Right now, we’re paying anywhere from 70 cents to a dollar more per gallon than this time a year ago.
(Photo courtesy of the National Renewable Energy Laboratory)
Energy analysts say a glut of
oil means gas prices probably
won’t spike too much this year.
Rebecca Williams has more:
Transcript
Energy analysts say a glut of
oil means gas prices probably
won’t spike too much this year.
Rebecca Williams has more:
We’re paying anywhere from 70 cents to a dollar more per gallon than this time a year ago. The good news is, we’re not likely to see four dollar-a-gallon gas anytime soon.
“We’re not in a world with runaway oil prices.”
That’s Ruchir Kadakia. He’s a global oil market expert with IHS Cambridge Energy Research Associates. He says weak global demand is keeping oil prices in check for now. At the same time, supply is relatively high. He predicts oil won’t average much higher than 80 dollars a barrel for the next year or so.
“And so what that really means for the gasoline point is through probably 2011, we shouldn’t expect to see gasoline prices much above three dollars unless it’s for a short period of time maybe in the summertime for a few months.”
Kadakia says oil speculators can drive prices higher or lower in the short term. But he doesn’t think we’ll see any major price spikes over the long term.
Airlines say that there needs to be more regulation on oil speculators. (Photo courtesy of NASA)
Recent swings in the price of
crude oil are leading to more
trouble for the US airline
industry. Rebecca Williams
reports:
Transcript
Recent swings in the price of
crude oil are leading to more
trouble for the US airline
industry. Rebecca Williams
reports:
Even though oil futures are trading for half of what they were last summer, the airlines are not happy.
David Castelveter is with the Air Transport Association. He says wild price swings for oil make it tough for the industry to plan ahead.
“They hedge their fuel purchases when the price is high at a lower rate and if the price of fuel goes low then they’re hedged in at higher rates and it costs them money.”
Airlines would like to raise ticket prices, but, with the recession, they’re worried no one will buy them.
So instead, they’re trying to cut back on how much fuel they use. Airlines are retrofitting planes with winglets that cut fuel consumption.
But that takes money and time. So in the meantime, they’re also cutting jobs and routes.
The industry’s putting pressure on Congress to force more transparency in the oil futures trading market.
They’re hoping more regulation on oil speculators would mean fewer price swings.
The price of a barrel of oil has jumped
up from $45 to nearly $70 in just
three months. And gas prices have been
creeping up too. Rebecca Williams reports
these prices are out of sync with the usual
rules of supply and demand:
Transcript
The price of a barrel of oil has jumped
up from $45 to nearly $70 in just
three months. And gas prices have been
creeping up too. Rebecca Williams reports
these prices are out of sync with the usual
rules of supply and demand:
Right now there’s a huge glut of supply of oil – and at the same time, weak global demand for it.
Ruchir Kadakia is a global oil market expert. He’s with Cambridge Energy Research Associates.
He says speculators are driving oil prices up.
“People believe that with positive economic growth in the future there will be greater demand for oil. So they start to buy up oil in anticipation of that demand recovery.”
So these speculators are making money while most of the economy is in a slump.
But Kadakia thinks the realities of supply and demand will eventually catch up and drag oil prices back down.
“The pain we’re feeling at the pump today is probably going to be the worst we feel all this summer.”
He thinks gas prices might actually get back below two dollars a gallon.
The President already has lifted an executive ban on offshore drilling. He now wants
Congress to lift its ban.
(Photo courtesy of the US Department of State)
President George Bush says Congress
should remove the ban on offshore drilling
because there might be a decade’s worth of
oil off the US coasts. Lester Graham
reports that might be an optimistic estimate:
Transcript
President George Bush says Congress
should remove the ban on offshore drilling
because there might be a decade’s worth of
oil off the US coasts. Lester Graham
reports that might be an optimistic estimate:
The President already has lifted an executive ban on offshore drilling. He now wants
Congress to lift its ban.
At an Ohio factory, President Bush talked about wanting to find more oil in the U.S.
“One place where there is, the experts say is, a bountiful supply of oil, perhaps as much
as 10 years’ worth at current consumption rates, is the Outer Continental Shelf. That
would be offshore America.”
But the President’s numbers don’t add up.
The Energy Information Administration estimates off-shore there’s 18-billion barrels of
crude oil that are currently off-limits. The U.S. consumes more than seven-and-a-half
billion barrels a year. That means 18-billion barrels would only last the U.S. less than
two-and-a-half years – not the ten years the President suggests.
Nancy and Dave Tom bought this home near Apache Junction, Arizona. They have to haul all the water they use with their pickup truck, so they quickly learned how to conserve. (Photo by Mark Brush)
Dave Tom hauls water with this trailer. He makes around two trips a week to keep their storage tank full. (Photo by Mark Brush)
This system of aqueducts and pumps moves Colorado River water 336 miles across the state of Arizona. Over its entire course, the water is pumped close to 3,000 ft. vertically. The $4 billion system was built using federal grants and low-interest loans. (Photo by Mark Brush)
It’s been estimated that the Phoenix metropolitan region gets 2,300 new residents each week. This new high-end development is near the Tonto National Forest. The homes will sell for more than $800,000. (Photo by Mark Brush)
These two lane roads will soon turn into four lane roads as housing developments continue to spread into the Sonoran desert. (Photo by Mark Brush)
Many areas in the Southwest are booming. With all this new
development, pressures on water supplies are growing. Mark Brush takes
a look at the lengths people go to, to get water in the desert:
Transcript
Many areas in the Southwest are booming. With all this new
development, pressures on water supplies are growing. Mark Brush takes
a look at the lengths people go to, to get water in the desert:
Nancy and Dave Tom used to get their water from a city water supply.
That was back when they owned a home in Tempe, Arizona. Like a lot of
people in the area, they had a pool, plants that needed water year
round, and a green lawn out back. Not exactly a desert scene. It took
a lot of water to support their lifestyle.
But life in Tempe was getting crowded. And when somebody rang their
doorbell and offered to buy their house for almost twice what they paid for
it, they jumped at the chance to move to a smaller town.
(Sound of birds)
They found a house for sale just outside of Apache Junction. It’s a
small city in the desert about an hour’s drive from Phoenix. The house
is at the foot of a dry mountain range and has spectacular views. But
the house didn’t have city water service:
“When we saw this piece of property we pretty much fell in love with it
immediately. And it was stated in the multiple listings that you did
have to haul water. And that the water trailer conveyed with the
property (laughs).”
(Sound of hooking up the truck)
To get their water, Dave Tom hooks up a trailer with a big plastic
water tank. He tows the trailer about 4 miles into Apache Junction.
There’s a water filling station here. He gets about 90 gallons of
water for each quarter dropped into the machine:
(Sound of truck parking)
“I’ve got my four quarters here – we’re going to put it in the vending
machine and have at it.”
(Sound of quarter and water rushing)
He makes about two trips a week, so he figures they’re using about 600
gallons of water a week. That’s quite a bit less than the 6000 gallons
they were using in Tempe.
Some of the things they did to cut back were obvious. Since they no
longer had a pool – and they didn’t water a green lawn – that helped.
But in their new place, they also bought a high efficiency washer and
dishwasher. And, when they don’t have guests around, they cut down on
the number of times they flush the toilet.
And they’re not alone in trying to cut back on water use. Even their
neighbors who have a well are really careful with their water. Phil
Reinhart lives just up the road. He’s rigged up a system of gutters
and pipes to catch rain water:
“You see it drains the front of my house and it comes down these
gutters into these storage barrels. And then I have a little pump that
I use and a little twelve volt battery that I use to pump my washing
machine full and then my washing machine then discharges into my citrus
trees – this is a lemon – here, take a lemon back with you.”
Reinhart is careful with his water. And he’s worried that the
population boom will put a strain on his well.
(Sound of water)
The tank on David Tom’s trailer is full. He tries to shut the water
off:
“Alright we’ll push the shutoff button – and watch out, you’re going to
get wet… no the shutoff isn’t working. We’re going to dump 25 to 30, maybe 40,
gallons of water, which to me it’s a shame they need to come down and
fix this.”
(Sound of water flowing)
A lot of this water spilling onto the ground has traveled a long way to
get here. The Central Arizona Project pumps water from the Colorado
River 230 miles away.
“Rather than a river than runs downhill by gravity, we’re a river that
runs uphill by pumps. We’re the largest electric consumer in the state
of Arizona.”
Sid Wilson is the general manager of the Central Arizona Project. He
says most of the water pumped into this region is used for farming.
But with rapid development, that’s expected to change. More water will
be used to service the new homes sprawling out into the desert.
“The CAP right now provides 40% of the water to this area, 40%, and that will increase
some over time.”
Wilson says people are going to continue to move to the Southwest. So,
future water supplies will have to be developed.
Back at their home near Apache Junction, Dave Tom has finished filling
up their underground storage tank. It’s taken him two trips with the
trailer.
(Sound of gurgling)
His wife Nancy says their new home has changed the way they think:
“Life out here in the desert has given me a greater appreciation for
water. There’s a part of me that says this is how everybody should
live in the desert. That they should have that awareness of their
water usage and embrace the fact that you live in the desert rather
than trying to change it into a lush tropical paradise.”
Right now, we’re paying anywhere from 70 cents to a dollar more per gallon than this time a year ago. (Photo courtesy of the National Renewable Energy Laboratory)
