Polls show 47% of Americans agree with America's action in Libya. I, however, would like to have seen a number of things done differently. I would like to have seen the President and the world community act just a little sooner, though in the end, I do not think this is going to have made a significant difference, but a life saved by earlier action is just that.
I also did not agree with the fact that we were not publicly calling for the ouster of Qaddafi from the start, but were simply saying that we were in the action to save civilian lives. This created some confusion and served to inspire Qaddafi and his loyalists early on in the engagement, most likely leading to additional fighting that may have been avoided.
This morning it is being reported that both the U.S. and U.K. have said officially that we are willing to accept the exile of Qaddafi from Libya without him standing trial for his terrorist activities and his brutal rule of the Libyan people over the past 40 years. I must admit that I find myself disappointed at this news. While ending the conflict earlier is a great thing, we also should be mindful of letting someone who has committed such atrocities simply retire and grow old somewhere; something his victims never got the chance to experience.
And while the Fence-Sitter-in-Chief is actually garnering some decent numbers on Libya, there is still a lot for him not to be smiling about. Oil prices are on the rise because of speculation in the market driven by Middle East "turmoil", the U.S. housing marketing is still in the shitter (sorry, there isn't a nicer way of putting it), and while we may be seeing some light at the end of the tunnel, the economy as a whole is still in really bad shape.
The country is in debt way ABOVE our eyeballs and we are continuing to borrow more and more. The dollar gets weaker and weaker, buys us less and less and the cost of everything is going up. Don't get me wrong, good job on standing up for Libya and way to show some strength and some pride, and maybe even a slight belief that America should be leading the world towards democracy and freedom, but after two years in office, I still feel that we have seen some pretty lackluster results for the most part.
This is a collection of my work, including both business and personal publications from a guy who considers it a great honor to earn a living doing what he loves...writing. Please note that the opinions expressed here are mine and mine alone and do not necessarily reflect the opinions of my clients, employers, leaders, followers, associates, colleagues, family, pets, neighbors, ...
Showing posts with label oil and gas. Show all posts
Showing posts with label oil and gas. Show all posts
Tuesday, March 29, 2011
Tuesday, June 15, 2010
Don't Forget To Watch The Oily Magic Show Tonight
I've been refraining from saying it, but I'm just going to go ahead with it already. Can you imagine how apeshit everyone would be going with The White House right now over this oil spill were The Great Satan George Junior still in office right now?
I am hoping that we finally see The Magician grow a pair over this oil spill when he speaks to us tonight. It kinda seems like he's been laying the foundation over the past few days to finally get in BP's face.
While I do understand how after blaming The Bush for eight years, it can be the go to response for Democrats that are appearing on The TV to talk about the oil spill, but really, you are going to need to do better than that. We need to take a long, hard look at oil drilling, its regulations, lack of regulations, and lack of adherance to regulations. Blaming The Great Satan George Junior for this isn't going to get us anywhere. We need to determine if our regulations did enough, if BP met them, and what we do if they did not. We need to quickly ensure all of our offshore drilling rigs have met regulations and get back on track.
Another thing I have noticed that some folks out there are starting to do is to compare the oil spill with Hurricane Katrina. Apples and oranges. Katrina was a swift-moving hurricane that killed people who could not, or just refused to, evacuate out of its path. Katrina's devastation was quick and deadly - killing a large number in a short period of time. It's economic and environmental impact will last for decades.
This oil spill, on the other hand, despite the fast-gushing oil we see at its source, moved relatively slowly over the water. There was well over a month of warning to react to ensure that this oil did not reach the coastline. The spill's devastation will be quick and deadly to a lot of wildlife, but to humans, it's devastation will take some time. Economic impacts will take months and health issues will take years to surface. The environmental impact may be around for well over one hundred years.
But, if we are going to make a comparison, here are some things to think about:
- Think reasonably about all of the other natural disasters that hit America (hurricanes, floods, earthquakes) and you will see that the response to those disasters before, during, and immediately after, all falls into the hands of local and state officials. The federal government doesn't usually get involved until the point at which the state's governor asks for federal assistance. Yet, with Katrina, the blame for a lack of planning, action, and response fell on the federal government, especially after the fact. Why was Katrina different than any other hurricane and who could have possibly known for sure what was going to happen before hand?
- This oil spill is different. This is a man-made disaster that occurred on federal "land" on an offshore oil rig that was OK'd by and regulated by the federal government. Do you see how this was the responsibility of the federal government from the very beginning? Have not, historically, the problems of the federal government fallen at the feet of whoever is President at the time?
- The Great Satan Geroge Junior called for a mandatory evacuation before Katrina hit, and while criticized, it is generally accepted that federal relief efforts were well underway four days after the hurricane hit with emergency funding signed and FEMA engaged. What is often overlooked is that both Mayor Ray Nagin of New Orleans and Louisiana Governor Kathleen Blanco refused to issue mandatory evacuations of the city despite being advised to do so by the federal government.
What is also overlooked is that in the case of natural disasters such as Hurricane Katrina, standard emergency management protocol calls for local and state officials to be prepared to manage the situation for three days until a federal response can be made. That would mean that the planning to ensure proper warning, mandatory evacuations, and transportation for citizens would be responsibility of the officials in the city of New Orleans and the state of Louisiana, not the federal government. Local officials don't really get any of the blame for what happened before, during and after Katrina, though, do they?
- I must say that within four days of the start of this oil spill, I did not see a massive response from the federal government, i.e. the current administration. It really seems like it took them a couple of weeks to even get up to speed on what was really going on and about 45 days before you could see them finally realizing what a big deal this was going to be.
- Bush went to New Orleans eight times in the first 46 days, and was condemned for not visiting enough. Obama took 49 days to visit the Gulf region three times.
The Great Satan George Junior will continue to be criticized for not getting out of his chair on the morning of 9/11 for eight minutes and not getting aid to New Orleans for four days, but I do believe in the long run, history will better remember this oil spill and will better remember that it took The Magician 45 days to realize that this was going to have an effect on his Presidency...oh, I mean, the American people.
I am hoping that we finally see The Magician grow a pair over this oil spill when he speaks to us tonight. It kinda seems like he's been laying the foundation over the past few days to finally get in BP's face.
While I do understand how after blaming The Bush for eight years, it can be the go to response for Democrats that are appearing on The TV to talk about the oil spill, but really, you are going to need to do better than that. We need to take a long, hard look at oil drilling, its regulations, lack of regulations, and lack of adherance to regulations. Blaming The Great Satan George Junior for this isn't going to get us anywhere. We need to determine if our regulations did enough, if BP met them, and what we do if they did not. We need to quickly ensure all of our offshore drilling rigs have met regulations and get back on track.
Another thing I have noticed that some folks out there are starting to do is to compare the oil spill with Hurricane Katrina. Apples and oranges. Katrina was a swift-moving hurricane that killed people who could not, or just refused to, evacuate out of its path. Katrina's devastation was quick and deadly - killing a large number in a short period of time. It's economic and environmental impact will last for decades.
This oil spill, on the other hand, despite the fast-gushing oil we see at its source, moved relatively slowly over the water. There was well over a month of warning to react to ensure that this oil did not reach the coastline. The spill's devastation will be quick and deadly to a lot of wildlife, but to humans, it's devastation will take some time. Economic impacts will take months and health issues will take years to surface. The environmental impact may be around for well over one hundred years.
But, if we are going to make a comparison, here are some things to think about:
- Think reasonably about all of the other natural disasters that hit America (hurricanes, floods, earthquakes) and you will see that the response to those disasters before, during, and immediately after, all falls into the hands of local and state officials. The federal government doesn't usually get involved until the point at which the state's governor asks for federal assistance. Yet, with Katrina, the blame for a lack of planning, action, and response fell on the federal government, especially after the fact. Why was Katrina different than any other hurricane and who could have possibly known for sure what was going to happen before hand?
- This oil spill is different. This is a man-made disaster that occurred on federal "land" on an offshore oil rig that was OK'd by and regulated by the federal government. Do you see how this was the responsibility of the federal government from the very beginning? Have not, historically, the problems of the federal government fallen at the feet of whoever is President at the time?
- The Great Satan Geroge Junior called for a mandatory evacuation before Katrina hit, and while criticized, it is generally accepted that federal relief efforts were well underway four days after the hurricane hit with emergency funding signed and FEMA engaged. What is often overlooked is that both Mayor Ray Nagin of New Orleans and Louisiana Governor Kathleen Blanco refused to issue mandatory evacuations of the city despite being advised to do so by the federal government.
What is also overlooked is that in the case of natural disasters such as Hurricane Katrina, standard emergency management protocol calls for local and state officials to be prepared to manage the situation for three days until a federal response can be made. That would mean that the planning to ensure proper warning, mandatory evacuations, and transportation for citizens would be responsibility of the officials in the city of New Orleans and the state of Louisiana, not the federal government. Local officials don't really get any of the blame for what happened before, during and after Katrina, though, do they?
- I must say that within four days of the start of this oil spill, I did not see a massive response from the federal government, i.e. the current administration. It really seems like it took them a couple of weeks to even get up to speed on what was really going on and about 45 days before you could see them finally realizing what a big deal this was going to be.
- Bush went to New Orleans eight times in the first 46 days, and was condemned for not visiting enough. Obama took 49 days to visit the Gulf region three times.
The Great Satan George Junior will continue to be criticized for not getting out of his chair on the morning of 9/11 for eight minutes and not getting aid to New Orleans for four days, but I do believe in the long run, history will better remember this oil spill and will better remember that it took The Magician 45 days to realize that this was going to have an effect on his Presidency...oh, I mean, the American people.
Wednesday, June 9, 2010
It's Finally Time To Comment On The Magician & This Oil Spill...
I have done my best to give this thing time. I have done my best to not be reactionary. I have done my best to not be swayed by media sources. I have still reached the following conclusion, though:
I am not impressed with this administration's efforts to date. While you cannot accuse them of doing nothing, and I do see that significant efforts are being made, I feel that these efforts were not undertaken as quickly as they should have been and while in an "unprecedented" volume, the efforts I am seeing are still not enough. While your efforts on any task may be the most by volume that have ever been done in history, it does not automatically mean that you are doing enough by default.
The Magician says that they explored every alternative, have done all that they could have, and would have tried anything that they know would have worked. I argue that they could have authorized the building of sand barriers along the coastlines much sooner than they did, could have better ensured that more resources were fighting in the water and not waiting until the oil reached the shore. When you are in a crisis, it is wise in the best of circumstances to not undertake efforts that you know will have no effect on the situation, but at the same time, if there is a chance that something will have an effect, you try it. You don't just sit there and wait for a better alternative to be suggested.
I must admit, also, I am bothered by the fact that The Magician has not had a direct conversation with BP's CEO at this point. I don't think the American people are asking you to pick up the phone and shout at the guy, but they are asking you to take command of the situation in the manner that you claim to have done. How do you command a situation when you have not had a direct conversation with the person that is in charge of the most important part of your operations?
I think that we need to take a long look at the fact that while drilling at these "incredible" depths, there are not enough safeguards in place, obviously, to make sure that this does not happen. We should take a long hard look at our drilling policies as a whole. While I understand some people's argument that a lapse in regulation and governance is to blame, we also need to look at the market and supply and demand as it relates to our current environmental policies. We're still using gas, which requires oil. We don't want to see oil rigs off our coastlines, so we force the oil companies to drill further and further out at deeper and deeper depths, then get upset when they cannot repair wells that are too deep. Do you not think that BP would much rather be drilling oil that is under the beach than under a mile of ocean? Why aren't they? Because we've told them that they can't, yet at the same time, demand low gas prices.
While I do appreciate the fact that The Magician has visited the area, I do still make the argument that he has not done so enough. Regardless of the fact of what he can and cannot do personally while there, the American people want to see him down there fixing this thing. A three hour stay on four hours of flight time so that he can get back home for the holiday weekend does not impress me.
Again, whether or not he is effecting the situation, the people of the Gulf Region would have at least liked to have known he was in the area, working well into the night and early morning with local officials, not see him stroll on the beach for a few hours and then go home. How in the world does a politician like The Magician not understand that? Also, I still think The Magician flew to California more times for campaigning this election season than he flew to the Gulf Region since this spill started. That says a lot to me.
The bottom line, Mr. Magician, is that we are not asking you to perform for the cable shows, we are asking you to perform for the American people, especially those that are being directly effected by this oil spill. Sometimes, when you need to get things done, you just don't take the time to figure out exactly whose butt to kick, you kick them all until people and resources get moving and start fixing the problem. Empowering local resources, moving federal resources, taking the time to be cool, calm and collected, you are doing, but commanding, you are not.
I am not impressed with this administration's efforts to date. While you cannot accuse them of doing nothing, and I do see that significant efforts are being made, I feel that these efforts were not undertaken as quickly as they should have been and while in an "unprecedented" volume, the efforts I am seeing are still not enough. While your efforts on any task may be the most by volume that have ever been done in history, it does not automatically mean that you are doing enough by default.
The Magician says that they explored every alternative, have done all that they could have, and would have tried anything that they know would have worked. I argue that they could have authorized the building of sand barriers along the coastlines much sooner than they did, could have better ensured that more resources were fighting in the water and not waiting until the oil reached the shore. When you are in a crisis, it is wise in the best of circumstances to not undertake efforts that you know will have no effect on the situation, but at the same time, if there is a chance that something will have an effect, you try it. You don't just sit there and wait for a better alternative to be suggested.
I must admit, also, I am bothered by the fact that The Magician has not had a direct conversation with BP's CEO at this point. I don't think the American people are asking you to pick up the phone and shout at the guy, but they are asking you to take command of the situation in the manner that you claim to have done. How do you command a situation when you have not had a direct conversation with the person that is in charge of the most important part of your operations?
I think that we need to take a long look at the fact that while drilling at these "incredible" depths, there are not enough safeguards in place, obviously, to make sure that this does not happen. We should take a long hard look at our drilling policies as a whole. While I understand some people's argument that a lapse in regulation and governance is to blame, we also need to look at the market and supply and demand as it relates to our current environmental policies. We're still using gas, which requires oil. We don't want to see oil rigs off our coastlines, so we force the oil companies to drill further and further out at deeper and deeper depths, then get upset when they cannot repair wells that are too deep. Do you not think that BP would much rather be drilling oil that is under the beach than under a mile of ocean? Why aren't they? Because we've told them that they can't, yet at the same time, demand low gas prices.
While I do appreciate the fact that The Magician has visited the area, I do still make the argument that he has not done so enough. Regardless of the fact of what he can and cannot do personally while there, the American people want to see him down there fixing this thing. A three hour stay on four hours of flight time so that he can get back home for the holiday weekend does not impress me.
Again, whether or not he is effecting the situation, the people of the Gulf Region would have at least liked to have known he was in the area, working well into the night and early morning with local officials, not see him stroll on the beach for a few hours and then go home. How in the world does a politician like The Magician not understand that? Also, I still think The Magician flew to California more times for campaigning this election season than he flew to the Gulf Region since this spill started. That says a lot to me.
The bottom line, Mr. Magician, is that we are not asking you to perform for the cable shows, we are asking you to perform for the American people, especially those that are being directly effected by this oil spill. Sometimes, when you need to get things done, you just don't take the time to figure out exactly whose butt to kick, you kick them all until people and resources get moving and start fixing the problem. Empowering local resources, moving federal resources, taking the time to be cool, calm and collected, you are doing, but commanding, you are not.
Labels:
Barak Obama,
British Petroleum,
California,
Democrats,
environment,
Gulf of Mexico,
NBC,
oil and gas,
politics
Tuesday, April 20, 2010
Here's My Quandary...
Here's my quandary, guy at the gas station asking for money while I am paying a ridiculous amount of money to put gas in my car: If you didn't have enough gas to get back to Riverside, why'd you come down here in the first place?
My favorite of these many incidents that I have been forced to endure occurred during my Quietly Working days.
I had pulled an all-nighter and was really sick to my stomach at the time. I needed to go down to the office to get some stuff to work on later in the day and on my way to the office, I had to make a detour to get some gas.
Before I could even make it to the gas station, I am behind a strip mall, hurling into a dumpster. After gaining my composure, I then head to get gas so I can get to the office and get home for some sleep before getting back to work. Those of you who know me know that I won't let a little thing like a stomach flu get in the way of getting my work done.
So, as the sun just starts coming up and I stop at the Chevron on PCH in Newport Beach, this guy comes over to me and asks me if he can have some money because he needs to get back to Riverside.
I found myself instantly sorry that I had wasted a good hurling in the dumpster instead of doing so on his shoes. I work for my money, Mr. Beggar, and I do it while sick as a dog. How dare you come ask me for some of my money, especially when you look like a healthy, able-bodied person, obviously of enough whit and determination to try to scam me of out some of my hard-earned cash! I do, however, love the look on their faces when I, unlike I am sure so many of their other victims, say, simply, "Nope," and keep going on about my business.
My favorite of these many incidents that I have been forced to endure occurred during my Quietly Working days.
I had pulled an all-nighter and was really sick to my stomach at the time. I needed to go down to the office to get some stuff to work on later in the day and on my way to the office, I had to make a detour to get some gas.
Before I could even make it to the gas station, I am behind a strip mall, hurling into a dumpster. After gaining my composure, I then head to get gas so I can get to the office and get home for some sleep before getting back to work. Those of you who know me know that I won't let a little thing like a stomach flu get in the way of getting my work done.
So, as the sun just starts coming up and I stop at the Chevron on PCH in Newport Beach, this guy comes over to me and asks me if he can have some money because he needs to get back to Riverside.
I found myself instantly sorry that I had wasted a good hurling in the dumpster instead of doing so on his shoes. I work for my money, Mr. Beggar, and I do it while sick as a dog. How dare you come ask me for some of my money, especially when you look like a healthy, able-bodied person, obviously of enough whit and determination to try to scam me of out some of my hard-earned cash! I do, however, love the look on their faces when I, unlike I am sure so many of their other victims, say, simply, "Nope," and keep going on about my business.
Labels:
business,
Chevron,
communism,
Newport Beach,
oil and gas,
quotes,
Riverside County CA,
socialism
Friday, July 10, 2009
Why Cap-And-Tax Is A Horrible Idea
What is Cap-And-Trade, or Cap-And-Tax, as it is more properly called?
It is the Waxman-Markey bill, which has recently passed the house by a razor-thin margin, and would place a cap on the total carbon output that the United States can produce over the course of a year, with that total amount decreasing year over year. Oh, and by “the United States”, I mean every business in the country, and you, the Americans who work for those businesses. Imagine being given an amount of carbon that your business can emit over the course of a year, then having to buy excess carbon permits from people who are not using all of their carbon allotment if you go over, or even worse, having to pay large fines if you cannot scrounge up enough carbon offset permits. When you get down to brass tacks, there are three huge problems with this bill:
#1 - It will raise the price of everything, literally, first energy prices, then the food and other goods that we all purchase as virtually every manufacturer and producer scrambles to pay more and more for their carbon permits, then pass that cost on to the end consumer.
#2 – The cost of operating manufacturing equipment will be rising in the U.S. and falling in every nation that has not implemented a Cap-And-Tax policy. Large, multi-nationals will have even one more reason to ship jobs overseas. While this may, in turn, help in the area of rising prices, many more Americans who rely on manufacturing jobs will be out of work.
#3 - While we are screwing ourselves into higher prices to reduce our carbon emissions, this bill does nothing to address the carbon emissions of other nations in the world. China’s carbon emissions are skyrocketing and they will be doing nothing to stop them while we slow down our already reeling economy with this bad piece of legislation.
While support for this bill does cross some party lines, there is clearly only one party that is supporting this bill as stated in the Wall Street Journal: “Even as Democrats have promised that this cap-and-trade legislation won't pinch wallets, behind the scenes they've acknowledged the energy price tsunami that is coming. During the brief few days in which the bill was debated in the House Energy Committee, Republicans offered three amendments: one to suspend the program if gas hit $5 a gallon; one to suspend the program if electricity prices rose 10% over 2009; and one to suspend the program if unemployment rates hit 15%. Democrats defeated all of them."
It is the Waxman-Markey bill, which has recently passed the house by a razor-thin margin, and would place a cap on the total carbon output that the United States can produce over the course of a year, with that total amount decreasing year over year. Oh, and by “the United States”, I mean every business in the country, and you, the Americans who work for those businesses. Imagine being given an amount of carbon that your business can emit over the course of a year, then having to buy excess carbon permits from people who are not using all of their carbon allotment if you go over, or even worse, having to pay large fines if you cannot scrounge up enough carbon offset permits. When you get down to brass tacks, there are three huge problems with this bill:
#1 - It will raise the price of everything, literally, first energy prices, then the food and other goods that we all purchase as virtually every manufacturer and producer scrambles to pay more and more for their carbon permits, then pass that cost on to the end consumer.
#2 – The cost of operating manufacturing equipment will be rising in the U.S. and falling in every nation that has not implemented a Cap-And-Tax policy. Large, multi-nationals will have even one more reason to ship jobs overseas. While this may, in turn, help in the area of rising prices, many more Americans who rely on manufacturing jobs will be out of work.
#3 - While we are screwing ourselves into higher prices to reduce our carbon emissions, this bill does nothing to address the carbon emissions of other nations in the world. China’s carbon emissions are skyrocketing and they will be doing nothing to stop them while we slow down our already reeling economy with this bad piece of legislation.
While support for this bill does cross some party lines, there is clearly only one party that is supporting this bill as stated in the Wall Street Journal: “Even as Democrats have promised that this cap-and-trade legislation won't pinch wallets, behind the scenes they've acknowledged the energy price tsunami that is coming. During the brief few days in which the bill was debated in the House Energy Committee, Republicans offered three amendments: one to suspend the program if gas hit $5 a gallon; one to suspend the program if electricity prices rose 10% over 2009; and one to suspend the program if unemployment rates hit 15%. Democrats defeated all of them."
Labels:
budget,
Democrats,
economy,
electricity,
environment,
oil and gas,
Republicans,
spending,
taxes,
Unemployment Rate
Friday, February 20, 2009
A Tax On Each Mile You Drive
Ray LaHood, the Obama Administration's Transportation Secretary is wanting to tax Americans on the number of miles they drive, instead of on the amount of gas they burn.
Taxachusetts is even considering a program where they place a GPS chip in your car to make sure you're not fudging on reporting your miles, but I am sure they promise they won't use it to track you.
The joke will really be on hybrid drivers because you'll pay the same tax per mile as someone with a tank that gets 6 miles to the gallon.
LaHood says this is thinking outside of the box, but I guess so is a tax on the air you breath, which I am sure can't be too far behind.
By the way, this new tax seeks to increase "revenue" because America has done what the politicians have asked us to do - drive more fuel efficient cars and drive less - but that means they are getting less gas tax money.
Hey, great job, America, you've lowered our dependence on fossil fuels, so here's your reward -- higher taxes!
Taxachusetts is even considering a program where they place a GPS chip in your car to make sure you're not fudging on reporting your miles, but I am sure they promise they won't use it to track you.
The joke will really be on hybrid drivers because you'll pay the same tax per mile as someone with a tank that gets 6 miles to the gallon.
LaHood says this is thinking outside of the box, but I guess so is a tax on the air you breath, which I am sure can't be too far behind.
By the way, this new tax seeks to increase "revenue" because America has done what the politicians have asked us to do - drive more fuel efficient cars and drive less - but that means they are getting less gas tax money.
Hey, great job, America, you've lowered our dependence on fossil fuels, so here's your reward -- higher taxes!
Labels:
Barak Obama,
Massachusetts,
oil and gas,
Ray LaHood,
taxes
Thursday, March 20, 2008
"Oh, It's The Alkylate's Fault..."
Experts are predicting pump prices, which jumped by almost a dollar a gallon in each of the last two springs in many parts of the United States, will spike again this year as refiners and gas stations switch from winter- to summer-blended fuels.
The increases, starting as early as February in southern California, could push the average national price to a record $3.50 a gallon or more by June. Prices in urban areas on each coast could approach $4 a gallon.
And the reason for the spring price shocks? Analysts say it’s linked to a shortage of alkylate, a little-known and expensive gasoline additive that some in the industry are calling “liquid gold.”
It has become a must-have ingredient since refiners stopped using MTBE two years ago when the potentially cancer-causing additive was found to be seeping into ground water.
The alkylate shortage has become the most important driver of summer gas prices, said Doug Leggate, an analyst at Citigroup Global Markets. “Supply of (alkylate) will set the price of summer gasoline — not inventory levels,” he said.
Oil companies deny they are purposely limiting production of alkylate, which like gasoline, jet fuel, and asphalt is a by-product of the oil refining process. But only recently have some started studying how they can boost output, and alkylate prices today are more than 15 percent higher than spot gasoline prices.
That means overall costs will jump when it is added in larger quantities to summer-blend fuels.
Without additives, gasoline doesn’t burn completely, increasing tailpipe air pollution. And untreated gas evaporates more quickly in hot weather, potentially causing vapor lock when it changes from a liquid to a gas and blocks fuel lines.
The federal government long ago required refiners to boost the oxygen content of summer-blend gasoline to make it burn more completely, a problem that was solved by adding MTBE and, more recently, ethanol.
But ethanol also has a high evaporation rate, so refiners increasingly have turned to alkylate, which Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J., calls the “magic bullet” in making summer gasoline.
The increases, starting as early as February in southern California, could push the average national price to a record $3.50 a gallon or more by June. Prices in urban areas on each coast could approach $4 a gallon.
And the reason for the spring price shocks? Analysts say it’s linked to a shortage of alkylate, a little-known and expensive gasoline additive that some in the industry are calling “liquid gold.”
It has become a must-have ingredient since refiners stopped using MTBE two years ago when the potentially cancer-causing additive was found to be seeping into ground water.
The alkylate shortage has become the most important driver of summer gas prices, said Doug Leggate, an analyst at Citigroup Global Markets. “Supply of (alkylate) will set the price of summer gasoline — not inventory levels,” he said.
Oil companies deny they are purposely limiting production of alkylate, which like gasoline, jet fuel, and asphalt is a by-product of the oil refining process. But only recently have some started studying how they can boost output, and alkylate prices today are more than 15 percent higher than spot gasoline prices.
That means overall costs will jump when it is added in larger quantities to summer-blend fuels.
Without additives, gasoline doesn’t burn completely, increasing tailpipe air pollution. And untreated gas evaporates more quickly in hot weather, potentially causing vapor lock when it changes from a liquid to a gas and blocks fuel lines.
The federal government long ago required refiners to boost the oxygen content of summer-blend gasoline to make it burn more completely, a problem that was solved by adding MTBE and, more recently, ethanol.
But ethanol also has a high evaporation rate, so refiners increasingly have turned to alkylate, which Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J., calls the “magic bullet” in making summer gasoline.
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