10:59 PM, Oct 20, 2012

USA TODAY – Autumn gasoline prices are about to drop faster than fall foliage.

With inventories rising and demand waning, gasoline prices could plunge 50 cents a gallon from October’s $3.86 peak average over the next few weeks, providing a lift for the economy and possibly becoming a factor in next month’s presidential election.

Gasoline, now averaging $3.69 a gallon, is expected to fall to $3.35 or lower by late November. In some regions, prices have already sunk below $3.

“Most of the country is heading appreciably lower the next few weeks,” says Tom Kloza of the Oil Price Information Service, who notes wholesale prices in some key markets have dropped from as high as $4.35 a gallon to $2.71. Pump prices typically lag big wholesale drops. But Kloza expects retail prices to sink five to 15 cents a gallon over each of the next three weeks.

The drop could provide a boost to consumer spending and influence next month’s presidential race, where gas prices have been a hot-button issue for much of the campaign. Several battleground states, including Ohio, Pennsylvania and Wisconsin, are enjoying big price drops.

“Certainly, lower gas prices are helpful in terms of consumer spending by increasing disposable income,” says Brian Bethune, chief economist at Alpha Economic Foresights. “And if prices come down at a rapid rate in the next three weeks, that would tend to help the incumbent. It may not be logical, but if people see problems with the high cost of food or gas, it’s the president who tends to get the blame.”

Gas prices have remained stubbornly high well past their traditional Memorial Day weekend peak, due largely to supply shortages and refinery woes on the West Coast and Midwest. But with oil inventories rising and production issues ebbing, prices have been easing the past week, a trend likely to accelerate. “This is very much gravity at work,” Kloza says. “The faster prices soar, the more prone they are to panic sell-offs.”

Kloza expects prices to bottom in the $3.30 range. Gasbuddy.com analyst Patrick DeHaan and energy analyst Brian Milne of Telvent DTN see a $3.35 bottom. Barring rising troubles in the Middle East or refinery issues in the U.S., prices could remain in that range through early 2013.

On Friday, gasbuddy.com was tracking some central Ohio stations selling gas for $2.97 a gallon. Gas prices remain stubbornly high in California — the nation’s priciest state averaging $4.51 a gallon — although some stations are charging more than $5. Energy experts expect prices to bottom in the $4 range. “California is not completely out of the woods yet regarding supplies, and their refineries haven’t been able to keep up,” Milne says.

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August 6, 2009

Written by Michael Grabell and Jennifer La Fleur as reported in ProPublica

Since the economic stimulus bill passed nearly six months ago, the Obama administration has repeatedly pledged that the money would reach middle America, seeping into the communities hardest hit by the recession.

But analysis of the most comprehensive list of stimulus spending to date found no relationship between where the money is going and unemployment and poverty.

Stimulus spending is literally all over the map, according to ProPublica’s analysis, which examined nearly all the contracts, grants and loans the government has reported awarding. Some battered counties are hauling in large amounts, while others that are just as hard hit have received little.

Take Trigg County, Ky. [2], where unemployment was 15.8 percent in June after the auto industry crisis rippled among suppliers. The stimulus has chipped in $1 million toward a biofuels facility and $30 million for a road project. According to the data, the county has been awarded $2,419 per resident.

But LaGrange County, Ind. [3], hasn’t fared so well. Despite having the identical unemployment rate, it has received only $33 a person. The community is still trying to recover after recreational vehicle plants shuttered last fall. Yet the stimulus has provided little more than the education and rural housing money that every county is scheduled to receive.

For months now, Democrats and Republicans have debated whether the stimulus is trickling down to communities that need it most. Much of the available evidence has been anecdotal, however, or based on studies that examined only transportation spending or a smaller list of projects.

The debate accelerates today as President Obama and Vice President Joe Biden visit Elkhart, Ind., and Detroit for a progress report on the economy that will again highlight the stimulus. What the available data show is that spending is uneven and sometimes runs contrary to measures of need.

Elizabeth Oxhorn, the White House stimulus spokeswoman, said much of the money thus far has moved through existing grant formulas that don’t take into account regional economic swings. But as some newer stimulus programs kick in — such as economic development grants and money to hire police officers — there will be more discretion in where to send dollars, she said.

“Where we do have opportunities to target assistance and programs that are meant to help hard-hit areas, we have done that, particularly in the hard-hit auto communities,” Oxhorn said.

First Look at County-Level Spending

Overall, the stimulus program will pump $787 billion into the economy, including tax cuts.

To assess what has happened so far, ProPublica combined all the data on the federal stimulus Web site, Recovery.gov, with reports from other government sources into a list totaling $120 billion worth of stimulus spending. Of that, ProPublica examined $55 billion that could be traced to the county level.

Getting a complete accounting of the stimulus is nearly impossible because some of its largest elements — tax cuts for individuals, increases in Medicaid and unemployment — aren’t being tracked to the local level or have yet to be distributed by the states.

While those programs clearly benefit individuals hurt by the recession, they aren’t intended to create or sustain many jobs, as with dollars aimed at infrastructure or schools. The 7 percent of overall stimulus funding in ProPublica’s analysis is the broadest, most complete snapshot of spending to date.

The largest categories are highway projects, Pell Grants for low-income college students and funding to school districts for disadvantaged students. The data also include airport grants, small business loans, housing assistance, nuclear cleanup and military construction contracts.

ProPublica tested the relationship between spending per person and several socioeconomic and demographic factors across more than 3,100 counties and equivalent areas, such as Louisiana parishes, to see if there was a statistically significant pattern in the way money has been allocated.

Nationwide, the results showed no significant relationship across counties when spending was compared against unemployment, poverty, race and income. Looking within state boundaries, spending did have a relationship to unemployment in a few cases — but not always in the same direction.

In New Jersey [4], for example, counties with high unemployment were more likely to get more stimulus money per person. The opposite proved true in Michigan [5], which has the nation’s highest jobless rate at 15.2 percent. A searchable list of county stimulus projects and demographics is here. [6]

Nuclear Cleanups Boost Rural Counties

The biggest winner so far — at nearly $12,000 per resident — is Thomas County [7], an area of 583 people in the Nebraska Sandhills. Unemployment there is 4.8 percent, about half the national rate.

Judy Taylor, chairwoman of the Village Board in Thedford, said the majority of residents consider the main stimulus project, a $7 million viaduct over the railroad tracks, a waste of money.

“Out here, there seems to be plenty of work for people,” said Janice Hodges, whose family owns a gas station nearby. “It probably could have been better used somewhere else.”

Overall, the counties faring the best in the stimulus program are sparse communities with a giant road project — such as Brooks County [8], Texas, or Hocking County [9], Ohio — as one expensive project to a county with few people can skew per-capita figures.

Other counties doing well are home to Cold War weapons plants. The stimulus includes $6 billion to clean up and dispose of waste in 12 states, and those were among the first contracts awarded.

Thanks to the massive cleanup of the Hanford Nuclear Reservation, Benton County, Wash. [10], has received more than $1.5 billion — second only to Los Angeles County‘s [11] $2 billion in total funding so far. Benton County’s per capita spending: $9,300.

In metro areas, per-capita spending varies. LA County’s funding equates to $215 per person. New York County [12], which covers Manhattan, is receiving $610; its neighbor, the Bronx, is getting $185. Palm Beach County, Fla., is receiving $57, and Wayne County, Mich., epicenter of the auto industry meltdown, has received $183 per resident — about the national average for spending that could be tracked to the county level.

Some well-off counties are benefiting greatly.

Summit County, Utah [13], home to Park City and several upscale ski resorts, is one of the wealthiest counties in the country with a median household income of $83,000. Under the stimulus so far, it’s received $659 per person.

The money includes a $15 million interstate paving project, a $5 million bridge replacement, $1 million for sewers and sidewalks on Main Street in Coalville, and a $570,000 small-business loan to a Park City oral surgeon.

John Hanrahan, chairman of the Summit County Council, said the highway and bridge projects are in the rural part of the county and are mainly used by long-haul truckers rather than residents.

“It doesn’t necessarily help a farmer a lot for hay or gas,” he said. “It doesn’t affect the ski industry. We still have a significant portion of the population who are struggling with this recession.”

Hanrahan’s point underscores one of the basic uncertainties when determining who benefits from stimulus dollars. Money spent on a project doesn’t necessarily stay in the community. Construction workers often drive through several counties to job sites.

“People will live in one area and work in another,” said Mark Zandi, chief economist for Moody’s Economy.com. “Some county in a region could be getting more money but it could have a beneficial impact on other counties in the region.”

Obama’s Pledge: Help Is on the Way

When Obama launched the stimulus package in February, he visited Elkhart, a city that had seen its jobless rate skyrocket from a 5.8 percent in October 2007 to 20.8 percent this March.

The next day, he visited Fort Myers, Fla., which had been pummeled by the foreclosure crisis. Since then, administration officials have repeatedly visited auto industry towns to promise help.

Trigg County is one struggling area that has seen a flood of stimulus money. The county, on the Kentucky-Tennessee border, northwest of Nashville, has about 13,000 residents but received $32.5 million.

The county’s largest manufacturer, Johnson Controls, made car seat frames until it closed in March, leaving 560 people out of work. But right on the heels of that shutdown came $30 million in federal money for an ongoing project to widen U.S. Highway 68.

That stimulus money freed state funds already pledged to the $55 million expansion, protecting the contractor’s current workforce. State officials said it might have stalled without the stimulus.

The U.S. Forest Service awarded $2 million in contracts to clean up the Land Between the Lakes recreation area, which had been devastated by an ice storm. The agency also gave the county a grant for a facility that will convert wood to fuel to power a local hospital.

“When you tally it up and see the dollars that will come into our area through the stimulus, it is working,” said Stan Humphries, Trigg County judge-executive. “It doesn’t move as fast as we would like or reach as many families as we would hope for. But we feel that we are getting our share of the funds.”

Big Pots of Money Hard to Track

Edmund Phelps, a Nobel laureate who is director of Columbia University’s Center on Capitalism and Society, said it’s no surprise that spending so far doesn’t relate to characteristics like employment or poverty. To get money out quickly, the government relied on funding formulas that aren’t designed for an economic downturn. “It’s kaleidoscopic,” he said of the stimulus. “And it was all done very quickly.”

Some of the largest pots of money — tax cuts, food stamps and Medicaid assistance — go to more than 100 million individuals, and government auditors are struggling to estimate the local impact.

“Can you send a man to Jupiter? In theory you can,” said J. Russell George, the Treasury inspector general for tax administration. “We could in theory track every dollar, but you have to consider the expense and the time it would take to do that.”

For other types of spending programs — such as the $54 billion to stabilize state budgets and help local schools, or $6 billion to build water and sewage treatment plants — the money trail stops at the state governments, which are still deciding how to divvy up the funds. Only a fraction of the stabilization money has been sent to the states from Washington.

Other programs, such as transit grants, mask where the jobs are created. When the Akron, Ohio, transit authority bought 19 buses, for example, it created work at local rubber suppliers — but also at the plants that made the buses in Kansas, North Dakota and California.

“It’s difficult to take into account all of the different dimensions,” said Steve Murdock, a former Census Bureau director who is a professor of sociology at Rice University. “You have populations with various kinds of needs and local economies that reflect different kinds of conditions.”

Elkhart’s Poor Cousin Next Door

As Obama returns to Elkhart, he might want to consider LaGrange County just to the east.

While Elkhart County has been awarded about $169 per resident — a little less than the national average — LaGrange has received just $33 a person, according to the data.

Both counties saw their economies crater last year when high gas prices and tight credit made it difficult to sell recreational vehicles, a primary industry there. Dozens of factories, dealerships and suppliers shut down while thousands lost their jobs.

LaGrange County has several needed transportation and infrastructure projects, said Keith Gillenwater, the county’s economic development director. But so far, it has been shut out of any of the federal highway funding doled out by the state government.

“It’s frustrating,” he said. “To me there’s a lot of disparity that should be re-examined and taken into consideration.”

 

ProPublica is America’s largest investigative newsroom.

Funky Fuels

Alternative energy sources—from algae to cow manure—that are really out there.

By Christopher Flavelle

 

  • Cassava

 

The United Nations’ Food and Agriculture Organization has looked at cassava, a potatolike crop grown across the developing world, as a possible feedstock for biofuel. Also known as tapioca and yucca, cassava is drought-resistant and needs less fertilizer than other crops, making it cheaper than corn.

Estimated production cost: $1.40 to $2.40/gallon.

Prospects: Moderate. Growing cassava for fuel could drive up food prices, either directly or by diverting land away from other crops. But developing countries may be eager to support a homegrown energy source.

 

  • Algae

 

Because it grows quickly, has a high oil content, and needs only sunlight and water, algae looks promising as a source of both ethanol and biodiesel. It also serves as a filter for dirty water and as a carbon sink. Ideally, an algae farm could be located downstream from a large-scale farm or factory, where it can clean the water of pesticides, carbon, and heavy metals.

Estimated production cost: $1 to $2/gallon.

Prospects: Good. Algae is cheap and easy to grow.

 

  • Beetle-infested timber

 

Thanks to the mountain pine beetle, some 500 million cubic meters of British Columbia’s lodgepole pine forest have been turned into a hole-riddled tinderbox. The province’s Lignol Energy Corp. is developing technology to turn the beetle-infested timber into ethanol. The job’s made easier by the insects’ own handiwork, which leaves the trees easier to break down.

 

Estimated cost: $1.50/gallon

Prospects: Moderate. Using trees for fuel will always risk pushback from environmentalists.

 

  • Cow manure

In 2004, the Central Vermont Public Service launched the Cow Power program, which pays dairy farmers to produce fuel in the form of methane, made from cow manure through a process called anaerobic digestion. There are 135 anaerobic digesters operating in the United States, according to the EPA. Those digesters produce enough energy to power some 25,000 homes.

 

Estimated production cost: Varied.

Prospects: Excellent. Anaerobic digesters are already widespread in Europe.

  •  Chicken fat

Oklahoma-based Syntroleum Corp. converts chicken fat into synthetic fuel, using a process it calls hydro-processing. The company says the fuel produced from chicken fat is chemically identical to regular, petroleum-based fuels.

 

Estimated production cost: Less than $2.40/gallon.

Prospects: Good. Barring an explosion in vegetarianism, otherwise-useless chicken fat will continue to be scraped off the floor of America’s industrial-size rendering plants for the foreseeable future.

 

  • Garbage

The ultimate alternative fuel source will need to boast some combination of worthlessness and abundance. The waste-to-ethanol process uses garbage that can’t be recycled or composted, like plastics and construction-wood waste, and turns it first into a gas and then a liquid. The final product is meant to be chemically identical to ethanol made from corn.

 

Estimated production cost: Too soon to tell.

Prospects: Excellent. If the technology promised by these plants works, expect to see a lot more of them.

Our Perspective:

Biofuels are paving the way to future energy independence. To date Ethanol has been the one product that everyone is aware of. It is made from corn. Below is an overview of other viable options that can be integral in developing future energy alternative fuels.

Let us know your thoughts?

Written by John Porretto  July 14, 2009  AP

HOUSTON — Exxon Mobil Corp. said Tuesday it will make its first major investment in greenhouse-gas reducing biofuels in a $600 million partnership with biotech company Synthetic Genomics Inc. to develop transportation fuels from algae.

Despite record-breaking profits in recent years, the oil and gas giant has been criticized by environmental groups, members of Congress and even shareholders for not spending enough to explore alternative energy options.

One of the company’s requirements was finding a biofuel source that could be produced on a large scale. It says photosynthetic algae appears to be a viable, long-term candidate. If the alliance is successful, pumping algae-based gasoline at Exxon service stations is still several years away and will mean additional, multibillion-dollar investments for mass production.

“This is not going to be easy, and there are no guarantees of success,” Emil Jacobs, a vice president at Exxon Mobil Research and Engineering Co., said in an interview with The Associated Press. “But we’re combining Exxon Mobil’s technical and financial strength with a leader in bioscientific genomics.”

Jacobs said the project involves three critical steps: identifying algae strains that can produce suitable types of oil quickly and at low costs, determining the best way to grow the algae and developing systems to harvest enough for commercial purposes.

Besides the potential for large-scale production, algae has other benefits, Jacobs said. It can be grown using land and water unsuitable for other crop and food production; it consumes carbon dioxide, the greenhouse gas blamed for climate change; and it can produce an oil with molecular structures similar to the petroleum products _ gasoline, diesel, jet fuel _ Exxon already makes.

That means the Irving, Texas-based company will be able to convert the bio-oil into fuels at its own refineries and use existing pipelines and tanker trucks to get it to consumers.

The $600 million price tag includes $300 million for Exxon’s internal costs and $300 million or more to La Jolla, Calif.-based Synthetic Genomics _ if research and development milestones are successfully met.

“Even though this is a multiyear program, we both still consider it a very aggressive timetable, and it involves a lot of basic research,” said J. Craig Venter, founder and CEO of the privately held company. “As a result, you don’t know the answers until you’ve done these tests and experiments.”

Algae is considered a sustainable source for second-generation biofuels, which go beyond corn-based ethanol into nonfood sources such as switchgrass and wood chips.

Royal Dutch Shell PLC said earlier this year it would scale back large investments in wind and solar in favor of next-generation biofuels. The European oil giant is working with Canadian company Iogen Corp. on a method to produce ethanol from wheat straw, and partnering with Germany-based Choren Industries to develop a synthetic biofuel from wood residue.

Another oil major, BP PLC, plans to team up with Verenium Corp. to build a $300 million cellulosic ethanol plant in Highlands County, Fla.

For Exxon Mobil, the world’s largest publicly traded oil company, the biofuels investment is tiny compared with its spending to find new supplies of crude and natural gas.

CEO Rex Tillerson said earlier this year Exxon’s 2009 spending on capital and exploration projects is expected to reach $29 billion, up from the $26.1 billion it spent in 2008. The company said those levels are likely to remain in the $25 billion to $30 billion range through 2013.

Exxon Mobil shares rose 25 cents to $65.95 in trading Tuesday. They’ve traded in a range of $56.51 to $86.47 in the past year.

The following is a guest post by Chelsea Green‘s Makenna Goodman:

I remember a time when defenseless kids with hippie moms got made fun of for using wax sandwich bags (ehem). I remember a time when it was considered uncool to be packing carrot sticks in your tote bag. When yoga was what the weird naked guys did at the hot springs in Ouray, Colorado; you know downward-facing dogs splayed out by the pool. I remember a time, in other words, when trendy things used to be not-trendy. Like BIODIESEL. The wave of the future.

You’ve seen it station wagons clanking around town with a sign on the back window that says, “This Vehicle Runs on Veggie Oil I’m Awesome.” You probably drive by and think: Damn. Those hippies are self-important, but I’m repressing the fact that I want to be just like them. What is wrong with me? But here’s the first thing you should know about biodiesel: It’s not just white people with dreads who use vegetable oil to run their cars. It’s a movement. Dude, my boss does it.

Know this:
*Biodiesel can be made from virtually any vegetable oil
*It can be used in any modern diesel engine
*It’s America’s fastest growing alternative fuel

But really, biodiesel is a tricky thing to understand, which is why many people just plain don’t. Consider it worth your while to get versed on biodiesel, from the experts. And everything you need to know, Greg Pahl will tell you. He’s the author of Biodiesel: Growing a New Energy Economy and The Citizen-Powered Energy Handbook: Community Solutions to a Global Crisis and knows the deal.

The following is an excerpt from The Citizen-Powered Energy Handbook: Community Solutions to a Global Crisis by Greg Pahl. It has been adapted for the Web.

Biodiesel 101

Biodiesel, a diverse group of diesel-like fuels, can be easily made through a simple chemical process known as transesterification from virtually any vegetable oil, including (but not limited to) soy, corn, rapeseed (canola), cottonseed, peanut, sunflower, mustard seed, and hemp. But biodiesel can also be made from recycled cooking oil (referred to as “yellow grease” in the rendering industry) or animal fats. One Vietnamese catfish processor is even using fish fat as a biofuel feedstock.30 There have even been some promising experiments with the use of algae as a biodiesel feedstock. As long as the resulting fuel meets the American Society for Testing and Materials (ASTM) biodiesel standard (D-6751), it’s considered biodiesel in the United States, regardless of the feedstock used in its manufacture (in Europe, the standard is EN 14214). And the process is so simple that biodiesel can be made by virtually anyone, although the chemicals required (usually lye and methanol) are hazardous, and need to be handled with extreme caution.

Simply stated, here is how biodiesel is made. The transesterification process is initiated by adding carefully measured amounts of alcohol (methanol) mixed with a catalyst (sodium hydroxide lye the same chemical used to unclog kitchen or bathroom drains) to the vegetable oil. The mixture is stirred or agitated (and sometimes heated) for a specific length of time. If used cooking oil is the feedstock, the process requires a bit more testing, lye, and filtration, but is otherwise essentially the same. During the mixing, the oil molecules are split or “cracked” and the methyl esters (biodiesel) rise to the top of the settling/mixing tank, while the glycerin and catalyst settle to the bottom. After about eight hours, the glycerin and catalyst are drawn off the bottom, leaving biodiesel in the tank. The whole idea of the process is to remove the thick, sticky glycerin from the vegetable oil, so the remaining biodiesel will flow easily and combust properly in a modern diesel engine without leaving damaging deposits inside the engine.

In most cases the biodiesel needs to be washed with water to remove any remaining traces of alcohol, catalyst, and glycerin. In this procedure, water is mixed with the biodiesel, allowed to settle out for several days, and then removed. The wash process can be repeated if needed, but it is time-consuming. Not everyone agrees on whether the water wash is necessary. A few smaller producers who are making biodiesel for themselves skip the process, while commercial producers usually must do it to meet industry standards. In the case of some larger, more sophisticated manufacturing facilities, the transesterification process itself is so carefully controlled and refined that the water wash is not needed. There are, of course, quite a few technical variations on this entire process for large-scale industrial operations, but the general transesterification procedure is similar.31

As the amount of biodiesel being produced grows exponentially, the quantities of glycerin by-product grows apace. Glycerin has always been a niche market that is highly sensitive to oversupply, and the recent exponential growth of this commodity as a result of biodiesel production has caused the world glycerin market to collapse. As a result, traditional glycerin manufacturing plants around the world have been closing, while new ones that use glycerin as feedstocks for epoxy resins, propylene glycol, and other products have been opening. Recently, glycerin has even been used by one California company, InnovaTek Inc., as a source for the production of hydrogen.32 Trying to develop new uses for glycerin has been keeping a lot of people awake at night.

Our perspective:

Biofuels is the wave of the future. The federal and many state governments have provides great incentives to help start this process.  Biodiesel adds the needed lubrication to low sulpher diesel, that extends the life of the engine and help it to run more efficiently.

let us know your toughts? You may leave a comment or email george@hbsadvantage.com with any questions you may have.