Tag Archives: california

Business/Economics, Opinion, U.S.

Occupy America: Why are Diesel fuel prices so high? Diesel commodity futures trading less than Gas, even with low sulfur refining

Read my November 20, and November 5, 2011, postings about current diesel prices.  It’s bad news, it explains why prices are only going up, and how fracking of natural gas is really for fuel production.

May 3, Diesel fuel prices are higher than gas, at the pump.

In Idaho, as of May 3, most gas stations are selling Diesel for about $4.15 per gallon.  The highest is $4.50 near Mountain Home.  That’s way higher than gas.  Most gas stations are selling gasoline around $3.65 per gallon, with the highest at $4.00 near Hailey, Idaho.

Yet Diesel futures are selling for less than gas futures on the commodities market.   As of May 2, gas futures, for June delivery, were at $3.34 per gallon.  Compare that to Diesel NY at $3.29, and Diesel Gulf at $3.31 per gallon.

So why is Diesel so much higher at the pump?

Many websites say it’s because Diesel must be refined to low sulfur standards.  That doesn’t explain the higher price at the pump!  The commodity prices paid are for already refined Diesel, so the claim that low sulfur refining is the cause doesn’t work.

Some people say it’s because Diesel is actually in higher demand than gasoline, due to industry (like trucking & airlines, “jet” fuel is actually a form of Diesel/Kerosene) and the military (possibly the biggest user of Diesel, thank the War on Terror).  That might be, but normally the commodity price reflects anticipated demand.

Some journalists have asked oil executives about fuel costs, but oil executives can only talk about the price of refined fuels sold on the commodities market, not at the pump.

What about taxes?  It turns out that taxes for Diesel are more than taxes for gasoline.  In Idaho the average (January 2011) pump tax (combined state/federal) for Diesel is 49.4 cents per gallon.  For gas, in Idaho, it’s 43.4 cents.  That’s only a 6 cents per gallon difference, so that doesn’t explain the 50 cent per gallon difference in the pump price of Diesel vs gasoline ($4.15 for Diesel minus $3.65 for gas).

By the way, California has the highest tax rates in the country for Diesel at 76 cents per gallon, and gas at 66.1 cents.  That’s because California has higher local and state taxes on top of the federal taxes.

So, the only conclusion I can come up with is that Diesel fuel prices, at the pump, are higher than gasoline due to higher taxes for Diesel, and maybe  higher demand for Diesel (again that’s usually what drives commodity prices, before it gets to the pump).  Maybe gas stations are trying to make up for their extremely slim profit margins on gas prices by jacking up the more stable Diesel prices?



Business/Economics, International, U.S.

Toyota Parts employees in United States told to take time off, without pay

I know an employee of the Ontario, California, Toyota North American Parts Center distribution warehouse.

He says they have been ‘requested’ to take “leave without pay”, due to the parts shortage in Japan.

While they are enjoying time with their families they are concerned about how long their time off without pay will last, they can’t go too long without getting paid.  Toyota is not certain about when parts will start flowing into the U.S. again.

International, U.S.

California Water contaminated 181 times safe limits

University of California Berkeley is reporting that their own testing on rain water revealed radiation contamination 181 times safe limits.

The Federal government’s max safe level of iodine-131 allowed in drinking water is 0.111 becquerels per liter. The UC Berkeley test showed iodine-131 at 20.1 becquerels per liter. Again, that was a test of rain water. Eventually the rain water will end up in municipal water supplies.

Fukushima, Idaho

Idaho INL Official statements ominously similar to statements made by Japanese Nuclear Officials

A local East Idaho TV news reporter interviewed an official at the Idaho National Laboratory, regarding the safety of the INL’s nuclear reactor during a seismic event.  INL’s emergency director Riley Chase made almost the same statements that Japanese officials made right before their nuclear disaster.

“If we were to have a seismic event, the safety systems would shut that reactor down…”, also, “…we have diesel generators that run, and we have battery backed-up systems that will provide and constantly keep cooling…”

I’d like to remind people that this is what the officials said in Japan.  Their safety systems and back up systems failed.  This is because the quake and tsunami in Japan was much stronger than anyone planned for.  The Japanese systems were set up to withstand a 7.9 quake. It is now clear that the event was much, much stronger.  I believe if we in Eastern Idaho experienced such a strong event the INL system would fail as well. A major fault line does run through East Idaho, from Salt Lake up to Yellowstone.

On the plus side, the INL reactor is low power, and is run for 6 weeks each time it’s powered up.  So hope that the big one hits when the reactor is shut down.

By the way, the INL reactor is not the only nuclear plant in East Idaho.  Idaho State University has a graphite reactor on its Pocatello campus.  Shouldn’t be much concern, their ANG-201 reactor produces only 5 watts of power (at least that’s the maximum it is allowed to produce).

I have talked to long time building maintenance employees at the University, and they have told stories of the radioactive waste, from ANG-201, being stored in unmarked buildings. The story I heard was that some maintenance employees were on the roof of a building when they were suddenly told to get off the building. They were sent for medical exams, where they learned they were being checked for radiation exposure. Apparently the building they were on was being used to store radioactive waste.

This brings up the issue of radioactive waste.  In the United States storage of radioactive waste has become a problem, because no one wants it in their back yard. So what happens to it? Some nuclear plants in California have simply been building up a stockpile of waste on their property. Here in East Idaho, the INL has been dealing with the problem of  contaminated waste for decades. If the U.S. experiences a major seismic event near nuclear plants, not only will the reactors become an immediate threat, so will the waste.

Business/Economics, Idaho, U.S.

Idaho in Top 5 for Foreclosures, Right Behind California

The latest Realty Trac survey puts Idaho in the top five states for home foreclosures.  Idaho is ranked number 5, right behind California at number 4.

Realty Trac says Idaho saw a 13.67% increase over the same time last year, and a 19.74% increase since the 2nd quarter of this year. For the 3rd quarter of 2010, one out of 86 homes in Idaho are in some stage of foreclosure.  California, while seeing a drop in foreclosures, still has one out of 70 homes in foreclosure.

LOS ANGELES, CA - AUGUST 12: A 'bank foreclosure sale' sign is posted in front of townhomes on August 12, 2010 in Los Angeles, California. U.S. banks repossessed homes at a near record pace to drive up July foreclosures. (Photo by Kevork Djansezian/Getty Images)

The top 5 states, Nevada, Arizona, Florida, California and Idaho, make up 50% of foreclosures in the United States.

This news comes as the big banks involved in the foreclosure fiasco are reporting big profits for the same quarter.