News reporting is going on that gasoline might top $4 gallon across much of the United States by the end of summer. 
The Energy Information Agency’s gasoline report provides one sign that this might be the case. This graphic representation of gasoline stocks doesn’t look so good — basically, it shows current gasoline stocks about 10% below the low end of “average” for this time and the trend line isn’t the right way.
As per Lou Grinzo at The Cost of Energy,
No one should leap to conclusions about this. It does not mean we’re headed for $4 or $5 gasoline or lines at the pumps or outright shortages. But it does mean that the people who run the refineries will have their work cut out for them from now until late summer. Remember, as badly as the US oil industry was hit by hurricanes in 2005 the situation remained relatively stable. Yes, prices rose and there were shortages in some places, but the effect on the energy supply wasn’t nearly as bad as it could have been.
This data … and the potential for $4 gasoline … should help drive more purchasers to look to more fuel efficient vehicles and forms of transport.
Perhaps electric bike purchases will pick up?
0 responses so far ↓
1 Darren Duvall // May 3, 2007 at 7:44 am
Look at the graph!
The models are off! The models are off!
Kidding.
Every month gas is above $3 is another month my hybrid looks like a better purchase.
2 A Siegel // May 3, 2007 at 8:20 am
Darren … Laughs always welcome …
Glad your investment is working out.
Point is that, all too often, inflation protection isn’t considered when people are calculating the benefits of efficiency investments.
3 Darren Duvall // May 3, 2007 at 9:20 am
There have been several incidents at refineries that have cut off gasoline supply for weeks at a time from those refineries this spring, if there’s a hurricane season that shuts down the Gulf refineries for any extended period there will be a significant gas price spike for sure this summer.
Refineries are horrifically complex pieces of machinery, they don’t start and stop on a dime. Or even a dollar.
I really think we should make their job easier by coming out with one blend of gasoline that works year-round in all locations. They just know to make ‘US Blend’ for a given octane rating, and won’t have to make the 11 blends the GAO found in 2004 for niche markets, which works out to 45 blends when different levels of octane are considered.
It might make things more expensive, but it should also help insure a regular supply, which is at least as important.
4 jimmy // May 3, 2007 at 2:18 pm
Boutique blends are a major problem… as is the swaps and winter and summer blends every spring and fall.
I personally think the prices would go down as a result of the standardization, Darren
5 Darren Duvall // May 3, 2007 at 2:36 pm
Apparently the reason for the summer blends is to get rid of some of the more volatile components that evaporate and contribute to smog. The downside is that the less-volatile gasoline doesn’t run so well in the winter, so for reliability reasons they have to switch back to the “winter blend”.
Unless there is some simple (and cheap) mechanical fix for this physical property of gasoline issue on the engine side, it seems we’re stuck with custom blends. The federal solution would be to simply mandate the most restrictive blend nationwide, sources I have seen have said that ‘Carb’ (California Air Resources Board, the California summer blend) is only 1-2c per gallon more expensive, and mandating its use everywhere would reduce smog and NOx everywhere. Even if that happened we’re still stuck with trying to make gasoline engines work equally effectively in -40F and 110F, which is a bit of a challenge.
Wonder how E85 does in that range of conditions? I don’t really know.