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Thursday, June 23, 2022
Focus on Gasoline Prices - just part of the story

Joseph D’Aleo, CCM

Skyrocketing gasoline prices are really just the start of an energy crisis in the making for all the energy we use in our lives and homes.  We look at that in detail with special focus in the northeastern part of the country, which is subject to heat and extreme cold, which makes us especially vulnerable to rising energy costs and its availability.

GASOLINE

Gas prices have skyrocketed under Biden. In the economic Obama administration, you may recall gas prices had soared to $4.gallon and the administration warned of $8 gas. It dropped and rose again to $4 but in the Trump administration energy independence crusade, the prices dropped by 50%.

The good old days were prior to 9/11 with February 1999 at $1.01/gallon. Family of 4 with 2 cars driving a total of 24,000 miles/year with 24 mph/gallon would have spent $1000.  In January 2020 prices had declined to just under $2/gallon and a family would have spent about $2000 on gasoline.

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By May of this year, gas prices skyrocketed to 4.58 (now near $5).  JP Morgan warns of $6 gas by August, which translates to $6000.

This would result in an INCREASE of $4000 under Biden for families who must travel to work.

It should be noted in the Obama administration, they thought $8 gasoline would accelerate the move to electric vehicles. If Biden stubbornly pushes gasoline to $8. The impact would be $6000 to families who can not afford the big investment in electric vehicles. They would see AN INCREASE OF $6000.

HEATING OIL/GAS

In New England, the heating season begins early and ends late. Prices often rise some in colder winters due to demand and supply issues but now large scale supply issues are growing and we saw prices skyrocket in 2022.

In January 2021 $2.55/gallon for heating oil by May 2022 rose to $5.999/gallon, a 235% increase

The $3854 in 2021 would become $9057, AN INCREASE OF $5,200.

Natural gas prices similarly (Henry Hub) rose 25%.

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ELECTRICITY

In recent decades, electricity prices in nations that took a aggressive green agenda increased to levels 3 to 5 times higher than the US. This chart prepared by an Australian organization using EIA data from the US showed that.

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More (some long lasting) blackouts occurring as wind and solar are unreliable!! Many households are said to be in “energy poverty” (25% UK, 15% Germany). Elderly and retirees on fixed income often are forced to “choose between heating and eating”

US STEPS BACKWARD INTO AN ENERGY ABYSS

Electricity is about to start rising or even jumping by at least 50% as the US pushes wind and solar. Other energy pundits expect that a doubling is likely. Remember, in Europe and Australia, who led the way on a green agenda, they pay 3 times what we paid.

The northeast states are already paying much more as part of the Regional Greenhouse Gas Initiative (RGGI), a cooperative, market-based effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia to cap and reduce CO 2 emissions from the power sector. See how they rank in the top 10 with California and Michigan.

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In a modest well-insulated two story home I spent $2136 in 2021. The biggest bills come in the hot summer months and around Christmas (lights). A doubling of rate would translate to AN INCREASE OF $2100

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Current trends suggest average electricity prices will at last triple by the end of a decade, a decade that began with the US being energy independent.

THE DAMAGE - INCREASES IN ENERGY COSTS

GASOLINE - $4,000 (eventually to 6,000)
HEATING FUELS - $5,200
ELECTRICITY - $4,300

TOTAL INCREASE over $13,000
TOTAL ENERGY COSTS over $20,000

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This is not to be taken lightly.

Note Countries In Europe and in Australia, that went heavily green, brownouts and blackouts occurred not unlike what the US saw in Texas in 2021 during the cold and heavy snow and snow that froze turbines. 

Many deaths occur in cold when the lights go out. In fact research has shown, 10 to more than 20% more deaths occur in the cold than heat. An international study analyzing over 74 million deaths in 384 locations across 13 countries. The findings were published in The Lancet.

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In countries like the US, Canada and the UK, they track mortality in winter - a metric called Excess Winter Mortality.

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Countries rushed to build coal plants to provide base load or import natural gas from Russia and keep the lights on. France invested in modern nuclear. Others relied on old reliable coal.

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The greens objected to dirty coal. They started importing natural gas - from Russia. By the way Russian natural gas in 2017/18 saved NH from going dark in the extreme cold on late December and early January.

The Russian war has many European countries planning to use coal this upcoming winter to keep the power going in the cold. This is true even as our nation, two years ago energy independent, is moving to abandon our energy dominance for a not ready for primetime gamble on renewables. 

Will Biden say we just have to tough it out so we can reach their green dream that in countries in Europe turned into a nightmare?

Posted on 06/23 at 08:45 AM
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