Energy Prices Headed Upwards-PGP

Paul Pollets

U.S. Federal Reserve Chairman Alan Greenspan warned this week that the global economy has entered an era of permanently higher crude oil and natural gas prices. This will force U.S. producers and consumers to rethink how they use energy. In the near term, it implies higher costs that would impact business investments and consumer spending. In the longer term, the U.S. economy will benefit disproportionately.


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RB_2

Gas just hit a high in Calgary...forescast....drum roll please..

$1.00 per litre...that's about $4 per gallon...and we're surrounded by the stuff!

Paul, If Mr. Meeker was still alive what would he say?

George_10

The short term effect will be

higher fuel prices and higher prices for those products which are made directly from petroleum. It will have a ripple effect on all businesses as their cost of doing business will increase and those that can pass on these higher cost will do so very quickly. Freight will become more expensive and so will many commodities such as grains and metals. The worst case example of higher oil prices can be seen by just going back to the early 70's. Every commodity price was sent to the moon only to fall after the oil prices fell.

Inflation under these circumstances will be difficult to hold in check. Therefore you will also see a rise in the cost of renting money.... interest rates.

The cost of money and the price of oil are always two very important catalysts in the world economy and it will show up in the stock market to be sure.

As always when there is severe price dislocation like this, there will be opportunities and sink holes. Read about what happened between Dec 1972 and the summer of 1974. That was an extreme, but it could very easily happen again.

BillW@honeywell

It means its time to...

replace that old, inefficient junker in the basement, up grade the control system, tighten the envelop of your home/building, use more effcient lighting methods. Get a blower door test done, and seal the leaks. Upgrade insulation. Energy costs are the 3rd largest cost of owning a home after mortgage and taxes, and the only one of those three that you can actually control. IMHO, opportunity knocks!

George_10

This could do to the heating and cooling

industry, what it did to the automobile industry. For a time high efficiency became the mantra. It seems to me that this parallel could be used to sell better systems.

hr

Solar, baby

bring back some incentives. A $1500.00 solar panel, exchanger, control package for DHW may have a good payback.

Here is a product displayed at this years "solar booth" at the Home Builders Show in Vegas.

Looks Danfoss ish, doesn't it

Conservation never hurts, either. Carter was the only president, I recall, that asked for citizens to consider that concept:)

hot rod

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Constantin

And to think...

that the coming US minimum efficiency standards were predicated on falling energy prices (IIRC)... how much higher would the standards have been set if the rulemaking process had started two years later...

I guess what it comes down to is that we all make our own choices that aggregate into something bigger. I'm busy trying to maximize the thermal efficiency of our coming home. Hopefully, many of you are convincing your clients that energy conservation makes good economic sense also.

Some day our nation will wake up to the reality that consuming 1/4th of the worlds energy is not sustainable over the long run. Some day, it will dawn on us that incrementally ratcheting up the Pentagon spending bill by $50BN every year is not the most cost effective means of assuring our energy supplies. In the meantime, we'll continue to drive down the street in 8MPG Hummers to pick up a latte at Starbucks.

J.C.A._3

Think about....

The person coming to your home, in a white coat and testing your heating system. He/She finds an inordinate amount of pollution going up your chimney. They can shut it down immediately. You have 2 chances to get it repaired, and running to the newest "standards", or you will be replacing it. NO questions, no excuses....You WILL replace the offending heating appliance immediately or go without.

This scenerio takes place in MOST of the western European continent!Anyone notice the "test" setting on most German control systems? The powers that be CAN and WILL shut you down, if there is a problem with your heating system.

Just one more reason,(PRICE of fuels being the other) that the European countries are standing on the doorway to America, selling their wares, and making some good dough doing it.

The way things are going, I would bet that in our lifetimes, we will be seeing the same things happening here. As the installer, if you ain't doing it right, your going to be losing money. Just a thought.

A clean running system is a well running system. It saves both US and the consumer, not to mention the environment ALOT of problems and money on energy costs. Chris.

hr

With less than 5%

of the global population, the US produces almost 25% of fossil fuel related CO2 emissions.

At least we could, or should, clean up the energy production.

The governors of 10 eastern states met and agreed to regional initive to curb CO2 emissions. In answer to the feds relaxing power plant emission standards last year.

Wishing them luck.

hot rod

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Paul Pollets

He'd say...

Drink more beer

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Constantin

It's one of the few monoplies left..

... at least in Germany. The chimney sweeps were appointed their territories many generations ago and guard them with an iron fist. They have the right to call the cops on you to open your door, let them in, test your system, and get paid a set amount for the privilege. Every year. Whether your heating plant can produce soot or not (the alleged reason it's necessary - prevent chimney fires).

One guy went to court since his heating system was designed not to emit soot and he could prove it. He lost.

Many sweeps merely milk the rent that their monopoly entails and sub the work out to the lowest cost hacks that pass muster. It's an ongoing scandal in Germany, along the same lines as hacks over here installing AC equipment without a license. Just because someone is a chimneysweep does not qualify them to diagnose your heating system...

Hopefully the system in Germany will be reformed to let the market decide what the cost of an inspection should be. Annual checkups are a good idea, but assigning rents to the lucky few is a great expense for the rest.

Lastly, just because your heating plant is running efficiently does not mean that you're a good citizen. After all, it's perfectly possible to be wasteful even in places with high energy prices. However, the economic incentives the Europeans have to shape up are usually good enough to put them on the forfront of energy-conserving technology and behavior.

RB_2

More beer

bio fuel...ur in the right frame of mind...

urp.

RB_2

\"Does it bother anyone

that Monopoly is owned by one company?"

Steven Wright

(Been trying to get rid of that quote for a long time...now its yours)

J.C.A._3

Point taken !

But that they have "THAT MUCH POWER!"(I believe they call it the"political trough" here in Ma.) I'm not surprised that the homeowner lost his appeal.

I DO NOT want to turn this into a political thing, but wanted to stress that "it could be happening HERE" soon.

Just like the "hot rods" of the 60's and 70's , the ones producing the most POWER, were also burning the fuel "more effiecently" than most mass produced cars , at the time. Yet there were no "emission tests" to prove it.Having done a few engine upgrades, and using the testing standards in use at the time, we more than passed. Most would have passed todays emission standards, as to NOX and CO emissions too!

Quality setup of equipment, control strategy, and proper sizing by QUALIFIED proffesionals will beat "what you need to meet the heat loss of your home", and what "WE sell", by a FAR stretch.

You, as a number cruncher should be able to see the benifits of subtle changes to the efficiency numbers, and lowered emmisions.

I know it's being perceived as a political "perk", but don't you think that there just might be a reason behind it? Cleaner air is a worthwile goal. JMHO. Chris