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Wednesday, June 1, 2022

Buckle up



My daughter who lives in California called up the other day. She happened to mention that she was excited to find gas for just $6.99/gallon. Most gas stations were charging about fifty cents a gallon more than that. 


You know what they say about California: everything happens there first. 


The European Union just added a sixth round of sanctions against Russia. By the end of the year the EU’s goal is to reduce Russian oil imports by 90%. That is definitely going to affect the markets. Now there’s some speculation the oil will end up in other places. Some of that might happen but Russia has limited options. Its pipelines to China are already maxed out. India is interested in buying oil, but getting it there is iffy. Russia is limited to shallow water ports. Those ports will only allow smaller tankers. To make a long trip that oil has to then be pumped from small tankers into large tankers. This operation has to take place on the open sea. While it can be done, it’s not easy or cheap. 


The Russian boycott is just one factor in the higher world wide prices. General inflation is an issue. Supply chain bottle necks raise prices. Post pandemic demand is a factor. And yes, oil company greed is right up there too. 


Prices are already high enough that demand destruction is taking place. People are cutting down on travel and combining trips. I know I am. Trips are planned now to accomplish as many things as possible. Trips are also being made using the most efficient vehicle we have that will do the job. That’s nothing new for me. Even my little economy cars have solid roof racks to do things like haul lumber from the lumber yard. No truck needed. 


At some point demand destruction will cause a fuel glut in the market and prices will at least stabilize. I hope you aren’t stuck with a huge gas guzzler as your only vehicle. It might have seemed like a good idea when gas was less than $3/gallon. Now, not so much.


Diesel prices are worse. As if that wasn’t bad enough, there’s a DEF shortage. Newer diesel engines require DEF to run properly. 


My guess is that it would be an unwise plan to expect prices to come down soon. You just might want to get ahead on planning how to do more with less gas. Of course, some people have money to burn. I’m not one of them.


-Sixbears


5 comments:

  1. Welcome to the prices much of the rest of the world have paid for a long time.

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    1. I know, right? They seem to function just the same. However, a lot of countries have decent public transportation and walkable cities. Older cities in the Rust Belt are more walkable, but most western and southern cities were built around cars and driving everywhere.

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  2. The goal of the criminals in power is the END OF PETROLEUM BASED ENERGY. They want ALL of us to cease using gas/diesel completely. To hell with the fact that there is NO VIABLE ALTERNATIVE.

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    1. Sorry you feel that way. Coal is already dead. Alternatives are coming on fast, but not fast enough. Petroleum is limited. They ain't making more of it. If we don't want to freeze in the dark we have to find something else. I've been successfully using solar in northern NH for over 20 years.

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    2. This comment has been removed by the author.

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