“Be kind, for everyone you meet is fighting a hard battle” - Often attributed to Plato but likely from Ian McLaren (pseudonym of Reverend John Watson)

## Saturday, November 29, 2008

### Is it "winter blend?"

My 10 fill-up moving average fuel economy has declined steadily from 21.76 m.p.g. for my September 25 fill-up to 21.03 m.p.g. for my most recent fill-up on November 26. This is quite significant and is obvious in the graph of that statistic. Clearly I'd like to know the cause of this deterioration, which amounts to well over 3%. Among other possibilities are: more traffic jams and city street driving; vehicle maintenance issues (tire pressure, wheel alignment, etc.); and air temperature. But another possibility is the switch to so-called "winter blend" fuel which, as best I can tell, takes place around September 15.

There's a very good article produced by Chevron that discusses many aspects of automobile gasoline. It's written at a level appropriate for a curious layperson, i.e., not as a scholarly journal article but with a higher intellectual content than a brochure or other mass consumer outlet. It discusses a huge variety of issues with respect to gasoline formulation, but for this post I'm focusing on a statement that "The heating value of winter gasoline is about 1.5% lower than summer gasoline because winter gasoline contains more volatile, less dense hydrocarbons."

Heating value is how gasoline chemists and physicists evaluate the energy content of gasoline. There are a variety measurements (i.e., units) for this characteristic: b.t.u./gallon; megajoules/liter; etc. I typically calculate using a bastardized unit of megajoules/gallon. This makes various calculations easier for me, since joules are a S.I. unit of energy and are convenient for energetic calculations, but gallons are what I buy at the pump. Clearly, the less heating energy available in a gallon of fuel, the shorter the distance that gallon will take my vehicle.

So, while it's certainly possible that the switch to winter grade gasoline is a part of the reason for my deteriorating fuel economy, it doesn't seem at all likely that it's the full explanation. Among other pieces of evidence that this isn't the full story, I did not suffer a similar decline in fuel economy in September of 2007. There was a similar declining period in January of 2008, however. Could it be that the switch to summer blend was, for some reason, delayed in the winter of 2007-2008 as compared to 2008-2009? I can find no indication of anything like this.

As to the other possibilities, it is true that I subjectively feel like my recent trips have been more stop and go, and local. But my average speed over the subject tanks has shown a very small decline. Of course, I plot my fuel economy vs. average speed and so I can say that the decline noted above would be equivalent to about a 3.5 miles per hour reduction in average speed over the period of time in question. I don't see this in the data either. That leaves maintenance issues and other random factors. I'll keep looking.

## Saturday, November 22, 2008

### The plunge in oil and gasoline prices

No one can help but have noticed the dramatic fall in prices of fossil fuel and related commodities. Nationwide, regular gasoline is well under $2/gallon. As readers of this blog might imagine, I track the price paid for each tank full, as well as the gasoline cost per mile. I use premium in the Land Rover LR3 HSE and the price for my most recent fill up was$2.459/gallon, down from a high of $4.959/gallon on June 17 of this year. Does this dramatic drop indicate that concerns about gasoline price and availability are a thing of the past? It does not. These prices are driven by a huge variety of factors, but the number quoted for "oil price" in the news is the nearest month futures price for "light sweet crude" on the New York Mercantile Exchange. There, you can find prices for a huge variety of commodities and a range of contract dates. For example, the closing January, 2009 (the nearest month) price for light sweet crude is$49.93/bbl, whereas the June, 2009 contract closed at $55.05/bbl. There is so-called "open interest" in contracts out as far as December, 2016 which closed most recently at$85.98/bbl.

This last is surprising, given the recent revelations of the International Energy Agency (IEA) report of looming production shortages. The IEA does not have a history of underestimating production capacity, quite the opposite. Yet the price of oil falls.

Already, alternative energy and unconventional (tar sands, etc.) oil projects have been shelved or put on hold because, at current prices, they don't "pencil out." In my opinion, this is ridiculously short sighted. By the time such projects would be completed, the energy produced would surely be profitable. It could be argued that the executives involved know more than I do, and I'm sure they do. But they're constrained by a system that holds them responsible for maximizing results on a quarterly basis so that the price/earnings ratio maximizes share value. Failure to act in precisely that way leaves the company open to shareholder lawsuits.

Such a system makes it nearly impossible to use this incredible opportunity to find rational and sustainable solutions while we can still operate the economy. The opportunity is unlikely to last. So, we've still got the throttle to the floor with the cliff straight ahead.