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Gas prices rise at alarming rate

Laura — Tue, 08 Jul 2008 11:39:07 -0700

UCAN In the Media

GAS: Pump prices up 23 cents this week

Rise is steepest in years; $4.39 is also new record

By CHRIS BAGLEY - Staff Writer

Thursday, June 5, 2008

North County Times - Gasoline prices shot up this week at their fastest rate in years, smashing the previous record for the 16th time in 18 weeks, according to weekly surveys for the North County Times.

Regular-grade gas climbed 23 cents to $4.39 per gallon, according to a survey of 151 stations on Thursday by the Utility Consumers' Action Network. Diesel fell to $5.06 from a record $5.11, according to the survey.

The steepening increase in gas prices was alarming, even after a four-month surge, said Charles Langley, who conducts the survey. Still, the wholesale price of raw, unblended gasoline fell 24 cents on Wednesday before rising again on Thursday, Langley said.

"We view this volatility with deep suspicion because it smacks of market manipulation," Langley wrote in an e-mail. "Not to add fuel to the fire, but I think it is a five-alarm fire."

The overall fall of several cents this week could translate into lower pump prices within a few days, Langley said.

Regular unleaded has risen 41 percent in the last 12 months and 44 percent since a dip in late January, according to Langley's surveys. Based on historical spending patterns, current prices, and recent gas-sales data from a state tax agency, the average household in San Diego County now spends more than $3,500 a year on gasoline.

The price spike at the pump comes even as oil edges back from more than $130 per barrel. Light, sweet crude for July delivery was trading in the $120 to $123 range earlier this week, but rose $5.49 to $127.79 on the New York Mercantile Exchange. It was the biggest single-day price increase in the history of the Nymex crude contract.

Crude's surge came as the dollar fell in response to comments by European Central Bank President Jean-Claude Trichet suggesting the bank could raise interest rates.

"Oil, which was very weak, rallied on those comments," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "They're out of step with the U.S., which is weakening the dollar."

When interest rates rise in Europe or fall in the U.S., bond investors tend to move money into Europe and out of the U.S., weakening the dollar against the euro. Many investors buy commodities such as oil as a hedge against inflation when the dollar is falling. Also, a weaker greenback makes oil less expensive to investors dealing in other currencies. Those investors tend to step up their oil purchases, which pushes up its price for those who deal in dollars.

Many analysts believe the dollar's decline has been one reason why oil prices have nearly doubled from year-ago levels. The rise in oil, which now accounts for about 70 percent of the price of gasoline, has in turn pushed gas prices to records.

Gasoline's average refining margin, a measure that includes both profit and cost, fell below 25 cents per gallon last month from about $1 a year ago, according to estimates by the California Energy Commission. Gasoline's rise this week paralells an increase in the estimated refining margin, to more than 50 cents per gallon.

Independent gas stations are losing an average of at least 25 cents on each gallon they sell, the commission estimated on Monday. Stations that sell gas under agreements with specific refiners such as Shell and Valero were earning an estimated average of less than 1 cent per gallon.

Earlier this week, Federal Reserve Chairman Ben Bernanke indicated that more interest rate cuts are unlikely in the U.S. Bernanke's comments sent the dollar higher, helping push oil prices lower.

The average national price of a gallon of gas rose by a fraction of a cent overnight to a record $3.989 on Thursday, according to a survey of stations by AAA and the Oil Price Information Service. Prices haven't fallen since May 6, AAA records show.

"We may still get to $4 in the next couple of days, but I do think ... it's just a matter of time before the retail price starts to stall," AAA spokesman Geoff Sundstrom said.

Diesel prices are already falling; the average national price of a gallon of diesel slid 0.8 cents overnight to $4.77, according to AAA and OPIS, though prices are above $5 per gallon in some areas. Diesel prices peaked at a record $4.792 on May 30, and have risen $1.87 in a year due mostly to rising demand for the fuel in the developing world. High diesel prices have boosted prices of food and consumer goods transported by truck, ship and rail, putting additional pressure on families already struggling with $4 gas.

Oil's decline since May 22 follows concerns about demand. Recent data from the U.S. Energy Department and the California Board of Equalization show that high prices have led consumers to buy less gas. Automakers are cutting production of large SUVs and trucks, and sales of those vehicles have been declining in San Diego County for more than a year now, according to a local association of dealers.

Still, gasoline refiners, wholesalers and retailers are feeling pressure to keep prices high, for now. Crude prices have risen 89 percent in the past year, while gas prices are up only 27 percent. That discrepancy has pressured profit margins along the gasoline supply chain; falling demand may have prevented gas suppliers from raising prices as much as they would like.

The Associated Press contributed to this article. Contact staff writer Chris Bagley at (760) 740-5444 or cbagley [at] nctimes [dot] com.

Gas prices beat national average in San Diego's North County communities

Laura — Tue, 08 Jul 2008 10:40:50 -0700

UCAN In the Media

GAS: Local gas prices soar higher, faster than nation's

Analysts cite refining, taxes and possible discrimination

By CHRIS BAGLEY - Staff Writer

Friday, June 13, 2008

NORTH COUNTY TIMES - Gasoline prices in North County continued to shoot up higher and faster than the national average last week, a gap that analysts attribute to California's unique refining requirements, higher sales tax and possible price discrimination by refiners and wholesalers.

North County stations were selling regular gas for an average of $4.59 a gallon Friday, up by about 17 cents in the last week, according to regular surveys by the San Diego-based Utility Consumers' Action Network.

The national average had risen by about 8 cents in a week, to $4.07 a gallon Friday.

Over the last year, the national average price has risen by $1.02, according to AAA.

North County drivers, in contrast, are now paying $1.38 more per gallon than they were paying a year ago. That translates into another $932 out of the pocket of a driver who uses 675 gallons a year, the state average.

Refiners and independent analysts have pointed to the skyrocketing price of crude oil on international markets as the leading cause of the price escalations.

But analysts say that doesn't explain the growing gap between California and the rest of the country, because oil costs roughly the same regardless of location.

Historically, Californians have paid 20 to 25 cents more per gallon than drivers in most other parts of the country.

North County's gap had been comparable, but it widened to 30 cents in early March, flirted with 40 cents in April and May, and topped 50 cents within the last week.

Gaps often grow in the springtime when California air-quality regulations begin to require different blends, analysts said.

That makes for less competition among refiners during the summer months because out-of-state refiners can't easily produce and deliver gas that meets California regulations, said Severin Borenstein, director of the University of California Energy Institute, at the Berkeley campus.

Even within California, prices frequently vary by as much as 20 cents a gallon from one community to the next.

Gas in San Francisco, among the state's most expensive cities a year ago, has risen only $1.06 in the last year, to $4.57, according to daily reports by the automobile association.

Gas in the Los Angeles area has risen by $1.31, to $4.58, according to the group.

Tupper Hull, a spokesman for companies that extract and refine oil in the western United States, said gas stations have historically charged higher prices in San Diego County because the ratio of stations to residents is lower than in Los Angeles.

This disparity is even more dramatic when tourists are included, Hull said, citing a 1997 study commissioned by the industry.

Competition in San Diego County is also thwarted because generally stricter land-use regulations slow down the process of setting up new stations, Hull said.

Most gas stations in Southern California are independently owned but operate under a sort of franchise agreements with Chevron, Shell or another refining company.

Margaret Felts, a Sacramento petroleum engineer who investigated energy-market manipulation during the California energy crisis of 2000-01, said it's easy for refiners to charge higher prices to affiliated stations in affluent suburban areas such as North County, translating into higher retail prices.

"It's a market where they know they can get a higher price, and so they do," Felts said.

Known as "price discrimination," such behavior is common in several industries and is generally legal as long as sellers act independently of one another, Felts said.

Borenstein said he's seen no recent evidence that refiners are colluding with one another to set prices. Still, he said, he can't rule it out.

"It would be very difficult to find evidence in this market," he said. "That's just a black hole."

David Hackett, an Irvine-based analyst, said Southern California prices have gotten an extra bump since mid-May, when a refinery in New Mexico began having problems.

The metropolitan Phoenix area, which had drawn much of its gas from New Mexico, began buying more from California refineries, Hackett said.

It's nearly impossible to determine how easily California refineries can react by producing more gas, Borenstein said. To do so might require state monitors at each refinery, he said.

"The solution has to be not second-guessing how refiners are producing, but making sure the market stays competitive," Borenstein said.

California's sales tax is also 2 to 3 cents higher than those of most other states, Borenstein noted.

When the price of gas rises by $1 at the wholesale level, the retail price rises by nearly $1.08 in California.

In Georgia, a similar wholesale increase pumps up the retail price by $1.04.

The increases have caused ever-greater disruptions in the lifestyles of North County residents and would-be residents.

Pam Mattox, who lives by herself in Temecula and works at a nearby casino, said she's been looking for a change of pace in her life.

She decided a few weeks ago that she'd like to live with a friend in Escondido, but is putting off the move until she can arrange a daily car pool to Temecula.

"If the gas keeps going up, I can't move," she said. "It's just too expensive."

Prices have changed other commuting habits, too. Several North County drivers have reported switching to smaller cars and leaving lower-mileage trucks and sport utility vehicles parked at home.

Such newfound frugality has pushed down gasoline use by 1 to 2 percent from year-earlier levels, according to a state agency.

The Associated Press contributed to this article. Contact staff writer Chris Bagley at (760) 740-5444 or cbagley [at] nctimes [dot] com.

UCAN files protest before CPUC against application of SDG&E for expedited approval of the Miramar Energy Facility II Project

Sandy Young — Mon, 07 Jul 2008 16:07:23 -0700

UCAN News

Utility Consumers' Action Network (UCAN) has hereby filed a Protest of SDG&E's application and,specifically, its request for expedited approval of construction of a Miramar Peaking Plant.

Click here to read UCAN's protest.

Locksmith Scams.....how do you make sure that your home and office are secure?

michael — Mon, 07 Jul 2008 11:43:40 -0700

UCAN News

Forget about computer worms.....how do you make sure that your home and office are safe?

When you hire that company to come to your house or business to
install or change locks what protection do you have that your new lock
won't used by the locksmith in some nefarious way. Or, for that matter,
that the installation will be done correctly. Believe it or not, there
are some unsavory locksmith scams being reported on the Net and by the
Better Business Bureau. Check out the following links before you hire
that locksmith!

http://locksmithscams.com/

http://www.sandiegolockandsafe.com/locksmithscams.html#newsstories

Locksmith Scams.....how do you make sure that your home and office are secure?

michael — Mon, 07 Jul 2008 11:41:09 -0700

Forget about computer worms.....how do you make sure that your home and office are safe?

When you hire that company to come to your house or business to install or change locks what protection do you have that your new lock won't used by the locksmith in some nefarious way. Or, for that matter, that the installation will be done correctly. Believe it or not, there are some unsavory locksmith scams being reported on the Net and by the Better Business Bureau. Check out the following links before you hire that locksmith!

http://locksmithscams.com/

http://www.sandiegolockandsafe.com/locksmithscams.html#newsstories

Oil prices up, gas prices dropping

Charles Langley — Fri, 04 Jul 2008 13:41:23 -0700

UCAN News

Yesterday, oil reached a new all-time record high of $145.29 a barrel, yet San Diego gas prices are dropping.

Today, the average price of gas in San Diego County has dropped 4¢ since last Friday to a new average of $4.55 a gallon.

The new average is the highest price average ever in San Diego history for the Fourth of July. Last year on this day, San Diego gasoline averaged $3.08 a gallon.

Diesel prices have surged, and will continue to climb, reflecting massive increases on the spot market. Today, diesel once again climbed above the $5 mark to a new average price of $5.03 a gallon. This new average is up 5¢ from Tuesday, an we expect to see aggressive price hikes of 5 to 20¢ a gallon in the next week at most diesel retailers. Last year on July 4, San Diego diesel averaged $3.13 a gallon.

##30##

Policies not drought friendly

Sandy Young — Thu, 03 Jul 2008 10:48:46 -0700

Homeowner associations and city codes all over California enforce the watering of lawns even during drought conditions and a water emergency declared by the governor of the State.

A Sacramento couple found themselves caught up in red tape and code when they decided not to water their lawn letting it die instead. Landscaping plans were in the works, but the neighborhood watchdogs reported them before those plans were put into motion. Facing a fine that added up to half their monthly morgage the Sacramento couple was lucky to get public outrage and support after a story appeared in The Sacramento Bee.

The happy ending is that no fine will be meted out and members of the city council admit that city codes may need revising.

Like many Californians this couple's issues stem around agreements with landlords, cities, and HOAs that insist on the watering of grounds. The orderly maintenance of property is one of the factors that helps to keep property values from declining.

Perhaps more than the city of Sacramento can take a lesson from what the couple in the Bee's article lived through. Many contracts and codes need to be revised. Our current drought situation demands it.

Native plants and xeriscaping open many options to beautiful yards that can be maintained with much less water usage than traditional lawns require.

Marty Eberhardt, executive director of the Water Conservation Garden at Cuyamaca College is quoted in a March article at the VoiceofSanDiego.org saying, "It also requires behavorial change, a change of appreciation of a certain kind of landscaping. There are different concepts of paradise, and there's a vision of paradise that fits our weather patterns and soil types."

Paving paradise with lawns or cement has been a decades old vision of loveliness in San Diego County. The time has come to change our vision of paradise.

Click here to read the Sacramento Bee article.

Click here to read the Sacamento Bee follow-up article.

BLM lifts moratorium on solar energy applications

Sandy Young — Wed, 02 Jul 2008 17:52:54 -0700

Today the Bureau of Land Management announced the lifting of its moratorium on solar energy applications on federal land.

"We are happy to see that BLM will continue to process solar applications. With consumers facing rapidly increasing energy costs, the United States cannot afford to delay solar projects any longer." Solar Energy Industries Association (SEIA) President Rhone Resch said in today's statement. Click here to read his more from SEIA.

The Bureau of Land Management issued a press release saying:

"We heard the concerns expressed during the scoping period about waiting to consider new applications," said BLM Director James Caswell, "and we are taking action. By continuing to accept and process new applications for solar energy projects, we will aggressively help meet growing interest in renewable energy sources, while ensuring environmental protections." Click here to read more from BLM.

High gas prices equate to higher public support for oil exploration, Pew survey finds

Sandy Young — Wed, 02 Jul 2008 10:40:24 -0700

The Pew Research Center for the People and the Press, an independent opinion research group has released a nationwide study finding that "amid record gas prices, public support for greater energy exploration is spiking . . . and an increasing proportion (of people taking the survey) also says that developing new sources of energy - rather than protecing the environment - is the more important national priority.

The survey's found that an increasing number of support for energy exploration came from groups that previously had "viewed this as a less important priority."

Click here to read the entire survey.

Iraq's no-bid contracts delayed

Sandy Young — Tue, 01 Jul 2008 10:13:30 -0700

Yesterday, the widely anticipated announcement of the winners to Iraq's no-bid contracts was delayed. Today's New York Times reports that Iraq's oil minister, Hussain al-Shahristani made the announcement at a news conference in Baghdad. Click here to read the entire article.

Expectation was that Iraq would award the contracts to a handful of western oil companies. Instead Iraq invited foreign companies to bid for contracts to develop key oil production fields.

The Financial Times in London reports that:

Iraq's oil minister, specified conditions that illustrate the extreme political sensitivity of allowing western oil companies into Iraq, where many people believe the US-led invasion of 2003 was designed to seize control of the country's resources. Click here to read the entire article.

Warrantless wiretap votes equal dollars from Telecom PAC

Sandy Young — Mon, 30 Jun 2008 14:19:33 -0700

Telecom political action groups gave twice as much money to Democrats who switched from opposing to supporting legal amnesty to Telecoms that aided the government's warrantless wiretapping program.

Last week Wired reported that Maplight.org had analyzed campaign donations and found that 94 of 220 Democrats who had previously voted against Telecom amnesty had switched their vote to support a bill that expands the government's ability to conduct wiretaps inside American Telecom facilities.

Media General News Service reported that AT&T, Verizon, Sprint, and others sought immunity from prosecution for cooperation with the government's anti-terrorism wiretapping program. Click here to read the entire article.

The center for independent media, The Washington Independent, weighed in with their article, "FISA vote tied to telecom donation." Much is summed up with a quote from Mary Boyle, a spokeswoman with Common Cause: "We certainly know that contributions go a long way to gaining access and influence," she said. "The appearance is that money buys votes." Click here to read the entire aritcle.

SHUT UP AND DRIVE! Why new laws should not apply to young people.

Charles Langley — Mon, 30 Jun 2008 13:53:52 -0700

Hey - Maybe it is time to lower the "talking-while driving" age!

Using a cell phone without hands-free equipment while driving is now unlawful. Yet according to the LA Times talking to a fellow passenger while driving is as bad or worse than driving drunk.

What is it that makes a phone so dangerous? Why isn't listening to the radio or talking to a passenger equally deadly?

Is it possible that driving and phoning skills are a function of age?

If you are over the age of 35, you probably learned to relate to the phone differently than younger generations. Young people are far more familiar with multi-tasking, but for the middle-aged, we grew up relating to a phone that had a cord attached to the wall.

When middle-aged people talk on the phone, we tend to mentally revert to the "phone attached to the wall" mode. We get engaged in the conversation and start driving like old people ... really old people.

Just imagine for a moment, John McCain, Barack Obama, and Chelsea Clinton in a NASCAR style road race where each of them had to drive and answer tricky policy questions on a cell phone. Who do you think would win? I'm betting that Obama and McCain would come in dead last, with an emphasis on dead.

This is one area where young adults (not teenagers) have superior skills, because they have grown up learning how to multi-task. Perhaps younger people who have learned this skill should be exempted from laws that limit driving while talking. We don't allow people over the age of 40 to enlist in the military because of their advanced age, so why should they be allowed to use a phone while driving?

Just a thought.

With age comes wisdom, but youth could well come with the ability to talk on the phone while driving safely.

U.S. freezes solar energy projects

Sandy Young — Fri, 27 Jun 2008 18:13:10 -0700

The Bureau of Land Management has struck a blow to the alternative energy industry by placing a moratorium on new solar projects on public lands.

The New York Times reports that BLM says an extensive environmental study is needed to determine how large solar plants might affect millions of acres it oversees in six Western States. Click here to read the entire article.

Gas, food prices put America's seniors in jeopardy

Laura — Fri, 27 Jun 2008 14:49:15 -0700

Memo to Congress:

Our troubled economy and skyrocketing energy prices are hurting some of our nation’s most vulnerable – our senior citizens.

Seniors on fixed incomes have seen their savings and the value of their homes diminished. Many depend on programs that provide home-delivered hot meals or meals at senior centers as well as transportation to medical appointments and social activities.

One example: The San Francisco Chronicle reported that drivers with the Alameda County Meals on Wheels program cover 1,600 miles a day delivering 2,200 meals to homebound seniors -- two-thirds of them 75 and older.

Executive Director Cindy Houts said: “Our programs are just reeling from the double whammy of increased fuel and food costs. It’s happening throughout the county and throughout the country.”

Locally, Meals on Wheels told KPBS that it has lost 30% of its drivers since the first of the year. This means fewer drivers must deliver to more homes (about 1,500 a week in San Diego).

These costs will be magnified further in the face of a population that is growing older and will need even more of these services.

Senior citizens on fixed incomes may increasingly become victims in this economy as they skimp on medication and medical care, scale down their daily nutrition due to rising grocery prices, and find themselves isolated at home because of rising gas prices and transit programs that are curtailed.

These factors can trigger depression and other medical problems that will cost our economy even more in terms of increased costs for medical treatment and early institutionalization of seniors who rely on these programs to maintain their independence. For America’s seniors in this economy, the “golden” years are in jeopardy and many will suffer in silence.

Cc: John McCain

Barack Obama

San Diego County Water Authority reacts

Sandy Young — Fri, 27 Jun 2008 11:08:07 -0700

Yesterday the San Diego County Water Authority had a busy day. First it suspended its artificial turf incentive program in response to a Centers for Disease Control health advisory that cited concerns about lead levels found in certain kinds of artificial turf recently tested in New Jersey.

The Water Authority says in a news release issued Thursday that it will suspend its program as a precautionary measure until more definitive information and a recommendation on the safety of artificial turf is made available by the CDC or other proper public health and consumer product regulatory agencies.

The Water Authority also is requesting the concurrent suspension of all other water agency artificial turf incentives within its service area. To read this news release, click here.

Then, the Water Authority increased the 2009 water rates by 11.9 percent. In a news release issued yesterday the Water Authority states that regionwide, they estimate that the rate increase's impact on the average household's monthly water bill will be $3.42. To read this news release, click here.

The U.S. Energy Department releases its long-term market report

Sandy Young — Thu, 26 Jun 2008 15:39:20 -0700

The U.S. Energy Department has released its Annual Energy Outlook 2008 report with projections to 2030 this week. The following excerpt is under the title, Oil Production:

There is considerable uncertainty surrounding the future of unconventional crude oil production in the United States. Environmental regulations could either preclude unconventional production or raise its cost significantly. If future U.S. laws limited and/or taxed greenhouse gas emissions, they could lead to substantial increases in the costs of unconventional production, which emits significant volumes of CO2. Restrictions on access to water also could prove costly, especially in the arid West. In addition, environmental restrictions on land use could preclude unconventional oil production in some areas of the United States.
Click here to find all of the reports.

Today, Jim Jelter of Marketwatch covers the reports in his column. He says:

The Energy Department reasons that much of the supply tightness currently gripping the market, whether real or imagined, is likely to ease as major new oil fields come on line in Brazil, Azerbaijan, Kazakhstan, Russia and even here in North America. That would signal a fundamental shift in the supply-demand picture, even though output would need to increase by about 12 million barrels a day -- over half the 20 million barrels of oil the U.S. currently burns in a day -- to keep pace with global demand.

Investors have a choice in the weeks and months ahead. They can either pay attention to underlying fundamentals in the marketplace or, like Macbeth, they can continue to listen to witches playing on their innermost fears and succumb to madness. Click here to read more from Marketwatch.

Independent gas stations find themselves in pricing stranglehold

Laura — Wed, 25 Jun 2008 00:00:00 -0700

UCAN In the Media

Pump pain hits independents

Prices keep station owners from competing with branded dealers

By Bruce V. Bigelow

UNION-TRIBUNE STAFF WRITER

June 24, 2008

Price-sensitive motorists have long viewed independent service stations as relative havens in times when fuel costs are soaring.

Lower gasoline prices are the key advantage that independents have in competing against stations affiliated with major oil companies like Chevron, Shell and ExxonMobil. But during the great price spike of 2008, pump prices have often been lower at branded dealers than at independent stations – sometimes by 25 cents a gallon or more.

“From the beginning of this year, we cannot compete,” said Jamal Jonna, co-owner of the Ultra Gas and Mini-Mart on San Diego's El Cajon Boulevard. “There is no independent guy that can match or beat the brand name.”

The reason is that independent station owners have been paying higher wholesale prices for gasoline than branded dealers – a situation known in industry parlance as a “rack inversion.”

Independent dealers who count their profits at 10 or 11 cents per gallon say in recent weeks they confronted wholesale price increases of 15 or 20 cents per day – and there's nothing they can do about it.

At Pearson Fuels, an independent station on El Cajon Boulevard, co-owner Mike Lewis said he was selling each gallon of unleaded gasoline at 2½ cents below cost during the first week of June – and his price was still 25 cents a gallon higher than nearby branded stations.

“I've never seen it this bad,” said David Hallack, who owns Emerald Oil of La Mesa. “I thought (Hurricane) Katrina was bad. But this is a lot worse. For the past six months, we've been getting slaughtered, just killed.”

With gasoline prices at record highs, many consumers assume that even independent gas stations are sharing in Big Oil's windfall profits.

Behind record fuel prices at the pump, however, dealers are seeing unprecedented spikes in wholesale fuel prices, sharply higher credit card fees, increased operating costs and reduced customer demand.

Such factors help explain why ExxonMobil recently announced plans to sell its company-owned service stations, joining an industry trend by getting out of the retail fuel business.

Industry officials estimate that major oil companies now own fewer than 2 percent of California's gas stations – and less than 5 percent of stations nationwide.

That means branded station owners are responsible for maintaining the property – including environmental concerns – and buy their fuel under long-term contracts directly from their affiliated supplier.

Independents typically buy gasoline from refinery terminals, which set wholesale prices based on the spot market for crude oil. The independents can set their retail prices below branded rivals when wholesale fuel prices “at the rack” are below the so-called “tank wagon price” paid by branded dealers.

But with U.S. crude oil prices doubling over the past 12 months, wholesale prices at the rack have often been sharply higher than what branded dealers pay. While such price inversions occur from time to time, wholesale prices paid by independents in San Diego stayed upside-down from mid-March to June.

If such inversions continue indefinitely, “The end result is that every independent would try to become a branded station – or they would go out of business,” said Lewis of Pearson Fuels.

“I'm sure every independent is feeling it,” said Dave Whitlow, who owns Spirit Gas in Lakeside. “We're all pumping 50 percent less than we were a year ago.”

Whitlow said wholesale fuel dealers now react within hours to spikes in crude oil futures trading on the commodities exchanges.

“The rack price, the wholesale price, is changing daily and sometimes even two or three times a day,” Whitlow said. “If you own a branded station with a fuel-supply contract, the prices also change, but just not as much.”

Such volatility means every 8,800-gallon tanker truck of gasoline becomes a $35,000 gamble for independent station owners.

“When prices get this high, it gets much more difficult for people to pay our bills,” said Matt Davis, purchasing and supply coordinator for the Soco Group, a fuel wholesaler in Carlsbad. “With higher prices, we have to extend a lot more credit.”

The implications are obvious, especially to those who view independent service stations as a competitive antidote to the seemingly lock-step pricing among branded gas stations.

About 20 independent stations have closed in San Diego County over the past six months, according to Charles Langley, fuel price specialist at UCAN, the Utility Consumers' Action Network.

Langley estimates that over the past 10 years, 240 gas stations of all types have stopped selling gas in San Diego – roughly 30 percent of the county's total. Of those, 80 were independents, Langley estimates.

Among the latest casualties is Hallack's Emerald Oil in La Mesa. He said he recently signed a letter of intent to affiliate his station with Valero Energy Corp., which operates hundreds of service stations in California.

“If it were not for our alternative fuels and the alternative fuels that I sell to others, we would have had to shut down two years ago,” said Lewis of Pearson Fuels. His station sells and supplies ethanol, which consists of 85 percent ethanol and 15 percent gasoline and is suitable only for flexible fuel vehicles. It has been priced nearly a dollar below the station's price for unleaded gas.

Mini-mart sales are also a key to survival, Lewis said. He noted the $1.20 profit he makes from a $1.59 slush drink is about the same as the $1.21 profit he gets from selling 11 gallons of gas at $4.54 a gallon.

Another problem facing branded and unbranded stations is the percentage of the sales price that credit card companies charge on every consumer transaction. The percentage is fixed, usually at just under 2 percent, but with gas prices topping $4 per gallon, credit card companies are taking a bigger piece of each fill-up.

Gas stations, which typically mark up retail gasoline by 11 to 12 cents a gallon, are seeing credit card fees take most or all of their profits.

UCAN's Langley said another ominous development for consumers is the recent announcement that Sacramento-based New West Petroleum plans to sell 29 service stations in San Diego.

New West acquired the Exxon-branded stations as part of an antitrust deal that enabled the 1999 merger of Exxon and Mobil to move forward. Valero also supplied fuel to New West's stations, which Langley said has helped to keep gasoline prices more competitive in the San Diego market.

Gil Moore, New West's founder and owner, said he doubts that the sale will have any effect on gas prices in San Diego, which he contends have become much more competitive over the past decade.

On Friday, the average price for unleaded gasoline in San Diego County was $4.61 a gallon, according to UCAN. In San Francisco, the average price for unleaded was $4.62, according to the American Automobile Association's Daily Fuel Gauge Report. It was $4.63 a gallon in Los Angeles and $4.57 in Sacramento.

Moore said he decided to sell the stations because “we've been running these stores for 10 years and it's getting old. It has nothing to do with San Diego, but we live in Sacramento and we're just tired of coming down to San Diego to do business. We just decided we're going to concentrate in Northern California.”

That may be true, but Lewis of Pearson Fuels also sees the deal as another sign of the times.

The fact is that “if your business is a cash cow, you keep it – or you figure out a way to keep it,” Lewis said. “I can tell you, we haven't made money in a long time.”

Bruce Bigelow: (619) 293-1314; bruce.bigelow [at] uniontrib [dot] com

California law prohibiting handheld cell phone usage while driving takes effect July 1st

ashkan — Tue, 24 Jun 2008 16:07:52 -0700

On July 1st, 2008 California Vehicle Codes 23123 and 23124 take effect, prohibiting the use of handheld cellular phones while driving. There is no grace period and officers will be able to issue citations starting July 1st. The law, spawned by safety concerns about cell phone usage while driving, severely restricts handheld cellular phone usage.

Drivers 18 and older can use cell phones only with a hands-free device, such as Blue Tooth, while talking, but both ears cannot be covered. In addition, dialing while driving is discouraged, although it is not prohibited, so long as a hands-free device is used while speaking. Using a handheld telephone’s speaker function is also allowed while driving.

A first violation is punishable by a $20 fine and subsequent violations are $50. However, if a driver is cited for other violations, a first offense is $76 and a second offense is $190, according to the Uniform Bail and Penalty Schedule.

Citations for cell phone violations while driving are reportable and WILL appear on your driving record. However, a citation for using a cell phone while driving will NOT result in a violation point.

Although text messaging is not specifically prohibited, an officer may pull drivers over for unsafe driving. Some argue that text messaging is, in fact, more dangerous than using a cell phone while driving, and criticize the law for omitting any specific reference to text messaging.

For minors, the law is even more stringent, completely banning any use of cell phones, pagers, laptops or any other electronics, including hands-free devices, to communicate while driving. According to the California Highway Patrol, this is because statistics show teen drivers are “more likely than older drivers to be involved in crashes because they lack driving experience and tend to take greater risks.”

Officers can pull over drivers under the age of 18 for driving while using a handheld cell phone. An officer may not, however, pull over a minor for using a hands-free device because this is a secondary, rather than a primary violation.

In any event, a handheld cellular phone can be used during an emergency to call the police, fire department or other emergency services. In addition, the law does not apply to passengers.

Suggestions

Before running out to purchase a hands-free device, check to see if your cell phone originally came with one.
If not, most electronic stores sell hands-free devices, with the simplest around $5, to the more expensive BlueTooth option.
Remember, most cell phones include a loudspeaker option, which you can use to communicate, hands-free, while driving.
There may also be bargains online, such as here and here. You may even want to search eBay.
It may also be wise to simply consider not using your cell phone while driving!

Iraq's no bid contracts need scrutinizing

Sandy Young — Tue, 24 Jun 2008 13:10:06 -0700

Iraq's no bid oil contracts are being scrutinized by Senators Charles E. Schumer, John Kerry, and Claire McCaskill. Filing a letter today with the State Department is a step in a right direction to shed light on what potentially can be very lucrative contracts. Read more from The New York Times.
More importantly, the no-bid deals could inflame sectarian tensions in Iraq. Read more from The Washington Post.

The New York Times reported Thursday that BP, Exxon Mobil, Shell, and Total were in the final stages of negotiations on the no-bid contracts.

Sunrise Powerlink decision delayed as regulators request more details

Laura — Mon, 23 Jun 2008 14:38:05 -0700

UCAN In the Media

PUC: Revisit alternatives to Powerlink

Order may delay ruling for months

By Bruce V. Bigelow

UNION-TRIBUNE STAFF WRITER

June 21, 2008

It may rank as the biggest environmental study in California history – and now it's going to get bigger.

In a ruling yesterday, the state regulators overseeing the formal review of San Diego's proposed Sunrise Powerlink directed the state's power grid operator to provide a more detailed assessment of alternatives to the high-voltage transmission line.

The four-page order from the California Public Utilities Commission is expected to delay a decision on the estimated $1.5 billion project by months. Under the previous schedule, the final environmental impact report was set to be completed this summer and the commission's ruling was expected this fall.

But the order noted optimistically the commission should still be able to issue its ruling before the end of the year.

“We're disappointed,” said Christy Heiser, a spokeswoman for San Diego Gas & Electric. “The critical need for the project remains as strong today as it was when we first proposed it.”

Sunrise Powerlink's opponents hailed the order, which requires extensive computerized analyses of alternatives to the route preferred by SDG&E. Revised portions of the 7,500-page environmental report then must be recirculated for comment period.

The commission “did the right thing for the public today by deciding to reissue the report in order to fill gaps left in the initial environmental analysis,” said the Sierra Club's Micah Mitrosky.

SDG&E proposed building the 500-kilovolt transmission line between San Diego and the Imperial Valley in 2005, arguing the link is needed to increase the capacity and improve the reliability of the San Diego power grid.

SDG&E has maintained that Sunrise will connect to solar power plants and other renewable-energy projects, enabling the utility to meet a state mandate to provide 20 percent of its total power production from renewable power sources by 2010.

But the 150-mile route preferred by the utility would traverse Anza-Borrego Desert State Park, and has drawn fierce opposition from environmentalists, landowners and consumer groups.

SDG&E's Heiser said the voluminous draft environmental report released in January by the PUC and the federal Bureau of Land Management already ranks as the biggest environmental study of its kind in California history.

The utility estimated earlier this year that it will spend almost $126 million on the process required to win regulatory approval for the project. Now that price tag will likely climb higher.

The commission's order suggests that cost-benefit analyses for five alternatives were not as detailed as the assessment that SDG&E provided for its preferred route through Anza Borrego.

“The current record does not adequately quantify the technical feasibility or the economic benefits of various alternatives” based on computerized models using “reasonable assumptions,” the order said.

The order directs the California Independent System Operator, or ISO, which manages the flow of electricity on most of the statewide power grid, to provide additional assessments of specific alternatives.

While SDG&E and the ISO both filed comprehensive assessments of the economic benefits of Sunrise, the order noted the ISO's “overall methodology was superior.”

SDG&E's Heiser noted that the ISO strongly supports Sunrise and the utility “has no problem with them doing the modeling.”

The order signed by Commissioner Dian Grueneich and Administrative Law Judge Steven Weissman includes a six-page spreadsheet that specifies what assumptions should be used in various scenarios.

Michael Shames, executive director of San Diego's Utility Consumers' Action Network, and a Sunrise opponent, described the order yesterday as a bombshell.

“What they're really saying here is not so much about an assessment of the other routes but about the economic assumptions in SDG&E's case,” Shames said. “Both operationally and economically, (Weissman) wants to see how this thing works, and he's only got a partial picture so far.”

Bruce Bigelow: (619) 293-1314; bruce.bigelow [at] uniontrib [dot] com

Hands off the cell phone or pay the fine

ucansue — Mon, 23 Jun 2008 12:22:49 -0700

Hands off the cell phone or pay the fine is expressed in a San Diego Union Tribune article written by staff writer Pauline Repard. She presents the difference in rules for teens and adults and points out how ironic it is that legally adult drivers are not barred from sending text messages even though they are barred from talking on the phone while driving. Californians can kiss $97 per offense good-bye if they get caught not following the rules. It does seem odd that one can drive while eating a double-decker cheeseburger, drinking a milkshake, putting on make-up, shaving, disciplining kids in the back seat, and letting the dog sit in your lap. As long as you're obeying the rest of the rules of the road, you aren't stopped. It seems odd that this single aspect was chosen to enforce when the rationale was supposed to be paying total attention to the road.

Oh well, I guess I'm not privy to the logic of the state or federal government. But, I'm going to follow the law and not give another $97 to the state or to the local municipality.

And you?

Sunrise Powerlink decision delayed until November

Laura — Mon, 23 Jun 2008 11:56:14 -0700

UCAN In the Media

REGION: Power line decision delayed until November

State orders review of wind project, economic benefits

By DAVE DOWNEY - North County Times Staff Writer | Friday, June 20, 2008

In a setback for San Diego Gas & Electric Co.'s controversial transmission line, state regulators Friday ordered that a draft report examining the Sunrise Powerlink's environmental impacts be expanded to include new information about a Mexico wind power project.

The four-page ruling by California Public Utilities Commissioner Dian Grueneich and Administrative Law Judge Steven Weissman also directs the agency that runs the state power grid to recalculate the economic benefits of Sunrise and project alternatives.

The ruling marked the second time in a year that the finish line for the $1.5 billion project has been pushed back.

The first delay, coming last summer, moved the decision date from January to August. This latest delay pushed the decision back to November.

Grueneich and Weissman said there is a need to add a new section to the draft environmental impact report covering the potential for tapping into wind power through a project called La Rumorosa in Baja California. That alternative is said to be capable of delivering as much electricity as Sunrise, the 150-mile high-voltage power line SDG&E wants to build across the North County backcountry and Anza-Borrego Desert State Park.

Grueneich and Weissman also ordered a revised analysis of the technical feasibility and potential economic benefits of several leading alternatives to Sunrise Powerlink. Besides the wind project, alternatives include a much shorter power line between Camp Pendleton and Lake Elsinore, local natural-gas-fired power plants, a southern route for Sunrise around the state park and blanketing roofs in San Diego County with solar panels.

The commission's environmental branch and the U.S. Bureau of Land Management, which teamed up to write the original 7,000-page draft report released in January, are expected to release the revised report July 10.

People will have 45 days to comment. And in October, Weissman is scheduled to make a recommendation based on the new findings.

Then, in late November, the commission would get its first crack at a decision.

"Clearly, we're disappointed with the CPUC decision," said Jennifer Briscoe, a spokeswoman for SDG&E.

However, unlike the first delay, which forced the utility to plan for a 2011 opening instead of one in 2010, this one won't force SDG&E to wait another year, Briscoe said.

Michael Shames, executive director for the San Diego advocacy group Utility Consumers' Action Network and one of the project's opponents, suggested the ruling constituted a major setback.

"This is as wild of a regulatory case that I've experienced in 25 years of doing this," Shames said in a telephone interview. "It's wild in the sense that every time you think this case is going to be put to bed and submitted (to the commission), something else comes up. It's very unprecedented and it's huge. It's a bombshell."

Opponent Bill Powers, an engineer and activist, welcomed the closer look at La Rumorosa, which would require three miles of 500-kilovolt wires to bring the wind power across the border and use the existing Southwest Powerlink line to move it to the San Diego area.

"If you use the existing infrastructure, it doesn't impact the environment at all," Powers said.

Contact staff writer Dave Downey at (760) 745-6611, Ext. 2623, or ddowney [at] nctimes [dot] com.

Solar credits get no help from addict-in-chief's latest energy plan

Sandy Young — Mon, 23 Jun 2008 10:10:39 -0700

The Senate Republicans have managed to defeat the renewal of the critical solar energy credits six times now.
President Bush's latest scheme to get Saudi Arabia to pump more oil toward an addicted nation has been put into motion and Thomas L. Friedman of the New York Times doesn't mince words when he tells us in his column Sunday that it is hard for him:

"to find the words to express what a massive, fraudulent, pathetic excuse for an energy policy this is. But it gets better. The president actually had the gall to set a deadline for this drug deal."

That deadline is Independence day. A day that many Americans watch parades and set fireworks off in the darken hours celebrating freedom from oppression.

Click here to read Friedman's column.

Click here to read the Monday's Washington Post's article headlined. "White House welcomes Saudi oil output pledge."

The addict-in-chief isn't the only Republican addicted to oil. Read Charles Langley's December 2007 blog. Pete Domenici at that writing was the top recipient of dollars from oil and gas companies, electric utilities, and natural gas transmission and distribution corporations. Now, according to www.opensecret.org, Domenici has received over $168,000 for campaign finance cycle 2008 from the oil and gas industry alone.

Solar credits remain in purgatory thanks to Senate

Sandy Young — Fri, 20 Jun 2008 16:10:16 -0700

Earlier this week the president of SEIA (The Solar Energy Industries Association) Rhone Resch released a statement about his disappointment "that the Senate has once again failed to reach a bipartisan consensus that would allow this important legislation to move forward." More.

He is speaking about the Energy Independence & Tax Relief Act, H.R. 6049.

Monday, a New York Times editorial had urged the Senate "to begin to redeem itself, by approving a bill to extend vital tax credits for renewable fuel sources like wind and solar power." More.

The Washington Post reported on Tuesday that the Senate blocked debate of the bill leaving the fate of the credits uncertain. More.

On Wednesday, Politico.com explained the whole thing to us in an article that shed some light on the hostility and partisan bickering. More.

The San Fransciso Chronicle brings the discussion home to California where the potential loss of revenue is great:

William Morin, director of government affairs for Santa Clara-based Applied Materials said that without a steady policy of tax incentives most manufacturing will continue to go overseas. More.

Click here to see the voting record for the Senate for H.R. 6049.

Gas prices have declined slightly

Charles Langley — Fri, 20 Jun 2008 09:16:08 -0700

UCAN News

Today, UCAN's gas survey at www.ucan.org showed a statistically significant price decline of 1.3¢ for regular unleaded gasoline in San Diego County. Whether the new, slightly lower price is a trend toward dropping prices, or a speedbump on the road to $5 a gallon gas remains in the hands of NYMEX oil speculators. If anonymous NYMEX buyers keep bidding up the price of oil, then gas prices will continue to climb in San Diego. It should be noted that 90% of the futures buyers on the NYMEX can not take delivery of the oil when the contracts are due - these are industry outsiders whose lust for quick profits has created the perception of increased demand (see our commentary Paper Money Chasing Paper Barrels).

The new average price is $4.607 a gallon. Diesel prices have declined, too, dropping to 5.005 a gallon, from $5.04 a gallon last Friday (see below for historical data).

The price cuts have been spurred in part by slightly lower oil prices on the futures market. In recent months, local gas prices have reflected changes in the future NYMEX price of oil, which means that consumers are paying for the future price of gasoline today. Oil prices dropped yesterday on rumors that China would reduce its oil consumption by raising gasoline prices. In addition, the Saudis are expected to produce more oil, although it is unlikely that this will have a significant effect on decreasing prices.

Price History:

Price today:
Regular Unleaded = $4.607, Diesel $5.005

Price Last Friday:
Regular Unleaded = $4.614, Diesel = $5.04

Price this day last Month (May 20, 2008),
Regular Unleaded = $3.99, Diesel = $4.86

Price this day last year (May 20, 2007):
Regular Unleaded = $3.12, Diesel = $3.10

Price Two Years Ago:
Regular Unleaded = $3.24, Diesel = $3.21

Oil CEOs' pay up, way up

Sandy Young — Wed, 18 Jun 2008 12:56:36 -0700

The oil industries' chief executive officers' got fat in 2007, well at least their wallets did.

Here are some excerpts from the June 17 magazine article:

Equilar's study found that for the 12 CEOs at the largest U.S.-based, publicly traded oil companies, median total compensation increased by more than four times the rate of that of executives in the Standard & Poor's 500-stock index as a whole.

Some analysts say these CEOs are receiving pay raises based more on factors they don't control-such as sharply rising oil prices-than on managerial prowess. "Energy companies' improved performance is almost entirely due to high oil prices," says Paul Hodgson, an executive pay expert for Corporate Library, a Portland (Me.) corporate governance research organization. "But if [their executives] deny culpability for high oil prices, why are they getting rewarded for them?"

Link to BusinessWeek's news analysis here.

Why John McCain's plan to drill our way out of the energy crisis will fail

Charles Langley — Tue, 17 Jun 2008 17:19:32 -0700

Today the Washington Post reported that John McCain has a solution to America's energy crisis: Drill more oil by opening up more federal lands. The solution is not surprising, given that Sen. McCain has taken nearly $1 million dollars in contributions from Big Oil so far this year.

There's only one problem: There is no guarantee that the leases will be drilled. And even if they are drilled, there is no guarantee that the oil won't be sold to foreign nations. Second, the plan is little more than a continuation of Dick Cheney's 2001 energy plan.

The flaw in McCain's plan is that it relies on the oil industry to actually drill for oil on the land that it leases. It assumes that we have a competitive market for oil and that large mulitinational oil companies will rush to drill once the lands are made available.

This assumption is highly unlikely. According to a new report by the Congressional Committee on Natural Resources, oil companies could immediately begin harvesting an estimated 4.8 million barrels of oil each day from existing leases on U.S. lands. The report notes that according to the federal Minerals Management Service, 79% of the USA's underground/undersea oil supply is already available for leasing.

"Drill Our Way Out of It" is not a new idea. In fact, it is a very old idea crafted entirely by the oil industry in an effort to keep the USA dependent on imported oil for the next 50 years. "Drill Our Way Out of It" is Dick Cheney's original, failed energy policy of 2001 (click here to read the actual policy). It should be noted that the Cheney Plan was crafted entirely by oil and energy industry executives (source) including convicted energy criminal Ken Lay, who was later identified as a key participant in creating the rolling blackout energy crisis of 2001.

For years the oil industry has used a similar argument to "Drill Our Way Out" to explain high gas prices. For example, it has repeatedly stated that "no refineries have been built in the last 35 years." This is a carefully crafted statement that is intended to deceive voters into thinking that the government is rejecting refinery applications.

The reality is that the oil industry doesn't want to build new refineries because more refineries mean more gasoline. More gasoline means the price of gas goes down, and that's bad for profits. If the industry really wanted to build more refineries, it could have taken advantage of George Bush's 2005 energy plan, which made abandoned military bases available to oil companies that wanted to build refineries. To date, not a single company has taken Mr. Bush up on his generous offer.

So far, Big Oil's phony supply side arguments have worked. Millions of Americans believe that the solution to high gas prices is to let the industry build more refineries. Now, Big Oil is using the same distorted lie to explain high oil prices by suggesting that we can drill our way out of this mess by exploiting treasured national parks.

And unfortunately, Sen. McCain believes them.

Solar incentive credits to expire at year's end

Sandy Young — Tue, 17 Jun 2008 17:18:11 -0700

In six months the investment tax credits, meant to stimulate investment in solar energy, and the production tax credit, meant to encourage investment in wind energy, are set to expire unless congress makes them a priority and renews them.

So far the quarreling in Congress hasn't abated.

If you haven't had an opportunity to read Thomas Friedman's op-ed piece that ran in The New York Times in late April, I'm recommending it and providing a link.

Also, and more importantly, here are links to the Senate and to the House of Representatives. Let them know where you stand on solar incentive programs.