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  1. #1
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    As Gas Prices Go Up, Impact Trickles Down

    As Gas Prices Go Up, Impact Trickles Down
    By THE NEW YORK TIMES
    Published: April 30, 2006

    It is hard to watch the numbers flutter ever upward on the gas pump these days. A look at the ripple effect of rising gas prices across the country:

    The End of Fun and Games

    Gas prices are not doing much for the love life of Fernanda Tapia.

    A student at Brandeis University in Waltham, Mass., Ms. Tapia, 21, is among the untold number of money-strapped college students who have been grounded by the pumps.

    Ms. Tapia's red 2004 Dodge Neon was supposed to be a ticket to freedom when her brother passed it down to her in January. She had planned to drive to Manhattan each weekend to visit her boyfriend at New York University, and also dreamed of going out to restaurants and making day trips with friends.

    But the car has been nothing but a money-guzzler, she said, leaving her so short of cash that the car often sits in the parking lot outside her apartment.

    "When I first got the car it was all fun and games, but I found out it's pretty expensive to fill the tank," Ms. Tapia said. "I don't even want to put gas in my car right now."

    Unexpectedly high gas prices are also putting a crimp in the summer plans.

    J. R. Cowan, a history major at Quinnipiac University in Hamden, Conn., said he decided against a cross-country summer trip because "gas would cost double what I budgeted for when I started dreaming about California last year."

    When Amanda Early, a junior at Seton Hall University in South Orange, N.J., accepted a four-day-a-week summer job in public relations near the campus, she did not realize it would amount to a sentence of spending an entire summer in New Jersey. Ms. Early had planned to drive home to Connecticut every weekend, but she said gas prices would force her to remain in New Jersey in the house she shares with four other girls.

    "This is a college town," Ms. Early said, "and it is nowhere near as much fun in the summer."

    A sophomore at Northwestern University in Evanston, Ill., who declined to give his name because he did not want to risk angering a prospective employer, said he might turn down a summer job delivering prescriptions for a pharmacy in a Boston suburb. The $10 hourly wage was acceptable, he said, but not the requirement that he drive his own car and pay for gas.

    KATIE ZEZIMA

    Defending Big Oil

    John C. Felmy, the chief economist of the American Petroleum Institute in Washington, the main trade association for the oil business, sounds frustrated.

    As an undergraduate at Pennsylvania State University, he said, he drove to Boston with his debate team during the Arab oil embargo. More than 30 years later, he can recite the topic for 1973-74 without hesitation: "Resolved, the federal government should control the supply and utilization of energy in the United States."

    On the drive back, Mr. Felmy recalled, his group was almost stranded in Connecticut because no gas was available, a result, he said, of government misallocation. Government, Mr. Felmy said, can make energy problems worse.

    "I thought we'd learned from bad energy policy by now," he said, although there are days when he is not so sure. Those are the days when his computer flashes with hate e-mail from people who blame the American oil industry for the rise in oil prices.

    "People just simply don't know the facts," he said, "but they accuse you of everything you can imagine."

    Mr. Felmy's organization has been arguing to anyone who will listen that over the long haul, oil company profits are almost identical to the average for manufacturers in the United States, and that since 1982, the price of petroleum products is up less than the price of pulp and paper or lumber, and only about one-third as much as drugs and pharmaceuticals. But it has been tough going, with the public and with legislators, he said.

    "The politicians are reading all the polls, they know how concerned consumers are, and they are trying to figure out what to do about it," he said. "Some are lashing out, attacking the industry, using information that is simply inaccurate."

    Mr. Felmy said he was proud of what he did for a living, and he called institute members "honorable companies."

    "They're doing what they should do, what is legally required for their shareholders, unlike other companies you've heard about in the news," he said. "They are managing their business properly, keeping fuels flowing to consumers, even though we're operating in places where sometimes people are shooting at us."

    His industry, Mr. Felmy said, is "1.4 million Americans working to keep your gas tank full 24 hours a day."

    MATTHEW L. WALD


    Driving Guzzlers for a Living

    Few drivers feel the pain of soaring gas prices as acutely as the New York City cabbie stuck behind the wheel of a Crown Victoria sedan with a thirsty, overworked eight-cylinder engine.

    At the entrance to the Checker Management taxi depot in the Long Island City section of Queens is a trio of old, battered pumps where returning cabbies refill their bottomless tanks after their 12-hour shifts.

    The old pumps offer only regular unleaded, and for the very modern price of $3.15 and nine-tenths of a cent per gallon. It is still lower than prices in Manhattan, where most of these cabbies go through a full tank of gas lurching and screeching around traffic-clogged streets for 12 hours.

    Back at the depot, they replenish their tanks, shaking their heads in disgust as the pumps' rusty digit counters spin.

    "We drive 12 hours a day, so we feel it more than anyone," said one driver, Peter Lee, 54, who began driving cabs in New York in 1972. He pointed to the depot's fleet of Fords, mostly Crown Victoria sedans.

    "These things get about 10 miles per gallon in the city, 8 miles if the customer wants the air-conditioner on," he said, adding that gas mileage was made worse by the choppy gas-brake-gas-brake driving style required in New York City. "New York people are always late and telling you to drive fast, so you have to keep gunning the engine and then braking, which uses more gas."

    The drivers at the depot, just across the East River from Midtown, are almost all immigrants, and all kinds of languages, dialects and accents can be heard in the tight locker room. They wolf down home-cooked meals — whether couscous, curry or rice and beans — before their shifts. With the Manhattan skyline looming to the west, they gather in the parking lot and grouse about gas prices.

    Drivers often log 150 miles a shift and spend almost $50 in gas, Mr. Lee said, about $20 more per day than a year ago. He recommended that the city order a 50-cent surcharge for each fare to compensate cabbies for price increases.

    Most drivers at the depot rent their cabs for 12 hours at a time, usually paying more than $100. They pay up front in cash and get a key to a cab with a full tank of gas; they must refill it when they return the cab.

    "Compared to a year ago, I pay $15 more a day in gas," said Miguel Gonzalez, 67, of Queens. "I only take home $100 a day, so that's my lunch and dinner right there."

    Lesly Richardson, 50, a Haitian immigrant from Brooklyn, nodded in agreement.

    "That's $100 a week," he said. "That's your grocery bill."

    COREY KILGANNON

    New Hope for Ethanol

    These are happy days for an ethanol man.

    The price of grain-alcohol fuel is up sharply as demand has surged, and Colorado's newest ethanol plant is almost ready to open after four years of preparation and sweat by Dan R. Sanders and his family.

    "It's great for us," said Mr. Sanders, 28, as he watched one of the first loads of corn — ethanol's main ingredient — arrive on Friday morning from a farm in northeastern Colorado.

    When Mr. Sanders's company, Front Range Energy, begins shipping next month from this $60 million factory in Windsor, Colo., an hour north of Denver, it will just about double Colorado's ethanol production, adding 40 million gallons a year to the pipeline. And at least two other plants around the state are in planning.

    continued...

  2. #2
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    Re: As Gas Prices Go Up, Impact Trickles Down

    Ethanol, which is essentially identical to the old corn liquor of moonshine fame, is increasingly blended with gas to reduce emissions and replace other additives like MTBE, or methyl tertiary butyl ether, which is a suspected carcinogen.

    But more and more vehicles are also able to burn commercially available ethanol fuels like E85 — 85 percent grain alcohol — and kits can also be bought that allow cars to burn an even higher percentage of ethanol. All this has further increased the demand, and the price. In most parts of the country, E85 sells for 30 cents to 60 cents a gallon less than regular unleaded gasoline, but most cars get fewer miles to the gallon burning ethanol.

    Ethanol has its critics. Some economists say that farm subsidies blur the fuel's real cost, making it a less than perfect long-term alternative in thinking about the world after oil.

    But here in Colorado, people like Mr. Sanders say the economics make more sense than ever. Until recently, ethanol could only make money if distilled close to its fuel source, he said. That is why corn-country Iowa dominates the nation's production.

    Increasing demand is shattering that boundary, making factories feasible closer to where the product gets sold. About half of Front Range's output, Mr. Sanders said, will go no further than Denver.

    The Sanderses have also lined up local buyers for the waste. The left-over corn mash will be sold as cattle feed, while the carbon dioxide produced by fermentation will be made into dry ice and sold in the Denver market.

    But operations like this are still small potatoes by the scale of big oil. On a day when the Chevron Corporation was announcing $4 billion in profits, Mr. Sanders and his wife, Jana, and their 2-year-old daughter, Ellie, were watching the corn arrive. And Ellie was not even very interested.

    KIRK JOHNSON

    Cutting Into Travel and Food

    Jeremy Cole looks at the black numbers on the blue Marathon Gas sign in Kirtland, Ohio — $2.87 for a gallon of regular — and thinks of his broken vow.

    For two years, Mr. Cole, 19, had given his girlfriend a gift on the 25th of each month, to commemorate the day they met — Jan. 25, 2002 — at Willow Hill Baptist Church in Willoughby, Ohio.

    But for the past three months he has missed the date as gas prices have risen.

    This month, Mr. Cole bought her a rose and a pink wind chime, because she loves to hang pink things from the ceiling of her bedroom.

    The fuel warning light in his 1993 Honda Accord was glowing. It was a 25-mile drive to her house in Chardon, and Mr. Cole, who studies computers at Lakeland Community College and earns $8.18 an hour working in a factory that heat-treats metal, did not have money for gas. So he stayed home.

    "I won't be able to see her till I get paid," he said. "Ever since gas prices went up, it's like I'm barely able to see her."

    Until this year, Mr. Cole said, he always filled his tank. On one recent day, though, he bought only five gallons for $14.35, barely enough to drive to school, work and straight back home.

    A guitar lies across his back seat, and his trunk is filled with amplifiers. Mr. Cole plays in a band called In All His Ruin. Before gas prices jumped, band members drove separately to practice at the drummer's house in Chesterland, 15 miles away. Now they all meet at Mr. Cole's house and carpool, squeezing themselves and their equipment into a different member's car every week.

    On the way home, Mr. Cole used to stop at Wendy's and order the No. 6 combo meal: spicy chicken sandwich, medium Dr. Pepper, medium fries. Now he orders junior hamburgers from the dollar menu.

    "It's not a gourmet meal anymore," he says. "French fries are an extravagance now. It makes me angry that I have to change my whole life because of gas prices."

    CHRISTOPHER MAAG

    At $2.39 a Gallon, a Bargain

    Cheap gas prices are in the eye of the beholder.

    At the Flying J Travel Plaza in Casper, Wyo., a gallon of regular unleaded gas sold this week for $2.39, about as low as anywhere in the country and more than $1 less than some places in California and Hawaii.

    But gratitude at the pumps? Forget it.

    "Gas prices don't seem low to me," said Dick Gilbert, a tow truck operator, who was out $170 filling his vehicle's two tanks. "And they just keep going higher."

    Mr. Gilbert was preparing to burn most of the gas on a 250-mile round trip to retrieve a broken-down truck. He will charge his customer $2.50 a mile, but even so, he said rising gas prices were eating into his profits.

    In an adjoining gas lane, Cindy Wright spoke of the pain high gas prices cause the single mothers who make up many of the clients at the public health clinic in Torrington, where she is a nurse.

    "They can't afford to drive," she said. In another sign of the times, Ms. Wright said, a relative who owns an auto repair shop arrived at work one morning recently to find that thieves had siphoned gas from vehicles left there overnight.

    DOUG MCINNIS

    Caught in the Middle

    Pity the people who sell gas in San Francisco or lease franchise stations from the oil companies. No, really. As if working around fumes and grime were not enough, now customers are rude — even hostile — about the sudden escalation in gas prices, which in San Francisco are among the highest in the country.

    "Someone today threw the money down, and said, 'This is ridiculous,' " said Stella Liu, 51, who leases a 76 gas station from Conoco and runs an adjacent automotive repair business. Other customers scream at her cashier before jumping into their cars and tearing away from the station.

    Ms. Liu, though, is sympathetic. She too has to buy gas to fuel her 50-minute commute (one way) from the suburbs. "If I were making the money, I wouldn't be here," she said, "We are all in the same boat."

    Prices may fluctuate, Ms. Liu said, but even when gas is $3.36 for a gallon of regular, as it was on Friday at her station in the Potrero Hill neighborhood, her profit is unchanged because she is paying more to her supplier.

    "It's the same for me as it is for the customer, maybe worse," she said. Business is down because people are buying less gas — choosing a quarter or a half a tank — and then paying by credit card. "We have to pay insurance and workers compensation, the rent," she said. "We are making the same money we did years ago. Only now, it barely covers the cost of our overhead."

    Many customers understand the dealers are not at fault, but others simply rage at the nearest target.

    She advises angry customers to contact Conoco.

    "I tell people, I'm just the dealer. I have no control over the price. I don't even know why the price is going up."

    CAROLYN MARSHALL

    Trying to Share the Pain

    In a region where buses advertise that "Gas isn't expensive if you don't buy any," Matt Mulholland of Lynwood, Wash., assumed it would be easy to arrange a carpool for his daily commute, especially as gas approached — and passed — $3 a gallon.

    "Let's save time and gas!! yes yes YES please," Mr. Mulholland wrote on the Craigslist Web site.

    A month later, Mr. Mulholland, 32, still drives alone. No one responded to repeated pleas to share the 40-mile round trip from his home north of Seattle to Bellevue, a city east of Lake Washington. He is disappointed, not least because, with a passenger, he could zip into Interstate 405's high-occupancy vehicle lanes and prune his hourlong commute.

    "I look at cars around me and they always have one person," said Mr. Mulholland, who works as an estimator for an auto body company. "I thought I'd probably have more chance of getting somebody interested now, when they're talking about prices peaking at $4 by the end of the summer."

    But so far, the shock of $3 gas has not persuaded many commuters to change their behavior.

    There has been no increase in registration for the Rideshare program, which arranges carpools and vanpools for the county that includes Seattle and Bellevue, said Cathy Blumenthal, the program's coordinator for King County Metro Transit.

    By contrast, 5,000 people — a 62 percent increase over the previous year — signed up to share rides last fall after Hurricanes Katrina and Rita drove local gas prices toward $3.

    While Mrs. Blumenthal wonders if people are waiting — either for prices to surge or recede — before they alter their driving habits, Mr. Mulholland is more pessimistic.

    Complaints about gas prices are "hype, a hot button," he said. "People talk without doing anything."

    JESSICA KOWAL

    This article was written and reported by Kirk Johnson in Windsor, Colo.; Corey Kilgannon in New York; Jessica Kowal in Lynwood, Wash.; Christopher Maag in Kirtland, Ohio; Carolyn Marshall in San Francisco; Doug McInnis in Casper, Wyo.; Matthew L. Wald in Washington; and Katie Zezima in Boston.

  3. #3
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    Apr 2006
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    USA
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    Re: As Gas Prices Go Up, Impact Trickles Down

    I usually drive 25 miles north and fill up in Oregon where the gas is much cheaper..approx 40 cents / gallon less, But today I didn't have time, so I paid $3.36/ gal...for regular :eek:

  4. #4
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    May 2005
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    Ware Shoals SC
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    Re: As Gas Prices Go Up, Impact Trickles Down

    Ethanol will never even make a dent if we continue to drive like we do now. I read it would take 92% of america's land mass if we used corn to make fuel if we continued to drive like we do now. That means nothing but pure land and then we would even have enough room so you get the picture. It will only help some for a short time.

    I say get a moped or bike when you can. We are so dependant on gas its pathetic....We need a way to get off of it not lower the price. The emissions make us sick and warm the air(global warming).

  5. #5
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    Re: As Gas Prices Go Up, Impact Trickles Down

    Editorial
    Ethanol's Promise

    The political scramble to find quick answers to rising oil prices has produced one useful result, which is to get people talking about substitute fuels that could make us less vulnerable to market forces, less dependent on volatile Persian Gulf oil producers and less culpable on global warming.

    That, in turn, has focused attention on the fuel that seems to have the best chance of replacing gasoline — ethanol. President Bush mentioned ethanol in his State of the Union address. Entrepreneurs like Bill Gates have begun investing in it. And every blue-ribbon commission studying energy has embraced ethanol as a fuel of the future. One leading environmental group, the Natural Resources Defense Council, predicts that ethanol, combined with other strategies, could replace all of the gasoline Americans would otherwise use by mid-century.

    Until recently, the only ethanol anyone had heard about was corn-based ethanol, a regional curiosity that accounts for about 3 percent of the nation's fuel and suffers from its association with the agribusiness lobby and with presidential candidates hustling support in the Iowa primaries. What the experts are talking about now, however, is cellulosic ethanol, derived from a range of crops, native grasses like switchgrass and even the waste components of farming and forestry — in short, anything rich in cellulose. A Canadian company called Iogen, a leader in the field, makes its ethanol from wheat straw.

    Like corn ethanol, cellulosic ethanol can be used in automobiles, so it is appealing as an answer to oil dependency. And both forms of ethanol are inherently superior to gasoline in te.rms of reducing global warming emissions, since the carbon dioxide they absorb while growing helps offset the carbon dioxide they produce when burned in a car's engine. Cellulosic ethanol is in fact much more useful than corn ethanol on this score, because it requires far less energy to produce and thus emits fewer greenhouse gases.

    In theory, hydrogen, which Mr. Bush keeps touting, could achieve the same purposes. But hydrogen cars are unaffordable, and a system for producing and delivering hydrogen is at least a generation away. An ethanol infrastructure is already in place, thanks largely to our experience with corn ethanol. Detroit makes cars that are capable of running on a blend of 85 percent ethanol and 15 percent gasoline, and pumps can be quickly constructed. In time, all vehicles can be "flex fuel," capable of running on either fuel.

    And with oil at $70 a barrel, the price is right, too. Corn ethanol, which once required a subsidy, became competitive when oil hit $40 a barrel. Once the technology matures, cellulosic ethanol should be competitive at even lower oil prices.

    Daunting problems remain before cellulosic ethanol is available on a broad scale. The technology must be improved, farmers persuaded to cultivate cellulose-rich crops, commercial plants built. Getting all this up and running will require both private and public capital and sustained leadership. Iogen estimates that its first commercial plant, which it wants to build in Idaho, will cost $300 million. Mr. Bush has asked for only $150 million for research, development and production combined.

    Ethanol will not by itself end our oil dependency or global warming. We also need far more efficient cars and more efficient transportation systems as part of a larger smart-growth strategy. But given enough financial support and political will, it could be a huge first step toward ending America's oil addiction.

    .

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