Who Sets Gas Prices At The Pump?

Right now gas prices are hovering around the $3.80 mark in my area of the country.  We have all heard rumors of the so far mythical $5 a gallon gas in the US.  This is obviously a source of much angst in the US because we are a large country with a large suburban and rural population who have literally grown up as a nation with the automobile. What is more we like BIG automobiles because we spend a lot of time.  We like big automobiles because we have active lifestyles, and we use them to work, and we like to feel safe. 

So who is to blame?  Is it those filthy Oil Executives?  OPEC? The owner of the convenience store chain?  The government?  Yes.  it is all of those folks.  But it is way more complicated than that and unfortunately even after a lot of study the answers are not that satisfying.  What is more it is so complicated that there is no easy answer. 

To even begin to understand this issue you have to start at the beginning.  It is the most basic Economic rule.  Supply and Demand.  On the Supply side is a group of countries, primarily known as OPEC, Oil Producing and Exporting Countries. 

OPEC is a consortium of 13 countries: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

Together, these 13 nations are responsible for 40 percent of the world's oil production and hold the majority of the world's oil reserves, according to the Energy Information Administration (EIA).  More than that Saudi Arabia is way out in front.  The table below is in BILLIONS of barrels of oil. Countries in red are OPEC nations.

1	Saudi Arabia	264
2	Canada	178
3	Iran	132
4	Iraq	115
5	Kuwait	101
6	United Arab Emirates	97
7	Venezuela	79
8	Russia	60
9	Libya	39
10	Nigeria	35
11	United States	21
12	China	18
13	Qatar	15
14	Mexico	12
15	Algeria	11
16	Brazil	11
17	Kazakhstan	9
18	Norway	7
19	Azerbaijan	7
20	India	5

Top 20 countries: 1224.5 (95%)

OPEC can affect the cost of gasoline with even a threat of producing less oil.  Doing so lowers (or causes the perception of lowering) supply relative to demand and therefore increases price.  They don’t even actually have to do anything because the price is set by other groups which do not always behave rationally, but we will get to that.

Another word on OPEC, if you look at that list you will notice that none of those countries has what we would normally consider warm and friendly feelings towards the United States.  It is pretty much a who’s who of who hates America.  Interesting, since if we were not buying their product they would mostly be afterthoughts, or never-thought-abouts on the world stage.

Lastly with OPEC it is important to note that although they used to be able to push prices all over the place by increasing or limiting demand they have even less influence now than they have historically because with the exception of a couple of countries, Saudi Arabia for one, most of the member countries are pumping it out as fast as they can now despite what they agree to do.  They are making money as fast as they can, while they can.

To get back on point you also have to understand a bit about the United States’ nearly insatiable need for Gasoline and other fuels.  We are large geographically and we have by far and away the worlds’ largest economy (still).  We use a LOT of oil.  We use a lot of oil because we have decentralized our manufacturing plants away from Rail yards and have embraced Japan’s JIT (just in time) method of purchasing and logistics.  This works well in a small country but in one as large as our it necessitates a tremendous amount of trucking. 

Also because we average nearly three cars per household (even our so called poor drive) and because of the social and moral breakdown of our culture no one can stand to live in the city or town center and we all migrate as far away from there as possible we are more reliant on the automobile, because we all largely still work somewhere.

Couple that with the fact that we are more rural in nature than most of the other developed countries in the world to begin with AND the fact that we have grown up with the automobile instead of the automobile being a recent addition to a city that has been around since the middle ages (London, Paris, Rome, etc.) and you can see that our love affair with automobiles is not going anywhere.

  One small but increasing factor is the rise in wealth of India and China.  Their demand for oil is increasing because they are not riding bicycles as much as they used to.  They want to drive cars.  Incidentally this is forcing a lot of Americans to look towards riding a bicycle.  But this is still not the reason gas is going up.  And if everyone bought a Prius it would not really help.

Next let’s look at the Oil Companies themselves.  We all hated that guy from BP and we have all heard how the Oil Companies are making record profits every quarter in the multiple Billions of Dollars.  They are a fat and easy target.  But you have to understand how their business works.

There is no such thing as an "Oil Company". It is an oversimplification for an entire industry made up of hundreds or maybe thousands of companies worldwide with different pieces of the overall oil business.
But for an oversimplification here is one possible option where the company does everything. The oil company will gain rights to the oil from the government, it leases or buys the land, drills the oil, ships it to a refinery, refines it, ships it to distributors, then gas stations, then sells it directly to the consumer.
The problem with this scenario is that no business does the whole thing alone. Many companies only do one stage in the process. Some major oil companies never get past transportation of the crude oil. Some only refine. Some only refine for certain products

They don’t set the price of the Crude Oil.  Take Saudi Arabia for instance, Exxon or BP might have spent their money to find  the oil in the seventies.  They probably built the drill rigs and the pumping stations, but the OIL belongs to the King.   Therefore he is in charge of when it gets pumped and when it doesn’t.  And it works like that for all the other nations as well.  Someone owns the mineral rights to the oil and someone else drills for it and hauls it.  The ShelExxonBp’s of the world make contracts with the owners of the oil to develop their fields.  That is why you hear talk to “leases” and such in the Gulf.  In come cases the Government owns the land and controls who gets the leases and when an oil company’s lease runs out they move on or someone else moves in.  Further complicating this is the fact that just because it says BP on the side of the oil rig, doesn’t mean it is really BP’s rig, these are often times outsourced to smaller companies working on contract.  This is similar to an Airline, if you fly a lot you know it may say Delta on your ticket but you may be flying a local carrier (ComAir) leased to Delta.  Or a trucking company where the driver is an owner/operator leased to a larger company. 

Oil companies, the major ones at least, usually pump their own oil. They have exploitation permits (contracts) from the countries that they are pumping the oil from. In every contract the case is different. In some cases they pay a fixed amount up front to take the permit (contract) in other cases they pay a fixed amount per barrel they pump. The most usual case is that in the permit they agree to some very complicated formulas that determine the amount the companies pay to the countries for each barrel. In these cases they take under consideration the cost of pumping, oil prices, investments, number of barrels pumped etc.

It is important to note they may do this YEARS in advance.   So oil companies are making huge profits now because prices are up now and they agreed to contracts speculating what the overhead costs and the price of a barrel of oil would be years ago.  All you have to do is look at the price of gas for the past decade to see that no one would have figured that kind of rise into a forward looking contract.

  They invested in oil fields when prices were much lower, with the expectation that they could break even at, say, $50 per barrel. Since the market price is now more than $100 a barrel, the extra money is gravy. It's like a farmer who can raise corn for $1.50 a bushel. If the market price is $1.75, he makes a quarter per bushel. If the market price jumps to $2.25, his profits jump as well. (If the market crashes to $1 per bushel, the farmer loses money. That can happen to oil companies as well.) Oil companies, like the farmer, are the beneficiaries of high market prices, but they can no more control those prices than a farmer can dictate what he gets for a bushel of corn.

This may seem strange to many readers who did not grow up in a farming or mining or oil producing area.  But when you are a farmer you don’t know what your profit will be at the end of the harvest because you don’t know what your beans or corn will be selling for.  Again, not to get ahead of myself but this is the way it works.  You are a farmer and you make a decision to raise beans.  Typically you borrow the money to put your crop in, for seeds, fuel, labor the whole shebang.  You know when it comes harvest time where you will be taking your beans.  There are only a few buyers in any area.  If you are lucky you can get a contract for X amount of dollars per bushel when you plant.  This is a simple form of a “future” When you hear on the news that “Corn futures are trading up $.02” that is what they are talking about.  People buys and sell contracts on prices for all kinds of things as if it were stock in a company on the “Commodity Market”.  These people are “Speculators.”  It gets really complicated really quick trying to make sense of all the rules and strategy of the game. There are buyers and sellers and then their are third party brokers just making money in the transaction or the trading of the contracts themselves.   Basically think of “futures” as insurance against taking a severe beating at the end of the harvest, or you may buy an “Option” which is even better, you have the “Option” of selling it for this price unless you don’t want to, in which case you don’t have to.  You may contract all your crop for one price or break it up or only put part of it in contract and play the wait-and-see-game with the rest.  Then again you might lose the crop or not raise as much as you thought and that is bad.  That is how banks get farms cheap. 

But who sets the market Price?  It must be the Gas Station Owners right?  Well to some extent, yes, but not completely.

It goes something like this, every day a station gets emailed the wholesale cost for a gallon of gas, for reference. They use that number and then add other costs in to try to figure out what their ideal price point would be. .  At most convenience stores the gas is what brings in the customers but snack sales are what keeps the lights on.

But the reality of what consumers pay at the pump has little to do with the literal cost of the gas in the tanks at the store.Here's an approximation of where each dollar you spend on gas goes:

• Crude oil: 55 cents
• Refining: 14 cents
• Distribution and Marketing: 8 cents
• Taxes: 13 cents

You know the hidden number in a gallon of gas?  You know, we say that gas is 3.85  but there is that other little number that is not rounded up.  gas is really 3.85^9. .   That is usually the profit margin of the store itself on gas.

Back to the cost of gasoline: oil is traded just like any other commodity, by the use of Futures and Options. Both of them are financial products. Here is a generalization on how this might work.  Lets say that you want to buy a barrel of oil, not right now, but in six months. You believe that in six months the barrel will cost $60 . Then you buy a future that is worth $60. In six months you go to the market to buy your barrel. If the barrel costs more than $60 you use your future and take it at that price. If it costs less you do not use your future and buy it normally. Do not take all these literally, the way futures and options work is far more complex and they are also subject to supply and demand.

Another thing that might put this in perspective is the difference you pay for ticket prices to a concert or sporting event.  You can pre-purchase them cheaper than you can at the door.  Now think about if you didn’t know for sure but there was a possibility that the tickets at the door might go on SALE just before showtime and also a possibility that they could go way way up .  You pre-purchased ticket is a hedge against a higher price, a “Future”.

Please note that oil is not bought only by Oil companies but also countries who further complicate the process.

When the spot value, or the value “right now” goes up usually the future and options values go up. That means that when the prices increases the companies anticipate that in the future when they will need to buy more futures to buy more oil they will have to pay more money. What they do is they sell the oil they already have at a higher price to find the money to buy the new options and futures.

You can understand now why when the spot prices go up you have an immediate increase on the gas at the gas station. They will sell gas at higher prices even though they use reserves that they bought much cheaper in order to compensate for the future prices they will have to pay.

One more reason for the immediate rises at the gas-stations is the fact that the gas-station owners and gas distributors do take advantage of the situation. When all the media say that the prices go higher they find it a great opportunity to take advantage and make more money. They do this because they can, there is literally no law against it.

Please also note that the taxes on fuels, is oftentimes  a percentage of its value. So the higher the price the more taxes you pay. Finally the supply chain of oil is complicated and a lot of different companies take part in it. All of them have a specific margin that they calculate it on the price they bought the oil. The gas that you buy at the pump is much more expensive than the oil that it is pumped at the well.

So, if the price is not set by OPEC, and not by ShelExxonBP, and not by the local corner station, who really slaps the price per barrel on the barrel of oil?

The Government?  No.  Now, the government can influence things for reasons we will get into in just a bit.  Without getting off topic; opponents of increased domestic drilling say it will not affect immediate gas prices.  This is patently illogical because just like with OPEC, the threat of increased supply will lower prices immediately. The other thing that always gets glossed over is that increasing our domestic drilling probably would not lower worldwide oil prices, but it could  lower our domestic gas prices.  to deny that is ludicrous int eh extreme, for one thing we would not be paying for shipping oil halfway around the world.  Our refinieries are in the gulf.  not coincidentally a lot of our vacant oil fields are within several hundred miles of the gulf coast.  The withholding of permits for drilling at home and the idling of our ancient refineries (none new since ‘76 because the government will not allow it) has a definite deleterious impact on what we pay at the pump, to think otherwise is insanity.  But the government doesn’t set gas prices.  Oh, and opening up the strategic reserves is about like a fireman using a bottle of Evian to put out a fire.  Sure it is water, but it ain’t near enough.  The strategic reserves are to allow the military and necessary infrastructure of the country to survive a short term embargo or military operation.  Not to make it affordable for you to take the ‘lade to starbucks.  It is a mere fraction of what the public uses in a very short amount of time.

Ok, so gas prices are not completely at the whim of Government either.  So WHO controls the price of Oil? 

The guy we haven’t really talked about much.  Not the Producer, and not the Consumer, the other guy.  The guy in the system who doesn’t care whether it is oil or corn or sow bellies.  The guy who makes his money trading “futures”.  These folks buy futures and sell and trade them to make money in the middle of the process between producer and consumer.  The so called “speculator”.  Remember Enron?  That was one of their gigs.  But lots of other companies do it too, you can buy futures online.  They might be part of your mutual fund or 401k.  And the Futures on Oil are traded on the NYMEX.

NYMEX is a Commodity exchange.  Commodity exchanges began in the middle of the 19th century, when businessmen began organizing market forums to make buying and selling of commodities easier. These marketplaces provided a place for buyers and sellers to set the quality, standards, and establish rules of business. By the late 19th century about 1,600 marketplaces had sprung up at ports and railroad stations. In 1872, a group of Manhattan dairy merchants got together and created the Butter and Cheese Exchange of New York. Soon, egg trade became part of the business conducted on the exchange and the name was modified to the Butter, Cheese, and Egg Exchange. In 1882, the name finally changed to the New York Mercantile Exchange when opening trade to dried fruits, canned goods, and poultry.

As centralized warehouses were built into principal market centers such as New York and Chicago in the early 20th century, exchanges in smaller cities began to disappear giving more business to the exchanges such as the NYMEX in bigger cities.  Now, the NYMEX operates in a trading facility and office building with two trading floors in the World Financial Center in downtown Manhattan

The floor of the NYMEX is regulated by the Commodity Futures Trading Commission, an independent agency of the United States government. Each individual company that trades on the exchange must send its own independent brokers. Therefore, a few employees on the floor of the exchange represent a big corporation and the actual employees of the MYMEX only record the transactions and have nothing to do with the actual trade. The NYMEX is one of the few exchanges in the world to maintain the open outcry system, where traders employ shouting and complex hand gestures on the physical trading floor.

Yes that is right, the cost of a barrel of oil is ultimately decided by a few people yelling and waving hand signs at each other in New York.

These traders are the ones ultimately responsible for the cost of a barrel of crude.  They don’t represent Oil Companies, at least not directly, they represent Hedge Funds and Brokerage houses. 

Now, I am

not economist, there are many many people who could lose me instantly in a discussion on this topic.  But I am smart enough to know that there are groups and people in this scenario with enough pull to influence the market. Some of them may be big oil executives, some might be foreign governments, but by and large it is just like the stock market.  It cannot really be controlled, but it can be nudged, and we know who likes to nudge everything.

-KOOK

Government Does not Create; it Destroys

When Missouri achieved statehood in 1821, tens of thousands of immigrants rushed in looking for a better life. Many were escaping political, religious and economic oppression in Europe. Missouri's abundant and virtually untapped resources attracted large numbers of immigrants from Germany, France, Switzerland, Austria and eventually Italy. The rich soils, expansive waterway connections, timber and abundant game made Missouri a veritable Eden for the poor and the landless.

In 1824, Gottfried Duden, an optimistic traveler from Germany, arrived
on Missouri soil. He believed that many of Germany's woes resulted from overpopulation and poverty. Thinking emigration was the solution to these problems, Duden and his friend Louis Eversmann had set sail for America
to study the possibilities of German settlement in the United States.

Arriving in St. Louis, Duden and Eversmann found Nathan Boone, son of Daniel Boone and surveyor of government lands. Boone led them on a tour of the Missouri River valley.  For almost three years he lived in a cabin near Lake Creek, recording the weather, growing conditions and daily doings on his farm. In 1829 Duden published his findings back in Germany and it soon became a best-seller. To struggling—even starving—Germans back home, these words offered an almost irresistible allure of freedom and plenty. Feeling the oppression back home, the promotional writings of many Germans, including Duden's glowing account, inspired thousands of Germans to emigrate to the "New Rhineland."

As German settlers pushed westward, many carried carefully-wrapped clippings from their old world vineyards. Many of the groups traveled down the Ohio River from Cincinnati, to the Mississippi and up to the mouth of the Missouri River at St. Louis, right in the footsteps of Gottfried Duden.

Moving to a new land caused a deep yearning to preserve their heritage. In 1836, the German Settlement Society was intent on establishing a new "Fatherland" in America. They selected some land on the south bank of the Missouri River, west of St. Louis, and founded Hermann. The original town was laid out with some plots originally sold as wine plots, beginning in the 1840s. Though their settlement met with many hardships and the soil on the hills nearby wasn't appropriate for many forms of agriculture, by 1846 they had produced their first wine from locally cultivated grapes. In 1848, the town's wineries produced 1,000 gallons. By 1855, 500 acres of vineyard were in production and wine was being shipped to St. Louis and beyond. 

By 1870 Missouri led the nation in wine production and the North American Norton grape produced a wine made by a Missouri winery which won a gold medal in a Vienna competition in 1873. Five years later, another Missouri Norton Wine  Gold in Paris.  Norton wine was lauded not just for its taste but also for its presumed healthfulness as “the best medicinal wine in America.”  Missouri wines won eight gold medals at world fairs between 1873 and 1904

By 1900, Stone Hill Winery, which the German immigrant Michael Poeschel began building in 1847, was the third largest winery in the world (second largest in the U.S.), producing more than a million gallons of wine a year.

Before 1920, there were wineries in 48 Missouri counties. Long before anyone had ever heard of Harry Truman, Independence MO was known for its wine production. In fact, Missouri's Wine region grew to include more than 100 wineries.

It all came to an abrupt halt in 1920 with the passing of the Volstead Act and the addition of the 18th amendment to the Constitution.  Prohibition dealt a fatal blow to Missouri's wine industry. Many families lost their livelihood. The destruction of Stone Hill Winery completely ruined the local economy.  A full decade before the stock market crash of 1929, Hermann was plunged into the Great Depression.

It is said that when the Government Agents, “Revenuers” came to Stone Hill and began pouring the wine out, it flowed through the streets from three in the afternoon until two in the morning in a river three inches deep down the street and into the Missouri River.

But they didn’t stop there.  They destroyed all the equipment in such a way it could never be used again.  In most cases the only wine making equipment that survived was that which was taken to local churches, because they were exempted from the act so they could make their sacramental wines.   In fact, the only Missouri winery to survive this dry period was St. Stanislaus Novitiate, located in St. Louis, where the Jesuits continued to produce sacramental wine.

Following repeal of the act in 1934, Missouri's wine industry was nothing but a memory. High liquor taxes and license fees discouraged the industry's rebirth. People’s tasts had shifted as well to hard liquor as a result of the speakeasies, bathtub gin, gangsters, and moonshiners. A few dozen wineries did reopen, but much of Missouri remained legally dry, and a there was little demand for anything other than sweet, dessert-style wines. 

Some Norton vines survived in Missouri in what has been described as the vineyard of a bootlegger.  Prohibition’s destruction eradicated the Norton grape entirely from Virginia, its birthplace.

In 1965 Jim Held, a legitimate vintner obtained cuttings and started bringing the vine and Missouri winemaking back. Winemaking is on the rise in Missouri again, but the industry as a whole was probably set back one hundred years.  One article at the time says that a billion dollars (1920 dollars, second only to US Steel) was lost in the US in an instant due to the complete and utter destruction of the Alcohol Industry and lest we forget that is not just breweries, distilleries and vineyards. 

It is farms, labor, equipment manufacturers, bottlers, distributors (rail, sea, and highway), salesman, advertisers, retailers…everything: gone or greatly reduced.

But think about this, whether you like wine, or even don’t drink a drop of alcohol at all; this was a big big industry.  This was people’s culture, it was their livelihoods and their life’s work.  They came HERE from somewhere else to live their dreams.  They built something from nothing. The came to the US to build something and to make their families’ lives better and believed in the promise this country held enough to risk their lives to come here.  They were the leaders in their fields the champions of the industry.  They did it here, it was in America.  It was a legacy.  If not for prohibition Missouri, and by extension US wine, could have eclipsed all French or Italian winemaking.  We will never know.

How many of us would like to see our life’s work run through the streets and into the river and be gone; destroyed simply because of political pressure and authority?

We lost our history, people lost fortunes.  And it wasn’t an outside force that did it.  It was well meaning do-gooders who thought they could legislate morality.  We did it to ourselves, and we used our own government against us.

Think of all the other things that the US was or is known for being truly exceptional at.  Would you like to lose those simply due to government involvement?

The Automobile industry?  Oh, wait….nevermind.

The Fast Food and Soft drink industry…under assault

Possibly the best example:  The oil industry and our dependence on foreign oil.

The cost of gasoline in this country today is a direct result of us allowing political pressure to mandate economic and industrial reality based on a set of beliefs that are held by a certain set of people to the detriment of us all.  It is because of climate change alarmists and what amounts to a Volstead Act on the Oil Industry in this country.

Government is only force, fire, and destruction; it cannot create one thing and it is a power that doesn’t care who it is directed at.  It is simply a monster of destruction and chaos and you can never control it, and it would just as soon hurt one group as it would another.

Our only defense is in understanding what has been done with it in the past.

If you Give a Mouse a Cookie…

Why is it so difficult for people, who admit to seeing what the goons in the District of Criminals are doing, to believe that those in DC will do MORE?  The answer is twofold, on one hand people Project their desires onto politicians and demand their pet cause be addressed, on the other hand when no limits are set and different voices call for different things and those in power get away with whatever they try then they begin to feel there are  no limits; indeed functionally there aren’t any.

First let us understand that once the District of Criminals is given the power to do one thing, they will do more.  Allow them to tax your property; soon they will tax your income. Allow them to tax your income; soon they will tax your benefits.  Allow them to provide your healthcare; they will feel compelled to control unhealthy things. Allow them to control the “unhealthy things” and soon everything will be declared “unhealthy”.

More, more, more, more, more, more, more.

They forget to declare a nanny or a gardener’s wages; and we do nothing.  So they or the next guy forgets he has a house in the Bahamas or in Ireland; and we do nothing. So then the other guy forgets to pay his taxes that he was reimbursed for anyway; and he gets promoted.  So then they up the ante again, and again, and again.  No limit.

A man associates with terrorists, thugs, and thieves, and we turn a blind eye; so why wouldn’t he think it was Ok to appoint some of those associates to positions in his administration?  He says that we are “five days away from fundamentally transforming this Nation” and we do nothing; then why would he not then think it was fine to go ahead and do that?  People didn’t listen and didn’t hear what he said, they heard what they wanted him to say.  They projected their and desires and beliefs onto him…

Once a person realizes that they have no limits placed on what they can do, it fans the flames on their desires and dreams. Once a person has demonstrated that they have no limits in area A; we must realize that they also have no limits in Area B.

Hypothetically let’s say I am an advocate of Gun Control.  I think all guns should be banned.  Once the government enacts that ban, why should I think they would not attempt to control something else?  The next person advocates for stricter drug laws, and so on and so on. That is to say, once we allow the government to control one thing; they will naturally think it is ok to control another thing.  I do not advocate anarchy; but we must take special care and be more vigilant, realizing that when we give government the power to control one thing we as individuals think is good, someone else also has pet causes and issues that we may not share. The resultant message that a politician gets is that the people as a whole want him to control many many things…and there are no limits.

Here is the human failure that allowed BHO and his merry band of radical criminals in control of this nation:

People want to project their values on likeable or public figures.  BHO said some nonsensical fluff but people HEARD what they wanted to hear.  BHO and Botoxi and Dingy Harry have demonstrated no limits to what they will attempt, because the people have not enforced any.  Yet, people project their own values onto them.  They say “surely they wouldn’t do that”, when nothing that these goons have done would logically lead us to believe that they indeed would not do that; quite the opposite, we have seen no evidence that they would limit themselves in any way.  But  we have consciences and limits and  we  would not dream of such illicit, unethical, or amoral behavior, so  we  project our values on people who have no such constraints, and indeed have not been taught those constraints by any experience they have had with we the people. 

  If you give a mouse a cookie, he is going to want a glass of milk.  If you get him a glass of milk, he will want a straw, and if you give him a straw he will want a napkin to wipe his mouth.  If you give him a napkin to wipe his mouth; he will want a mirror…

My pet cause and my desire is for government to get out of my life, and to leave me alone. Many people may say this, but the difference between me and a lot of people is not only do I want them out of MY life I want them out of your life as well; many people want them in your life, but out of theirs…

-KOOK

Smart Grid: Smart for Whom?

 All this is taken directly from the NY Times article, if this stuff doesn’t anger and frighten you then I don’t think you are paying attention.

WASHINGTON — Millions of households across America are taking a first step into the world of the “smart grid,” as their power companies install meters that can tell them how much electricity they are using hour by hour — and sometimes, appliance by appliance. But not everyone is happy about it.

 Leo Margosian of Fresno, Calif., said his meter put July use at three times as much as last July's.

Customers in California are in open revolt, and officials in Connecticut and Texas are questioning whether the rush to install meters benefits the public.

[snip]

Elizabeth Keogh, a retired social worker in Bakersfield, Calif., who describes herself as “a bit chintzy,” has created a spreadsheet with 26 years of electric bills for her modest house. She decided that her new meter was running too fast.   Ms. Keogh reported to the utility that the meter recorded 646 kilowatt-hours in July, for which she paid $66.50; last year it was 474 kilowatt-hours, or $43.37.

[snip]

At one in Fresno, Calif., Leo Margosian, a retired investigator, testified that the new meter logged the consumption of his two-bedroom townhouse at 791 kilowatt-hours in July, up from 236 a year earlier. And he had recently insulated his attic and installed new windows, Mr. Margosian said.

At the urging of the state senator, Dean Florez, Democrat of Fresno and the chamber’s majority leader, and others, the California Public Utilities Commission is moving to bring in an outside auditor to determine whether the meters count usage properly.

[snip] To reduce their bills, customers could cut back at pricey peak times and shift some activities, like running a clothes dryer or a vacuum cleaner, to off-peak periods. Utilities will then have lower costs, the argument goes, because the grid will need fewer power plants as demand levels out.

Someday utilities hope to use the meter to control consumption by major appliances like air conditioners [!holy!shit!]. But experts are still debating what technical standards the meters and appliances should use to communicate.

[snip]  And with smart meters, utilities are alerted immediately if a customer’s power is out.

If a utility decides to shut off a customer for nonpayment, it can do so by remote control; if the customer pays enough money to allow resumption of service, the utility can also do that from a central office without sending out a representative. [!!! think of what else this means]

[snip]

But today, reining in energy consumption is less of a corporate priority: generating capacity is in surplus in almost all parts of the United States because the recession has shuttered so many factories. And in swaths of the eastern United States, the wholesale price difference between peak and off-peak demand is far smaller lately.  [so the point of this is…WHAT?  Politics of Greed is what it is]

The long-term impact of the smart meters is uncertain. Some studies show that people use less electricity when they can see the numbers ticking higher on the meter. [no joke, and when the power company turns your heat off or your AC off because they know better, or make a mistake, or kill your grandpa when they kill the oxygen machine that is sucking up too much power oh well, you cannot possibly be expected to take care of yourself, and it sounds like even if you track and understand your usage it is going to go up anyway.  Looks like from this the rate you are charged is whatever they want it to be that minute] I guess the only question I have is, Smart Grid: Smart for WHOM?

Read the complete article below:

‘Smart Grid’ Is Making Many Households Unhappy - NYTimes.com

So Where Do I stand on the issues?

My partner in crime asked Where do you Stand on issues the other day, and it is a great question. I started to answer just to clarify MY positions and it got too long for the comment section.


When I started this blog I would have to say I thought I was what commonly passes for Republican these days. The more I have discussed and aired my thoughts here and studied and read, the more I realize I am Constitutionally Libertarian. So in a nutshell here is my stance on the issues:
Fiscal Policy - Leave us alone. Free Market Capitalism is the way, the truth, and the light when it comes to fiscal policy. The government is the problem not the solution. Audit the Fed, Get rid of the Fed.

Freedom of speech - this means freedom of all speech even that which we disagree with and do not like or that which makes us uncomfortable. This means Fox news and even MSNBC news.



Freedom of Religion- not freedom from, even those ideologies that we do not agree with , as long as those people believing those ideologies can live peaceably with us and not blow up our planes, trains, automobiles, and buildings, or Kill our kids. Free to choose any religion, even none, realizing that this nation was founded on strong Judeo Christian traditions.



Second Amendment - Leave us Alone. It is plainly said in the constitution and there is a reason why. I have perfect gun control thank you: the ability to hit the target, and a good two hand weaver stance.


Abortion- LIFE, liberty, and pursuit of happiness. Duh. I do not know exactly where life begins, but in lieu of knowing I will side with Life. It is totally illogical to be pro-abortion and anti-KFC


Taxes - will never be low enough.


Entitlements - breed cultures of dependency and need to be slowly and methodically scaled back and controlled. OASDI will not be there when I need it anyway, start letting me pay for my ancestors as well as save for MY future.


Anthropogenic Climate Change - Good story, right up there with Hansel and Gretel and the Three Little Pigs. All three are to get children and mental midgets to do something someone else wants them to do.




Wars- IF...IF, they are important enough to fight, fight hard, win decisively and come home quickly. Strike fear into the enemies heart and break his will to wage war and you won't have as many people trying to start stuff with you.


UN - keep them here and keep an eye on them, but never take them seriously.




Immigration - I am for all the LEGAL immigration we can stand. I am in favor of making it easier to obtain work authorization. But the line forms over there and no cutting, the rest of you go back the the end of the line, cross our border illegally again and we will shoot you.


Education - leave my damn kid alone, you can't run the post office, DMV, balance a checkbook, read a bill, tell the truth, obey the law, or pay your taxes. Leave my Kid alone. Vouchers are a good idea, let parents vote with their feet, and their school tax dollars. Then the schools that PERFORM will SUCCEED.


Unions- there was a time, fifty years ago, when Unions were a good thing. Now they are just PACs and Criminal Organizations that feed off of hard working people like a tick. They need to go the way of the dodo.



Healthcare - Leave me alone. Tort Reform, Entitlement reform, EMS reform, less insurance restrictions. That would help healthcare. What the Fed wants to do is not about healthcare or health insurance but about consolidating control and power.


Energy, for heaven’s sake drill here, drill now. All the Cars running on wishful thinking is not going to happen this decade or probably in the next two. So let's quit running ourselves into bankruptcy and prevent our economy grinding to a halt. Let's stop funding those entities which do not have our best interests at heart. Let's create some jobs in this country. No Smart grid, that is just like Government Healthcare, a joke and lever of control. Build some Nuclear power plants, they are good enough for China and France, why are they not good enough for us?
-Kook

The story of stuff

Let's conduct a little thought experiment shall we? I briefly toyed with the idea of going through this script line by line but it would be too long to hold a readers attention. So, read it yourself and then you tell me why it is unthinkable for this to be lauded as a great lesson to teach to our children. The new York Slimes has given this crap its seal of approval as a wonderful way for our kids to learn about many issues important to today.
Read the script and then post a comment or send me an email why this is wrong. Best comment gets it's own post here and at conservative blog central. Click the link to read the file:
The Story of Stuff annotad unabridged script.

Back To Basics Part I -Exceptionalism not Imperialism

Back To Basics - Part II - Exceptional Science
Back To Basics Part III - Exceptional Economy
Back To Basics Part IV - Exceptional Culture
Back to Basics V Recap

Read the Script to the Story of Stuff Here



Ps. The story, video, book, and website for this "educational material" is funded by the Tides Foundation. Friends of Apollo and Acorn.

One Down; who know's how many to go

The resignation of White House green jobs adviser Van Jones could ultimately embolden conservatives who are critical of the Obama administration for its reliance on "czars" -- the nickname for special advisers who do not need congressional approval

If anyone thinks that this in any way removes the influence this man has on the pResident, or that this in anyway makes Obama less of a radical then I do not know if there is hope for you.

I will take this as a small victory, but this does not fix the problem of Statists in the White House.

Still, I was very pleasantly surprised to see this as I read the news this morning.

-Kook

If Obama Fails, It's Not His Fault

Posted by The Keeper of Odd Knowledge (Kook) with a big Hat Tip to : Right Klik: If Obama Fails, It's Not His Fault

It looks like the Demokrat MSM are preparing for what might be the inevitable failure of their Messiah's health care plan. Some amazing damage control memes are beginning to emerge:

1. Failure is good!

From Slate:

It's easy to forget that, even if Obama's health care effort is bogging down, the effort itself still serves his presidency as a crucial time-waster, tying up Congress and giving him a reason to postpone (or the public a reason to ignore) those other divisive, presidency-killers" [e.g. cap and trade, immigration legalization, card check and the Afghan War].

"If he keeps failing to pass health care until spring, that might not be such a bad outcome. In fact, even quick passage was maybe never in his interest. There are things more unpopular than struggling...

Failure is success? Yeah ― they're that desperate!

2. Obama's failure is really a failure of the national press corps, the left wing and the Demokratic party.

From The New York Times:

Throughout the 2008 campaign, Barack Obama’s most loyal constituencies were the national press corps and the left wing of the Democratic Party.

But now both groups are turning on him. As the health care debate enters its decisive weeks, the left doubts President Obama’s commitment, and the press doubts his competence.

...[we] assume that some kind of legislation will eventually pass.

If it doesn’t, President Obama will have been defeated. But it’s the party, not the president, that will have failed.

Rhetorical question: If Obama's not running the Demokrat party, who is???

3. Obama is bogged down because he has been working so hard to accommodate Republicans.

From Bloomberg:

Schumer, speaking on NBC’s “Meet the Press” yesterday, said Obama and Democratic leaders are “bending over backwards” to win Republican support. “It’s looking less and less likely that certainly the Republican leadership in the House and Senate will want to go for a bipartisan bill,” he said.

As RNC chairman Michael Steele has pointed out, this claim is patently absurd. Demokrats have not been striving for ― nor have they been expecting ― Republican cooperation...

From Fox News:

Steele told reporters that he thinks if Democratic senators think they have the votes, they should try a tactic that would allow them to get around a bill-killing filibuster without the 60 votes usually needed. Steele said he didn't think Democrats would do it because of potential voter backlash.

"Get it to the floor. Up or down, baby," Steele said at a news conference at the state GOP headquarters. "Put it on the table. And if you don't think you've got enough votes to get to 60, you've got the nuclear option. You've got 51."

The legislative tactic Steele suggested, called "reconciliation," would allow senators to get around a bill-killing filibuster without mustering the 60 votes usually needed. Democrats control 60 of the Senate's 100 seats, but some moderate Senate Democrats have expressed reservations about Obama's plan.

4. Obama is failing because he's too nice.

From The LA Times, words of encouragement from Rep. Maxine Waters:

"Yes, we know that you are a nice man... But there comes a time when you need to drop that and move forward," Waters said. "We're saying to you, Mr. President, 'Be tough. Use everything that you've got. Do what you have to do. And we have your back.' "

Obama's "nice guy" veneer is barely skin deep. Barack "I WON" Obama, the self-described ruthless pragmatist, has already pulled out all the stops for his agenda. And that is precisely the problem.

Twenty-seven days after taking office, Obama abandoned his short-lived commitment to transparency and bipartisanship and signed his ill-conceived stimulus bill into law. In his frenzy to push the legislation through Congress, Barack had managed to earn the hesitant support of a grand total of two extant Republicans (RINOs, both from the same state).

Since that very turbulent moment, Americans have developed persistent doubts about Obama's judgement and leadership strategy. And in the process they have rediscovered their self-confidence. The Wall Street Journal explains:

American democracy has never been democracy by plebiscite, a process by which a leader is anointed, then the populace steps out of the way, and the anointed one puts his political program in place. In the American tradition, the "mandate of heaven" is gained and lost every day and people talk back to their leaders. They are not held in thrall by them. The leaders are not infallible or a breed apart. That way is the Third World way, the way it plays out in Arab and Latin American politics.

Those protesters in those town-hall meetings have served notice that Mr. Obama's charismatic moment has passed. Once again, the belief in that American exception that set this nation apart from other lands is re-emerging.

Let's be clear. Obama's problem in implementing ObamaCare is not the press corps, the left wing Demokrats, the GOP, the protesters or the "naysayers". His critics aren't his problem. His proposal is.

Right Klik: If Obama Fails, It's Not His Fault

Well Said My Friend.…This Guy brings out the worst in me too…

H/T to Feed Your ADHD and Innominatus

By Innominatus Comments in blue by KOOK

This guy brings out the worst in me

I saw over at Hot Air that our licksphincter (*chortle) of a president is offering up our money to Petrobras, the Brazilian oil company, to help develop a big offshore oil field. $2 billion, billion with a "B." It is outrageous, especially coming from a guy who's so against domestic drilling and petroleum use. (amen!) But for whatever reason, the issue just didn't piss me off the way it should have. 'Spose I'm just getting used to Obama being a lying, hypocritical POS who throws our money around like it is effin' confetti. (*hee hee* I know I am getting sensory burnout on my pissed off meter too…)
Then I read further and saw that George Soros just-so-happened to make a big stock move in Petrobras that coincided (coincided, yeah right) with Obama's $2 billion pledge. (What a Kowinky- DInk, one would think there was some collusion there if one were a paranoid right winger)
OK, now I'm officially pissed! (me too!) Isn't this prick rich enough yet? (never!)Aren't we in enough debt already? (Are we still a sovereign nation? Then not enough for this crowd)I know Barry has made the pissing away of billions an almost trivial event, but WTF? Put us on the hook for more debt so Georgie can get richer and Brazil can sell us oil we should be drilling ourselves? Son...of...a...bitch! (ditto)
I'm kind of a newbie around here, so a lot of you don't know all that much about me or my writing. I'm basically a really low-key easy-going guy. I mostly just write sarcastic, even bordering on silly, stuff to try to entertain. It takes A LOT to get my blood pressure up where it is right now. This Soros pitsniffer really, really pisses me off. (*giggle Pitsniffer…*guffaw)

Feed Your ADHD

Chevy Volt – My quick take

First impression: It is not ugly. The stats say that the average person drives to work 40 miles to work a day. That is the range of the Volt on battery power only. Then the 1.4 L engine kicks in. It gets 50 MPG. It has between a 5 and a 7 gallon tank. So figure around a 300 mile range on gas only. Which is what the average car gets. It is supposed to cost 40k next year. It was supposed to cost $40k last year, and it may cost $45K two years from now.

Remember this car has to be plugged in. It has big ol’ batteries in it. Batteries eventually wear out. It has to be plugged in. So I guess all you carport, parking on the street types are S.O.L. More than that, it seems to me you have to quit thinking about this as only a Car, you also have to think about it as a kitchen appliance. If it plugs in, what it its “energy star” rating? Don’t forget we have been debating about and many of us are warning of huge energy taxes like Cap and Tax. If the Government will not allow more Hydro electric power, or Nuclear then this means more Coal burning (we do NOT burn oil for electricity). One one hand North America is the Saudi Arabia of Coal. On the other hand our lovely politicians want to kill the Coal industry. Looks like to me we will just be getting out of the frying pan and into the fire. We are YEARS from solar or wind being anything but a novelty. I predict that the Government will inflate the price of gas to coincide with Government motors launch of the Volt to entice consumers that a 40k price tag, unproven technology, and the rise of the cost of electricity is preferable to driving a dino-juice powered car.

Let’s go back to the batteries. I know from experience that disposing of industrial batteries is a bureaucratic red –tape expensive nightmare. They will wear out. What happens when your Volt breaks down? Remember, GM just closed a LOT of dealerships. Of those left, how many will have the tools, training, and equipment to repair the product? What about Parts? I am sure the thing requires a lot of proprietary parts. Until such time that there are a couple million of these cars on the road what dealerships will want to carry the parts? What kind of service life can we expect? What are the batteries going to do in winter? What happens at the hotel, no public charging facilities anywhere yet? But I think I am missing the point, this car is not meant for people who travel, mainly only commute.

Which just further emphasizes the elephant in the room. We are a divided nation. City mice and Country mice. I am a country mouse. I like to got to the lake, I like to go camping, I pull trailers, I live in a rural area where the roads get bad in winter. I like my truck. I drive over 40 miles a day most days. My ‘07 truck is creeping ever closer to 50k miles. I cannot afford to have a $40k commuter car taking up space, paying personal property tax, licensing, maintenance, etc on. When it comes to every issue, this always comes up, the real divide in this nation is not economic, educational, or anything else. It is Urban vs. Rural in most cases.

If I can have only one vehicle it will be a pickup truck. Ford, GM, and Dodge, sell more trucks than any other model in their line up. Trucks are such a uniquely American phenomenon, that it took Toyota and the other years to build a true full size truck with a V8 and now those are some of THEIR best selling vehicles. This seems to me to point to a fact that we seem to be overlooking. Many families have two or more cars, most of those families not in huge cities include some type of truck. As the economy crumples the truck will likely be the last to go. They are more durable, they are more versatile, and we love them more.

I am not convinced that this is the answer. I have to hear more. That being said I am not opposed to this technology, just know that we are trading one energy that is getting more expensive, with another. I think this is much better than that POS Smart car crapbox.This is just what I THINK. What do you THINK?

Musings of a Vast Right-Winger: House bill calls for federal tax on mileage

OH No…I NEVER saw this coming

Thursday, August 6, 2009

House bill calls for federal tax on mileage

The story below is from Land Line.
DemocRats are getting desperate for new money sources.
If they could, the DemocRats would tax the air we breath.(They will get to it, give them time)
When will the tax schemes stop?
------------------------------
A bill up for consideration in the U.S. House seeks to change the way highway users are taxed to fund transportation.
Rep. Earl Blumenauer, D-OR, introduced a bill that would establish a federal pilot program to study vehicle miles traveled, or VMT, as a possible supplement to or possible replacement for the current per-gallon fuel tax. The bill, HR3311, does not specify what would happen to the fuel tax if a VMT program were established.

Musings of a Vast Right-Winger: House bill calls for federal tax on mileage