barrels of oil from the Strategic Petroleum Reserve so the oil companies would have enough fuel to make gas and keep the country going. But the companies don't need this oil. They're already swimming in it.

The story goes like this: Refineries are increasing their stocks of crude, yet not increasing production of gasoline. This may help explain the high prices. It is an odd situation, since usually, in the summer, refineries are operating full tilt to lay in supplies of gasoline and home heating oil.

Meanwhile, the high gas prices are adding to the profits of the big companies. Says the watchdog group Public Citizen: “Since George Bush became president in 2001, the top five oil companies [selling gas] in the United States have recorded profits of $254 billion: ExxonMobil: $89 billion, Shell: $60.7 billion, BP: $53 billion, ChevronTexaco: $31 billion, ConocoPhillips: $20 billion.” The group adds: “As Americans shell out more dollars at the pump, the profit margin by U.S. oil refiners has shot up 79% from 1999 (the year Exxon and Mobil merged) to 2004.”

The industry was 'allowed' to investigate itself, and came up with this:


As gas prices rise, conserve fuel and keep perspective

While the rapid rise in gas prices in the wake of Hurricane Katrina has been costly and unpleasant, there is no clear evidence today of industry-wide price gouging.

We're shocked - SHOCKED - to discover no price gouging in the 'Awl Bidni$$'!


So what is behind this gas crunch?

It's not the damage to refineries in the Gulf Coast, officials said. The real problem: the pipeline that supplies almost all of our gas had no electricity until Thursday. Officials said the gas pipeline should be running at 61 percent of its capacity by Friday.

Right! Lying again! As John Lennon once observed, Instant Karma's Gonna Get You! But as King George claims to be a Christian, would not the retribution be more Biblical in nature - as in Mother Nature?


Could this attack by Mother Nature herself be Biblical?

So, where does Mother Nature strike us? It struck us in the heart of our oil producing region where our gluttony for this commodity is refined so that we can fill up our SUVs.

Bush stated that he would tap into our strategic oil reserves, while he once ridiculed former Vice President Al Gore in wanting to do the very same thing. But, here is the catch. These reserves are unrefined crude oil and we need these now-damaged refineries to get it into the people's hands.

Years ago, when California was facing an energy crisis, George W. Bush stated "there would be no help coming from Washington, D.C." I found that statement callous in nature.

The effects of this destruction will not only be felt this region, it will be felt by all of us. We will be affected by increased gasoline prices which have already begun to happen. Many of the goods we consume are shipped by trucks and planes where the cost of increased gas prices will be past along to the consumer.

Will we hear "Attention Wal Mart shoppers, our low prices have just gone up"?

We just might:


Wal-Mart Uneasy About Rising Gas Prices

Wal-Mart may be facing a worse enemy than its critics: rising gas prices.

The price of a gallon of unleaded gasoline hit $3 and more at some places across the country this week, making Wal-Mart Stores Inc. President and CEO Lee Scott's previous worry about $2-plus a gallon seem nostalgic. Scott in August blamed the company's second-quarter sales shortfall on rising gasoline prices, which he has always said has a negative impact on spending by Wal-Mart's core customers. He said rising pump prices present the company's biggest risk to its future performance

"I do feel good about the economy, but I do worry about the effect of higher oil prices," Scott said.

That was before Hurricane Katrina hit the Gulf Coast this week, closing oil platforms, refineries and pipelines and driving energy prices to new highs.

Walmart cannot stay in business long if the truckers who deliver the goods are having troubles:


Gas prices taxing truckers

Damage to Southern refineries and pipelines from Hurricane Katrina has caused a nationwide fuel shortage, sending gas prices soaring past $3 per gallon and in some cases to $4 and $5 per gallon at the pump. And truck drivers in particular are feeling the squeeze.

Roy Davis, who is hauling 37,000 pounds of lettuce in his tractor-trailer from Salinas to San Antonio over the Labor Day weekend, said he expected the escalating cost of fuel to put many small truck companies and independent operators out of business. Davis, who works for Baldwin Distribution Services in Amarillo, Texas, said his truck holds 400 gallons of diesel fuel and gets 5.9 miles per gallon. He said it would cost more than $1,000 just for fuel on his 1,672-mile trip.

"The little man is going to have to go. They can't absorb the costs,' Davis, 58, said as he repaired a flat tire at a truck stop on Milliken Avenue in Ontario.

Prices at a gas station attached to the Milliken truck stop shot up to $3.07 for unleaded and $3.17 for diesel Friday afternoon.

Victor Salvatierra, a Chino resident who owns his truck, set out Friday afternoon on a trip to deliver strawberries to Canada. He expressed frustration with the current prices but said he felt powerless because he has to compete against other
independent truck operators for jobs. "If I don't take the load, someone else will,' he said.

But Salvatierra, 43, said that if fuel increases even a few more cents, "I will have to stop my truck. There is no profit at all.' He said that although fuel prices are skyrocketing, companies do not increase his pay to offset the higher costs. "There's nothing I can do. I can only stop my truck. Nobody is helping us. They put on the load and you have to take it or leave it. "If I stop my truck, nobody will notice. It's my problem.'

Both Davis and Salvatierra said they were angry with the government for refusing to put a ceiling on fuel prices. "Nobody's got an answer. Katrina put a hurt on everybody, but somebody in D.C. needs to put his foot down,' Davis said.

But ultimately, he said, consumers will be the ones who suffer from higher gas prices. With so many products delivered to stores by truck, "somebody has to pay for it,' Davis said. "Me and you.'

Davis also was worried about the short supply and said he was anxious to get home to Amarillo to celebrate his wedding anniversary this weekend.

"Before I get to San Antonio, will there be enough (fuel) for me to get home?' he said.

That is the question facing a tourist decline in Las Vegas as well. They must not like the odds:


Casinos worried about impact of soaring gas prices

Supply disruptions caused by Hurricane Katrina are pushing gasoline prices up, and a casino industry leader said Thursday there's concern that the higher prices could in turn prompt some tourists to cancel Nevada travel plans. "There is concern in the industry how the consumers are going to react whenever you have these kinds of price increases," said Bill Bible, executive director of the Nevada Resort Association which represents most major hotel-casinos.

Bible said about half of the tourists in Las Vegas arrive by plane and the rest in vehicles, and in either case higher fuel prices could reduce such traffic. He also said concerns about fuel supplies "may cause some people to not travel because they fear they won't be able to get home."

The hospitality industry is wondering if that thought is why room occupancy is down at their busiest time of the year:


Jump in gas costs prompts worries of tourism drop

“We’ve had hardly any business the last couple of days,” said Hilda Hamby-Stott, general manager of the Best Western Oceanfront hotel in Virginia Beach, where 25 of the hotel’s 110 rooms were vacant. “We’ve taken a big hit. We know that most of the hotels on the O ceanfront are taking a hit. Normally, we wouldn’t have a room to sell right now.”

Gerald Solomon, general manager of the Bayview Motel in Norfolk, blamed rocketing gas prices for a dozen cancellations since Wednesday. “Every weekend since the summer began, we’ve been packed full, and now everything’s canceling on us,” he said.

Margaret Walker, of Norfolk, gassed up her Chevrolet Tahoe at a Shell station near Old Dominion University, dropping $45.40 on 14.65 gallons of regular grade. But she vowed to limit her fuel expense as much as possible. “I’ve decided I’m going on one tank of gas,” Walker said. “But I’m not going to be able to go anywhere once I’m there. I’m going to stay put.”

No tourists, no tourist dining. Restaurants are becoming concerned about the effects of gas prices as well:


Katrina's Financial Blow Will Extend Beyond Gas Prices

Diners in Kentuckiana may feel some of the effects from Hurricane Katrina. "Yesterday, I was loaded up on gulf oysters, today I'm out," said Joe Bonura of Louisville wholesaler Bluefin Seafood, which supplies 230 restaurants in Louisville. About 10 percent of Bluefin's seafood comes from the Gulf region. "We're not able to get the Gulf oysters for awhile, we're not sure when they'll come back in," Bonura said. "Everybody's loading up so that they can have them through the weekend."

Some, however, aren't convinced that anything significant is happening to tourism - yet:


Sharp jump in gas prices hurts retailers, construction

Gasoline prices may continue climbing, but the Hampton Roads economy, including its tourism sector, will have little difficulty absorbing the cost, an Old Dominion University economist predicted Friday. “Even if gas prices go to $3.50 a gallon, I don’t think that will damage the region’s tourism,” said Gilbert R. Yochum, head of the university’s Economic Forecasting Project. “The real wild card is how people respond to the president’s message” that they conserve fuel by cutting back on their driving.

This message doesn't seem to be getting the desired response from everyone:


PAIN AT THE PUMP

Cedar Point Amusement Park was a popular destination point for many Michigan families like that of Ken and Gayle Coleman of West Bloomfield. The couple and their three children had been planning the 110-mile trip to Sandusky, Ohio, for three weeks and were not about to cancel. It cost $30 in gas to fill up the tank of their rented Dodge Caravan.

But the message IS getting throuogh to professional drivers:


High gas prices cancel track races

Tonight’s Hoover Chevrolet /GM Performance Parts Sportsman 50 card has been postponed as well as the Sunday night Cracker 100 for Modifieds and Roadrunner 20. Dates for these events will not be announced until the current gasoline situation in Schuylkill County substantially improves.

With the local gasoline chaos in the aftermath of Hurricane Katrina’s devastation of the Gulf Coast last week, Big Diamond Raceway promoter Fritz Roehrig has decided to postpone all racing at Big Diamond Raceway scheduled for this weekend. "The price of gasoline in the county is now at $3.36 a gallon,’’ Roehrig said Thursday night. "Two area stations are out of gas and one is near empty and there are waiting lines of 15 minutes. People have been traveling out of the county for gasoline because of the situation, which is growing worse.

"I cannot see using gasoline for a sport or to attend a sporting event now that there appears to be a shortage."

That won't play well with the Red State NASCAR Dads! Especially the ones who still drive around with 'W 04' stickers! It might affect George's approval rating - like this shows:


Seven in Ten Americans Hurt by Gas Prices
Public approval for President Bush's handling of the issue: 20%

As the price of oil temporarily surged above $70 a barrel in the wake of Hurricane Katrina, a new CNN/USA Today/Gallup survey finds that rising gas prices are already negatively affecting most Americans. And while more people blame the oil companies than the politicians in Washington for the higher gas prices, a substantial number of people also blame the Bush administration and to a lesser extent the Republican and Democratic members of Congress.

As gas goes up, Detroit goes down:


Auto sales take a blow from Katrina, gas prices

Automakers saw mixed sales results in August as the hype over this summer's employee discounts faded and Hurricane Katrina ravaged dealerships in the South. Several companies reported a drop in truck sales, a likely result of rising gas prices.

The trucks are definitely feeling the pinch - even in Texas:


Fuel costs starting to hurt

In the past year, the price of gasoline and diesel fuel have risen more than 40 percent both locally and nationally, AAA New Mexico reports. In the past two days in the aftermath of Hurricane Katrina, gas prices have skyrocketed to $3 a gallon at many stations in El Paso and elsewhere, and the average price for a gallon of diesel in El Paso is $2.612. Diesel fuel has increased about 20 cents a gallon in the past two days.
University of Texas at El Paso economics Professor Tom Fullerton said "high gasoline prices will cause an additional drain on business-sector profitability over the next couple of weeks."
In the past month, locally owned grocery store company Blue Sage Supermarkets has seen a 2 percent increase in shipping costs because of rising fuel prices. "And that was before Katrina's impact," Blue Sage president and owner Gene Denison said. Denison anticipates another increase in the cost to ship food to his supermarkets. "We'll eventually be forced to pass it along to our customers, or we'll go broke," he said. "There's not a big margin in the grocery business."

Not everyone will be able to pass along higher fuel costs:

Pat Villalobos, president of Barnhart-Taylor Inc., which manufactures heating and cooling equipment and does construction work, said high gas prices have been hurting her business. "My gas bills are getting higher and higher," she said. Barnhart-Taylor is working on four construction projects at Fort Bliss.
Villalobos said it's virtually impossible for her to pass increased fuel costs on to the federal government.
High fuel prices are keeping JoJohn Vega up at night. Vega is the vice president of operations for Mesilla Valley Transportation, an El Paso and Las Cruces trucking company with more than 1,200 employees and a fleet of 800 trucks. Every time the price of diesel goes up by 1 cent a gallon, that costs Vega's company about $15,000 in added expenses each week, he said. "It cost us nearly $900 to fill up one of our trucks" on Wednesday, Vega said. "And we have 800 trucks. Think about that."

Vega's company has tried to pass on some of its increased costs to its customers through a fuel surcharge, but that has only helped the trucking company recoup about 70 percent of its fuel expenses during the past year or so. "Tires are petroleum-based," he said. "Our tires have gone up, oil has gone up, fan belts have gone up -- anything that's petroleum-based."

Vega said he fears for the economic well-being of the trucking industry and of the nation as a whole. "Eventually, people won't be buying things like microwaves and televisions, and that means less things for us to transport," he said. "People are going to concentrate on the basics, things like gas, milk, food or even beer," he said.

But that isn't going to solve the problem if one is concerned about the connection between higher gas prices and remaining in business:


Gas prices causing worry and hardship

Larry Svir of Severson Oil in Winona says he wouldn't be surprised if prices temporarily rise to $3.30 to $3.60 per gallon in the next two weeks.

"Gas prices — it's a killer," said Eric Lawrence of Lawrence Transportation, a firm that operates over 500 trucks out of Winona. "I'm getting a little nervous about supplies." Companies such as his can use fuel surcharges to pass on the increases, he said, but they eventually get passed on to the consumer.

Farmers don't have the luxury of passing on costs. They are dependent on commodities markets and speculators can disrupt those just as they can oil markets.

President of the Minnesota Farm Bureau, Al Christopherson, a farmer of 1,800 acres himself, says agriculture is a very energy intensive industry and in times like these, has to rely on the safety net of federal programs. Farmers get hit directly by fuel prices during planting, cultivation and harvest, he said. They also face a delayed cost impact from petroleum-related inputs, such as fertilizer and herbicides, transportation to market and the shipping of commodities to their ultimate destinations.

Rebecca Hostrawser, a Winona State University student, who commutes from La Crosse, wonders how she will cope if prices keep climbing. "Everything is cut and dried — the job I do, the bills I pay. I don't have any play money. I would have to take another job, is what's going to happen," she said.

If there are any jobs:


Storm's Economic Shock, Job Losses Likely to Rival Worst

Hurricane Katrina, by forcing an exodus of workers and families from New Orleans and surrounding areas, appears likely to rank alongside Sept. 11, 2001, and the Arab oil embargo of 1973 as one of the nation's most serious and sudden economic shocks -- particularly in terms of job losses -- in recent memory.

Analysts at Stone & McCarthy Research Associates estimated yesterday that the storm has wiped out several hundred thousand jobs along the Gulf of Mexico coast, at least temporarily.

The workforce that once operated the region's oil rigs, refineries, ports and other businesses is now widely dispersed. The result could be a labor force crisis that delays the eventual economic recovery.

Soon after Katrina hit, surging gasoline prices were already prompting consumers to curtail their spending on other items.
That may cause businesses to cut back on hiring and investment, probably slowing economic growth in coming months.

The slump's severity will depend critically on consumer psychology, analysts said yesterday: A panicky response to climbing gas prices would help drive them up higher, making things worse. "This disaster is unleashing the type of energy supply shock that we had viewed as the economy's greatest vulnerability," William C. Dudley, chief U.S. economist for Goldman, Sachs & Co. said yesterday.

Katrina's impact on the national economy will worsen if rising gas prices cause employers to hold off hiring or to cut jobs because of slowing demand, weakening the national labor market. "The worst-case scenario is if the drop in consumer spending leads to sufficient job losses to push the unemployment rate materially higher," Dudley said.

Meanwhile consumers have already started altering their routines in response to skyrocketing gas prices. A CBS Poll conducted after Katrina struck and released Thursday found that 70 percent of Americans said they are driving less because of higher gas prices and nearly half said they have cut back their other household spending.

And the National Weather Service forecast three to five major hurricanes between August and November -- of which Katrina was the first.

We progressives have been pounding on the table that workers have to have a decent wage if there is to be any reserve when its needed. Finally, someone else sees this connection:


Wages, Gas Prices Linked

This isn't a story about a nation going down the tubes. The good old USA is doing fine overall for investors and salaried professionals, except the finery isn't reaching as wide an audience as it used to reach.

This week's spike in gasoline prices, temporary or otherwise, is viewed as yet another slap at families in the middle of the income scale and below, whose buying power keeps shrinking despite a so-called economic recovery. Lately, some forecasters are saying the best years of growth are behind us in this economic cycle. If the expansion were to end soon, "it would be the first recovery on record where household income fell every year," said Jared Bernstein at the Economic Policy Institute in Washington, D.C.

"One would have to question why you call such a beast a recovery," Bernstein said.
The trouble is that workers don't have much bargaining power, not only because of competition from Asia on the manufacturing side, but because companies of all types just aren't creating enough jobs, even though they're flush with cash. How can that be, you might ask, if the nation's unemployment rate dropped below 5 percent as it apparently did according to Friday's labor report?

As another Labor Day comes around, we are seeing this double-whammy action more clearly than we'd like. Along with the hurricane's surge in fuel prices, new reports on income, spending, wages and workers' attitudes rolled in, leaving a less than ideal picture of typical family economic bliss in Connecticut and the nation as a whole.

More than 3 million people who should be working at this stage of a recovery are not even looking for jobs, largely because they're frustrated by a lack of jobs, according to an analysis by the Economic Policy Institute. So today's 4.9 percent jobless rate is behaving more like a 6 percent rate.

That makes sense when you look at surveys such as one done by Peter D. Hart Research and released Wednesday by the AFL-CIO. It showed 60 percent of workers unhappy with the nation's economy. Two-thirds said employers are falling short in sharing profits even when the companies are doing well - raising the question, what the heck is the other third thinking?

We know that competition from China and India drives down wages for lots of different types of work, notably factory production and computer programming. And we know that prices at the corner pump are up sharply since 2002 in part because we have a shortage of refineries - painfully so this past week, as Katrina knocked out eight of them.

But overflowing crude boilers wouldn't matter much if there were not a middle class family in China - or a company over there - that was perfectly willing to buy that gasoline at upwards of $3 a gallon.
So, to a point, we're paying the market price, and the market price is higher because we no longer control the world's money the way we did for most of the 20th century. Exactly likewise, the market price for lower-skill (and some high-skill) labor is lower than it was a few years ago because we no longer control global production of goods.

I'm not so sure that we are still in control of something equally important - the operation of our local governments. They are also feeling the pinch - some in dire ways:


Gas prices take toll on budgets

Like businesses and families, local and state governments in Kansas and Missouri are feeling the price pinch and trying to figure out how they are going to pay the higher bills.

Johnson County government estimated it would spend $600,000 more on fuel than budgeted. Olathe, $410,000; Overland Park, $200,000 more. And that was before Hurricane Katrina pushed gas prices even higher.

The Kansas City Area Transportation Authority is considering a fare increase to help pay its higher diesel fuel bill. The ATA, which uses 10,000 gallons of diesel a day, already had budgeted $3.58 million for fuel this year — a 79 percent increase from a year ago.

And how will the cops beable to show up on COPS if their cars are out of gas? Will they take the bus like the bad guys obviously will?


Cities and towns across the viewing area also are making changes to save gas.

In Raleigh, police will increase their foot and bicycle patrols.

Raleigh Mayor Charles Meeker also encourages more people to consider riding city buses.

In Fayetteville, city buses will be free to encourage more people to use them. The mayor also has asked police to save on gasoline consumption by walking their beats, and city employees will work different hours to avoid driving during rush hour.

I can see the crime rate dropping as fast as the gas prices are rising!

There Oughta Be A Law - But Who Will Enforce It?


High gas prices pinching police fuel budgets

Lenawee County Sherrif Larry Richardson says his patrol cars have burned up 80 percent of the money allocated for fuel - leaving only 20 percent for the final third of the year. "We are paying more than twice as much as last year," said Richardson. "If it keeps going up we're going to have to take some drastic measures."

Richardson said he recalls mileage limits and stationary patrols for police during the fuel shortage and high prices in the 1970s. Nothing that drastic is on the table at the moment. "Right now we're hoping they can ride the motorcycles more until the weather gets bad," Richardson said.

And then?

One county exec worries about Katrina's effects on the cost of where the rubber hits the road:

Rising fuel prices were also on the minds of Lenawee County Road Commission board members on Friday. Costs calculated for township road projects will be pushed out of balance, said Bob Emery. "I wonder where the asphalt prices are going to go," said board chairman Merrill Bales.

Managing director Orrin Gregg said the road commission is already trying to move up paving projects that were scheduled next year to avoid higher prices for petroleum-based asphalt components.

Some states have it even worse. Take Massachusetts under Republican Governor Mitt Romney:


Fuel prices may cost state $100m

Rapidly rising fuel prices could cost Massachusetts and its cities and towns more than $100 million in extra energy spending this year, further straining budgets that have not recovered from the recent recession, Governor Mitt Romney said yesterday. [T]he Legislature may have to consider a supplemental spending bill later this year to cover fuel costs for state vehicles and buildings, and to help cities and towns pay for theirs.
"That includes municipal costs. That's schools, that's hospitals, state hospitals, police cars, it's prisons," Romney said. "That's real dollars that we care about."

But he ran as a tax cutter - "That's real dollars that we care about." Now, the reality of that fallacy is coming home - hard:

City and town officials, and officials at other government agencies, said yesterday they expect rising gas prices to squeeze their budgets. 'These cities and towns have to patrol the streets, they have heavy equipment, they have to heat their buildings with heating oil," said Geoff Beckwith of the Massachusetts Municipal Association. "We're still working with the Legislature trying to get the snow relief money from last winter." Beckwith said in addition to powering their vehicles and heating their buildings, local officials are worried about helping residents who may not be able to afford high home heating bills.

No Child Left Behind will leave behind a few more:

In Worcester, school officials already have set aside one-quarter of the district's supplies budget -- which pays for crayons, copy paper, and other classroom essentials -- to cover the rising cost of diesel fuel for buses. In Revere, school officials have canceled all out-of-town field trips.

Alternative Transportation? We Won't Have No Alternative Transportation!

Cities and towns are not the only ones getting hit. Even before Hurricane Katrina, rising fuel costs had caused a $10 million shortfall in the budget of the Massachusetts Bay Transportation Authority after the first two months of the fiscal year. The latest cost increases will open that gap wider, an agency spokesman said yesterday. "The soaring cost of fuel is making it exceedingly difficult to maintain a balanced budget," said T spokesman Joseph Pesaturo. "If prices continue to rise, the MBTA will be facing some extraordinary financial challenges in the months to come."

Not surprisingly, there is someone in the federal government who is trying to rise about the cant of the 'Red Crass' and point out another path toward energy self-reliance:


As gas prices rise, conserve fuel and keep perspective

[T]his momentary crisis, so evocative of the energy crises of 1973 and 1979, must serve as a wake-up call for this nation to get a more responsible, long-term energy policy. As U.S. Rep. Tom Allen of Maine stated on Thursday:
"We cannot drill our way out of our dependence on foreign sources for the fuel on which our national security and our economic prosperity depend."
There is not an infinite supply of fossil fuel. At this point, our nation’s economy and, frankly, the world’s economy would come to a thunderous, crashing halt if our supply of oil were to dry up.
This is dangerous to our economy and our national security.

So what do we do now - go to war against Iran and steal their oil? Or Libya's? Or Venezuela's?

Not so fast there, Pilgrim!

Let this painful moment inspire us, not just our leaders but all of us who consume so much of this fuel, to get serious about conservation and alternative energy. We need to provide tax and other incentives for the use and development of alternative fuels.
We need to do this not for our short-term personal finances but for the long-term health and security of our children and grandchildren.

Instead, this is what we get from the balance of our (s)elected officials:


State may apply for federal gasoline waiver

The EPA allowed states to accept a winter mixture of gas two weeks early. Winter gas adheres to different emissions standards than summer gas. The EPA also let states accept diesel fuel with a higher sulfur content. Connecticut, which is under strict pollution and air quality standards, receives a different, cleaner kind of gas than many states.

Connecticut Gov. M. Jodi Rell has also said she is considering temporarily suspending the state's gas tax. Georgia has waived its state fuel tax for a month and Massachusetts is considering a similar move.

At this point, someone else would be screaming for the government to step in and take things over. I'm going to surprise our freeper-market wrong-wing regulars and state here and now that I believe that the government should stay out of attempting to fix the price of gas. I'll explain why shortly.

But to begin, the Heritage Foundation has this to say to establish the positional base on gas prices that I tend to agree with:


A Bad Response To Post-Katrina Gas Prices

Policymakers should leave the market to do what it does best: allocate limited resources to their most valuable uses.

More specifically, this is what they mean:


Pounding at the pumps Oil companies blame Katrina for snap surge in gas prices

There's no crude oil shortage, he said, but much of the gas refinery production in the U.S. Gulf Coast has been shut down in Katrina's wake. Motorists understandably think it's an excuse for fuel companies to cash in on a tragedy.

Michael Ervin, of Toronto-based MJ Ervin and Associates, said there are rational market-based reasons for the rise here as the result of a catastrophe. The loss of refining supply has pushed up U.S. wholesale prices - some of it due to speculation.

He said Canadian wholesale prices move in lockstep with those south of the border - if they didn't, American buyers would instantly snap up all of Canada's gasoline. "Gas stations typically operate on one or two days' inventory," he said. "Once the wholesale price goes up, the effect at the pumps is quite immediate."

It all underscores how vulnerable North America is to a localized interruption of refining capacity, he said. "It is putting extraordinary pressure on the balance of supply and demand," he said, noting gas supplies are always tight even when all refineries on the continent are running. "When they are all operating, they can just keep up with demand."

Keeping it more simple:


Let prices fix the energy crisis

The North American energy industry is one of the most dynamic and price-reactive in the world, and the best policy is to let market players figure out when, where and how to respond to the supply chaos created by Katrina. Oil, gas and gasoline supply will respond to price and demand.

Like this?

Prime Minister Paul Martin sounded like a giant of energy policy by comparison. "I think we all understand the major reason for the increase" in gasoline prices, he said, pointing to Katrina. Somewhat less clear was Mr. Martin's statement yesterday that Canada is ready to produce more oil to relieve world oil prices. Or at least that's what he seemed to be saying before he went on to explain that Canada cannot produce and ship more oil to the United States except over the long term. Canada has no oil reserves, and the Canadian branch of the world oil industry is pumping all it can.

Despite my objections to the observations of a 'resilient' energy industry, I tend to agree with these statements against government intervention in gas prices. But not for the reasons our wrong-wing friends would love to hear.

This next excerpt explains my objections to government intervention:


Putting caps on gas prices is not the solution to rising cost

Capping the price of gas might sound tempting - anything that would reduce the price of gas is attractive at first blush. But it treats symptoms - and not even effectively - and not the root cause.

To that end, some lawmakers have called for reducing gas taxes. Cutting those taxes, however, only leaves fewer dollars for our highways and bridges, an infrastructure system that needs more improvement than ignoring. Even a tax holiday would leave the state, counties and municipalities short on significant amounts of revenue.

Currently, additives and blends mean gas runs about 10 cents to 15 cents per gallon more in California than it would otherwise, the Western States Petroleum Association reports. The result of eliminating additives, however, will be more smog and lower air quality. That in turn carries long-range problems of higher medical costs for Californians, especially the elderly, who must deal with increased respiratory ailments.

[W]eaning this nation off foreign energy through the development and encouragement of alternate fuel sources for vehicles ... demands a new way of thinking about energy in the halls of Congress and the White House.

In addition, considering the bungled response of Bu$hCo to a major natural disaster, would you trust your energy future to such incompetents?

I wouldn't.

There has to be a change in the thinking of the people of this nation. To start with, we as a nation have to resume thinking! In addition, we have to reduce to vituperative methods by which both ends of the spectrum 'converse' with each other. And lastly, there has to be a change in the number of political parties this country supports so that no one party can ever again dominate the entire government.

Assuming, of course, that we still have a democratic republic and not a plutocratic oiligarchy.

But all in all, we could still have it worse - much worse:


The Final Thought

Most important, let’s keep our perspective. The nation’s priority right now must be helping the victims of Hurricane Katrina whose have lost loved ones, their homes and in many places food and water, the very basics of life. A spike in gas prices is troubling but it is a flyspeck when compared with the agony of the men, women and children struggling for survival in the wake of Hurricane Katrina.


Copyrighted [©] source material contained in this article is presented under the provisions of Fair Use.

FAIR USE NOTICE

This article contains copyrighted material, the use of which has not always been specifically authorized by the copyright owner. I am making such material available in my efforts to advance understanding of democracy, economic, environmental, human rights, political, scientific, and social justice issues, among others. I believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material in this article is distributed without profit for research and educational purposes.

pessimist :: 7:53 PM :: Comments (35) :: TrackBack (0) :: Digg It!