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Thread: Cheap Gas

  1. #1
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    Default Cheap Gas

    With the U.S. national gasoline price hovering above $4/gallon, I got to wondering just how expensive gasoline really is. Keep in mind that less than ten years ago, gas could be purchased for $1/gallon--without adjusting for inflation.

    Until recently, the "all time" high gas price, adjusted for inflation, was $3.50 ... in 1918. And for the twenty year period 1985 through 2005, gas was at an all-time low.

    Factoring in purchasing power (income minus taxes), today's prices look even better.

    As recently as April of this year, the nominal gas price in the US was $3.22/gallon. Okay, so maybe not exactly the right time to buy that second Hummer, but at least we're not in Europe, where the April 2008 price ranged from $6.12/gallon in Bulgaria to $9.39/gallon in The Netherlands.

  2. #2
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    Default The Cheapest Gas

    Gas is much more expensive in Europe... true.

    Cars in Europe tend to be 4 cylinder and smaller... not all but most. Also, traveling distances in Europe are also shorter as compared to our expansive continent.

    Gas is under a $1 in Baharan and gas is subsidized in China by the government so that it doesn't exceed $3/gal. A short term fix but thats the way they are handling it.

    The cheapest gas is to get off of gas... at least petroleum based gas. Water can be broken apart into H and O via electrolysis which can come from wind, solar, nuclear, hydro. The H can be liquified and stored in tanks and cars can be retrofitted to burn H. The government can give tax credits for the conversion kits and all the car companies can join on it to provide them factory direct and no void warranties. In the beginning H will be expensive, over time H will come down... way down.

    When H burns it turns back to H2O... good for the environment.

    No more will petrol countries have us by the neck (or something else) ... tweaking our economy, threatening us and causing us to go to war to protect their ability to sell us oil.

    I hope the next president will make a 'moon shot' mandate to be on H by ... well a few years from now.

  3. #3
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    Default Gas is costly.

    Quote Originally Posted by Jeff Dieffenbach View Post
    With the U.S. national gasoline price hovering above $4/gallon, I got to wondering just how expensive gasoline really is.
    Though it may bring some comfort that we are paying less for gas than let's say, Europe, consider this recent interview with Peter Buetel:

    The cost of even a penny increase in gasoline is huge to the American consumer, Cameron Hanover analyst Peter Beutel wrote in a note to clients in early May. "Every penny increase in the price of gasoline costs American businesses and consumers $4 million" per day, he wrote.

    The numbers are staggering, Beutel said in an interview. For the first 4 months of 2007, higher gasoline prices cost the U.S. economy $1 billion more than the same period of 2006 -- and a whopping $40 billion more than the first four months of 2002, Beutel said.


    Today's crier explores what other town's are doing to conserve energy.
    The price of a gallon of diesel fuel is averaging around $4.85/gal.
    Is it possible that busing the kindergarten from all points in town to one location in the south, and busing the Loker population several miles to the north, might not incur the savings we expected to realize from the school consolidation? Is there a maximum that the Wayland Schools are able to pay for transportation?

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    Default

    Quote Originally Posted by Mary Barber View Post
    Though it may bring some comfort that we are paying less for gas than let's say, Europe, consider this recent interview with Peter Buetel:

    The cost of even a penny increase in gasoline is huge to the American consumer, Cameron Hanover analyst Peter Beutel wrote in a note to clients in early May. "Every penny increase in the price of gasoline costs American businesses and consumers $4 million" per day, he wrote.

    The numbers are staggering, Beutel said in an interview. For the first 4 months of 2007, higher gasoline prices cost the U.S. economy $1 billion more than the same period of 2006 -- and a whopping $40 billion more than the first four months of 2002, Beutel said.
    I'm not downplaying the impact of the recent steep increase in gasoline price. That increase presents a very real challenge for many people. That said, the $4 million number isn't as large as it sounds, being spread over on the order of 100 million people/businesses. That's 4 cents per day per business/consumer.

    Quote Originally Posted by Mary Barber View Post
    Today's crier explores what other town's are doing to conserve energy.
    The price of a gallon of diesel fuel is averaging around $4.85/gal.
    Is it possible that busing the kindergarten from all points in town to one location in the south, and busing the Loker population several miles to the north, might not incur the savings we expected to realize from the school consolidation?
    My understanding is that we now have a bus contract with a fuel price that's locked in, and that as a result, we're expecting to come in a bit under our budgeted amount for the 2008-2009 school year.

    As the Committee discussed at its 7/7 meeting, bus routes are not yet set (nor are they typically set at this time of year). The extent to which enrollment, the 1.5 mile travel distance, and safety, congestion, and convenience considerations come into play therefore leave some uncertainty in terms of exactly how transportation will play out.

    Quote Originally Posted by Mary Barber View Post
    Is there a maximum that the Wayland Schools are able to pay for transportation?
    Technically (and meaninglessly), the maximum would be the entire school budget. Practically, some increase over the budgeted amount could be paid by spending less in other areas of the budget. "Transfers" like this happen every year based on unexpected events: fewer Kindergarten arrivals might lead to the dropping of a section, maternity leaves might lead to the addition of a teacher, and so on.

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    Default Is the fuel in the contract?

    Jeff D

    The prior Wayland bus contract did not include fuel and there is a separate line item for fuel in the school budget. I believe the fuel is also not include in the new one either. Are you certain about the fuel?


    What amount is the town paying for this fuel that they have locked in a price and how long is the lock for?

  6. #6
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    Default Fuel Prices

    Jeff

    You hasn't reponsed to my post. I know you are busy with many different threads.

    Could you please clarify the status of fuel within the bus contract or the set price for fuel which Wayland has recieved? It is my understanding that this is NOT including in the new contract and Wayland has not lock in a price for fuel at this time.

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    Default

    The delay had nothing to do with other threads, but rather, with checking with our administrators. I was incorrect--we lock in other utility prices such as oil and natural gas, but not diesel fuel for buses.

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    Default Clarification on bus contract

    Thank you for your correction Jeff. So just to clarify there is no fuel included in the bus contract which has been signed and there has been no lock on prices.

    Therefore since fuel is up significantly from last summer do you think the amount in the budget for the fuel account will cover the cost? The buses have to drive much farther and carry more students. How does this affect the bottom line of savings?

  9. #9
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    Default

    Quote Originally Posted by Alexia Obar View Post
    Therefore since fuel is up significantly from last summer do you think the amount in the budget for the fuel account will cover the cost? The buses have to drive much farther and carry more students. How does this affect the bottom line of savings?
    The fuel increase that's relevant is the one from when the transportation budget number was proposed (January?) until the time that the fuel is purchased. While there's certainly a significant increase over that period, that increase is not nearly as great as when compared to last summer.

    Until the final bus routes are nailed down, we won't be able to estimate expected fuel consumption. Back in April (April Fool's Date, I note with some amusement), I took a rough stab at part of the transportation question.

  10. #10
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    Default Gas should be a concern.

    January 17th the price of diesel gas was $3.43 p/ gal.
    Today it was $4.95 per gallon.

  11. #11
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    Default Doing the calculation...

    Quote Originally Posted by Mary Barber View Post
    January 17th the price of diesel gas was $3.43 p/ gal.
    Today it was $4.95 per gallon.
    Mary, I don't have the figures available, perhaps the people you know do but if you wanted to know the amount of cost for fuel then ...

    Cost of Fuel for Loker Reconfig = Number of Busses used *2 (twice a day) * 15mpg(diesel) * Average Miles/Trip * Number of Trip Days * $4.95/GalDiesel

    Then add about 50% onto this for maintainence.
    Personnel costs? Maybe there are extra hours.. don't know?

    Regards, Alan

  12. #12
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    Default Formula Wrong

    Alan,

    I respectfully suggest you check your formula. It is so wrong that one could accuse you of intentionally misleading the reader.

  13. #13
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    Default State your formula

    Then state your formula.

  14. #14
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    Default Well let me try

    to decipher your formula first.

    you said "Cost of Fuel for Loker Reconfig = Number of Busses used *2 (twice a day) * 15mpg(diesel) * Average Miles/Trip * Number of Trip Days * $4.95/GalDiesel"

    So if there were 10 buses making 2 trips per day getting 15 mpg and the average trip was 20 miles for the 180 days of school and diesel cost 4.95/gal you would get $5,346,000. Which you state is the cost of fuel for the loker reconfig without accounting for the 50% ($2,673,000) of maintenance or additional driver hours. I think even you would agree that $8 million plus is wildly overstating the cost.

    Now, before you jump on my assumptions about the number of buses or the average miles, I choose them as examples to demonstrate how your formula worked.

    A correction to your formula that would help is to divide the the daily miles by the MPG to get the number of gallons of fuel used. The gallons of fuel used would then be multiplied by the cost of fuel. This would still be wildly inaccurate but it would at least be mathematically sensible.

    A more accurate formula to calculate the cost of fuel for the loker reconfiguration would require using the total cost of fuel for the 3 elementary schools from the 07-08 school year and increasing it for the increased price of fuel anticipated in 08-09. This increase (adjusted 07-08) is required because if we had not done the reconfiguration we would have had the increased cost driven by rising fuel prices. The next step would be to calculate the anticipated costs for the 08-09 school year by taking the bus routes and their respective mileage for the 3 elementary schools. This step can not yet be performed because the bus routes have not yet been planned but perhaps someone could make a guess. The next step would be to subtract the adjusted 07-08 numbers from the anticipated 08-09 numbers. This would give you an estimated fuel cost differential.

    I think that your estimate of increased maintenance costs as a multiple of fuel prices is also inaccurate. I think it would be much better to use it as a metric of mileage driven. I believe this because maintenance cost is driven by use much more than it is by fuel cost.

    I realize this is an oversimplification (for example you would need to actually plan bus routes without the reconfiguration to get the actual estimated mileage) but it is what I think is much more accurate than your formula.

  15. #15
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    Default Excellent !

    Ok, so now we have an algorithm.
    The loker parents want to know what the increased in fuel costs are.

    You with this detailed algorithm could now calculate the increased costs.
    Would you feel up to it to do that calculation?

    Thanks, alan

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