Archive for January, 2009
January 30th, 2009
I was sitting here writing about how Rockford area gas prices have dropped seven cents in the past week and a half, while the national average stayed where it was. That was such nice, happy news.
Aaaaand, then prices spiked today. They’re $1.99 a gallon around Rockford, up at least 10 cents. They’re also up to $1.99 in Springfield and over $2 in the Chicago suburbs, according to Illinoisgasprices.com.Why? Because of fears that a refinery strike this weekend could idle half the nation’s capacity. While there’s hope it’ll get settled before the Sunday deadline, the markets always get spooked when such things are unsettled at the Friday close. If it gets settled, look for prices to fall back down. If it doesn’t … hooo boy.
Here are the prices from this morning, before things got ugly (courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford dropped slightly to $1.86 a gallon. We’re tied at fifth in the state and were tied at 115th of the nation’s 280 metro areas, quite a good place to be given our above-average taxes. The Illinois average dropped slightly to $1.91. The national average rose slightly to $1.85. Illinois has the 12th-highest gas prices in the nation, including the District of Columbia. Alaska, California, Hawaii, Nevada and Washington average more than $2 a gallon.
Diesel: Rockford dropped three cents to $2.35 a gallon. We have the fifth-highest diesel prices in the state. The state average dropped slightly to $2.50. The national average dropped a cent to $2.39. Illinois is tied with the 14th-highest diesel prices in the country, including the District of Columbia. Only Alaska, D.C. and Hawaii remain above $3 a gallon.
January 30th, 2009
President Obama’s support staff and Secret Service personnel have talked to Gary/Chicago International Airport officials about the possibility of landing Air Force One there on visits to Chicago. The problem is, the two main airplanes that are used as Air Force One are Boeing 747s, which can’t land on GYY’s short runway. Yes, the president has smaller planes he could use, but doesn’t he want to return home in style?
That’s the case Chicago Rockford International Airport Executive Director Bob O’Brien is making. He says that Obama should avoid O’Hare because of the existing congestion, but should consider RFD … which has a long enough runway and top-notch landing guidance systems. O’Brien says Obama can land at RFD and helicopter into Chicago faster than it would take to land and get out of O’Hare. You can see Bob’s response in the above article.
So far, he’s not gotten any interest from the Obama folks, but he’s made the pitch to other officials. No clue if it’s made its way up the chain. Maybe the president reads The Passenger Seat?
January 30th, 2009
“Rod R. Blagojevich, Governor” has been covered up with “South Beloit Plaza1″ (or whatever the name of the particular plaza is).
I woulda went for “The Illinois Tollway - It’s Bleeping Golden”
January 30th, 2009
After 13 years at $1 a ride, Rockford Mass Transit District is considering a fare hike and a new 25-cent transfer fee. Given the rising price of fuel, increased inflation and service additions since 1996, plus tightening of state support it was only a matter of time. Here’s how we’d rank in Illinois if the increase is passed as proposed (ranked on base adult fare, though I note when there’s a longer, more expensive route - no express routes though) :
- Chicago - $2.25 cash; $2 with CTA cards and 25 cents for transfers (fare went up 25 cents in January)
- St. Clair County (St. Louis area) - $2, 75 cents for transfers (fare went up 25 cents in January, will go up another 25 cents next year)
- PACE (Chicago suburbs) - $1.75, 25 cents for transfers (fare went up 25 cents in January)
- Rockford - $1.50, 25 cents for transfers. $1.75 for longer CherryVale Mall route (if 50-cent fare increase approved for April)
- Bourbonnais - $1, with a longer $3 route.
- Danville - $1, with longer $2 and $3 routes.
- Quad Cities - $1 (fare went up 20 cents in January), with a longer $1.50 route.
- Peoria - $1
- Bloomington-Normal - $1 (increased in September by 25 cents)
- Champaign-Urbana - $1
- Springfield - $1
- Madison County (St. Louis area) - 75 cents to $1.75, depending on length of route (increased 25 cents a couple of years ago)
- Decatur - 75 cents
- Galesburg - 60 cents
- Quincy - 50 cents
- Macomb - Free (Western Illinois University routes have been free, city routes went free from 50 cents this fall. WIU pays much of the local cost)
A few takeaways:
- We’re right now in the middle of the pack at $1, but we’re one of the biggest systems in the state … and bigger bus systems usually cost more.
- I wonder if any of the others - like Peoria - will look at fare hikes soon as well.
- There’s precedent for a “zone fare” system like what RMTD is proposing in Cherry Valley. Some other public transit systems have significantly higher fares for some significantly long routes (including links to other mass transit options 30 or so miles away.) Interesting model.
- Ridership would have to drop more than 33 percent for RMTD to lose money on this proposition (that doesn’t take into account the new transfer and Cherry Valley fees, though). While some will go back to their cars to avoid a 50 percent fare increase, I doubt nearly that many would.
Thoughts?
January 30th, 2009
From the Tribune - they’re removing the signs and not putting Quinn’s name up in their place.
They’re going to do it at night, Baltimore Colts Meigs Field style, to minimize traffic disruptions. (UPDATE: OK, they’re doing at least some in the daytime)
January 29th, 2009
A co-worker reminded me to ask the obvious question about if and when they’ll be removed/replaced.
Joelle McGinnis, Tollway spokeswoman, said, “We are trying to determine how and when now.”
That’s a picture we’ve GOT to get.
January 19th, 2009
We’ve dropped 34 places in the national metro area rankings on gas prices in the past week, as the rest of the nation is seeing prices increase. Here’s a great article from the Quad-City Times explaining more on the balancing act that refiners and retailer are facing. It makes an interesting point - refiners took a hit on gasoline because it allowed them to make the more profitable diesel and jet fuel late last year. Now, they’re trying to get margins back to normal, and they’re doing annual maintenance, so you’ll see wholesale gasoline stay up despite crude’s drop.
Meanwhile - and I think people miss this key point - retailers have to keep gasoline at a reasonable price because they need shoppers to come in their stores and buy other things. I’ve been told that while fuel sales are as much of a gas station’s volume, it only provides like 20 percent of the profits. The real money is getting people to buy things in store. If they inflate prices, people shop elsewhere and then they’re in real trouble.
The more I learn, the more I realize I need to learn…
Here are the prices (courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford stayed at $1.93 a gallon, increasing almost a cent over the weekend. We’ve fallen to seventh in the state and are tied as 86th-highest of the nation’s 280 metro areas. The Illinois average stayed at $1.99, rising three cents over the weekend. The national average rose a fraction of a cent to remain at $1.84, up more than two cents over the weekend. Illinois has the fifth-highest gas prices in the nation, including the District of Columbia. Alaska, California, Hawaii and Washington average more than $2 a gallon.
Diesel: Rockford dropped four cents to $2.39 a gallon, down seven cents over the weekend. We have the sixth-highest diesel prices in the state. The state average dropped two cents to $2.52, down three cents over the weekend. The national average dropped a cent to $2.42. Illinois has the 15th-highest diesel prices in the country. Only Alaska and Hawaii remain above $3 a gallon.
January 16th, 2009
Prices have stabilized in Rockford in the $1.90s, while the rest of the nation rises. We’re a bit closer to the national average and we’re falling in the ranking of metro areas. Barring an oil spike, I expect that trend to continue.
Here are the prices (courtesy of AAA’s fuelgaugereport.com):
Gasoline: Rockford rose a fraction of a cent to remain at $1.92 a gallon. We’ve fallen to sixth in the state and are tied as 67th-highest of the nation’s 280 metro areas. The Illinois average rose more than a cent to $1.96. The national average rose almost two cents to $1.82. Illinois is tied with the sixth-highest gas prices in the nation, including the District of Columbia. Alaska, California and Hawaii average more than $2 a gallon.
Diesel: Rockford rose more than three cents to $2.46 a gallon. We have the fifth-highest diesel prices in the state. The state average rose a cent to $2.55. The national average remained at $2.43. Illinois has the 15th-highest diesel prices in the country. Only Alaska and Hawaii remain above $3 a gallon.
January 16th, 2009
Here is a “discussion draft” of the American Recovery and Reinvestment Act of 2009 put out by House Dems. It’s an $825 billion proposal, $550 of which is spending on projects and programs (the rest is tax cuts).
It doesn’t break things down to individual projects or state-by-state funding, but gives general guidelines. More details will surely come, though I don’t know that Congress will pass something that specifies what communities get what … it might just be formulas that will be worked out afterward. We shall see. The Rockford region’s list of projects for the stimulus plan is here to remind you what we’ve asked for.
I’ll focus just on the transportation-related highlights (this being a transportation blog) of the Dems’ plan. First, the items that could help fund specific local projects:
- Highway Infrastructure Investment ($30 billion): “These funds will be used for ready-to-go, quick spending highway
projects for which contracts can be awarded quickly. … Funds are distributed by formula, with a portion of the funds within each State being suballocated by population areas.” Surprising how little of the package is proposed on highway projects. This suggests they’ll be very selective in what projects get funded.
- Capital Assistance to States—Intercity Passenger Rail Service ($300 million): “Provides grants on a discretionary basis to states to fund necessary capital improvements to improve intercity passenger rail service. … Grants under this program are awarded to the most
meritorious projects as measured against statutory criteria.” This could help us get our Amtrak service to Chicago restored.
- Amtrak Capital Grants ($800 million): This appears to be money to improve existing Amtrak-owned infrastructure, particularly in the heavily traveled northeast corridor. Not sure it can help any service in Illinois.
- Transit Capital Assistance ($6 billion): These funds will be used to purchase buses and equipment needed to provide additional public
transportation service and to make improvements to intermodal and transit facilities. … Funds will be distributed through the existing urban and rural transit formulas.” This could benefit Rockford Mass Transit District.
- Capital Investment Grants ($1 billion): “These funds will be used for light rail lines, rapid rail (heavy rail), commuter rail, automated
fixed guideway system, or bus-way/high occupancy vehicle (HOV) facilities. … Funds will be distributed on a discretionary basis and will assist the dvancement of full funding grant agreement projects that are already in construction as well as final design projects that are nearly ready to begin construction.” Could help our development of commuter rail to Chicago.
- Grants-In-Aid for Airports (AIP) ($3 billion): Ready-to-go airport infrastructure projects “for all segments of civil aviation”. Chicago Rockford International Airport always has AIP projects it could use funding for - taxiway improvements, cargo apron expansion, etc. Pity the third runway isn’t “ready to go”.
Here are some elements that might not have a local impact, but are still noteworthy:
- Fixed Guideway Infrastructure Investment ($2 billion): Fixed guideway systems includes a range of transit, including commuter rail, light rail, bus rapid transit, ferryboats, trolleybuses and others. Might help existing Metra lines in Chicagoland, though I don’t know what other regional projects would fit. “These funds will be used for capital projects to modernize or improve existing fixed guideway systems, including purchase and rehabilitation of rolling stock, track, line equipment, structures, signals and communications, power equipment and substations, passenger stations and terminals, security equipment and systems, maintenance facilities and equipment, operational support equipment including computer hardware and software, system extensions, and preventive maintenance.”
- Aviation Explosive Detection Systems and Checkpoint Screening Technologies ($500 million): “Would accelerate the deployment of optimal screening solutions, reduce congestion in airport terminals, improve reliability and efficiency of baggage handling, reduce screener turnover and injury rates, and improve security in airport lobbies.” While Chicago Rockford International Airport isn’t big, crowded or delayed enough to probably warrant funding for this just yet , Chicago O’Hare
- Non-Intrusive Inspection Technology (Cargo) ($100 million): Replace some systems that scan cargo containers.
- Modernization of Land Ports of Entry Facilities ($150 million): Upgrades to key ports of entry for improved border security, trade/travel facilitation and reduced wait times.
Finally, there’s a particular push toward renewable energy, including efforts to encourage electric vehicles for governments, nonprofits and private groups. Perhaps Rockford could benefit in some small way:
- Energy Efficiency and Renewable Energy Research Development, Demonstration and Deployment ($2 billion): While most of this is for biomass and geothermal projects, $800 million would be used for other types of projects, including “research and
development for advanced batteries necessary for the conversion to electric vehicles and storage of energy to increase the effectiveness of renewable energy projects.”
- Advanced Battery Manufacturing ($1 billion): Grants for facilities to support the building of batteries for vehicles.
- Alternative Fueled Vehicles Pilot Grant Program ($400 million): “These grants may be used for the acquisition of alternative fueled vehicles, fuel cell vehicles or hybrid vehicles, including buses for public transportation and ground support vehicles at public airports.
The installation or acquisition of infrastructure necessary to directly support an alternative fueled vehicle, fuel cell vehicle, or hybrid vehicle project funded by the grant is also eligible.”
- Transportation Electrification ($200 million): “Federal funding is provided to implement a grant program to states, local
governments, and metropolitan transportation authorities for qualified electric transportation projects that reduce emissions, including shipside electrification of vehicles, truck stop electrification, airport ground support equipment and cargo handling equipment.”
- Energy Efficient Federal Vehicles ($600 million): Replace some federal agency vehicles with plug-in and other alternative fuel vehicles.
January 16th, 2009
Two good explainers on this:
“It’s essential that the people who make the petroleum products earn a rate of return on their capital. Otherwise, they’re going to go bankrupt and they’re going to close.”
- From the Associated Press: Both the refiners and gas stations face a delicate balancing act - keep prices high enough to make money, but low enough to remain competitive.
Quinn Cassidy, an independent gasoline retailer in Slidell, La., said his profit margin on a gallon of gasoline has improved significantly since the summer, when he and others sometimes made pennies per gallon. Now, because of crude’s descent, he says he can make 25 cents to 30 cents a gallon — and he makes no apologies for trying to keep the price as high as possible while remaining competitive.
“Why isn’t it OK for me to make money?” Cassidy said.
It’s easier to make money when prices are coming down (conversely, it’s harder to make money - and easier to lose it - when prices go up). Analysts call it the “rocket and feather”, and some people think that’s some evil plan by the oil industry to gouge. But, to the extent it exists, it’s because they’ll balancing lower profits when crude soars with higher profits when it falls … the average being a reasonable “hey let’s stay in business” level.
Both these articles underscore how complicated a process energy pricing is. It’s not simply, “Oil goes up, gas goes up the same percentage; oil goes down, gas goes down the same percentage.” There are lots of steps, lots of moving parts, and no easy answers. I know that’s what frustrates readers the most - it’s hard ot understand why prices do what they do, and it seems unpredictable and capricious. Also, unlike other consumer goods, the price is in big signs out on the street.
I find the quote from Consumer Watchdog research durector Judy Dugan interesting:
“The refinery cutbacks are for purely financial reasons,” she said. “Now is the time for government to insert sharper oversight and regulatory controls of the refining industry.”
Funny how it wasn’t time to do that when the refiners were losing money (Check out the negative number in November here. Should the government also take steps to provide minimum returns for refiners? It seems like everyone is for the free market until it hurts them…
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