OEMS Worry About Cheap Gas

World wide oil prices are down bellow $81/bbl because of poor economic activity (demand) in europe and china. OPEC has decided they need the cash so aren't cutting production
Commodities - Oil, Silver and gold prices - CNNMoney

The enhanced recovery of the bakkan and eagleford shale formations does increase supply at the same time demand has gone down, but it is small amount that OPEC could easily cut back if they didn't want the cash now. The US has also upgraded refineries in the midwest and gulf coast to more cheaply refine lower grades of oil like the oil sands, making the country less prone to opec blackmail.

The dollar is stronger than the yen and euro so in relative terms oil has dropped more in dollar than euro or yen or renminbi. Much higher taxes mean that fuel to the consumer won't get as low in europe or japan as the US. The chinese car market is already the biggest in the world, but the chinese govrnment could make equally cheap gssoline available if they thought it would stimulate their economy.

 

OEM's worry about cheep gas ~ funny. Back in the day, they worried about expensive gas. Sky high gas prices meant their money pots - the obscene land barges that moms / dads 'needed' to do their solo-daily commutes in, would kill sales. Sky high gas meant buyers would in stead, switch over to the low profit gas sippers. Can't have THAT now. Poor dealerships ... can't have it both ways.

 

Like I said earlier these worry lines are about cafe rules cutting into there profits. For some car companies a gas tax would actually help. Profits from vehicle sales in north america are up for toyota, gm, ford because they are selling more expensive less efficeint vehicles. The f-series is doing great business, as people are snapping up the all steel discounted models. Ford's bet on aluminum for better mpg may be partially wasted with these prices, but ford will still make a lot of money on the truck.

 

....well we might be in a price holding position until after the elections maybe we see soon if prices go up or down from here

 

I'm still paying over $2.50 a gallon for gas, and while it's cheaper than it was I still remember frowning at the gas pumps not so long ago when I was filling up a 2002 4x4 at a dollar something a gallon.
In other words, I'm thinking that Priuses are still worth driving at $2.50 a gallon, and I'll betcha gas has been even cheaper that THAT during the nearly 15 years of Priusdom.

Even if gas doesn't go back up due to market forces, there are folks wearing blue ties and pant suits that are salivating over sub-stratospheric gas prices as another way to shank the working poor for some more tax money.....so how many people out there REALLY think that gas prices are going to stay low???
Besides....Winter is right around the corner.
Long term weather patterns suggest that it's going to be a cooler than average winter which GUARANTEES two things:
1. Pointless arguments between people who do not know the difference between "global warming" and "climate change."
2. Higher home heating oil demand.


Personally?
I'd keep the Prius.

 

i wish it would translate to heating oil. the present government is killing low income wage earners.

 

Very few low earners use heating oil, but politicians in the North East through incentives like low income tax credits, and sticks like not building infrastructure, have kept the percentage there higher than the country as a whole. I would think that over 40 years after the first oil embargo we would be done with home heating oil in the US. At least its a much smaller problem than 30 years ago

Heating oil: a last stand in the Northeast? - CSMonitor.com

 

Heating oil IS predicted to cost LESS, this season.

 

i sure hope so. i had no idea we were the last bastion, very prevalent around here. natural gas infrastructure breaks down when you leave the metro area. there is quite a bit of propane rurally, but that is as bad or worse.

 

Conneticut is taking steps to improve the natural gas infrastruture. Oil was down to about 6% of households in 2009, and the new infrastructure must have it lower.. What is needed is to help people get off oil, which is the scarcest most expensive heating source. Massachuets and Maine seem to be the biggest users of home heating oil, and some rural areas are difficult to run natural gas lines, but we have been spending government money keeping people on oil. (yes home delivery of oil provides jobs, and I am a job killer asking for simple construction of gas lines and maintenance that provide many fewer jobs). It would have been cheaper for everyone to have moved many off oil earlier. Alaska and Hawaii have some unique reasons to keep oil for heating, but that doesn't apply to the other 48.

Massachusets does have lots of programs
http://www.massresources.org/massachusetts_energy_assistance_d.html

In 10 years I would prefer we had built natural gas infrastructure instead of kept people on oil.

 

I disagree with the premise of the CSM aritcle.
Most low income wage earners on HHO units have a great economic incentive to switch to NG or Propane however (comma!) most of them rent....and many that do not that are holding onto the typical 90-year old frame house with 30 year mortgages and have no economic flexibility to upgrade their home heating units.
Poor people have poor options.
All of those itty-bitty little blue states get FOLD in the winter!! (beyond cold)
Trivia question: What is the per-gallon tax on home heating oil state-by-state?
This isn't troll bait, I genuinely do not know, but if it's over a penny per gallon, it amounts to nothing more than a tax on being poor.

Perhaps a $10,000 "stupid tax" on oil-fired home furnaces might force some rental properties to upgrade their HVAC systems, but the cost is going to be passed down the line in the 99.99999999999999999999 percent of the nation that's not rent controlled.

I completely agree that these systems need to be phased out, but I'm thinking that taxing the oil/equipment along the lines of the "gas guzzler" tax is the wrong way to go.

YMMV.

 

on the other hand, with no competition, we have to relay on government to control runaway pricing.

 

OK some journalists talking $2 gaso today but I made that call on these pages several weeks ago

 

That isn't the way I read it. It is about the home owners not the renters. Those owning the properties have less incentive to upgrade if the state doesn't get natural gas lines installed and if renters don't really pay the price for oil because its subsidized to them. The key is providing natural gas infrastructure, and loans to convert, instead of subsidies for oil for ever.

I don't think there is any federal tax. Some states may tax. There are federal subsidies for low income.heating LIHEAP cost about $3.3B in 2013. I don't know how much it will go up this year and next. It mainly goes to low income users of heating oil, but some other low income heating customers get it. Electricity and natural gas are normally taxed at the state level. I don't know sate by state heat oil. Why is it a poor tax on oil, but not for people that are taxed on more efficient energy? Wouldn't it be better to spend that money some other way than keeping people on oil for heat? Low income people in texas get subsidies from texas to run their airconditioning when its 100 degrees. Whey should the north east be subsidized to stay on oil? I'd rather pay to get them off oil once than pay every year to keep them adicted.

Well first step would be that if you have low income renters getting the subsidy, we take land loard income to pay for their oil bills. That would get the landloards to stop being subsidized. Its a small probblem, but one that won't get better if we use the excuse that the poor need to stay stuck on oil because it creates jobs, instead of getting them on a better system.

 

I concur that first steps would be to provide kickbacks for installing propane/NG heating systems to include smaller room ventless systems, and perhaps empower local distributors as well.
I would also eliminate all taxes on home heating oil.

I would charge any legislator $10,000 for each word over that which would fit on one 8-1/2' x 11.0" piece of paper....single sided, 12 pitch font for "relief" legislation for this (and many other) issue(s.)

...Or 10 days in jail for each character.

 

There's no or very low taxes on HHO, that's why it's dyed, so people with diesel vehicles can't use it to run on and get around the road taxes.

 

Bob- any way that New + Used vehicle preference shows a smaller down turn for hybrids?

 

Curious that no one mentions heat insulation, draft reduction, and other means of lowering fossil fuel consumption rather than shifting from one fossil fuel to another.