After that dismal inflation report we could all use a little good news, couldn't we? I forgot to post gasoline prices on Monday, so here they are today:
This time I even adjusted for inflation! I wouldn't normally do that for a four-month series, but since inflation has been running high I figured it might make a small difference.
Anyway, using the inflation-adjusted price, regular gasoline has dropped 43¢ since the middle of June. That's 8.5%. Hooray!
& even cheaper still compared to all other countries.
Seriously, chart I saw had about twenty other price per gallon listings, & only Mexico, with a seminationalized petro industry (PEMEX) & a half-Bernie half-Trump half-man populist president (Andres Manuel Lopez Obrador), had a lower number.
Half-Bernie Half-Trump.
See also: https://youtu.be/Abky6hbKPpg
like the alligator's shoes
which half is bernie, and which half is trump?
Futures gas prices (proxy for wholesale) are down a few more cents so far today and are now down about 90 cents since early June. In theory, we should see another 50 cent drop at the pumps in the next couple of weeks. It’ll also be interesting/frustrating to see how high oil company profits will be when Q2 reports start appearing in a couple of weeks.
The gas price will reach bottom at the same time as Benny T & Liz C drop the Report of the January 6, 2021, March on Washington Committee. & just as the Congress takes August recess & townhalls & campaigning begin in earnest.
Why this will be bad for Democrats on the generic congressional ballot.
It’ll also be interesting/frustrating to see how high oil company profits will be when Q2 reports start appearing in a couple of weeks
They're going to be eye-watering. The oil companies (as well as the Saudis, OPEC, etc.) are happy to keep gas prices high to kneecap/punish Biden in hopes that a GOP wave in November and/or in 2024 will bring a "friendlier" regime into power (i.e. one that looks the other way on human rights) open up the sluices once again to unfettered exploration and pipeline construction.
No lies detected.
Nope, Russia ended that plan.
except that if prices remain high and we go into recession, oil prices will fall as demand drops. there is self-interest among oil companies and oil producing countries in finding a goldilocks spot that keeps prices tolerable, high enough to maintain profits but low enough to keep the economy humming along.
alas, needs to be below $4/gallon by end of Aug. for Dems to have a good chance of holding on...
Down to 3 dollars by October????
At WTI's current price -- $96 -- in April gasoline (all grades) was at ~$3.10/gal. Gasoline prices trail oil by a couple of weeks when the prices are going down.
I think prices have to drop below $2.50/gal, matching what they were at the time Biden took office, for consumer sentiment to flip just on the basis of gasoline prices.
I disagree. A functionally running gasoline market should be 3$ in the summer. Only 2:50 in the dead of winter.
Is the EIA site in sufficient shape to report on consumption?
A suggestion for a new post: How much will closure of the Diablo Canyon Nuclear Plant in 2024-2025 increase California gasoline prices? Diablo's output will be partly replaced by output from fossil-fueled power plants in California, which will increase demand for carbon-emission permits in California's cap-and-trade program. California's refineries are in the same program.
Two notes: 1. IANAE on the pros/cons of keeping an old nuke in operation, so please do not assume I am pushing anything. I'm just curious. 2. PG&E claims it will replace Diablo's output with renewables. IMHO, that claim relies on a dubious accounting scheme ("Power Source Disclosure") that omits any time-matching between Diablo's output and the solar/wind output that allegedly replaces it.
PGE is going to petition the state to keep Diablo Canyon open. I believe there is a new pool of money they want to receive to do so.
Do you have a source for that? The news I've read hints that PG&E does not want to keep Diablo going, and will do so only if Newsom and the CPUC apply pressure. But maybe that's all "spin".
WASHINGTON, June 28 (Reuters) - Power utility PG&E Corp (PCG.N) asked the U.S. Department of Energy on Tuesday for a 75-day extension to the deadline to apply for federal funds that could keep its California nuclear plant open.
In a letter to the DOE's Office of Nuclear Energy, the utility said "an extension is needed to provide PG&E the time to collect and analyze the information and prepare an application."
https://www.reuters.com/business/energy/diablo-canyon-nuclear-plant-operator-seeks-extension-that-could-keep-it-open-2022-06-28/#:~:text=DOE%20proposed%20the%20change%20on,and%20help%20fight%20climate%20change.
What they're doing is petitioning the Dept of Energy to change the rules so that it'll qualify for money that'll allow them to restart an extension application. It does not mean that they'll be able to stave off closure.
That closure is coming because their NRC operational permit expires in 2024/2025 on units 1/2. They have to complete a 20-year extension permit application within 2/3 years.
They first started an extension in 2009, but withdrew it in 2018. Having completed some of the safety upgrades/updates, it does not mean that the timeline is significantly shorter. They have to undergo a new safety review and they still have to undergo public presentation and comment period, then address those concerns.
But, is it that much cheaper?
2020 EIA LCOE Nuclear for production in 2025:
$5.6 - (assumed 10% upgrade cost of new facility at $56.10) Capital cost
$15.36 - Fixed O&M
$9.06 - Variable O&M
$1.10 - Transmission cost
_____
$31.12 - total cost per MWh
2022 EIA LCOE Hybrid Solar (includes 4hr* battery) for production in 2027:
$34.98 - Capital costs
$13.92 - Fixed O&M
$0.00 - Variable O&M
$3.63 - Transmission cost
_____
$52.53 - total cost per MWh
* -- 4 hour battery does not mean it can only last 4 hrs. It means that it can store 4 hours of the selected output of the solar production facility. EG 1000MW = 4 hours of 1000MW. Overnight hours are the lowest draw, so 4-hr is the assumed load required to cover off-peak use.
Thanks for the information. I guess time will tell. My understanding is that Newsom is working to have enough continuous backup power as CA moves toward 100% renewable sources. If this is true, it's not about the cost of the power, it's about the availability/reliability of the power.
This has been a pleasant chat. Thank you.
In case you're interested, I have occasionally had to explain the electricity grid to family and friends, and stumbled across a good analogy: The transmission of electric power on the grid is like the transmission of mechanical power by the chain on a tandem bicycle. I encourage you to take a look at the first few pages at this link:
https://regulatory.moe.gov.ir/getattachment/30b5346d-12e3-434d-bb7e-b2a0e8f65b8a/Electricity-system-as-a-Tandem-bicycle.aspx
The analogy helps clarify the need to accommodate the intermittent, fluctuating output of wind and solar power sources. Thanks again.
Honestly I think the price of eggs is more important than the price of gas, still almost double what it was a year ago.
Because people will put gas in the tank at almost any cost and the car will still work but they can imagine they could go without eggs which becomes a sense of immediate deprivation and there's no serious alternative to an egg.
You could ride the bus or the train or buy an electric car, but you can't buy an electric egg or replace it with anything.
Here in NM at the local Sprouts, there hasn't been a big leap in egg prices. You can still get 18 cage-frees for under $4.
In Iowa 18 eggs would have been about $1.80 a year ago, right now the cheapest is $4.40 at Walmart.
This really frosts your breakfast.
Okay, but are they cage-free?
Cage-free are $6.24.
Lets also note nonbanking and commercial subprime banking is surging. It's replacing the federal reserve system and has no oversight. The Fed system which ties into the dollar is driving it up and driving more dollars into the US........which nonbankers use to finance loan volume. A globalist counterculture to the disgraced banking system. Will quicken loans become the number one mortgage lender in the US????
Old farts like Kevin probably won't get it. The financial crisis changed the economy forever. The Federal Reserve system no longer has the loan volume to effect the economy like 20 years ago. Even Fed rate hikes do not mean what they think it does. Don't like the banks mortgage rate????? No problem.......sic sic.