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Low Gas Prices : Short Term Memories

The high climate and air pollution costs of low pump prices. People rushing out to buy gas guzzlers (SUV) while the pump price is low $2/gal, many will end up keeping these vehicles for 11 more years, long after the price rebounds to $6 or more per gallon. I hope to see oil hit $200 per barrel in the near future. 

I once lived only 3.7 miles from my work, in an over-priced urban studio apartment in downtown Bellevue with my wife. She worked within walking distance of our home. We used a Toyota Prius, a Honda PCX150 gas scooter and an electric Nissan Leaf S car. Times have changed. We moved 15 miles away to get into a home that is almost 5x larger, but now have to commute together with our syncronized work schedules in one car up and down I405 in western washington between Renton and Bellevue. The lease on the Nissan Leaf S ended and it went back, and we replaced it with the purchase of a longer range hybrid Honda CR-Z ex 6sp coupe. I knew that our relocation would require more range than the leaf could yield, so now we have two fuel sipping hybrid cars and that same PCX150 scooter.

The Ford F150 is the most popular car in America. Look at Fuelly for the F150 and you will see that it is a gas hog, far from the 46 MPG of our Prius, 38 MPG of the CRZ and 89 MPG of the PCX150. Unlike many Americans, Meg and I also do not have children and never will have children. We use less of everything as a result, produce less trash, drive less, use less hot water, eat less food, we are smaller people with a smaller footprint. Even our home is smaller at 1504 square feet, which is small for the area, but its in a nice gated community on a view edge of a ridge with a nice view. I swapped out all the light bulbs in our home with LED when we moved in. We try to conserve hot water and energy when doing dishes, showering, doing laundry etc. I have a long memory for gas prices in the $4+ range, doing long road trips with these higher fuel prices in the Prius.

Part of me rejoices in the low gas prices. I am broke, upside down with credit card debt, and keep getting hit with random expensive bills that are unexpected because of America's wonderful healthcare system. I would like to send a special thanks to my health insurance company, Regence Blue Cross for raising my premiums 82% over the last year while bumping the deductible up at the same time. The Affordable Care Act was a fucking joke, and made health insurance more expensive for almost everyone that I know.

Part of me is sour with reflection knowing that if gas prices stay low, people will drive more places, more often, causing more emissions and more traffic congestion, making America more dependent on foreign oil while our own oil industry is loosing jobs faster than congress is loosing approval because of the $30 per barrel oil prices. 30 billions tons of CO2 gas per year, that is what humans release by burning coal, natural gas, oil and all the petrochemical fuels every year. This compares to 0.5 billions tons from all volcanic activity. A billion tons of CO2 is not a trivial amount for the energy balance of earths atmosphere. Whether human activity is responsible or not may be a debate, but I can tell you that we have not had much of a winter where I live for the last few years. Climate change is an undeniable reality, the scientific debate is all about whether or not human activity at the 7+ billion person scale of today is affecting the energy balance of earths atmosphere. Only a dunce cap idiot liar would suggest that human activity with regard to climate changing gas emissions is having no affect on the energy balance of earths atmosphere. They are called green house gases because their presence in the atmosphere traps the suns energy, like a green house. So if we release green house gases, we are going to increase the amount of energy that the earths atmosphere captures from the sun. That is simple, easy to understand, basic, and anyone who claims not to agree is either stupid, confused, dishonest or all of the above.

I support the oil industry, and may be seen as a hypocrite because of this. I stand behind the American Petroleum Institute, and believe in cultivating the US economy with higher oil prices and clean technologies like Plug-in Hybrid vehicles, the VW XL1 being my personal favorite. Gasoline's amazing 12,000 watt hour per kilogram energy density mops the floor with lithium ion at 600 wh/kg. The Tesla Model S for example needs a $50,000 lithium ion battery to go 300 miles per charge, and that is at first, when the battery is brand new. Over time the battery will fade and so too the single charge range will decrease, nothing a little Autopilot cannot more than make up for. Auto-pilot can reduce the energy consumption of any vehicle by up to 40% by taking the human irrational emotion out of the driving equation, even in the Model S. All of my vehicles burn gasoline now, and so does my weed wacker. I like having acccess to high quality top tier gasoline from Cenex, 76, Chevron, BP and Shell. I know that oil spills are an environmental nightmare, and that is why I support clean technology in drilling and exploration. Let's be realistic here, we have to move a lot of people a lot of places, and batteries are simply not good enough yet, and will not be ready for prime-time to replace gas in a significant way until batteries have the same energy density as gasoline, in perhaps 20 years. Even when batteries do have great energy density, I will still want a range extending generator in my RE-EV of the future. Today the Chevy Volt and BMW i3Rex are my favorite RE-EV's. I would personally like to use propane in my range extender, since it is shelf stable for long periods in pressurized steel tanks like the ones used by bar-b-q grills the world over. I like Butane, Methane, and Ethane as fuels, those short clean burning hydrocarbons we find in lighters, camping stoves, natural gas, etc. I am so enthusiastic for the oil industry lately that I am pondering investing in it literally, but have yet to buy any shares of anything, XOM looks like a good base investment.

Holy mother, an environmental scientist endorsing big oil, WTF right? Again its all about being realistic. I am all for hybrid, plug-in hybrid, and pure electric vehicles. I really like propane more than gasoline. I am a clean burning enthusiast who favors LNG over Diesel. I even like the idea of hydrogen fuel cell vehicles. I am also very enthused by the idea of a gas station that sells bio-gasoline, bio-diesel, LNG, Propane, Butane, Hydrogen, and electricity. The reality is that people need to go places, and America is covered in roads, like it or not. We need the energy density of gasoline today to give the Toyota Prius its amazing single fill up range. We need the energy density of gasoline and other hydrocarbon fuels to give aircraft decent range. The best flight duration for electric helicopters for example is less than 1 hour per charge. The batteries today are just not ready for human mass transportation class aerospace vehicles. When rechargeable metal air batteries are produce by the billions in a giga-factory that will be a very different story :)

I think oil is gold, like black magic, it can be used to make all sorts of cool plastic polymers, like the keys and body of this Acer I am publishing this blog posting with. I almost can not imagine what the world would be like today without plastic and 3D printing of it. I am a fan of PLA, but the really strong cool aerospace grade plastics are made from petrochemicals, speaking of which the barrel of oil today can be used to make $700 worth of specialized plastic polymers, adhesives, coating, lubricants, and other high performance products that people love to enjoy in powersports, travel leisure, and when painting, publishing, or printing in 3D. Some cool synthetic petrochemical plastics like Delrin are even machinable :) Nylon is one of my favorite and one of the coolest synthetic plastics. Unlike glass, which I also love as a material, plastics are very forgiving, impact resistant, my Kyocera Brigadier would not be nearly as strong without synthetic plastic polymers.

Imagine how much more money oil company could make if they stopped selling hydrocarbon fuels, and converted the remaining oil in earths crust into recycleable high performance plastics, like PP, HDPE, LDPE, and PET :) I realize the plastics have problems, especially in terms of high temperature leaching of the plasticizing chemicals like Bisphenol S. I also realize that microplastics are harmful to consume and bad for nature. The plastic trash in nature is a social problem, not a technical one. We need to teach the stupid people of the world how to recycle, why they should stop littering, and why we should cultivate the future with clean technology. I even believe that the oil company executives of today and tomorrow can become our allies in the future, with cleaner operation, more leadership in setting a good example for children everywhere, especially here in America. I believe we should invest in making the future cleaner, brighter and better, and that is exactly why emissions controls on modern vehicles are so important. Tisk Tisk VW for diesel gate lies.

I am flawed, imperfect, and a hypocrite in some ways. I make mistakes and I do not have the answer for all the worlds problems. But I strongly believe in clean technology, like electric vehicles with on-board range extending engines. I really want a hybrid motorcycle with a durable enduring battery technology like Nickel Iron that lasts decades, not some weak lithium ion that degrade from heat after only a few years of sitting around charged. The Lithium Ion batteries of today may be eons ahead of lead acid in some ways, but lead batteries enjoy widespread use in all sorts of things because they are stronger, more durable, much cheaper, and widely recycled. Lead is a really interesting material, the end series of many atomic decay sequences, its 82 out orbital electrons and stable nucleus structure make the PbO : H2SO4 H20 : Pb battery of today very strong for starting engines, backing up UPS systems for computers, fire control panels. In a power chair for disabled people, the SLA battery acts as both energy storage and to lower the center of gravity which makes the chair safer and more stable. In many applications, Lead batteries are better because they always like being fully charged. At 80Wh per kilogram, the energy density of lead acid is terrible by comparison to NiCD or NiMH, but neither of those two chemistry batteries like to be stored fully charged. NiCD likes to be stored discharged at 1v per cell, charged to full right before it is used and then stored dead. This is terrible for an electric car application. NiMH likes to be carefully kept between 30 and 80 % charged, and only holds up well for long periods and lots of cycles if it is shallow cycled in this range, similar to lithium ion in this way, where 30 to 80% charge is the magic endurance boosting state of charge range, also not ideal for electric vehicles. The Nissan Leaf even shipped with a long life battery setting that cut off charging when the battery reached 80% state of charge...... very telling

Sometimes I sit around and google search for 300MPG and aero-conversions, for something really cool like the VW XL1, Tesla Model S, or Honda CR-Z. The 2016 Toyota Prius is really interesting and so is the new Rav4 Hybrid. The Lexus CT200h is cool too. Lacking a manual tranny, non of those vehicles spike my interest more than the 14 CR-Z ex couple that I roll these days. Every car I have ever owned except the Prius was manual, and its fun to be back into the shifting mix, I know that the time for this will end in the near future. Future vehicles will be DSG, with dual clutch automated manual transmissions shifted by computers. Many cars today only come in automatic tranny options, and the hand shifted manual is fading into history. I fear that scant few models will offer a manual tranny in just a few more years. The CR-Z will become a classic someday :)

With just me riding it, the 13 PCX150 can yeild over 100MPG at city speeds :) good thing too since it can only hold 1.6 gal of gasoline. Its clean burning liquid cooled 4 stroke engine churning out an amazing 13hp, the 350w ACG starter is mild hybrid in its nature. Some part of me wants to get a Honda Grom for Meg (but air cooled?) another part of me wants to give Meg the scooter and get a Honda CB300F (woot woot). Yet another part of me wants an enclosed hybrid motorcycle that gets 300mpg, but they do not exist today, outside of a custom DIY effort that few have undertaken at great time and cost expense. If the VW XL1 can give over 100MPG, then we should be only a few years away from others cars that do the same. I believe 2018 will be a big year for plug-in hybrids! The lack of cool options today has me kind of bummed, but will give me time to pay off my high interest rate credit card debt :) woot woot :

I wrote this posting under the influence of Ginsing extract, we picked up a case of bottles at an asian grocery early today. They are small glass bottles that have a medical like rubber gasket seal that is revealed after you peal the aluminum cap away with a plastic lid tab, after which you stick a plastic straw into the gasket and drink the honey sweetened herb concentrate. It promotes Yin, or dark side insomnia energy. I was feeling deeply angry about an outrageous hospital expense summary prelude to a huge bill, and decided to open the case and enjoyed two of them. I had taken a short nap to reset my brain chemistry, now its 11pm and am I am wired awake. The battery of this machine is low, so I am going to cut out for now.

Peace be with you friends. Thanks for reading :) Hope you enjoy what I share ^^ wearing my ideas and part of my life on the sleeve known as Thinking About It :)

Part 2
After Midnight :)

Back from the gas station, $1.99 per gallon, picked up 15 gallons, for $30, the Prius took a little more than half, I used the remainder in a pair of gas cans to top off the CR-Z, there is perhaps a gallon left in the big jug for the scooter, woot woot. My hands now smell of gasoline from using the jugs. I was careful not to touch any gasoline, but the vapors cling and stain in their own way.

15 gallons of gasoline is a lot of energy. Each one some 34khw worth of power. That is 510 kWh of stored chemical energy for $30USD2016, or $0.058 per kWh, too bad the engines are only about 30% efficient at turning that chemical energy into torque and power to move the Prius, CR-Z and PCX : that means driving them is like running an electric car on electricity that costs $0.18 per kWh, roughly double our local rate as of lately, or the Nissan Leaf runs on about $1 per gallon eq cost if the power is $0.098 per kWh, roughly speaking, assuming 4,1mi/kWh. With gas prices so low, the capital cost difference make the range, refill speed, and practicality of the hybrid cars we have more useful to us at this time. I rarely ever go to the gas station and by gas in cans. The rational was to save a trip and some time, I brought the gas cans along with the Prius which needed a refill to capture more gasoline in one transaction and one trip, after which I was able to top off the CR-Z, and store enough left over to fill up the scooter later :)

Part 3

Research oil stocks to Buy for the long position (sit on em) absorb dividend yield and watch the price of oil climb :) Its a commodity, the world uses more of it every year and the earth is not exactly making any new oil at a rate even close to the rate at which it is consumed. No special tips here, but the sector will be interesting to watch as oil prices hover around $30 per barrel.

I took the advice of Warren Buffett, and his investment arm Berkshire, and took a big lump of money from my investment account and went in on COP for $39 per share. COP of ConocoPhillips also known as Philips 66, is an oil producer, upstream, mineral mining, exploration and oil pumping company. The upstream production market has been hammered by low oil prices. The last time this happened back in 1997 and 1998, a two year oil glut then, the oversupply produced falling gas prices and gasoline was selling for under $1 gallon in 1999. Well, welcome to the 2015 and 2016 oil glut years. I have been following the trend for a while. But this party is not going to keep going forever, the American public has responded to the new cheaper $2 per gallon or less gas by buying more Ford F150's, driving more miles, and buying more gallons of gas. The Chinese economy will not stay down forever, and when it come roaring back to life, cars that burn gasoline are going to sell even better in China next time, putting pressure on the oil supply, ending the glut, and pushing the price of oil back up. I suspect that oil prices will more than double by then end of 2017. This is why COP is a good buy right now, and why so many investment firms are recommending it as an energy stock to buy right now. Sale prices at the pump, and low oil prices, means upstream produces like COP are getting hammered. This also means that as the glut ends and oil prices climb, COP will make a huge comeback. Lets let the cooking crumble.

This is my first foray into oil investing. I believe OPEC is correct, that over 90% of new cars sold in the year 2040 will run on gasoline. Cheap repeated profitable designs sold in latin America, Africa, Asia, it will be cars and roads, and gasoline will remain the dominate energy sources. Even hybrid cars like our 2005 Toyota Prius run on gasoline. The hybrids return better fuel economy by capturing regenerative brake energy and using it to help accelerate. Hybrid cars return better fuel economy by turning off the engine when the vehicle is stopped. In the end they are just a better clean technology lower emissions vehicle that runs on gasoline. So even if hybrid vehicles sell like sugar in the future, gasoline will likely be the fuel that powers the range extending engine. Its also probably worth noting that oil can be turned into millions of products other than gasoline, its like a magic feedstock chemical mixture from which all sorts of plastics, coating, lubricants, pain, adhesives, binders, epoxy, base chemicals, fertilizers, pesticides, drugs, etc etc. The manufactured world of things that we have today owe their production to the versatile chemical feedstock that we call crude oil. I actually believe we should stop making fuels with oil and save the oil for all of those much cooler uses.

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