Those increases are really going to f*#$ with the price of food.

 

In more ways than just transportation costs. Petroleum and natural gas are major elements in the costs of growing and processing crops, from fertilizers and other agrichemicals to fuel for equipment to till, plant, and harvest.

 

With investment in railroad capacity and efficient intermodal transfer facilities a big bite can be taken from transport fuel use by using road-railers, trailers on flatcars or spine cars, and containers. Rail freight consumes 1/5 to 1/3 as much energy per ton mile, compared with long-distance trucking.

 

Regular unleaded gasoline last night at Kroger in Fort Wayne was $3.19/gallon.

Yes I am going to say this -- rail access will help (especially electrified lines), but water access is even more fuel efficient. Those cities that are on waterways or electric railways (preferably powered by renewable sources) will fare the best in the coming years.

 

But the best way is to reduce the distance which food must be transported. Let's not forget that during World War II backyard victory gardens produced 40 percent of America's food.

We are still eating the butternut squash, onions and potatoes that we "put up" down in the basement.  The cold-hearty greens and spinach are kaput.  There's a cabbage in the 'fridge.  However, right now I am at the point where my raw vegetables come from Costco and they feature Mexican broccoli, Peruvian asparagus and Canadian tomatoes.  The asparagus is flown in.  Seriously.

We are still eating the butternut squash, onions and potatoes that we "put up" down in the basement. The cold-hearty greens and spinach are kaput.   There's a cabbage in the 'fridge. However, right now I am at the point where my raw vegetables come from Costco and they feature Mexican broccoli, Peruvian asparagus and Canadian tomatoes. The asparagus is flown in. Seriously.

 

Not for long.

Gas prices: Bracing for more pain at the pump

 

Read more at: http://money.cnn.com/2010/12/30/markets/oil_commodities_gas/index.htm?hpt=T2

Yes I am going to say this -- rail access will help (especially electrified lines), but water access is even more fuel efficient. Those cities that are on waterways or electric railways (preferably powered by renewable sources) will fare the best in the coming years.

 

But the best way is to reduce the distance which food must be transported. Let's not forget that during World War II backyard victory gardens produced 40 percent of America's food.

 

I can believe it.  My parents raise most of the fresh vegetables that they need from intensive beds on a patch of land not much larger than the average Cleveland city backyard.  That's the real potential for "urban farming".

My favorite author, Steven Solomon, says that you can raise half the food you need with about ten hours of work per week.  I think he said you need 1,000 to 2,000 square feet. 

 

You will be eating a lot of potatoes.

MarketPlace: Rising Fuel Prices Could End Economic Recovery

 

http://marketplace.publicradio.org/display/web/2011/01/05/am-increasing-oil-prices-could-end-economic-recovery/

Dick Cheney used to say "the tax cuts will make up for them being gouged by the oil companies"  (an inexact quote).  Where's the republican trick now?

Cleveland.com poll about how people will respond to higher spring gas prices.  Anyone notice a possible answer they conspicuously left off the list????  Argh.

 

http://www.cleveland.com/business/index.ssf/2011/01/as_gas_price_pushes_higher_are.html

Argh is right! I selected Other and typed "public transit."

 

I encourage others to write similar words for consistency of message.

 

EDIT: here's the guy who wrote the poll. I see that ignorance, though hopefully not racism, is alive at the PD.

 

A friend wrote this...

 

Dear Mr. Zicari,

 

The online poll on the Cleveland.Com Business page regarding choices

individuals/families would make if gasoline prices continue to rise misses

two obvious choices that should be offered: 1) bicycling 2) public transit.

As of 3:00 p.m. Thursday the responses showed nearly 16% chose "other," and

I have to wonder how many who selected that category list one or both of

these modes.

 

These are both common modes of transportation, and during the previous gas

price spike to $4/gallon both modes clearly showed immediate increases in

usage throughout Ohio and the US. To leave them out of the poll represents

a large oversight that should be corrected, and the poll reissued. I am

pleased to see you added two options for walking, a form of transportation

not often formally recognized as such.

 

Thank you for your consideration, and please forward if there is another

person on staff more appropriate to address this matter.

 

__________________

 

The response:

 

From: "PETER ZICARI" <[email protected]>

Sent: Thursday, January 06, 2011 3:21 PM

Subject: Re: Poll omits obvious choices

 

I suppose ... but I am very ambivalent about bicycling, which is not a

realistic option in winter at all, and even public transit as a safe or

reasonably fast option for commuting in a congested urban area. For people

who work more than a couple of miles from their homes, a bus trip can take

far longer than driving and may leave travelers in ... let's call them scary

situations ... in unfamiliar neighborhoods before dawn or after dark. In

the Cleveland area, we have at least one adult biker a year killed in

traffic.

 

Peter Zicari

216-999-4309

 

_______________

 

My friend will respond with a message using these and other data and links...

 

Your poll is about cost, not speed. If it wasn't, you wouldn't have listed walking two miles. Actually, driving is far more risky than taking transit. I would have hoped by now that people finally put away their racism for understanding and logic....

http://www.allbusiness.com/professional-scientific/scientific-research/244291-1.html

 

Trips on public transportation result in 200,000 fewer deaths, injuries and accidents than similar trips made by car. The National Safety Council estimates that riding the bus is over 170 times safer than traveling by automobile.

http://www.pacommutes.com/public-transit/benefits/

 

And Cleveland has three electrically powered rail transit routes which are safe, fast and efficient regardless of oil prices...

http://www.lightrailnow.org/facts/fa_00015.htm

Oh. My. God. that response is absolutely OUTRAGEOUS!  Moronic and obnoxious all in one.  He should probably write an article warning the what, 70,000+ daily RTA riders how imperiled their lives are every day.  Just ridiculous.

Yep. And these are the people who are informing Northeast Ohio.

^Oh- check the poll- they added public transit and bikes!

Yep, and transit and bikes (added together) are attracting a greater response than their initial two answers (carpool or more efficient car). I'm sure they have no idea why because many of the PD's writers live at the outer edge of Cuyahoga County or in collar counties.

Some interesting links imbedded in this article....

 

Don’t Sweat $3.50 Per Gallon Gas

Daniel Gross, On Wednesday January 5, 2011, 5:46 pm EST

 

Almost as surely as dawn precedes daylight, the rising price of oil tends to lead to higher gas prices. With the price of a barrel of oil at around $90, there is increasing concern that expensive fuel will choke off the U.S. economic recovery. At TheAtlantic.com, Lisa Margonelli makes the case that gas, at $3.07 a gallon across the country, is already problematic. And in the video below, my colleagues Henry Blodget and Aaron Task wonder whether high gas prices will hurt car sales:

 

SEE MORE AT:

http://finance.yahoo.com/news/Don-Sweat-3-50-Per-Gallon-Gas-dg-3085476876.html?x=0

Brown urges crackdown on energy traders to address gasoline price spikes

Senator says speculation partly to blame for rising costs

Thursday, January 20, 2011  11:17 AM

By Dan Gearino

The Columbus Dispatch

 

Sherrod Brown is asking a federal panel to immediately crack down on energy traders whose actions he thinks are partly responsible for the recent spike in gasoline prices.

 

"We know the damage that high gas prices do to the economy," he said today, speaking outside at a Downtown gas station.

 

He is asking the Commodity Futures Trading Commission to use its full authority to rein in hedge funds and other investors who are making big bets on the price of oil. The panel gained greater oversight power when President Barack Obama signed the Wall Street reform bill last year.

 

Full story at: http://www.dispatch.com/live/content/business/stories/2011/01/20/sherrod-brown-crackdown-oil-speculation.html?sid=101

If successful, the end result of which will be a sudden, huge spike in fuel costs by 2015 rather than a gradual one in the four years leading up to then. Speculators are looking at leading indicators -- demand/supply fundamentals in the future and they see unprecedented demand/supply troubles ahead. Stopping speculation won't stop the fundamentals from igniting the rocket engine on the market price, but it does buy politicians some short-term brownie points. And since Brown is up for re-election in 2012, what will hit America by 2015 is not an issue for him. This is why I hate politics. It's selfish, short-term and ultimately irrelevant.

This is why we need only one party (the Obama Party), so we can have a coherent plan for the future, without suffering long term disasters for short term gains.

He's just a politician too.

But when he's dictator, he won't be.

Oy.

Gasoline prices for February setting all-time records

Published: Tuesday, February 08, 2011, 8:00 PM

By John Funk, The Plain Dealer

 

Typically, the price of gasoline tumbles after Christmas, slumping deeply in February as demand disappears and supplies of "winter gas" pile up at oil company terminals.

 

Not this year.

 

The terminals are full. But the prices are headed up.

 

Average prices across the nation - and in Greater Cleveland - hit new all-time February highs based on the first eight days of the month. And they haven't stopped.

 

Full story at: http://www.cleveland.com/business/index.ssf/2011/02/gasoline_prices_for_february_s.html

Although I have a new heat pump and high-efficiency gas furnace for central heat, in the coldest winter weather (which we've had an extraordinary amount of, this year) I close the upstairs registers and use one or two kerosene heaters during the day for spot heating to reduce the furnace run time. (I'm never out of sight of the heaters when they're operating.)

 

With undyed, untaxed K-1 kerosene upwards of $4/gallon at the pump now, the economics of that are diminishing rapidly.

Interesting poll (still on-going) in Columbus Business First.... http://www.bizjournals.com/columbus/

 

Business Pulse Survey: What price must a gallon of gasoline hit to make you reduce driving to save money?

 

9%      $3

36%    $3.50

36%    $4

0%      $4.50

0%      $5

18%    $5.50 and higher

If Libyan unrest spreads, gas could reach $5

By Gary Strauss, USA TODAY

Updated 7h 54m ago

 

If political unrest in Libya spreads to other oil-rich countries and the ensuing chaos disrupts crude oil production, gas prices could hit $5 a gallon by peak summer driving season, industry analysts say.

 

Benchmark crude oil prices soared Monday, rising about 6% to $95.39 a barrel for April contracts on the New York Mercantile Exchange as violence and a military crackdown spread in Libya, the first major oil-producer hit by a burgeoning anti-government movement. The increased violence prompted BP and Norway's Statoil to pull oil workers from the country.

 

"If this thing escalates and there's a good chance that there'd be a shift in supplies, $5 gas isn't out of the question," says Darin Newsom, senior analyst at energy tracker DTN.

 

Full story at: http://www.usatoday.com/money/industries/energy/2011-02-22-1Alibyagas22_ST_N.htm#

It's the people with long commutes that feel it the most, since those are largely inflexible, at least today.  Even at $5 gas, two trips a month to Cleveland and one every other month to Columbus from Akron aren't going to bust my budget.  It's the people who burn two gallons of gas per day getting to and from work (e.g., a 25 mile commute in a 25mpg car) that really face the brunt of it.

 

I think that one possible socioeconomic consequence of a sustained rise in gas prices to above $5 would be a shift in corporate culture towards greater support of telecommuting, including budgetary priorities to make telecommuting more viable in more industries.  I know that most urbanists here are hoping that that will be one of things driving returns to the inner cities, but lifestyle adjustments that dramatic take a while to sink in and may be the result of more generational turnover than adaptation.  (In other words, we'd end up shifting over decades to a more urban-friendly world simply by having the next generation of high school and college graduates choosing to live closer to downtown, not because people already enjoying living in Westlake decide to give it up.)

If gas goes up to $5+, I can see massive, massive  migrations to cities with excellent pre-existing public transportation, with people virtually giving up cars for nonessential things. That means cities like NY, Chi-town, and San Fran will even become more desired business and residential hot spots.

I'd imagine that folks will be pleasantly surprised with the high quality of small cars that have come out in the last couple years and will continue to come out in the future. There isn't enough economic activity right now to support mass migration of any sort (and most of those cities don't have jobs for the great huddled masses). I'd guess that folks with the ability may consider giving up home amenities to live nearer to work. The hardest families will those with two incomes in which both already have long commutes. Sadly, I'd expect this to kickstart another round of foreclosures, especially in the exurbs.

People will move if their costs warrant it, and $5+ Of gas might be the deciding factor for a ton of businesses and folks. 

If gas goes up to $5+, I can see massive, massive  migrations to cities with excellent pre-existing public transportation, with people virtually giving up cars for nonessential things. That means cities like NY, Chi-town, and San Fran will even become more desired business and residential hot spots.

 

I'm not so sure about "massive migrations to cities", but I can see people moving closer to where they work.  A lot of people work downtown and in the core cities, but a lot of people also work in the suburbs.  In general I would probably expect a modest shift of population from suburbs/exurbs to core cities as people move to live closer to work.

High gas prices take money out of the economy. That weakens the credit markets. That makes it difficult to buy/sell houses. So if there is a lot of mass migration, it will be due to desperation from worse conditions than what happened in 2008. And unless people rent out their homes, it could leave a lot of abandoned homes on the landscape. Gramarye is correct. Telecommuting is an option for many people. But rapid change is difficult when people cannot sell their homes or afford to buy/lease newer, smaller cars.

 

According to the Hirsch report (http://www.netl.doe.gov/publications/others/pdf/oil_peaking_netl.pdf), a painless transition to a fuel-efficient American economy will take 20 years. That time has passed.

I think there is a special kind of agony and fury that comes with high fuel prices, more so than increased taxes or other costs of living.  I remember a few years back when we $4/gallon gas, and everyone was in this high tense, angry mood.  People would stop going out if they didn't have to because there's just something so unsettling about gas doubling in cost.

 

And if that becomes the norm, then there will be a huge response.  We can't handle European costs of gas without their standards of tranportation, and I can see a migration to US cities that best match those countries'.  Especially if $5+ is the new standard.

 

And people can move quickly if motivated.  Look at how fast whites moved away due to busing.  10s of millions of people just moved within a relatively short period of time, probably taking losses on their homes due to the immediacy of white flight.. Fear and anger does that to people, and fuel increases can be a hell of an impetus

 

Brown urges crackdown on energy traders to address gasoline price spikes

Senator says speculation partly to blame for rising costs

 

I like Sherrod Brown, but this is another example of the cluelessness of our elected officials.

 

 

My favorite was when Congress passed a resolution in 2008 urging OPEC to pump more oil. America was jonesing for more of the black crack and needed a bigger hit. OPEC was pumping as much as it responsibly could. If it pumped any more rapidly, it would have damaged oil fields (some say it already is). The long-term matters little to the addict.

People can move quickly if motivated, but people can also be very resistant to change.  The white flight parallel doesn't really work because for those people, the neighborhood itself had become something they wanted to escape, while in this situation, the neighborhood remains desirable for most suburbanites--it's just a question of whether they can afford it anymore, and to do so, they may well cut back on other expenditures rather than abandon their community.

 

As for the prospect of abandoned homes in the suburbs: That may be the case.  It certainly happened to the cities when more people wanted to get out than get in.  However, it's also possible that some people, whose travel needs are less (or who actually work in those suburbs), would jump on the opportunity.

Ideally, we'd be able to realign people's work places with their homes. How many people who live in the core curse their drive out to the suburbs, while those living in a 'burb curse their drive downtown? Let's say that there are roughly equal positions held by people forced to commute simply because of the way the stars aligned (personal network, job availability timing) in both an office park and a downtown office building. The downtowner took the job location that the suburbanite wanted and vice versa. If fuel prices were higher, companies would understand reluctance to commute. Jobs and housing would naturally move closer to each other.

West Texas Intermediate crude hit $100/barrel today while wholesale gasoline rose to $2.75/gallon -- add 60-70 cents to that for the retail price, taking into account marketing, distribution and a profit margin of less than 10 percent.

Gas went up 20 cents in one day at the Shell station near where I live. 

 

Woah.

Why the Disruption of Libyan Oil Has Led to a Price Spike

By CLIFFORD KRAUSS

 

HOUSTON — Crude oil prices reached $100 a barrel in the United States on Wednesday, the highest price in more than two years, as Middle East oil flows were interrupted this week for the first time since the region’s turmoil began.

 

Multinational oil companies have curtailed production in Libya as protesters engage in violent confrontation with the government of Col. Muammar el-Qaddafi. Analysts estimate that as many as a million barrels of Libyan oil a day have been removed from world markets in recent days, and investors fear that more oil production could be disrupted if the unrest spreads to other crucial producing nations, like Algeria.

 

More broadly, economists are concerned that if oil prices stay high this year, they could slow the already fragile global economic recovery. As a general rule of thumb, every $10 increase in the price of a barrel of oil reduces the growth of the gross domestic product by half a percentage point within two years.

 

Libya produces less than 2 percent of the world’s oil, and exports little to the United States. But the high quality of its reserves magnifies its importance in world markets. Read more at: http://www.nytimes.com/2011/02/24/business/energy-environment/24oil.html?_r=1&nl=todaysheadlines&emc=tha25

Gas went up 20 cents in one day at the Shell station near where I live. 

 

Woah.

 

But bus fares didn't! ;-)

Libya produces less than 2 percent of the world’s oil, and exports little to the United States. But the high quality of its reserves magnifies its importance in world markets.

 

And that's the biggest point right there. Many people think that all oil is the same. There are more types of oil in the ground than there are types of coffee at Starbucks. And different types of oil require different types of refineries. You can't take Saudi Arabian sour crude and process it at a multi-billion-dollar refinery that was designed to process sweet oil from Libya. So if all refineries that are designed to refine Saudi Arabian sour are already operating at or near capacity, it doesn't matter if the Saudi's claim they will put more oil on the market to compensate for the loss of Libyan sweet. What you need is another nation that produces crude similar to Libya's crude offering to pump more to compensate. Problem is, sweet crude is increasingly rare and there aren't many nations willing or able to pump more. They may not have the spare capacity, and sometimes pumping more oil can damage an oil field.

 

Libya has the good sweet stuff -- one of the few nations on this planet that still does.

What a ride! Now WTI oil has dropped almost $7 from its $103 high earlier today.

From my counter, I can watch gas prices at the Kroger station across the street. $2.99 to $3.39 since Monday for 87.

I pass a gas station on the way to work every morning. It was at $2.94, then to $3.15, $3.29 and now $3.39/gal. The media is starting to pick up on this. There was a discussion about oil and a commentator said we have to start doing something about "our crack addiction to oil." A little late, in my view.

Gas was 3.35 or so on Sunday, last time I filled up (and wont be filling up till I drive down to Louisville this weekend).  This was at one of those cut-rate 'Speedy' or 'Speedway' places.  I think you can get cheaper gas at Valero, too. 

 

The  pump prices really spiked last week, into the weekend.

Last weekend, as oil prices fell back to about $95, wholesale gasoline kept rising to about $2.90. It's still rising ($2.95 at last observation) as oil prices have rebounded to $99 ($114 Brent) today.

BTW: Spotted a station in Columbus this a-m at $3.42 for regular.

 

Gasoline price increases in February set new records

Published: Wednesday, March 02, 2011, 6:00 AM    Updated: Wednesday, March 02, 2011, 9:16 AM

By John Funk, The Plain Dealer

 

CLEVELAND, Ohio -- The average price of a gallon of gasoline jumped 24 cents here in the last week, setting the pace for a painfully expensive spring.

 

The spike here from $3.11 per gallon on Feb. 21 to $3.35 on Monday beat the increase in the national average price, which rose  from $3.17 to $3.37 per gallon.

 

The increases could spell big trouble for Cleveland's and the nation's shaky economic recovery as a trip to the gas stations becomes a deep dive into consumer wallets, pouring money into the family gas tank that would have been spent elsewhere.

Full story at: http://www.cleveland.com/business/index.ssf/2011/03/gasoline_price_increases_in_fe.html

Stations will hit at least $3.60 very soon, as the wholesale price of gasoline today has hit $3.05. Add 60 cents to that for distribution, marketing, profit margin etc. at the retail outlets.

Plus compensating for credit card fees, which are probably more onerous during bad economic times and high gas prices.