Comments 1 - 40 of 40 Search these comments
Well for the past few years I have kept a running total of my household's 30-day expenditure on fuel for transportation. Nothing has changed in our household in the past year: same vehicles, same drivers, same commutes.
Period of March 19 - April 18 of 2010 was $233.
Period of March 17 - April 16 of 2011 has been $395.
It's an increase of $162 per month or nearly $2000 per year.
How many working class families in San Jose have $2000 extra income per year to spend on fuel?
How many working class families in San Jose have $2000 extra income per year to spend on fuel?
Not the 2012 Republican Voters, I can tell you that.
How many working class families in San Jose have $2000 extra income per year to spend on fuel?
Not the 2012 Republican Voters, I can tell you that.
Tenounce, except for a very small handful of rich elites in The Fortress (many {most?} of them in the South Bay section of The Fortress, nonvoters {not citizens} ) who don't wanna pay taxes, there really aren't "Republican Voters" in our region.
Well anyone is Free to corner the oil market like the Koch Brothers.
Just do what they do and everything will be fine.
As soon as taxes are eliminated.
You forgot the sarcasm alert :-). Yes, let's have 0 taxes. With 0 taxes we would all be rich.
zzyzzx says
Average MPG for only 20? Are people really that stupid?
In a word, YES.
There's no source for that value on the figure, but RITA gives values of 18.1 mpg (passenger cars) and 22.6 mpg (Other 2-axle 4-tire vehicles) for average U.S. car fuel efficiencies. You'd need the #'s in each category to calculate some sort of weighted mean, but 20 mpg doesn't seem like a bad estimate.
http://www.bts.gov/publications/national_transportation_statistics/html/table_04_23.html
Average MPG for only 20? Are people really that stupid?
In a word, YES.
....and YES!
terriDeaner, sure, but the big picture is that the US population as a whole has never given a crap about car/vehicle energy efficiency unless it is because they are feeling pain in their wallet.
Sad but true, and the great global archive of self-serving stupidity known as "teh internets" will ensure that future generations will know, and they will hate us for it.
Sad but true, and the great global archive of self-serving stupidity known as “teh internets†will ensure that future generations will know, and they will hate us for it.
That's a great quote.
justme says
Sad but true, and the great global archive of self-serving stupidity known as “teh internets†will ensure that future generations will know, and they will hate us for it.
That’s a great quote.
Agreed... until our humorless, future robot overlords decide to overwrite us out of history.
terriDeaner, sure, but the big picture is that the US population as a whole has never given a crap about car/vehicle energy efficiency unless it is because they are feeling pain in their wallet.
I think this is an interesting point, and a ball of issues... but I'm to tired to engage right now. One more errand and off to bed. Tootles!
Not thinking too deeply into it, I would imagine that increasing fuel prices might increase housing prices near employment centers as people try to lock in a somewhat reasonable transportation cost. Conversely, I can't quite imagine anyone thinking that it would be a great idea to buy in Stockton or Brentwood, unless they happen to have stable employment in those somewhat far-flung towns. Though there might be good reasons to buy in Merced, actually. There might be some price stability around BART lines, even pretty far out from the center of things. We might also see more alternative transportation-car pools and bikes and such.
Not thinking too deeply into it, I would imagine that increasing fuel prices might increase housing prices near employment centers as people try to lock in a somewhat reasonable transportation cost.
Another interesting point. But at what geographical and temporal scales would this work?
The fixed cost of my older depreciated 20 mpg vehicles is just about $42 per month per vehicle. Fixed cost is insurance and registration.
The fixed cost of my depreciated 40 mpg Prius is just about the same.
At $4.15 per gallon, the variable cost is about 21 cents per mile on the non-Priuses and about 11 cents per mile on the Prius. The variable cost for maintenance on those old cars is about the same on all of them, and if I don't drive them at all it is zero. But that is ignoring an honest accrual for the replacement cost of that frickin' battery on the Prius when the time comes.
You can call me really stupid if you want to, I don't care. Those 20 mpg vehicles don't cost me a whole lot more to operate than The Cool and Hip Prius.
I don't think high gas prices will hurt the housing market It will hurt rural and far out areas, but it could increase demand in areas closer to sources of employment. So it's a wash.
The direct impact on home prices that gas prices could have seems pretty small at a glance, the problem are the knock on effects to the economy. People will still stop spending money elsewhere because that cash is now going towards fuel instead of good and services, which means loss of business, which means loss of jobs and/or wages. Goods will also have their prices increase at the same time due to higher energy and shipping costs.
Unless its sustained for a good long while I don't think ~$5/gallon gas will push the US into another recession by itself. Its when you get to $7-10/gallon gas that things get really bad since fuel will get priced right out of the hands of the poor (ie. you're screwed if you have to drive to LA to work or live in Riverside) and the middle class will end up with most of its spending cash absorbed by fuel costs.
That would also be the time to buy a Prius or some other super fuel efficient vehicle, however the vast majority wouldn't be able to afford it at that point either. But then they probably couldn't afford the car payment on those things either even when things were better for them, so its totally pointless to talk them at all.
Until then Sybrib is dead on. Those 20mpg "gas guzzlers" are some of the most practical vehicles to own right now, particularly the domestics. Which are cheap and if you know about cars you'll know the particular models that are actually reliable (yes they do exist, I have a early 90's LeSabre still going strong with over 200K miles, gets around 20mpg). FWIW I also have a 05 Matrix that gets something like 29mpg that I use more for daily driving, but only because its easier to use in the city. My couch on wheels LeSabre is fantastic for highway driving though.
Also due to Cash for Clunkers destroying the used cars that go traded in the prices on the Japanese used cars that used to go for $2K now go for closer to $5K or even more just for a car that runs period, no matter its mechanical or cosmetic condition. Its ridiculous and has price the cheap but fuel efficient beaters out of the hands of the poor who would really need them the most.
Unless its sustained for a good long while I don’t think ~$5/gallon gas will push the US into another recession by itself.
Here's a good interactive chart from reuters for estimating the impact of oil price on global GDP:
http://graphics.thomsonreuters.com/11/02/OIL_CALC0211_SB.html
screenshot from zerohedge:
The underlying model is that GDP drops 0.5 for every $10 increase in oil price. It predicts that at ~$190/bbl (brent crude) global GDP would be zero. There is some fuzziness here since WTI, which is more relevant to the US market, is currently ~10% less than brent crude. Either way, according to the chart above this would mean gas would need to be ~ $6/gal (US prices) for global GDP to hit zero, so your $7-10/gal projection (US) doesn't seem too far off target for a recession. I'm not sure about the exact outcome of sustained $5/gal gas here, but I suspect it would AT LEAST increase the chances for a slow grind down for a while. That said, the global economy is on pretty shaky ground, so an even smaller oil shock may have bigger immediate consequences in some areas (think about Europe...).
We are currently at ~$123/bbl (brent)-$112/bbl (WTI) and ~$4/gal gas.
I think it would be 6-9 months for sustained ~$5/gal gas to start to push the US into a recession, closer to 9 than 6 months normally except the high unemployment and underemployment have made the economy more fragile than usual.
We'll see, but I think gas will get over $5/gal and stay there late this year, assuming the Fed goes all out with a QE3 or extended and expanded QE2.
We’ll see, but I think gas will get over $5/gal and stay there late this year, assuming the Fed goes all out with a QE3 or extended and expanded QE2.
Quite possible. We'll probably hit $4/gal nationally in early May, almost certainly by Memorial Day. Peak should be sometime mid-summer, if this trend mirrors the 2008 oil spike.
So I guess it depends if oil crashes mid-summer or whether it levels off but keeps on creeping up through the fall. Demand is showing signs of weakening already, but there are legitimate supply concerns that could keep oil/gas elevated at $4-5 for a while I think.
As for QE3, don't forget about the election cycle that re-commences this fall...
Eliza says
Not thinking too deeply into it, I would imagine that increasing fuel prices might increase housing prices near employment centers as people try to lock in a somewhat reasonable transportation cost.
Another interesting point. But at what geographical and temporal scales would this work?
Looks like 50 miles is enough to kill sales of new houses relative to foreclosures closer to a city center:
Builders of New Homes Seeing No Sign of Recovery
http://www.nytimes.com/2011/04/23/business/economy/23housing.html
RICHMOND, Ill. — In this distant Chicago suburb, a builder has finally found a way to persuade people to buy a new house: he throws in a car. [...]
Builders and analysts say a long-term shift in behavior seems to be under way. Instead of wanting the biggest and the newest, even if it requires a long commute, buyers now demand something smaller, cheaper and, thanks to $4-a-gallon gas, as close to their jobs as possible. That often means buying a home out of foreclosure from a bank.
Four out of 10 sales of existing homes are foreclosures or otherwise distressed properties. Builders like Mr. Meier who specialize in putting up entire neighborhoods on a city’s outskirts — Richmond is some 50 miles northwest of downtown Chicago — cannot compete despite chopping prices.
Apparently its really a $17k credit for a GM vehicle but you can choose to put it towards the house instead. The Aveo apparently gets around 27MPG, which isn't bad but that is a really mediocre car to say the least.
Average MPG for only 20? Are people really that stupid?
How does this make someone stupid? Stupid is buying a new car just for a gas mileage advantage, unless you NEED a new car. I drive a 2002 vehicle that probably gets less than 25 mpg. I have not tracked mpg in a while so I'm not sure. Bought it used in 2003. It's paid for, runs great, quiet, reliable, body has one small door ding, and I like it. Cost of a new car far outweighs savings by increasing mpg. Oh, and driving an older vehicle makes my insurance cheap. Even if my mpg is 20, I don't think this is a stupid choice.
RICHMOND, Ill. — In this distant Chicago suburb, a builder has finally found a way to persuade people to buy a new house: he throws in a car. […]
Builders and analysts say a long-term shift in behavior seems to be under way. Instead of wanting the biggest and the newest, even if it requires a long commute, buyers now demand something smaller, cheaper and, thanks to $4-a-gallon gas, as close to their jobs as possible.
That's pretty funny. Richmond is pretty rural and isn't a big enough city to have that much employment. But it does have great highway access. Most people who live in that area commute a LONG way to work. I guess that's why the builder thinks a new car is a good incentive.
Most people who live in that area commute a LONG way to work. I guess that’s why the builder thinks a new car is a good incentive.
100mi (round trip)/20 mpg = 5 gal per round trip
5 gal * $4/gal = $20 per round trip (US AVG)
$20 * 5 days/week = $100/week commuting
$100/week * 52 days/yr = $5200 per year spent on fuel alone.
Prius avg's around 40 mpg, I think, so commuting in one of those would cost $2700 per year. They cost more than $17K though...
Aveo avg is 27 mpg, so commuting in one of those would cost $3851 per year. You could probably get a base model for $17K or less.
Guess it would come down to maintenance costs. Those could add up fast for an older vehicle driven 100mi*5days/week*52weeks/yr (26,000 mi/yr).
terriDeaner,
Do you own a Prius? I do.
You can buy a whole lotta gasoline with the cost of replacing that friggin battery. For my model Prius, a service advisor showed me an invoice- $4000. That's for the older model Prius. Replacement cost for the battery in the newer model Prius is higher.
I got a Prius in 2000 because it was a gadget that I was fascinated with at the time, when it was an ugly weird car, a geeky gadget before it was cool to be a geek; before "Prius" became a A Cool and Hip Birkenstock-ish Whole-Food-ish "I'm Better Than You Because I Care About the Environment More Than You Do" Left Coast Elite Fashion Statement. With 100K miles on it now I probably saved about 1000 or so gallons of gasoline compared to a simpler small car. Most of that time when I saved those 1000 gallons, it was $2-ish gasoline, not $4-ish gasoline.
So I am skeptical that with an honest accrual of the replacement cost of the battery, that it even penciled out to pay for itself.
Another way to reduce one's gasoline cost by half or even two thirds is to carpool. But here in the Bay Area, it is not Hip, and it is not Cool, to carpool long distances. Casual carpooling over the Bay Bridge maybe, but not long distances.
A Prius is Hip and Cool, though.
No, I don't own a Prius Sybrib. I don't drive enough to make owning a hybrid cost-effective, and I was always wary of the replacement cost for the battery.
That said, I'd don't have strong feelings for or against buying a hybrid or carpooling. Or being cool, for that matter... although I always thought birkenstocks looked dorky.
Another way to reduce one’s gasoline cost by half or even two thirds is to carpool.
You can reduce gasoline costs by one hundred percent if you live near a train station and don't have an automobile. If you live so close that you don't even need the train, total transportation costs can be reduced to zero.
The Prius is great for someone who's going to have an automobile whether it's efficient or not, but the "buy a Prius for the environment" crowd really bothers me. If they really cared about the environment and about conserving energy, they wouldn't have a car at all.
The next car I buy will be a plug-in hybrid. Electricity is a lot cheaper than gasoline.
$1.40 worth of electricity will take you 40 miles.
$1.40 worth of gasoline will take you how far?
Non-scientific, but interesting to see how the gas savers stack up....
Electricity is much cheaper than gas, but as more people plug in, electric prices will increase. Also, the car costs a lot.
Hybrids are mature technology. In San Francisco, cab drivers put 300K miles on Ford escapes, saving about $30,000 per car in fuel over a few years before having to retire the cars for legal reasons. They also probably saved abut 12 brake jobs, because of the regenerative braking, so add in another $6000 to $12000 in savings for that.
http://articles.latimes.com/2009/mar/30/local/me-green-cabs30
I think that the fear about battery replacement costs is mostly drummed up crap. Has any study come out showing the # of battery failures per miles driven or the percent of cars needing a battery change?
"Toyota says its out-of-warranty battery replacement rate is 0.003 percent on the second generation Prius that debuted in the 2004 model year. That equals about one out of 40,000 Priuses sold, says Toyota spokesman John Hanson."
http://www.newsweek.com/2008/05/26/assaulted-batteries.html
Here's another article about battery replacement.
How much SILVER is in those batteries?
None apparently (wikipedia):
http://en.wikipedia.org/wiki/Toyota_Prius
Battery
A sealed 38-module nickel metal hydride (NiMH) battery pack providing 273.6 volts, 6.5 A·h capacity and weighing 53.3 kg (118 lb)[55] is supplied by Japan's Panasonic EV Energy Co. They are normally charged to 40–60% of maximum capacity to prolong battery life as well as provide a reserve for regenerative braking. Each battery pack uses 10–15 kg (22–33 lb) of lanthanum. As each electric motor in Prius also contains 1 kg (2 lb) of neodymium, the car is described as "the biggest user of rare earths of any object in the world."[56]
Ni metal hydride seems like a good choice because it should be lighter than lead-acid, but more robust (i.e., maintains charge over a longer lifetime) than a lighter Li battery.
Hybrids are mature technology. In San Francisco, cab drivers put 300K miles on Ford escapes, saving about $30,000 per car in fuel over a few years before having to retire the cars for legal reasons. They also probably saved abut 12 brake jobs, because of the regenerative braking, so add in another $6000 to $12000 in savings for that.
I don't doubt that hybrids are a good choice for certain situations, particularly those applications that require a lot of driving. As a side note, someone who drives a regular car (without regenerative braking) could probably save a similar amount of $ by doing the work themselves. Some specialty tools are required, but the skillset needed to replacing disk or drum brakes is not out of the reach of the average person.
I think that the fear about battery replacement costs is mostly drummed up crap. Has any study come out showing the # of battery failures per miles driven or the percent of cars needing a battery change?
“Toyota says its out-of-warranty battery replacement rate is 0.003 percent on the second generation Prius that debuted in the 2004 model year. That equals about one out of 40,000 Priuses sold, says Toyota spokesman John Hanson.â€
Also from wikipedia:
http://en.wikipedia.org/wiki/Toyota_Prius
The Prius uses an all-electric A/C compressor for cooling, an industry first.[24] Combined with a smaller and lighter NiMH battery, the XW20 is more powerful and more efficient than the XW10.[25] In the U.S., the battery pack of 2004 and later models is warranted for 150,000 miles (240,000 km) or 10 years in states that have adopted the stricter California emissions control standards, and 100,000 miles (160,000 km) or 8 years elsewhere.[26][27] The warranty for hybrid components is 100,000 miles (160,000 km) or 8 years.[28] [this is at least correct for 2nd generation Priuses; I'm not sure the warranty is the same for newer models]
Seems like a pretty good deal unless you keep your car longer than 100-150K miles or 8-10 years.
I agree, that in some situations, a hybrid would be bad. High mileage city driving they are great. High mileage highway, maybe less so. Low mileage, any situation, maybe not so good of a deal.
Letting a reusable battery sit around idle is generally bad, too.
battery replacement costs is mostly drummed up crap.
It is not crap.
When I was at Toyota getting service for something, I asked the service advisor if he knew "approximately" how much a replacement battery would cost for my 2001 Prius. He told me that as a matter of fact he was having one installed for someone that day. The paperwork was close at hand and he showed it to me: $4000. Replacement battery came with a ONE YEAR warranty. For $4000.
You can choose to not believe what I wrote, and to call it crap if you want to, but that is what happened.
Also, my battery had to be replaced in 2005 due to a recall. I think I only had one more year of warranty on it at the time (I think the 2001 Prius had a five year warranty on its battery.)
Toyota says the Prius has an out-of warranty battery replacement rate of 1% for 1st gen & 0.003% for 2nd gen. You have an anecdote that there was one with a dead battery in the shop. I believe your story, but there are just as many stories about how much lower the maintenance costs are on a hybrid. Any car can blow an engine & have a huge repair cost. The question is, how often does it happen.
By the way, I hardly drive enough to justify my own car, much less replacing a car with a new one. If I did drive a lot in the city, I'd look at a hybrid. If I drove a lot on the highway, I'd look at turbo diesels.
There seem to be several wild cards for the economic 'recovery' and the summer 2011 housing market. I have a hard time seeing how our consumption-based economy will improve if oil/gas keeps getting more expensive. Not surprisingly, consumer confidence has been taking a beating lately:
Consumer Confidence Dips Amid Higher Gas Prices
http://www.npr.org/2011/03/29/134950482/consumer-confidence-dips-amid-higher-gas-prices
I don't follow this metric too closely, since it seems like a poor indicator of what people will ACTUALLY do with their money when it comes time to be spent. However, the article brought up a few good points. One very interesting point was that current gas prices are effectively reducing wages:
"There is a sort of diminished sense of purchasing power," she said.
Signs of financial strain emerged Monday in February's consumer spending report, which showed that most of the 0.7 percent jump in spending went to cover higher gas prices. Although personal income and rose 0.3 percent for February, after-tax incomes actually fell 0.1 percent after adjusting for inflation.
And...
The national average for a gallon of gas hit $3.584 Monday, the highest ever for this time of year, according to AAA, Wright Express and the Oil Price Information Service.
How much will this weaken demand for housing from first-time homebuyers (NOT investors) for the near future (spring-summer)?
#housing