RC attributes the lower prices of late 2008, early 2009 to the recession — which I do, too.  But we’re entering uncharted territory, and possibly driving and thriving on borrowed time.  We’ve far outpaced geology’s production in our consumption for many decades, and the past few years we’ve never consumed it more quickly.  The worldwide peak of oil production is at hand, if it hasn’t already passed.  After that, a permanent decline, meaning a permanently decreasing supply of freshly extracted oil per day.

So, is the recent increase in price due to increasing demand (as in we’re getting out of the recession) or due to decreasing supply (as in we’re starting the down slope of the production curve)?  Right now it’s a bit hard to tell: 2009 production was lower than 2008, and the recovery, if you can call it that, is a tad shaky at best.

But it’s hard (though not impossible) to argue that the trend for the price of oil is up as it gets harder to find, and shorter in supply.  Whether $5 gas comes in 2012, or this year, or 2015, or even later, it will arrive and we will need to adjust to the added cost somehow.  I doubt many people (except for the Lorax, maybe) are looking forward to paying more for gas, since it’s nothing but a tax on the way many of us live: commuting, traveling, and then traveling and commuting.   Actually, that’s just the tip of the iceberg: there are lots and lots of products that are derived from oil, and they’ll all get more expensive.  Even Congress couldn’t be this comprehensive with a tax. (Though I’d be foolish to tempt them, wouldn’t I? )

Bottom line, high gas prices are coming.  If you’re not in a position to pretend that you’re paying $15 for gas now, why not pretend that you’re paying $5 for gas now? If you put 20 gallons of gas in your truck and pay $60 for the gas ($3 per gallon), pretend like you paid $100 for that fill-up and sock away the $40.  Then adjust things around that new constraint.  There!  You’ve made the transition to $5 gas.  Now what about $6 gas?  Do the same thing.  And so on.

This is the proactive way to deal with rising gas prices.  Far better to adjust early than scramble in reaction.

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One commenter on that post suggested getting a CarChip E/X but on the newer models of the Chrysler Town and Country, there’s a mechanism to get the codes without taking it to the dealer.  I just turned the ignition on and off five times in a row quickly, and the codes appeared in the odometer reading. Then, figuring out the cause from the code was an easy lookup on Google.

The code by itself doesn’t tell you what parts need to be replaced, but it does tell you why the check engine light is on.  Knowing what got tripped can help lead to more specific information on the web, and give you some talking points if you decide to take the vehicle somewhere to get it fixed.

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I began to wonder what kind of money solar panels were going for.  So I hit up my trusty source: eBay.

I did a search for “solar panels” and checked the completed listings for items that sold.  I sorted from highest total price (final bid price plus shipping) to lowest.  Here’s what sold on the first 400 listings last night:

This is a very rough calculation, of course. I took new and used, monocrystalline and polycrystalline, with and without extra stuff, with cracks and without, all different brands, and just took the total cost and divided it by the total wattage to get the cost per watt. The average of the 84 auctions: $3.59 per watt.

How fast do solar panels pay for themselves? To figure this out we need to know how much electricity would cost elsewhere.  For us, it’s 9 cents per kilowatt-hour.  Let’s say that my power needs are 1 kw, 12 hours per day.  One kilowatt of solar panels will cost me $3,590, plus installation, which I have no clue, but let’s say that it brings up the cost to $5,000.  So, there I go, I’ve paid for my power needs.

If I pay 9 cents per kilowatt-hour, that’s $1.08 per 12 hours (day).  Diving this into $5,000 gives me a payback time between 12 and 13 years.  It’s a pretty expensive alternative at those prices.  Plus, I’m not even looking at power losses, cloudy days, tree shade, aging of the panels, etc.  It’s likely a better deal for people in sunnier states (and higher metered energy prices).

But on the other side of the equation, will power prices go up?  Will it be rationed?  Will it even be available?  This gets back to my friend’s original motivation:  self-sufficiency.  In any case, this is something to keep on the radar.

My analysis might use a little fine-tuning.  Any other things that are important to consider?

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So if you were thinking about getting 5% off the cheapest gasoline in town, you’ll need to apply before this Friday, November 14th, 2008. Sorry about that!

The non-business TrueEarnings® Card from Costco and American Express, as far as I know, is still being offered.  That still gives you 3% off of qualifying gas.

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I hadn’t been getting my gas at Costco because I could get a better deal with my Chase PerfectCard™ MasterCard® at other gas stations because the price at Costco wasn’t low enough to compensate for not being able to use my gas rewards credit card there.

Well, Costco now offers cashback rewards cards for members: the TrueEarnings® Card from Costco and American Express.  This card currently carry no annual fee as long as your Costco membership is up to date, and gives you up to 3% back on qualifying gas purchases (Costco or standalone gas stations).

If you already buy gas at Costco and pay your balances in full each month, then this credit card might be interesting to you.

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Gentle accelerations and coasting. Hard accelerations increase RPMs so those use more gas.  Hard braking means that you had your foot on the gas longer, so you used more gas.  I try not to be too much of a jerk but if someone’s really riding my back bumper I’ll take my time.

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This statement reminds me of the kind of envy that dripped from Microsoft articles in the 1990s.  Bill Gates’ income was a similar order of magnitude, and I’d be lying if I said that I didn’t enjoy watching him and other Microsoft brass get their feet put to the fire with antitrust questioning.  Perhaps you enjoyed it too.

I don’t feel the same way about putting the oil companies on the chopping block.  I don’t enjoy paying $4 per gallon any more than anyone else, but how is this Exxon’s fault?  It isn’t!

News articles that make a point of calculating how much Exxon Mobil made per second last quarter are aiming to get readers feeling like the oil companies are handing it to them.  Perhaps then they’ll vote for legislators who will push for a windfall profits tax.

It all really boils down to jealousy.  The have-nots will always want what the haves have, and they will encourage decision makers to enforce a moral obligation on the haves.  The oil companies researched, explored, got drilling rights, built rigs, pumped, refined, and sold, and now we’re mad that they’re making a profit?  Come on!  We have a lot of our comforts and prosperity because these folks went out to find the oil and develop the refining technology.  Before, though, they were selling it to us on the left side of the production curve.  Now that we’re around the peak, things are more expensive.  That’s not their fault.  That’s geology!

If coal becomes the fuel of choice later down the road, I suspect we’ll direct our ire toward them.  Or solar.  Or wind.  (Watch out NanoSolar and GE!  We’re coming to get you!)

Stringing up individuals and companies that bring the most value to the table isn’t the way to encourage them to work harder for our benefit.  But I’m thinking that there are enough people who would rather have someone take care of them than to be proactive about how they react to life’s events that we’ll see higher taxes on the rich and the productive.  Then, we’ll all be poorer.

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What is the smallest emergency fund with which you would be comfortable?

I said “75 years” with a wink. But I knew that I wasn’t winking on the inside.

Embracing a cover-all-contingencies mentality isn’t productive and that’s what I was doing in part with that comment. It All I can do — or all anyone can do, really — is prepare for what we can, because there’s no way to cover for all contingencies.

Forget it. Next question!

That realization hurts. It can immobilize, like after I read Kunstler’s The Long Emergency. I was depressed for a couple of weeks after finishing that book.

As it turns out, peak oil is just one Really Bad Thing that’s going to turn our lives upside down. How about these?

• Peak water
• Insolvency of the banking system
• Irreversible climate change
• Food shortages and disruption of distribution
• Hyperinflation
• Recession or depression
• War with Iran
• AIrborne anthrax
• Cats and dogs living together, mass hysteria

A 75-year emergency fund doesn’t do a darn bit of good if I’m dead, or if I can’t buy the food I need to keep from becoming dead.

Worrying about all of these things is insane, and I don’t worry about all of these things. I know they exist, and I know how to prepare for some of them. I shuffle my investments around based on this information. I lose weight. I plan to buy a little extra food. I save to snap up bargains.

I’m not willing at the moment to prepare for all of them, but that’s just a calculated risk. I plan for what I can, accept the rest, and pray, because ultimately God is in control. Being thankful that things are still as good as they are helps, too.

An emergency fund is good to have, but a 75-year emergency fund is overkill. Fifty is plenty.

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Ah well, just get a gas guzzler with a guarantee of $2.99 gas and you’re all set, right? Probably not, according to Consumer Reports. Three years of $2.99 gas might be nice, but (a) it’s only for three years; (b) you stand to get better deals with other options, like a cash-back option; (c) you might not even be able to get gas to fill up a guzzler if a supply crunch hits for whatever reason. What’s more, trading it in might be a problem.

OK, scratch the guzzler with subsidized gas. How about a Smart Fortwo? It’s gotta be better, right? Well, it does get about twice the gas mileage as a Chrysler minivan, but at 1800 lbs (or a ton with driver) it gets tossed all over the place, despite what the manufacturer might tell you. A friend at work recounted a story of a friend who had his Fortwo substantially sucked toward a passing semi due to the partial vacuum. Not fun. I spoke with a gentleman a few months ago who had just bought a Fortwo and he admitted that “bridges were interesting.”

OK, what about a motorcycle? They can get 50+ MPG, right? A local motorcycle driver’s education course recently opened up twice the normal number of available spots, so it’s clear that this is becoming another option. Getting caught riding these in the rain sucks, though, and you have very little protection if a semi gets mad at you.

OK, how about a hybrid? Well, they’re great in cities but not much better than gas-only cars on the open road. The batteries are heavy and take up a lot of room. The solar panels on newer models don’t appear to be doing much more than powering the air conditioner.

So the safe vehicles are becoming onerously expensive to operate, the gas-sippers leave a bit to be desired in safety, and the new technology isn’t really breakthrough. My 2004 Corolla appears to be a good tradeoff — mid- to high-30 MPG and reliable with a solid feel — but even this will get to be an expensive vehicle to operate as time goes on.

Gas credit cards can help a bit but the savings will never solve the larger problems of scarce oil. None of these options will.

Fahrschmerz is here and it will be getting worse. The best options will be to travel less and to move close to work, but we’ll continue to travel and commute long distances to work until we’re forced otherwise, either by bankruptcy or rationing. On the off-chance that we actually get things together and conserve heavily on a national scale, this will merely subsidize the costs for other countries and allow them to satisfy their own demand more cheaply.

Maybe paying $15 for gas now is a good start, because it will be there soon enough, and vehicular transportation will be bad in just about any method.

Or at least cut out the soda when you gas up.  (Thanks to Greener Pastures for including that article last week.)

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Northwest Airlines recently planned to cut 2,500 jobs as the high price of fuel reduces the number of daily flights and the number of needed personnel.

The airlines, Northwest and others, have been instituting new fees, and increasing existing ones, to offset the costs of fuel on tickets already sold, and to trim losses on their balance sheets. Douglas M. Steenland, chief executive of Northwest, estimates that the new fees will generate $250-$300 million in revenue.

$15 for the first checked bag. An increased ticket change fee of $150 (up from $100).

But the new fee that caught my attention will be unfortunate news to frequent fliers: a fee of $25 to $100 for redeeming a frequent-flier ticket.

Yup, after September 15th, frequent fliers at Northwest will get the privilege of paying for their previously-free tickets.

Does this take all of the fun out of frequent-flier programs and airline reward credit cards like the WorldPerks® Visa® Platinum Card or the JetBlue Card from American Express? It probably doesn’t take out all of the fun, but it will pay to check out your travel plans and your spending plans to see if programs or credit cards like these stand up to other options, since redemption of airline miles will become more restrictive, and may even require some cash out of pocket to redeem. (It might be time to can the airline cards and just go with one that gives you cash back right on your next bill, like my old standby the Chase Perfectcard® Mastercard®.)

The one silver lining of all of this is that flight, though more expensive, will get a little bit less congested.

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