Tuesday, September 30, 2008

Topping off, and other Evil rituals

Well, no other rituals except topping off, actually. But you've got to have a grabber title, neh?
When I told a friend in the Northwest that we were out of gas down here, her glib (thoughtless) reply was: "Self fulfilling prophecy. Everyone thinks they're going to run out of gas, so they run the place out of gas." My reply, which shut her up, was "If that were true, how come it's only the southeast that's run out of gas? Are you saying only people in the southeast were concerned about gas after Ike?" Mind you, this was -right- after Ike. Nobody in the southeast, or anywhere else in the country, knew how the pipeline system in the southeast worked. We're out of gas in the SE not because of a panic-run on gas. We're out because there's NO GAS in our pipeline!!

So anyway, the new meme being trotted out -now- in the southeast is that "If people wouldn't keep 'TOPPING OFF' there wouldn't be a shortage." Riiiiiigghhtt.

Little math exercise for you folks: If 5 people need 10 gallons of gas a week each to do their business, that's 50 gallons. We'll assume work-week only, and drop Sat/Sun from the equation. So that's 2 gallons of use each day, per person. Okay, everyone still with me?

So, if each person fills up once a week, that's a 10 gallon load each day, 5 days a week. We'll assume that only one person per day 'fills up.' And everything's hunky-dory and big bad old Ike didn't hurt us. Nyah-Nyah.

But here comes the new scourge in the land: the "TOPPING OFF" behavior. .

Now, instead of filling up once a week like good little prols, our new shredders of the fabric of civilization TOP OFF each day, to keep their tank full. (The horror!!!)

So let's do the math on this new Dark Ritual: 5 people a day, 2 gallons each a day. 5X2= (wait for it)
TEN GALLONS LOAD EACH DAY!!!! (AAAARRRRRRGGGHHHH!!!!) NO!!!!!! The Horror. The Horr... uh. Wait. Hmmm.... Let me go back over that. Hmmm. So, ten gallon load a day under 'fill up' mentality. All good okay.
"TOPPING OFF" mentality: Ten gallon load each day... Hmmm. No, that can't be right. "TOPPING OFF" is evil. It's destroying the very fabric of our civilization. All the smart analytical people say so. How can this be?

I must have made a mistake in my equation somewhere. After all, the daily load for topping off behavior just couldn't possibly equal the daily load for fill up behavior. That would mean there's no difference. But topping off is EEEEEVIL!!!
Yep, I must have made a mistake in my analysis somewhere. Let me get back to you.

That 70's show...

Wow, I was born in '73, so you can guess I don't have much first-hand memory of the historic Gas crisis and shortages of that decade. How nice of Hurricane Ike to give me an opportunity to experience a gas shortage of my very own. Thanks Ike!
As I understand it, the southeast is fed its gasoline from one large pipeline that runs through Alabama, Georgia, up the Carolinas and into Virginia. When Ike came through nearby (oh wait, no, it was way over in TEXAS!!!) it caused damage to some refineries in the Gulf. Well, a large number of the refineries that feed our pipeline (from way over in TEXAS!!!) were damaged and/or shutdown in preparation/aftermath of Ike. So the flow in our pipeline has been a bit less robust than we'd like it down here. There -was- a reserve, and it flowed in the wake of the storm. But our pipeline is still well below capacity, and not all refineries are repaired and/or online. So since Ike, we here have seen 'rolling' shortages or outages of gasoline.
First, the price spiked up to about $5/gallon. A couple places got really enterprising and cranked it to $6. Actually, I'm not -necessarily- saying that was gouging. The problem could have looked severe enough in those first hours that scarcity would dictate such a price. Wisely, that price didn't last. It dropped down (well, relatively). Mostly gas has been running in the neighborhood of $4 here post-storm. Of course, a lot of the stations have been running out over the past couple of weeks. Some of the 'lesser' chains have been dry since about day 3, not having the clout or the network to wiggle their nose into the trough lately. If you read my blog-post just previous to this, you recall it was about the high price of diesel in comparison to gas.
Over the summer, diesel did 'index' in relation to gas, and was higher than any of the 3 gas grades. Prices for all grades plus diesel started dropping as summer waned (and as President Bush started pushing for more drilling. Instant 30 cent drop that day, my friends!). Well, diesel settled out at about $4.19 and then Ike hit. All gas grades spiked as mentioned above, but diesel held at $4.19. So just for a while here, I've found myself in the odd position of paying less for my petroleum product then others were.
Now, diesel's in the neighborhood of $4.29 and regular grade gas is around $4. So the situation has returned to 'normal' as far as 'indexing' off each other goes.
Ah, but here's the wrench in the works: everyone wants gas, and keeps running it out. Nobody wants diesel! So needless to say, the wife and I have been able to have a bit different perspective on this gas crunch compared to others...(whew!)
The Augusta area took delivery of some pretty good shipments yesterday, so I'd say about 40-50% of the stations in town have gas (one grade only though: regular). Most of the stations out of gas still do have diesel though. Of course, my take is that this was our 'turn' in the rotation. So what we've got in town, is what we've got. It will run out again. "They" say that shortages in the southeast (affecting the aforementioned states plus Tennessee) will go for a good couple more weeks at least. The Mrs. and I should personally be okay. Our diesel has enough in it to get us to work and back for 30 full days right now. We aren't making any extra trips, and all errands are going to be completed on the way back home from work.
Oh what's that? Haven't heard much about this situation? Hmmmm.... Actually, the only reason you may have heard anything at all is because guess where CNN's HQ is? Yep, Atlanta, GA. Even so, I would have thought that gas outages and hour to 2hour long lines in a significant chunk of the country would have gotten more play than it has. What's the deal with that, anyway?
Blame? Oh yeah. Since we haven't built a refinery in 30 years, none of the ones we currently have are in that great a shape to handle rough storms, and there's no redundancy for situations like this. So look to the Don't-Drill-Democrats if you really must lay blame somewhere. But then again, you can't ever really blame a Democrat for anything because nothing's ever their 'fault'. Fault implies failure or wrongness. Democrats are never wrong and never fail. It's just that America lacks enough 'will' or 'strength' to ensure the proper outcome from enlightened Democrat policies. So wait, I guess it's the fault of the american people directly that southeast cars are pretty thirsty right now...

The price of tea in... I mean, the price of Diesel in Detroit

Well, not just Detroit, but the whole U.S.
I am a sucker for the alliteration though.

Read this article for a perspective on gasoline and diesel price drivers in the U.S. then come back.
When I started this blog post, it was several months ago; much closer to the byline of the article I linked. Obviously post-Ike events (especially here in the Southeast) have 'changed the game' for now. But just keep this article in mind when you think about all the wheels within wheels that turn when it comes to oil policy. Growing up, it was always understood that diesel was much cheaper than gasoline. Of course, 'nobody' liked the smell, the noise of the engines, the waiting for the glow plugs to heat up before cold-starting, and the fact that consumer offerings in diesel cars were grossly underpowered and sluggish.
So lately I've become a big fan of diesel, and purchasing my first one in service to that fandom. In the intervening years, diesel technology has improved the cleanliness, reduced the noise, and the wider-spread embrace of turbocharging has solved the power/sluggishness problem.
As with all good things, a government agency has to come along and muck it up. With the advent of the ultra-low sulfer diesel, it is now more costly per gallon for diesel. Also, the new formulation does not have as much 'energy' per gallon as the older diesel formulas. So now in addition to paying more per gallon for mighty D, you get less miles-per-gallon from it. Double-whammy.
Notice in the article this passage:

Until then, refiners don't want to produce more diesel from the less costly heavier crude because that would also mean more gasoline--

So in this case, the refinery capacity is not the limiting factor; there's 'will' involved in determining whether enough diesel will be available and at what price.

Keep this article in mind to help widen the field of facts when you consider petroleum politics in the world and in the US today.

"Headed for" rough times!?!

Dean Barnett:
Suffice to say that if our banking and financial system doesn't recover its
footing, the overwhelming consensus is that we're headed for very rough times.

Headed for? Headed for? We're already in rough times. When the housing bubble has burst, when the Fed had to step in over the last year and drop the prime rate multiple times, when a Chicago Machine politician is -this- close to the White House, when the current (Republican!!) president is spending like a drunken sailor on shore leave the night before a suicide mission, when the (supposedly) best and brightest financial minds in the World can come up with only one "solution" to a problem {Just throw all our money at it; maybe something will stick}... brother, we're already IN rough times. (And if you're in the southeast like me, not being able to find any gas in the pumps isn't helping.)

The point, however is not that we're in rough times. Frankly it looks to me like these are the times "we" built for ourselves. The question is whether we're heading for Depression or not. I'm not so sure of that myself, but let's at least acknowledge that any actions (or inactions) taken at this point will not be in order to -avoid- rough times, but rather to mitigate them...

 
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