7 posts tagged “gasoline”

The below is from an entry I made at my main blog, based on some very basic maths after reposting a graph from the Historian’s blog.

Just last week I was listening to the radio—one of the foreign-owned stations that seem to populate the FM airwaves (probably Coast)—and the DJ gave one of the less intelligent commentaries about oil prices I had heard. He also referred to ‘gas prices,’ which of course is the incorrect term here where gas refers to gas, not petrol or gasoline.
   Petrol prices in New Zealand rise and fall based on American news—something that is not that relevant when it comes to how much we pay for oil. When there is a rise in the US dollar oil price, but the New Zealand dollar has strengthened over the same period, then that rise should not be felt at the pump as greatly.
   Let’s assume oil prices are at US$120 a barrel and there is no inflation between 2000 and 2008. (Of course, it was less than $120 in 2000 and more than $120 now.)
   In 2000, with the New Zealand dollar at an all-time low against the greenback, we would have had to fork out NZ$300 to get that barrel.
   In 2008, with the New Zealand dollar having gone back to around 1982 levels against the greenback, the equivalent is NZ$154.
   So for a New Zealand company buying oil, it actually costs less.
   However, I am ashamed to note that once you factor in the real prices, we are looking at these figures:

2000 price of crude, US$27·39 (real, not adjusted), equalling NZ$68·48
2008 price of crude, US$134, equalling NZ$171·79

Pump prices—and I know I am ignoring refining costs and a whole bunch of other stuff—are:

2000: NZ$0·97 per litre
2008: NZ$2·14 per litre

This actually means the rate of increase New Zealanders are experiencing is not as bad as the oil prices offshore based on New Zealand dollars, even if our prices are rising more quickly than Europe’s.
   While the Americans, relative to their dollar, are paying four times more, we are paying just under three times.
   Whatever the case, I think it’s worth informing the public—especially on whom we might be able to blame these price rises. And that demand and supply have nothing to do with these high prices, because demand is actually dropping—so we can stop blaming the Americans for their big SUVs and the Red Chinese for buying new cars.
   The targets are most likely the speculators, institutional investors, price fixers, the corporations and the cartels.
   And it seems to lend some weight to isolating a small country from these threats, globalizing where it makes sense—and in other areas, developing a better model in isolation to show the world how things might be done.

This is from the Historian’s Vox blog: oil consumption has been dropping since 2004.

   By the typeface, I would guess this is from The Economist.
   So if oil consumption is going down, and the law of supply and demand holds, why are prices at an all-time high? The Historian gives some decent horse sense on this—and it should remind us that the oil companies have a vested interest (and the MSM are too dumb) to keep the panic going.
   According to this graph, which I haven’t looked further into: global demand on oil is decreasing. The US dollar is weak, so prices are high relative to that dollar—but high oil prices should have less of an effect on other countries who are converting their own currencies to US dollars to purchase crude. Let’s also not forget that OPEC is a cartel that sets its own prices, and the oil companies are setting their own prices, too, raking in multi-billion-dollar profits per annum.
   He also points out there is speculation—which means the bubble will burst at some stage.

For American readers wondering what the heck I meant by $2 a litre, which is what we are paying now for regular (actually $2·01), I did a quick calculation this morning. This translates, in US dollars, to between $5·90 and $6 per gallon. Four bucks a gallon is a memory …

[Cross-posted] In January 2006, I predicted petrol would hit NZ$2 per litre but attributed it more to the Labour Government’s mishandling of New Zealand currency rather than oil prices. Now that the price has come to pass—consider that when I made it, $1·40 per litre was unheard of—I am surprised that no one in the mainstream media or even politics has brought up the parallels with the 1970s and New Zealand’s solution to the fuel crises.
   It seems a very obvious thing to bring up, so I have to question what people are afraid of.
   Responding to the volatility of international fuel prices, the Muldoon administration of 1975–84 embarked on energy projects in an effort to make New Zealand less vulunerable. The various Synfuel projects and energy exploration resulted in an era where New Zealanders drove around in natural gas vehicles, and we even produced our own petrol after converting it from gas.
   By the late 1970s, the New Zealand Government was subsidizing gas conversions and certainly by the early 1980s, many (most?) petrol stations offered compressed natural gas or liquefied petroleum gas alongside petrol and diesel. It was just considered normal.
   New Zealand was saving its foreign exchange and people were driving environmentally friendly cars.
   In 1984, the right-wing policies of the Labour Government saw most state assets relating to the venture sold off to corporations and Muldoon’s venture was passed off as a folly by the new administration, the technocrats of the Business Roundtable and, shockingly, by the National Party itself as it changed leaders.
   Even a bid to market LPG as an environmentally friendly fuel in the 1990s could not save it as the National Government taxed it tremendously—something that was clearly not done in the national interest.
   The winners of the destruction of this energy venture were the corporations, predominantly foreign-owned, buying in to outmoded, socially irresponsible technocratic thinking that has brought a widening rich–poor gap.
   That gap can only increase today with the cost of petrol, now refined offshore and imported by those same corporations, spiralling out of control.
   There’s not a peep from National, now in opposition, to say that it had been right in the 1970s as the only party prepared to shield a little country, so easily swayed by global economic forces, from oil company greed.
   The only logical and cynical conclusion is that National are as big a sell-out of New Zealanders as Labour and Roger Douglas were in the 1980s. And that they are suckers for monetarist theory, all the time closing their minds to the mere possibility that Muldoon—whose policies were adored by successful national leaders such as Lee Kuan Yew of Singapore, who did all right with them—might have been right.
   It’s election year—and National’s John Key is silent. Again.
   There’s a lot Sir Robert Muldoon got wrong but on the alternative-energy policies, I can’t find too much fault.
   First, New Zealand is a little country that is too drastically affected by global economics. Even Malaysia in 1997 could not protect itself properly against them. Hence, the technocratic, monetarist movement cannot be left unguarded.
   Secondly, energy prices are unstable and New Zealanders need to be protected against them.
   Thirdly, environmental policies demand that we look at alternative fuels.
   Fourthly, this is something that needs a governmental push to ensure alternatives are available nationwide, or at least somehow create incentives for the infrastructure.
   Faced with these basic facts, the development of our own energy sources for the long term seemed to be the only way forward.
   Sure it was cumbersome and expensive to develop, and there were missteps along the way, but where would we be today? Certainly not paying $2 a litre.
   Little did Sir Robert foresee that it would be so gleefully dismantled by his successors—with the same arguments of efficiency so cleverly used by the technocrats of the Slater Walker era in the United Kingdom.
   In spite of all the English expats here, we bought the arguments hook, line and sinker.
   One would have hoped that today, we would remain shielded from these energy crises offshore, with our fleet of natural gas-powered cars. That we would be leading the world in showing how alternative fuels worked, and foreign countries would be coming to us to license our technology.
   We gave up that lead, that advantage, in 1996 to follow the American example of gas guzzlers and SUVs.
   The General Election is mere months away, this is the hottest issue on the book, and no one dares bring up Muldoon. It’s because no one dares offend a few rich bastards making money off working New Zealanders by bringing up a leader who dared stand up to foreign corporate interests.

Further to an earlier post: so how did the New Zealand Government get us folks, happily driving around in natural gas cars with a huge natural-gas network of stations nationally, back into petrol (or gasoline to our American readers) in 1996? Well, there was this ad:

If you’re going to drive a gas guzzler, shouldn’t the birds and the trees know? Sure, you can use LPG and CNG. But they don’t even smell strong. Let ’em feel the power of petrol—good, healthy petrol that really say you’ve arrived. Let your V8 make your winters warmer. There might not be many tigers left out there, but you can stick them in your tank. Petrol. In 91 and 96 octane.

   OK, so there wasn’t that ad. It was pretty easy though: the National Government had been raising the tax on natural gas for a few years. When that didn’t sway New Zealanders from using domestically made natural gas and not depleting our foreign exchange reserves, they plain turned off the tap.
   In 1996, it was announced to all the gas stations that there would be no more CNG. LPG would continue, but the stations—all with the warm, fuzzy names of Shell, BP, Mobil and Caltex (part-owned by Texaco, which forms the Tex in the name)—were somehow hazy about its availability. Panic ensued. We got rid of our gas-powered Ford Sierra. (You could switch between CNG and petrol. Most converted cars since the late 1970s were dual-fuel, since the hybrid term had not been coined for cars then. Can someone please tell me or any New Zealander why the Toyota Prius is novel?)
   As it turned out, there were still plenty of LPG stations around, but by then we were driving around and letting the birds and the trees know.
   These days, you tend to see cab drivers use LPG but preciously few other people. This is a far cry from the 1980s and early 1990s, when natural gas-powered cars were normal. All of a sudden, the Labour Government thinks E10 is revolutionary. E10, in this country, is not revolutionary.
   Since 1996, we now happily pay 50 per cent more for petrol, polluting our environment and using US dollars to do so. Go, petrol! Yay, OPEC, New Zealand politicians love you!

The AA is warning New Zealand consumers that not every car can use E10, and noted Japanese imports. I should not be smug here, but caveat emptor. The warnings about buying cars not engineered for this market have been around for a long time, from issues with winter tyres (which have led to deaths here) and now, to fuel.
   But bravo to Volkswagen and Honda. From the Fairfax Press:

Volkswagen said all new petrol-powered vehicles bought in New Zealand since January 1, 2006 could use the biofuel. …
   Honda said all its vehicles produced in the last decade were E10 ready[.]

Still, my comments from yesterday stand.

Low res NZ PM with RM Gull E10

Some Americans already think that PM Helen Clark is Ms Photo Op, without the substance. That was the first thing that came to mind when this pic came through from the Ford Motor Company today.
   Considering that New Zealand had natural gas-powered cars when I was a youngster in 1980 (until the National government thought they might be bad for us in the mid-1990s and really pushed us toward good, healthy and cheap petrol) and Todd Park was experimenting with a methanol-powered Mitsubishi in 1983, you can see why I am not terribly impressed with news that we have this revolutionary, new biofuel pump serving E10.
   Little compares with our having a 20-plus-year lead on the rest of the world with LPG and CNG, something this country fails to acknowledge time and time again. Probably to cover up its own inadequacies and lack of vision.
   E10, phooey. Sure it’s a step in the right direction, but such a little step compared to the advances we were making against OPEC in the late 1970s. We should be crying about how our lead and knowledge have been flushed down the toilet, and how no one other than regular citizens gives a toss.