Posts filed under “Energy”
Since peaking at the end of July 2008 at $4.11, then collapsing to $1.65 that December, Gasoline prices have been on a wild ride. Since rallying back to almost $4 in May 2011, gas prices have been range-bound, gradually drifting lower.
There are a few factors driving this: Total miles driven has not recovered from its November 2007 highs. It is off almost 3 percent from its highs of more than 5 trillion vehicle miles driven annually. Persistently elevated unemployment of 7.3 percent means there are that many fewer people driving to work. And the pre-collapse shift to the exurbs — and their much longer commutes — suggests the trend toward ever-longer commutes may have topped out.
To put gasoline prices into the starkest relief, consider adjusting total U.S. miles traveled on a per capita basis. The chart above, via Doug Short, reveals that per capita miles driven peaked in June 2005. They have since fallen almost 9 percent. The last time we saw average annual mileage at these levels was back in 1995.
No wonder gasoline prices have been falling. At present, gasoline prices are below $3 in six states. If demand continues to drop off, we may soon see an average U.S. price of under $3.
While some analysts are applauding what this means for consumer spending, I am much more concerned with the demand side of the equation. The economy remains filled with soft spots and pockets of weakness.
click for interactive map
Source: CNN Money
Ethanol: Another Chapter in Scamnation September 15, 2013 Dear readers, this Sunday afternoon I urge you to take a ten minutes to read Gretchen Morgenson and Robert Gebeloff’s front-page piece in today’s New York Times, “Wall St. Exploits Ethanol Credits, and Prices Spike” (http://www.nytimes.com/2013/09/15/business/wall-st-exploits-ethanol-credits-and-prices-spike.html). Morgenson and Gebeloff expose the latest incarnation of the…Read More
Frack That “Clean natural gas” from fracking has been touted for years as a cure for global warming. But scientists say that fracking pumps out a lot of methane … into both our drinking water and the environment. Methane is a powerful greenhouse gas: 72 times more potent as a warming source than CO2. As…Read More
Big Banks Manipulated Energy Markets In California and the Midwest … Ripping Off Tens of Millions of Dollars in 9 Months The Federal Energy Regulatory Commission says that JP Morgan has massively manipulated energy markets in California and the Midwest, obtaining tens of millions of dollars in overpayments from grid operators between September 2010…Read More
Reducing Energy Weight David R. Kotok Cumberland Advisors, July 29, 2013 Last week we reduced our energy exposure to underweight. It had been overweight for a while, and we successfully participated in the rebound in natural gas prices and the narrowing of the spread between Brent and WTI (West Texas Intermediate) oil. It…Read More
Climate change seems like this complicated problem with a million pieces. But Henry Jacoby, an economist at MIT’s business school, says there’s really just one thing you need to do to solve the problem: Tax carbon emissions.
“If you let the economists write the legislation,” Jacoby says, “it could be quite simple.” He says he could fit the whole bill on one page.
Basically, Jacoby would tax fossil fuels in proportion to the amount of carbon they release. That would make coal, oil and natural gas more expensive. That’s it; that’s the whole plan.
Jacoby’s colleague John Reilly told me the price of gasoline might rise by 25 cents a gallon in the first year. Over time, that would increase. By 2050, Reilly figures the carbon tax would add about $1 to the price of every gallon. Across the economy, prices of energy-intensive goods and services would rise. This would encourage people and businesses to be more efficient.
This is why economists love a carbon tax: One change to the tax code and the entire economy shifts to reduce carbon emissions. No complicated regulations. No rules for what kind of gas mileage cars have to get or what specific fraction of electricity has to come from wind or solar or renewables. That’s by and large the way we do it now.
Economists Have A One-Page Solution To Climate Change
NPR, June 28, 2013