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Carfree Living / Oil Demand Destruction: The Story of Our Time

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(China's taken a big step, now it is America's turn to do more):

 

Oil Is Steady After Dropping $4 on China's Fuel Price Increase

 

By Mark Shenk

June 20 (Bloomberg) -- Crude oil was little changed in New York after falling more than $4 a barrel yesterday, the biggest drop in 11 weeks, on speculation demand will decline as China increases fuel prices today.

 

China, the second-biggest fuel consumer after the U.S., will increase gasoline and diesel prices by as much as 18 percent, the National Development and Reform Commission said. Saudi Arabian King Abdullah has called for a meeting between oil producers and consumers on June 22 in Jeddah.

= = =

 

Mark Shenk is on the case: mshenk1@bloomberg.net

 

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You're going to like this Dr Bubb.....

 

A report by Cambridge Energy Research Associates, an energy-consulting group, says 2007 probably will represent the peak year of gasoline consumption in the U.S., with annual demand dropping this year for the first time in 17 years.

 

"All signs point downward from here," says Samantha Gross, associate director of CERA's global oil-research group and one of the report's authors. Gas prices have been high long enough for consumers to see them as "something that's here to stay."

 

Judy Bayer, who works for a mortgage company, is coping with higher prices for gas by giving up outings to the movies, the mall and restaurants. "I don't leave my house. I go to work, and I come home," says the 45-year-old Webster, N.Y., resident.

 

 

AND EVEN BETTER ...... new converts appearing!

 

"Meanwhile, people have begun migrating from far-flung suburbs to urban centers where commuting distances are shorter and public transit is more easily accessed. In a poll this month of more than 900 Coldwell Banker residential-real-estate agents mainly in urban markets, more than 70% of them said their clients increasingly are interested in living in the city to shrink their gasoline bill".

 

http://online.wsj.com/article/SB1213926463...d=fpa_whatsnews

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AND EVEN BETTER ...... new converts appearing!

"...their clients increasingly are interested in living in the city to shrink their gasoline bill".

http://online.wsj.com/article/SB1213926463...d=fpa_whatsnews

 

Keep the Car - Sell the house / some Americans are doing that:

 

"Dean Hemstreet, a software engineer, improved his mileage by replacing his old car, a mid-1990s Chrysler sedan that gave him 17 miles a gallon, with a Hyundai Elantra, which gets 32 miles a gallon. "The gas prices were killing us," he said. Mr. Hemstreet, who lives in a suburb of Salt Lake City, said he intends to keep his new car for about eight years.

 

Meanwhile, people have begun migrating from far-flung suburbs to urban centers where commuting distances are shorter and public transit is more easily accessed. In a poll this month of more than 900 Coldwell Banker residential-real-estate agents mainly in urban markets, more than 70% of them said their clients increasingly are interested in living in the city to shrink their gasoline bill.

 

"The McMansion in the half-finished subdivision in a distant suburb has become the equivalent of the large SUV that people can't unload," says David Goldberg, spokesman for Smart Growth America, a group that advocates for more compact, walkable communities."

 

/Smart America Group :

 

How long before the wise up, and Sell the House AND Sell the Car? - Bring it on !!!

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Global oil demand to fall for first time since '93: analyst

 

By Laura Mandaro / June 20, 2008

 

SAN FRANCISCO (MarketWatch) -- Global oil demand is likely to contract 0.6% in 2008 for the first time in 15 years, said J.P. Morgan Chase late Friday. Analysts led by Joseph Lupton forecast global oil demand will fall another 0.2% in 2009 as demand dampens in emerging markets, whose appetite offset declines in developed markets' oil consumption in 2006 and 2007. Higher prices and weaker global economic growth are likely to temper demand growth in the emerging countries while developed countries' consumption continues to fall. "As impressive as [emerging markets] demand has been, the tide of global oil demand is set to turn," said the J.P. Morgan analysts in a note

 

/more: http://www.marketwatch.com/news/story/glob...&siteid=rss

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Part of an editorial piece in todays FT.

 

Oil and the city

Published: June 23 2008 03:00 | Last updated: June 23 2008 03:00

China's urbanisation, shifting millions of farmhands into factories, is a big reason why the oil price has risen sixfold over the past 10 years. China is not about to send everyone back to the land. So what is the solution to surging oil prices? One way, oddly enough, is to build more cities - or, at least, better ones. GaveKal, a research company, estimates that, of the roughly 85m barrels of oil the world consumes every day, just over one third is burned as petrol in vehicles taking city dwellers from point A to point B. This presents a huge opportunity on two fronts.

 

In the developing world, new cities can be planned smarter, making use of mass transit systems. In the developed world the issue is more complex, as people used to driving across sprawling suburbs have to adapt their lifestyles. But consider that, in the 2000 US census, about three-quarters of respondents said they drove alone to work and a similar proportion reached work within 20 minutes. Clearly, that is a lot of cars that could be off the road if a decent alternative existed. Europe, notably, has ploughed more investment into public transportation and taxed petrol at a much higher rate and still consumes less oil than it did when the last oil shock struck 29 years ago. Has its standard of living declined since then?

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But consider that, in the 2000 US census, about three-quarters of respondents said they drove alone to work and a similar proportion reached work within 20 minutes. Clearly, that is a lot of cars that could be off the road if a decent alternative existed. Europe, notably, has ploughed more investment into public transportation and taxed petrol at a much higher rate and still consumes less oil than it did when the last oil shock struck 29 years ago. Has its standard of living declined since then?

 

It seems to make sense.

But US cities may need to re-densify to make effective use of mass transit systems.

 

Tokyo, for example, is far denser than most US cities, which for years

have been spredaing out jobs along their highways

 

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THE CANDIDATES still don't get it ...

 

How they'd limit demand

• Should fuel efficiency standards be raised more? Congress hiked them last fall for the first time in three decades, from 25 miles per gallon to 35 miles per gallon by 2020. Where should they go beyond 2020? (more)

 

McCain: See how automakers do with the new rules before passing new ones.

 

Obama: Wants to double fuel economy standards within 18 years to 50 mpg by 2026.

 

• Should the government do more to promote conservation? Some ideas include government incentives for walking to work, a luxury tax on large cars, a tax rebate for small or electric cars, tax incentives and public wireless networks for people who telecommute, lowering the speed limit, among others.

 

McCain: Supports market incentives for more Internet coverage to help telecommuters. He would rely on laws restricting greenhouse gas emissions to spur innovative conservation.

 

Obama: Wants to make all new buildings carbon neutral, or produce zero emissions, by 2030. Promotes investment in a smart utility grid that can better manage energy demand. Has a lengthy section on his Web site talking about better urban development plans, and government incentives for towns that follow them. Obama wants to give utilities incentives to conserve energy. Lift cap on tax credit for more efficient cars, increase funding for public transport.

 

/more: http://money.cnn.com/2008/06/09/news/econo...sion=2008061707

== == ==

 

I reckon they need to channel revenues from a carbon tax into building mass transit

When they get round to it, such spending will benefit those who are located near the future

mass transit links- and may hurt those that have a rail over their land, but no terminal

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Double post:

 

Now, maybe I'm getting this wrong, but do you think there is someone big (maybe with a headscarf) sitting on crude at $138? :lol:

 

brent260608vn8.png

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Home buying practices adjust to high gas prices

By ADRIAN SAINZ, AP Business WriterWed Jun 18, 6:07 PM ET

 

In his hunt for a new home, Demetrius Stroud crunched the numbers to find out that, with gas prices climbing, moving near an Amtrak station is the best thing for his wallet.

 

Stroud was looking in Elk Grove., Calif. — about 85 miles away from his job in the San Francisco Bay Area — because homes there are more affordable. But with gas at $4.50 and a car that gets about 22 miles per gallon, Stroud would be pumping $560 a month into his tank.

 

So instead he made an offer on a home near the train station in Davis, which will shave $160 off his commuting costs.

 

"I wouldn't even be able to consider doing it without that Amtrak possibility," said Stroud, 45, who also telecommutes one day a week to his job in software quality assurance.

 

Stroud's choice represents a fundamental shift in the way more Americans are approaching home buying in this era of ballooning gas prices. Real estate agents, transportation officials and industry surveys indicate that home buyers are placing more importance on cutting their gas bills and commute times than they have since the oil shocks of the 1970s.

 

And there are some early indications that homes near urban centers, and subway, train and bus stops are often selling faster and at better prices than those in the distant suburbs.

 

On Wednesday, a survey of 900 Coldwell Banker agents showed a remarkable 96 percent said that rising gas prices were a concern to their clients, and 78 percent said higher fuel costs are increasing their desire for city living.

 

Don Denton, manager of Coldwell Banker Residential Brokerage in the Capitol Hill area of Washington, D.C., said prices are holding in the area and the neighborhood appears to be expanding.

 

"We have seen a steady increase in interest in our area over the last several years and it is comparable to how the reaction to the 1970s gas crisis sparked an interest in this area and inside the entire Beltway," Denton said.

 

A grueling commute by car into the city is the main reason why Mark Bulkeley wants to move closer to his job in Tysons Corner, Va., near downtown Washington D.C. He is selling his home in Haymarket, Va., which is 30 miles from work, and has signed a contract on a home in Great Falls, Va., that's just 6 miles from the office.

 

"My commute is miserable enough that I've taken to leaving my house at about quarter to five in the morning to avoid the traffic," said Bulkeley, a 36-year-old wholesale electricity trader. "It's kind of brutal. It's routinely an hour, and there's a lot of variability around that."

 

Bulkeley already has a hybrid Honda Civic, but he still calculates a savings of about $100 a month on gas once he moves closer to the city.

 

"When we decided that we were going to make a move we basically put a dot in the middle of the map where my office is and said, `We are not going to live farther than essentially a 20-minute circle around that,'" Bulkeley said.

 

Gas prices, which have shot up $1.07 this year, are magnifying demographic trends that show more younger buyers and empty-nest seniors are moving back to urban centers. If gas prices continue their ascent, this could have profound consequences over time on the future development of American cities and suburbs and modes of transportation.

 

Homes in cities and neighborhoods that require long commutes and don't provide enough public transportation alternatives are falling in value more quickly than more central locations, according to a May study by CEOs for Cities, a network of U.S. urban leaders.

 

In Atlanta, agent Mike Wright with Prudential Georgia Realty notes that real estate brokerages within the city perimeter have been selling better than those outside the city, reflecting an area trend of people moving "closer-in."

 

"You can easily draw the conclusion that's traffic or gas-price related," Wright said. "It's a decision that's both lifestyle driven and people trying to stay out the car."

 

In response to more riders, some U.S. cities are expanding their mass transit services.

 

The Dallas Area Rapid Transit system, for example, is doubling the miles of light rail it has to 90, said Morgan Lyons, DART's spokesman. The project has an estimated cost of $4 billion, and two main light rail lines are expected to be completed by 2014, he said.

 

Lyons said DART saw a spike in riders once gas prices began to skyrocket. And private investment in transit-oriented development — including condominiums and mixed-use projects that combine retail, residential and entertainment space — has risen to around $7 billion in areas including Dallas, Garland, Richardson and Farmer's Branch, Lyons said.

 

In Florida, real estate professor Bill Weaver sees this as possibly the beginnings a shift to a more European approach to finding homes.

 

For the past three decades, travel has been relatively cheap in the U.S., so more Americans sought homes in the suburbs or in the country because they wanted the space and quiet and didn't mind — or care about — the cost of commuting, Weaver said.

 

That approach led to sprawl in and around cities from Los Angeles to Orlando, Fla., in contrast to the smaller and more densely populated cities in Europe.

 

"Transportation costs in Europe have been so high for so long that they already take transportation into account when they buy a home," Weaver said. "We've just been behind on that. In that regard, you might look at high gas prices as sort of a silver lining."

 

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20080701-chart_a.gif

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Oil Demand Destruction Is The Story...,

 

Bye-bye gas subsidies

Could higher gasoline prices in China and India mean lower prices here in the U.S.?

 

NEW YORK (CNNMoney.com) -- If gas were more expensive in China and India, would it be cheaper in the United States?

 

Dozens of countries in the Middle East and Asia have subsidies and controls that keep gas prices low to consumers. Many think that the government tinkering artificially fuels demand, imposing higher prices elsewhere in the world.

 

Let the price rise in those countries, the thinking goes, demand will fall, and global prices will come down too.

 

But in recent weeks, China, India, Indonesia, and Iran - countries where the government sets the price of gas - have all raised prices.

 

And now analysts disagree on what the impact will be. Some say that gas consumption - and worldwide oil prices - could actually go up.

 

"Their lifestyle has changed so much for the better, it's not going to impact them that much if gas prices go up 20%," said Nauman Barakat, an energy trader at Macquarie Futures, the trading arm of Macquarie investment bank. "They are willing to pay more so they don't have to wait in line."

 

Others agree.

 

"Actual consumption is unlikely to be affected seriously," analysts at Wood Mackenzie, and energy consultancy, wrote in a research note. "As long as China's overall economy remains strong, significant growth in vehicle ownership will more than offset the negative effects of this price rise."

 

One result is that higher gas prices could give refiners an incentive to make more gasoline and eliminate the shortages that have plagued China and other fast-growing countries.

 

The price of gas

Gasoline is a relatively similar product and costs about the same to produce anywhere in the world.

 

To get the "true price" of gasoline, the price without taxes or subsidies, one could take the current U.S. price - about $4.09 a gallon - and back out the 40 cents or so we pay in taxes, said Bill Veno, an oil analyst at the consultancy Cambridge Energy Research Associates. That leaves a "market price" of about $3.70.

 

Some countries tax gasoline to death, and end up with a much higher retail price. In England a gallon of gas goes for $8.60, according to numbers provided by Vena. In Belgium it's $9.04. In the Netherlands it's nearly $10.

 

But in other places - whether it's to stimulate the economy of placate a restless population - gas is much cheaper than the market rate. In Saudi Arabia it's 45 cents. The Venezuelans pay just over a dime.

 

/see http://money.cnn.com/2008/07/02/news/inter...idies/index.htm

 

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This might depress you.

 

Moving Freight by Road in a Very Low Carbon World

 

"This preliminary assessment of the potential for decarbonising the road freight sector suggests that the combination of a series of radical, but probably feasible, changes could cut CO2 emissions by the 80% target adopted by the UK government for the economy as a whole for 2050 (relative to 1990). Of the two dozen scenarios tested the eight most optimistic would attain this level of reduction but require step changes in vehicle technology and corporate behaviour".

 

http://www.greenlogistics.org/SiteResource...tics%202050.pdf

 

Reading this makes me realise how little recognition of a possible economic meltdown, these forecasts take into account. The scale of change needed whilst acknowledged for climate reasons, ignores the resources issues with an almost overt ignorance of oil resources. It's almost like they are still planning for the wrong event.

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