GASOLINE PRICES CONTINUE TO FALL: NOVEMBER 2012

Gasoline prices continue to fall as predicted just a couple days ago (Gasoline Prices Are Falling: November 3, 2012)http://stopcontinentaldrift.blogspot.com/2012/11/gasoline-prices-are-falling-november.html).

From Gas Prices Tumble at Quickest Rate  in 4 Years: Survey (https://www.cnbc.com/id/49692132):

 "Gasoline prices averaged $3.5454 per gallon on November 2, down 20.75 cents from October 19 when drivers were paying $3.7529 at the pump, Lundberg said."
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"Another reason for the total U.S. price decline in the latest survey is California, the biggest state consumer, where pump prices fell 49 cents in past two weeks after an extreme price increase a month ago because of refinery problems.

The November 2 survey shows that gas prices have fallen a total of 29.21 cents in the last month, Lundberg said.

The highest prices for regular gasoline recorded in the November 2 survey were in San Francisco at $4.05 a gallon, while drivers in Memphis, Tennessee were paying the least at $3.11 per gallon."

The station closest to our home in Seven Lakes, NC, is advertising $3.51/gal, a bit lower than the national average and $0.39/gal from its peak this year.

GASOLINE PRICES ARE FALLING: NOVEMBER 2012

In spite of hurricane Sandy, gasoline price in the U.S. are falling (http://www.cnbc.com/id/49659811):
"AAA expects that gas prices across the country will continue to drop through the end of the year, assuming a smooth restart to production following Hurricane Sandy. AAA predicts the national average price of gas could fall to $3.40 a gallon by Election Day and between $3.25 and $3.40 a gallon by Thanksgiving. Gas prices could drop by 40 cents a gallon between now and the end of the year, says AAA spokesperson Avery Ash."

The national average is said to be $3.496/gal.  California is something else again and the lowest prices quoted by gasbuddy.com for Los Angeles is $3.96/gal and for San Francisco is $3.76/gal, but $3.65/gal in San Diego.  Perhaps it is no wonder that the Toyota Prius is the most popular car in California.

Where we are near Pinehurst, NC, the golf capital, the lowest gasoline price for regular I have seen as of yesterday is $3.58/gal whereas near our home it is $3.65/gal, but the latter is still 25 cents/gal lower than the peak this year.  The big cities in the state have even lower prices, however, with gasbuddy,com quoting prices as low as $3.18/gal in Raleigh and $3.17/gal in Charlotte.

AMERICAN EXCEPTIONALISM

For some time, I have been made uncomfortable about the frequent appeal to American Exceptionalism.*  Why do we need to keep mentioning ourselves of this?  It seems to me that if you really believe this, you don't have to keep talking about it.  Now it turns out that I am not the only one who is bothered by this: http://www.nytimes.com/2012/10/21/sunday-review/candidates-and-the-truth-about-america.html?pagewanted=1&_r=0&nl=todaysheadlines&emc=edit_th_20121021.  Please read this article as I will not address the health issues contained therein.

Yes, of course, we are the only nation to send men to the moon and the only nation not only to bring them back alive but  with loads of lunar samples to boot.  To do this we had to develop miniaturized computers for lunar exploration (Apollo Program) and Intercontinental Ballistic Missiles (IBM).  We developed the World Wide Web (WWW) and the Geographic Positioning system (GPS), originally for military purposes.  These were all Federal government initiatives.  Once given these tools, private industry has been able to develop them further into civilian use.  It was a great ride.  The main role of private industry is to take an invention and incrementally improve it.  Thus we have smart phones like Blackberries and iPhones I, II, III, IV, and now V among others.  After some false starts, we now have iPad I, II, and III plus many other tablet computers by other companies.  Slowly people are beginning to pay bills with their smart phones.  And a multitude of companies offer goods for sale on the internet.  These are all wonderful gadgets, but they are not the grand projects of yesteryear.

It was said after WW-II that jet aircraft would find military purposes, but would always be too expensive for commercial use. Now the airline  industry is dominated by jet aircraft.  On a trip to Hawaii several years ago, a rancher told us that he economically shipped his cattle back to the mainland on Boeing 747s.  He could even physically load more cattle on the airplane, but he couldn't because it would overheat the plane.  Wonderful.  Incidentally, the Boeing 747 was originally developed for military purposes (http://en.wikipedia.org/wiki/Boeing_747).

But somewhere along the line, we seemed to lose it.  When?  I think it was when we passed up development of the supersonic commercial airplane in the early 1970s.  We have competitors now.  Our automobile industry let the Germans and the Japanese into the market with more reliable automobiles.  I heard the other day that the best selling automobile in California is the Toyota Prius, a hybrid of gasoline and electric motors.  We couldn't develop a commercial hybrid car in this country because gasoline was too cheap.  There was no incentive for American's to buy high milage gasoline cars because the annual cost of gasoline was at noise level so they had to be developed elsewhere where the price of gasoline is high.  Cheap gasoline is slowly disappearing because it sells on global markets that control the price to a large extent.  Yes, the Federal government is trying to get the electric car developed so maybe we will catch up on the next generation of automobiles.  It is a fine goal with lots of Americans saying it is not worth the effort and cheering every failure.  We probably can look forward to growth of the natural gas automobile, something I rode in when in Japan in 1965, but you do lose trunk space.

In solar energy, we have many competitors, but it is gradually getting cheaper.  Our government did try to develop solar panels that did not use expensive glass (Solyndra; http://en.wikipedia.org/wiki/Solyndra), but the glass panel industry lowered the price of glass to make the cylindrical solid state panels uneconomic and the company declared bankruptcy.  We might have cheered forcing down the price of solar panel glass, but all the emphasis was on the failure of the company.  I would be surprised if something like the Solyndra method is developed by some other country in the future.

What I find strangest of all is the growing claims that college is not worth it or what I call the Dumbing Down of America: (http://stopcontinentaldrift.blogspot.com/2010/10/dumbing-down-of-america-if-you-listen.html)

We have lost the spirit of exceptionalism in this country.  We can get it back if we stop having such negative leadership and return to having more optimistic leadership.  Stop emphasizing why we shouldn't do things and return to a can do spirit.  Quit insisting that government can't develop things  when history has shown that they can.

* A word not in my spell checker, by the way, but see: http://en.wikipedia.org/wiki/American_exceptionalism

PRESIDENTS AND THE PRICE OF GASOLINE

The following is excerpted from CNBC (October 18, 2012):  https://www.cnbc.com/id/49461923.  You are encouraged to read the whole article.

Recent history seems to have borne out that view. Despite the recent Bush administration's strong support for the oil and gas industry, pump prices rose from a low of about $1.20 a gallon in late 2001 to a peak of $4 a gallon before crashing below $2 shortly before he left office in 2009. Shortly after Obama took office, prices began a steady climb and kept rising but remain just shy of that 2009 peak.
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U.S. energy policy has encouraged the exploration and production of crude oil, the biggest single variable in the pump price of gasoline, through tax subsidies that promote drilling. Those tax breaks, which were expanded during the Bush administration, have helped spur a boom in domestic production that has reversed a 20-year decline in U.S. 

U.S. demand for gasoline peaked in 2007 and has been declining steadily since then. Part of the reason, as Obama mentioned in Tuesday’s debate, is that the recession cut into demand for energy. But gasoline consumption is also falling because the cars and trucks are becoming more fuel-efficient. Obama cited his administration’s efforts to drive fuel efficiency standards higher.

As domestic demand has fallen, U.S. refiners have continued to squeeze more out of each barrel of oil. If the U.S. market were a closed system, the surplus gasoline would tend to drive down prices. But the system isn’t closed. With domestic demand falling and capacity inching higher, refiners have been exporting gasoline to overseas markets. Last year, the U.S. became a net exporter of gasoline and other refined products for the first time since 1949. (BOLDING MINE FOR EMPHASIS)

Meanwhile, the price of gasoline is FALLING!  Excerpted from CNBC (October 17, 2012).:  https://www.cnbc.com/id/49449346  Again I encourage you to read the whole article.

A dramatic spiral for gasoline prices in some key battleground states comes just three weeks before the U.S. presidential elections.

Ohio voters have watched prices at the gas pump drop by nearly 20 cents on average in the past week. At the same time, retail gas prices have plunged more than 10 cents in Wisconsin and Illinois.

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"I suspect that both candidates can guarantee $3 to $3.25 gal gasoline in Ohio after this week's gasoline debacle," said OPIS analyst Tom Kloza. "You will see some sharp retail drops in battleground states like Ohio, Pennsylvania, Florida, Wisconsin, and Nevada in the next few weeks."

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But while the notion that the government could somehow control gasoline prices is appealing, the reality is that the price you pay is set daily, sometimes hourly, by market forces around the world.

A series of U.S. refinery glitches and tight supplies in some regions caused gasoline prices to surge earlier this month to the highest prices since the spring. But the switch to a less expensive winter grade of gasoline, weak refinery demand and increase of supplies in certain areas caused gasoline prices to start coming down. An unexpected increase in U.S. gasoline supplies in the past week could cause pump prices to fall even further.