That math really points it out. Even for me (40K miles/year) we are only talking about a $650/year difference, so just drive whatever you enjoy and don't worry about it. My kids probably spent more than $650 on itunes last year, and I'm sure I spent twice that at starbucks.

lrg, i live in daly city and am interested in where you get your b100. do you actually live in sf or the surrounding area?
thanks,
240dude

I got B100 last week, last night I changed the fuel filters, the B100 smelled somewhat like old gas.
Should is smell like something else?
Kevin

__________________
1976 240D
1976 240D parts car
1970 220D daily driver

240dude,

California is a bit screwey about this (what else is new) and you have to "join" a co-op so they can presumably monitor if you have problems with the new fuel. I checked out a few places by just looking them up here: http://www.biodiesel.org/buyingbiodiesel/distributors/showstate.asp?st=CA

You might want to check further on Google as I know there are at least a couple of stations in Berkeley that sell it but afaik you'll still need to "join" to buy it.

The easiest one for me was Marin Biofuels in San Rafael but it looks like there are a couple in the South Pennisula that might work for you. I'm still waiting for my "fueling card" so I can fill up. I'll probably do an in-tank blend by filling up when I'm not at empty to get a tank or two at B50 or B75 to start. After that I hope to use B100 as much as possible.

__________________
LRG
1987 300D Turbo 175K
2006 Toyota Prius, efficent but no soul
1985 300 TDT(130K miles of trouble free motoring)now sold

Scott,

you're not alone. Mish's Global economic blog:
http://globaleconomicanalysis.blogspot.com/2008/05/quantifying-commodities-speculation.html

echoes your reasoning, and summed it up as:
============
Forces At Play

1) The falling US Dollar
2) Commodities speculation by price insensitive index strategy players
3) Rules and regulations at the CTFC that have categorized as commercial hedgers, those who are in reality speculating in enormous size.
============

Moreover, more sovereign wealth funds combined with commercial/instiutional hedge-funds are placing a larger percentage of their holdings (which are significant) into commodities futures.

This will be another game of "hot potato" just like speculative housing . . .

:-( neil

PS: here is Congressional testimony on how institutional investors and the CTFC are contributing to higher pricing of commodities:

http://hsgac.senate.gov/public/_files/052008Masters.pdf

Excerpt:


Congress Should Eliminate The Practice Of Index Speculation
I would like to conclude my testimony today by outlining three steps that can be taken to immediately reduce Index Speculation.

Number One:
Congress has closely regulated pension funds, recognizing that they serve a public purpose. Congress should modify ERISA regulations to prohibit commodity index replication strategies as unsuitable pension investments because of the damage that they do to the commodities futures markets and to Americans as a whole.

Number Two:
Congress should act immediately to close the Swaps Loophole. Speculative position limits must “look-through” the swaps transaction to the ultimate counterparty and hold that counterparty to the speculative position limits. This would curtail Index Speculation and it would force ALL Speculators to face position limits.

Number Three:
Congress should further compel the CFTC to reclassify all the positions in the
Commercial category of the Commitments of Traders Reports to distinguish those positions that are controlled by “Bona Fide” Physical Hedgers from those controlled by Wall Street banks. The positions of Wall Street banks should be further broken down based on their OTC swaps counter-party into “Bona Fide” Physical Hedgers and Speculators.

There are hundreds of billions of investment dollars poised to enter the commodities futures markets at this very moment. If immediate action is not taken, food and energy prices will rise higher still. This could have catastrophic economic effects on millions of already stressed U.S. consumers. It literally could mean starvation for millions of the world’s poor.

==========
Intro
==========

I have been successfully managing a long-short equity hedge fund for over 12 years and I have extensive contacts on Wall Street and within the hedge fund community.

Itʼs important that you know that I am not currently involved in trading the commodities futures markets.

I am not representing any corporate, financial, or lobby organizations.

I am speaking with you today as a concerned citizen whose professional background has given me insight into a situation that I believe is negatively affecting the U.S. economy.

While some in my profession might be disappointed that I am presenting this testimony to Congress, I feel that it is the right thing to do.

You have asked the question “Are Institutional Investors contributing to food and energy price inflation?” And my unequivocal answer is “YES.”

In this testimony I will explain that Institutional Investors are one of, if not the primary, factors affecting commodities prices today. Clearly, there are many factors that contribute to price determination in the commodities markets; I am here to expose a fast-growing yet virtually unnoticed factor, and one that presents a problem that can be expediently corrected through legislative policy action.

thanks lrg,
actually there is a co-op near me in pacifica (5-7 miles). there is a station in sf on third street that apparently sells bio as well (10 miles away). i am not sure i want to go the wvo route but who knows... there are both a taqueria and chinese restaurant within a block of me. on a side note i have seen recent news stories that wvo is being stolen.
thanks again,
240 dude

As a clarification - I totally agree that oil is way overpriced and no question speculation is a big factor here. The speed of the price increase goes way beyond what the relatively glacial supply demand dynamic would suggest. That said, it's also not only speculation causing this price increase and oil is not going back to $40, unfortunately. Most analysts I know calculate true equilibrium at about $80. I agree with the housing bubble analogy, but note that even now after a big drop in prices, housing still costs (on average) a lot more than it did 3-5 years ago. When the oil bubble lets go prices will drop, maybe back to $80, but that's quite a bit higher than a year ago and that is a result of underlying demand. The irony is that if/when we go back to $80 we'll all think that's cheap.

By the way, I have no affiliation with any oil or commodity company or hedge fund, I'm basically an economist (although I don't usually admit that in polite company).

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LRG
1987 300D Turbo 175K
2006 Toyota Prius, efficent but no soul
1985 300 TDT(130K miles of trouble free motoring)now sold

I don't know about $80, $100 seems like a more realist post-bubble price (unless the dollar is somehow fixed).

With it's 5-speed, overdrive gearing, I'm hoping my Euro 300TD will top 30 mpg on the highway. Haven't tried a long trip with that car yet.

Happy Motoring, Mark

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DrDKW

Diesel dropped here from $4.87 to $4.77 while RUG climbed from $3.89 to $3.95.

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Cheers,
Bill

I work in "oil patch central". My Province in Canada is now the largest supplier of crude to the USA surpassing Saudi Arabia by quite a lot.

The oil price per barrel is quite artificially high right now. It is not due to any kind of supply and demand economic principle but due to ordinary speculation. Right now the speculators are getting rich ... there will come a time shortly when the tide will turn and they will short the stuff ... and the price will plunge. Let's hope not too far ..

That said, at that time governments will step in with all kinds of "carbon taxes" to keep the price high. All kinds of reasons for this ... most political ... but it will happen ... trust me.

If the price price per barell sinks to something in the 50 or 60 dollar range at the well head ... it will simply make many of the oil-sands uneconomic and then the tap will be turned off and economics will take over again.

Upshot? Get used to $5 gallon prices at the pump.

Hopefully, you are correct. I'm afraid they will lose their "political will" ad let prices drop again. That would definitely be the wrong message, the public needs to understand that the cost of energy is going no-place except up. Wholesale prices need to stay high enough to provide an incentive for production (and alternate fuels), pump prices need to be significantly higher to reduce consumption. It doesn't matter if it's done through taxes or retail prices, but it needs to happen.

Just filled my TD for $4.73, while RUG is just about $4.00 here.
At this rate I'm hoping I'll no longer have to hear "But isn't diesel so much more expensive?" from the masses when they hear what I drive.
My brother's '94 Toyota 4-Runner has been mostly parked since he got a '99 4-cylinder Tacoma that gets 10 mpg better, while a friend, once proud of his recently purchased Ford Expedition, is now looking for a used Miata "just or running errands'!
I'm going to get my moped out of mothballs (Though I may have to get a pistol permit if I want to keep it!)

Happy Motoring, Mark

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DrDKW

I get that all the time. "Gas is cheaper than diesel so why drive a diesel?" They just don't get it. Do the math.

If you want to sell that moped, let me know. I've been collecting/riding them for years and would most certainly give it a good home.

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Cheers,
Bill

It's a Sachs-powered Montgomery-Wards Imperial, aka Columbia Commuter, and the only new motor vehicle I ever bought. Originally $800, I purchased it for half price from Wards, a year after the 1979 gas crunch. I think I'm going to have to hang on to it though.
I also have a 'project' 1962 Sears Allstate moped, made in Austria by Daimler-Puch.

Happy Motoring, Mark

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DrDKW