Obama's Upper Hand

Speaking of elections, stupid people are still under the belief that the next president can do something about gas prices.

With the price of petrol spiking even higher (my local station raised the cost of regular by 3 cents overnight) many people are starting to feel the pinch - but what can a president do about the price of oil?

Well, short of a time machine and a decision not to invade Iraq, not a lot, really. OPEC has the oil-industry by the throat and I can't see petrol prices ever dropping down to their pre-Iraq lows (the heady days when it took just $20 to fill a Firebird's petrol tank.)

The fact that they're powerless to do anything about it hasn't stopped presidential candidates McCain and Clinton jumping on the 'gas price' bandwagon and making what must be the most stupid election pledge of all time - to drop the federal tax on gasoline sales.

Here in America, there are two tiers of taxation. Federal, which hits everybody, and State, which only effect people from a particular state. That's why people from New Jersey pay $3.50 for a gallon of regular petrol while it's $3.93 in neighbouring Pennsylvania.

Federal tax - the stuff McCain and Clinton want to drop for three months during the summer, cashes in at around 18 cents a gallon. They have no control over State taxation, so the most they could reduce fuel prices would be 20c - meaning every time I fill up my Firebird's tank I save about $2.50. Over the course of the summer, that will save me a grand total of fifty bucks (which is not going to make or break the bank.)

The fact is that I, like millions of other residents of the United States, don't really care about the odd 20 cents here and there. We want the price of petrol to drop down to what it was before we invaded Iraq - kicking around at about $1.50 a gallon.

Nothing's going to bring those prices back again - certainly not a three month moratorium on petrol taxation. I'd rather a candidate tackle the real problems behind the energy crisis, instead of trying to fool us into thinking they're doing something positive by throwing us a few nickels and dimes.

Only Barack Obama has stood in opposition against the idea of dropping taxation on gas - and that gives him a lot of credibility in my book. He sees the scheme for what it is - and he also sees that the average American voter isn't as easily bought off as McCain or Clinton think they are.

Gas Prices - A Load of Hot Air?

When George W. Bush is the man making the most sense, you know you've got problems.

But yesterday, he stood up in front of the nation and was surprisingly honest about America's imminent fuel crisis - admitting "If there was a magic wand to wave, I'd be waving it."

Petrol prices in America have been rocketing up. Prices at the pump have more than doubled since George Bush took office and in all fairness, not all of the blame can be laid at the doorstop of the White House. America's reliance on oil has been an Achilles heel for many years. The worry is that we've reached breaking point.

Presidential candidates Clinton and McCain are both launching rhetoric designed to tackle the rising fuel costs, but President Bush is right. There is no magic wand to solve the problem of expensive fuel and the only way forward is a longer term solution.

But what's causing the rocketing fuel prices?

One of the major reasons oil is becoming more expensive is because there's less of it. For decades, we've known that oil is a limited resource and the 'black gold' that does remain buried is getting more and more expensive to pump. Hence rising prices.

Secondly, global demand is increasing. Both India and China are becoming major oil consumers and the more demand there is for a limited resource, the more the suppliers can charge for it.

Thirdly, there's simply less oil in circulation. Before George Bush advocated invading Iraq, Saddam Hussein's regime produced 3.5 million barrels of oil a day. Since the invasion, the same country has struggled to sustain 2.3 million barrels of oil a day and this oil costs more to produce because of the increased security. That's more than a million barrels of oil taken out of circulation every single day.

Lastly - and importantly - the real 'oil giants' of the world (the OPEC members like Saudi Arabia) are holding the world's oil supplies ransom. They control the vast majority of the available oil resources and because demand is increasing, they can charge pretty much what they want for it.

Although President Bush has called for OPEC to release more oil for sale, you can't really blame the Organization of Petroleum Exporting Countries for refusing to do so. At the moment, they can sell their oil for a specific price. If they released more, that price would drop. Therefore, to meet the same profit level, they'd have to sell more of their commodity. It's basic business to charge the most that they can for their oil and the fact that we're all still willing to buy it suggests that this is a very successful strategy.

OPEC is a very powerful organisation. Their stranglehold on the oil industry inspired the gas crisis in the 70's, when the Shah of Iran warned America: "You buy our crude oil and sell it back to us, refined as petrochemicals, at a hundred times the price you've paid to us...; It's only fair that, from now on, you should pay more for oil. Let's say 10 times more."

Basically, the reason oil is so expensive these days has little to do with the White House. It's the law of supply and demand and the manipulation of OPEC. The only influence the federal government has on the price of petrol is in the tax they stick on it - which both John McCain and Hilary Clinton advocate dropping during the summer to cut the price at the pump.

It's an impotent gesture. For the average consumer, an entire summer's worth of savings would realistically only save them $30 or $40 dollars.

What can we do?

In the short term, the easiest solution to the oil crisis would be to find a new and plentiful source of cheap oil, to lower the overall cost of fuel and cut the legs from under the OPEC blackmailers.

George Bush suggests drilling in wildlife reserves in Alaska, which might well produce a plentiful new supply, reduce America's dependence on foreign oil and give us all a break when we fill our tanks.

There are several problems regarding this, however.

Primarily, drilling for oil in Alaska would devastate the wildlife. Wiping out species of birds and animals all for the sake of a cheaper fill-up seems rather wrong.

Secondly, it's a short term solution. Oil is running out. How much oil is there in Alaska? How long will it be before that runs out as well?

And thirdly - perhaps most importantly - the continued burning of oil and other fossil fuels is permanently damaging the environment. The question of how long the Alaskan oil will last might prove to be redundant if we oven-bake the globe exploiting it.

Alternative Suggestions

There are alternatives - and one of the reasons America's in such a crisis at the moment is because these alternatives are being explored in an utterly incompetent fashion.

The most touted solution to the oil crisis are alternative sources of energy. Sustainable organic fuels. Clean and renewable energy generation. The technology exists now and with sensible investment, we could solve the world's energy crisis practically overnight.

But misguided environmentalists and greedy politicians have utterly messed up the whole process.

As far as gas prices go, oil used for generating power could be diverted into the fuel market if America adopted clean, safe nuclear power. Instead, we still have costly, cumbersome and environmentally apocalyptic coal and oil fired power plants.

Nuclear power is clean and safe. France has successfully relied on it for decades. Yet the shadows of Chernobyl and misguided environmentalists argue about the perceived 'danger' of nuclear power and stand in the way of America finally fixing it's rickety and outdated power grid.

This is the twenty-first century, yet California continues to have 'brown outs' and power cuts because of primitive power-plant technology. This is really unacceptable.

When it comes to fuel itself, an alternative to petrol already exists - ethanol. Clean, cheap and easy to produce, ethanol could pretty much replace petroleum with very minor upgrades to most vehicle's fuel system.

Yet greedy politicians have created an ethanol stranglehold almost as wretched as OPEC's claw-like grip on the global oil market.

Ethanol is produced from organic crops. The vegetation you use to produce ethanol effects the power to production ratio involved in making it. In Brazil, sugarcane ethanol generates about eight times as much energy as it takes to produce.

In America, however, the vegetation of choice is corn - which has a pathetic one-to-one power to production ratio. Basically, it takes as much energy to make corn-based ethanol as the ethanol actually produces when poured into a gas tank.

That's simply unsustainable.

But it gets worse. The likes of environmentalist Al Gore have pushed so hard for the production of ethanol that they've given American farmers enormous subsidies to produce it - and whacked a 52 cent import tariff on ethanol imported from overseas.

This means that American farmers are using food-crop to produce ethanol, rather than corn flakes, which is shooting up the cost of food across America. In addition, the expensive fuel they produce is no cheaper than imported gasoline. What's worse, the cheap ethanol from overseas (that could be mixed with American petrol and actually bring the pump-price down) is no longer priced competitively because the government has slapped a tariff on it.

Basically, Al Gore and his cronies have successfully tied up American ethanol production with so much red tape, graft, greed and corruption that it's effectively a dead end. A self serving money-generating gravy-train for a few politicians and thousands of farmers.

If we're going to end the fuel crisis and finally give America sustainable and cheap power, here's what we need to do:

1. Build nuclear power stations to replace the coal-fired ones. This will make a huge difference to the environment (but put thousands of coal miners out of work. Still, it worked in England.)
2. End the subsidies for farmers to produce ethanol from corn. That corn will return to the food-market and lower the cost of groceries across the country.
3. End the tariff on imported ethanol. This will mean that cheap, efficient ethanol can be mixed with petrol in the short-term to lower the price at the petrol pump.
4. Research and develop cheap, clean efficient alternatives to oil. They already exist. We just need to make them practical.

Given the corruption and incompetence in government, plus the stranglehold of the misguided environmentalists, I can't see this happening any time soon.

Tiffany III...

Given the life changing events about to engulf Tina and I, it would seem completely irresponsible to buy a five litre, V8 powered sports car like a Trans Am.

Like this one, for example, one parked in our driveway.

But it's okay. Technically, we didn't buy this car. We sold our little Subaru (which Tina thought was a bit too small and tinny) and used that money for a five litre, V8 powered Trans Am instead. So, technically, if you think about it, we didn't buy a Trans Am. We traded for it.

This is an important distinction to make. Otherwise, as I said, it would have been completely irresponsible.

In my defence, it was Tina's idea and she had a pretty convincing argument. In a couple of months, life is going to drastically change and the chances of us ever again being in a situation to buy a Trans Am will be slim to none.

This is the car I've always wanted. It's doubtful we'll ever get the opportunity again. And we got it for less than half the asking price.

Considering they only made 660 of the manual-transmission Firebirds in '85 and it's in a really solid condition, that seems like as much of a wise investment as any 'classic' car could be.

So we bought it. Ahem. I mean, traded for it.

Which means, right now, that we're left with two burgundy beasts parked in our driveway. The '85 Firebird Trans Am and the '86 Lincoln Town Car.

Many people wonder why we decided to sell the little, sensible Subaru instead of the Pimpin' Lincoln. Here are the reasons:

1. Despite an apparent 32mpg, compared to the Lincoln's 15mpg, the Impreza has actually only been saving us about $15 per week in petrol.
2. The insurance of the Lincoln is considerably less. The insurance of the Trans Am and the Lincoln combined is idiotically STILL less than the Lincoln and the Subaru.
3. Given the retarded behaviour of most New Jersey drivers, Tina feels considerably safer in a 4400lb Town Car than a 2800lb 'sub compact.'
4. Over the past six months, the Lincoln has cost us considerably less in maintenance than the Subaru - more than making up for the increased petrol costs.
5. The Lincoln can comfortably hold six passengers and has a boot the size of most people's apartments. In comparison, the Subaru squeezed in four people and only if they were willing to get better acquainted.
6. The Lincoln has velour seats. Velour, Baby! In comparison, the Subaru had nylon seats stained with baby vomit. And other people's baby's vomit is never as nice as your own.
7. Nobody is going to steal the Lincoln. Ever.
8. Like it or not, you have to admit the Lincoln is a seriously stylin' bit of vintage automobile - while the Subaru is a Subaru and nobody's going to mistake it for anything different.
9. Finally, and most importantly, we got far more money for a fairly new Subaru than we could ever get for the twenty one year old Lincoln. So selling the 'sensible' car made financial sense.

I don't know if anybody's going to buy my list of excuses (I mean reasons), but that's the way things are. Thank goodness I married such an understanding, indulgent wife!

Taking a Spin in the No-Fact Zone

BEFORE you angrily leave a comment - read a follow-up posting here...

Clearly following in the footsteps of Bill O'Reilly and other ill informed political pundits, my rant on the Great American Gas Swindle had a couple of inconsistencies readers of this blog pointed out.

For example, I wrote: "American car manufacturers boast about getting 'an incredible 25mpg' while in Europe our mid-sized cars effortlessly deliver 40mpg."

My father very wisely pointed out a problem with my theory - a significant difference between the US gallon (3.750 litres), and the UK gallon (4.546 litres). The mid-sized car that effortlessly delivered 40mpg in England would only do 33 mpg by American standards.

An anonymous contributor also took exception when I wrote: "European unleaded is 95 Octane... ...Regular American gasoline is a mere 87 Octane...."

According to a website they linked to, Octane Explained, there is a difference in the way Americans and Europeans measure octane ratings, too. The RON and MON ratings are significantly different so British petrol rated at 96 octane via RON would only be considered 92 octane on American gas pumps - our anonymous friend said: "American [Super] 93 is the equivalent of European 97, for example."

He also pointed out that some cars (he gave the example of a highly tuned Honda V6) run more efficiently on lower octane fuel. That might well be true - although my Lincoln and my parent's friend's Jaguar V12 both seem to purr more smoothly - and drink less - on 'the good stuff.'

Now I had actually done some research into this - the almighty Wikipedia (which is written by the ill-educated likes of me, I should remind you) explicitly states that: "octane ratings are higher in Europe than they are in North America and most other parts of the world."

Which seems to support my original comments.

I guess further research is needed - or if you're a fan of Bill O'Reilly, just go with what you think is the 'truthiness' - what you know intuitively, "from the gut," without regard to evidence, logic, intellectual examination, or actual facts.

After all, that's what many of us bloggers rely on instead of research!

With thanks to my father and my anonymous commenter.

The Great American Gas Swindle

BEFORE you angrily leave a comment - read a follow-up posting here...

With most cheap things, you get exactly what you pay for. That rule is absolutely true when it comes to American petroleum.

You might be surprised to hear that. After all, in America gasoline is about one third of the price of the UK (it's roughly $2.50 a gallon here at the moment.) But what very few people realise is that it's not the same stuff at all!

Roll up to a Shell station in the UK and you get offered Unleaded, Super Unleaded and, in some places, 4 Star or Lead Replacement Petrol.

In the United States, the gas station attendants (you don't pump your own gas in New York) will offer you Regular, Premium or Super.

Foolishly, you might think you're getting a bargain as you slosh American Regular into your car's 14 gallon tank - but you'd be wrong.

Because American gasoline is of inherently inferior quality to the stuff we sell in Europe - even the 'Super' grade.

The 'quality' of petroleum is matched to it's octane rating. This is the complicated percentage of iso-octane compared to n-heptane in the make-up of the gasoline. Standard European unleaded petrol, for example, has 95% iso-octane against 5% n-heptane.

No, I have no idea what that means. But I do know what it DOES. It controls the amount of energy it takes to 'ignite' the petrol in your car's engine. The higher the octane, the more energy it takes to ignite the gas - which might seem like a bad thing, but it's not.

You see, engines have to 'ignite' the petrol in each cylinder in a specific order to ensure smooth running of the car (and to prevent engine damage.) If your gasoline ignites in a cylinder early (producing a characterising 'pinking' or 'pinging' noise) the engine will get damaged as the pistons struggle to contain the out-of-sequence pressure. That 'pinging' noise - or Knocking as it's officially known - is an aural warning that your engine's getting damaged.

The higher the octane rating of petrol, the smoother and more efficiently an engine runs. Higher octane petrol increases horsepower and reduces fuel consumption. This is why NASCAR racing cars and World War Two fighter planes use 100 Octane fuel to ensure their combustion engines are running at peak efficiency.

Anyway. Now you know the basics of the Octane rating system, let me explain to your why American gasoline is a rip-off.

I mentioned that European unleaded is 95 Octane. 4 Star is rated at 97 Octane and Super Unleaded, which is what premiere league footballers use to fuel their Bentleys, is rated at 98 Octane. Just like European lager, this is the good stuff. Smooth, strong and 'reassuringly expensive.'

But if European petrol is Heineken or Leffe, that means American patrol is more like Bud or Miller Lite. Cheaply produced, generic in quality and liable to cause pungent exhaust fumes.

Because Regular American gasoline is a mere 87 Octane. Premium (ha! like Miller 'High Life' beer, advertising itself as 'the champagne of beers!) is 89 Octane and 'the good stuff' they call Super is anything but, with an Octane rating of 91 (or occasionally 93).

It's simply inferior fuel. The poor quality of the fuel is the number one reason why American engines need to be bigger and less fuel efficient. This is why American car manufacturers boast about getting 'an incredible 25mpg' while in Europe our mid-sized cars effortlessly deliver 40mpg.

This disparity is an enormous contributing factor towards the way Americans build and use their cars. If they had better quality petrol, their car manufacturers could produce smaller, more efficient engines (my five litre Lincoln produces the same horsepower as my two litre Volvo did) and the entire country would rethink the way they buy their gasoline.

But it's not going to happen, which is a pity.

What's even more of a pity is the way Americans seem pre-programmed to reach for the 'Regular' nozzle (or rather, their attendants do) instead of the slightly more expensive Premium or Super selections.

A recent experiment in my Lincoln has revealed that filling up with Super (for about three dollars more per tank) produces smoother running, more powerful and responsive performance (man, that car can SING) and then manages to give me a free 'gallon and a half' of mileage, delivering about 3 of 4 more mpg.

Do the mathes and you soon realise that it's actually CHEAPER to fill up with Super than Regular. It's CHEAPER and it's better for your car, better for the environment and you have to stop at the petrol station less frequently.

But still, like obedient little sheep, million of Americans line up at the gas station every single morning and pour gallons of Regular into their Yukon and Escalade SUV's, still stuck in the stupid frame of mind that they're saving a few bucks by buying the cheaper grade of gas.

That, my friends, is The Great American Gas Swindle.

Next week - Why Starbucks Coffee is overpriced...