Inflation?

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Fed's Duke: "America's Poor Have To Make A Choice Between Paying Their Gas And Their Mortgage"

http://www.zerohedge.com/article/feds-duke-americas-poor-have-make-choice-between-paying-their-gas-and-their-mortgage

Food and gas costs push consumer prices higher

Who here still believes inflation is only 2.7%?

http://news.yahoo.com/s/ap/20110415/ap_on_bi_ge/us_consumer_prices

U.S. gas price tops $3 a gallon, highest since Oct '08

What inflation?

http://www.reuters.com/article/idUSTRE6BQ3DU20101228?feedType=RSS&feedName=businessNews&WT.tsrc=Social%20Media&WT.z_smid=twtr-reuters_biz&WT.z_smid_dest=Twitter

Guest Post: Former Shell Oil Chief Predicts $5 Gas by 2012

http://www.zerohedge.com/article/guest-post-former-shell-oil-chief-predicts-5-gas-2012

I’m predicting a worse outcome over the next two years, which takes us to 2012 with higher gasoline prices, uncertainty as to the future of hydrocarbons, more regulation on the hydrocarbon industry based upon who the administration is today…
And what I fear the most is that by 2012 prices are so high that we have a backlash from the electorate and we go into reverse and we go back to a hydrocarbon only type of a future, maybe with some nuclear, instead of moving on in the 21st century.
…
I’m predicting, based upon the moratorium in the Gulf of Mexico, up to a million barrels a day of US production gone because of the politics of freezing drilling in the Gulf.
The headline is the moratorium is lifted, the reality is you can’t get a permit… I’m expecting no new drilling for two more years at least.
…
If we stay on our current course, within a decade, within ten years, we’re into energy shortages in this country big time. Black outs, brown outs, gas lines, rationing - that’s my projection based upon the current inability to  make decisions.
…
When the American consumers are short, or when prices are so high - $5 a gallon for gasoline by 2012 - I believe that’s going to happen - that’s going to set a new tone, it’s going to be panic time on the part of the politicians, they’re going to suddenly get some kind of a sense we better do something.

Energy industry safety

Click on chart to enlarge.

Despite its unsavory reputation, nuclear energy sources may not only be the cleanest environmentally, but also the safest. Recall that sun power and wind turbines require not-so-green manufacturing processes and vast land, respectively. This pie chart graphs the number of deaths for energy industries.

We need to develop alternative energy resources to wean ourselves away from hostile foreign oil producers for economic and national security reasons, but we should do it methodically and strategically. Driving our economy to the ground in an attempt to maintain energy independence will have catastrophic outcomes.

US refineries

I had a couple discussions last week with two men who work in refineries, one in Louisiana and Texas. Apparently, it's becoming increasingly difficult to operate a petroleum refinery in the Gulf states due to environmental pressures, shrinking profit margins and regulatory restrictions.

Refineries are an important link in our nation's energy chain, where crude oil is processed and refined into byproducts such as gasoline, diesel, asphalt base, kerosene, heating oil, and liquefied natural gas.

The US already imports too much crude oil from foreign countries, some with unstable governments, putting us at geopolitical risk. If more domestic refineries are forced offshore, we will become increasingly dependent on foreign sources of energy. Crude oil AND refined products would need to be imported. This will increase our exposure to supply shocks, and it will also inject a hidden, permanent tax on our energy sources.

Good News, Bad News...

Here in California, we got some good news.

The good news: the State Legislature passed a budget bill, resolving the $42 billion budget deficit.

The bad news: our personal income, sales, and vehicle license fee taxes will go up.

Obviously, services will be cut, but hey, at least they rejected the gasoline tax increase.