$2 Per Gallon Gasoline IS Possible

I will even state that 50 cent per litre gasoline in Canada is entirely possible.

How can I make this outlandish a statement? First a lot of Canada’s gasoline price is actually TAX so we only really need to cut the price of Gasoline in half to reach this lofty goal, but that is not the only reason.

Let me secondly tell you a quick story about my days at Nortel. When I started working there in the mid-80’s we have Vision 2000, where our goal was to be the Number 1 Telecommunications company in the World by the year 2000. Surprisingly Nortel reached that goal, however, by that time, it no longer mattered, because the Internet and Data networks had changed the world so much, no one was buying that much Telecomm equipment any more. We kind of ended up like being “The Smartest Man in the WWE” ™, who cares?

This is where my $2 per gallon and 50 cent per litre argument is actually based, in the next 20 years or so, there will either be technological breakthroughs and changes so drastic that the price of Gasoline (and Oil in general) will no longer matter any more, or, we will be completely f*cked, it’s that simple. The way that Gasoline prices and Oil prices are being manipulated and the fact that it is a dwindling resource (depending on the model you look at), something must change in 20 years, or the world economy will fall over (as opposed to this year’s version of the great economic implosion).

My guess (and hope), is that thanks to technology in general, computers in specific, that model will take over in terms of the use of energy and gasoline, and there will be a dramatic drop in the demand for Oil and Gasoline thus driving the price through the floor. This sudden dramatic drop will not do Canada any favors, so hopefully we won’t be the Gas Can for North America by then (but I suspect we will be).

The major thing stopping the widespread use of electric power for cars and transport is Battery and the ability to store energy (and how long it takes to recharge the batteries). Each year there are new(er) ideas coming forward, which hopefully will cause a version of Moore’s Law for battery lifetime (doubling capacity every  two years) or something close to that, and once that happens, gasoline will no longer be as important.

Am I completely off my nut? Maybe, I have been wrong before (remember Bill Gates saying, “Who could need more than 640K of memory in a computer”), but my guess is something will change and the ludicrous promise of Gasoline at $2 per gallon is possible, but maybe not in the next few years, and by that time, no one will care!

Any nay sayers

 

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Controlled Levee Breaks

Spending Floods

Sometimes we hold off spending our money on really big ticket items, because we convince ourselves we cannot afford it, or we think we cannot deal with the resulting debt, and, while these are all good reasons not to overspend sometimes some big expenditures must happen (e.g. windows on your house need replacing, a crack in your house’s foundation is causing a leak, etc.,). What needs to happen is that you don’t end up in a situation where you must spend the money, and maybe try to spread these larger expenditures out so you aren’t flooded out financially.

This is unfortunately what is happening in real life in Manitoba and along the shores of the Mississippi River where controlled floods are being allowed to hopefully save a larger number of houses. I don’t wish to sound flippant with my analogy here, for those affected our prayers and thoughts are with you.

How many large expenditures are backing up behind your financial dike or levee? If you wait too long you could end up with a horrendous set of financial outlays like:

  • Your home’s roof needs replacing due to age, or storm damage
  • Your furnace needs to be replaced due to age
  • Your air conditioning just is not working and needs replacing

Couldn’t happen? It did to me in an 18 month period, and luckily I had enough money to deal with most of the expenses, but any more of these big ticket items might have caused a lot more consternation in my life.

My wife and I have held off doing the windows on our house, even though we know they need to be done, but we are now faced with having to do them, or risk damaging our house’s framing and possibly causing greater damage by not acting on this (or more expenses with air loss through the deceprid windows that are currently in place). The expense is going to be quite spectacular I am assuming, and there are other large bills looming, but sometimes you just have to deal with the controlled flooding to keep from getting financially swept away.

Any other stories of perfect storms of large expenses occurring at the same time?

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Enbridge and Bill Shenanigans

Equal Billing Polka

For a while I have been reading about folks who have had HUGE end of year bills from Enbridge (these folks are using the equal billing capability that is offered to customers). These issues have been outlined by other financial bloggers and it has arisen for various reasons most of which are mistakes made by the billing system for Enbridge not taking enough money to cover the yearly costs, but the customers are expected to fork out the difference none the less. This is the danger of an “equal billing” system because you are at the mercy of the calculations your Utility uses (and I don’t like the fact that some force you into direct withdrawal at the same time, if you wish to use the Equal Billing system too, but that is for another post).

As you can tell good reader, it is rare that I will redo a story I feel has been well done by one of my peers (OK, sometimes I do), but in this instance, I have a very different perspective on this storyline.

A while ago I wrote about how when I replaced my washer and dryer with a new front load washer and dryer, I seemed to be saving a great deal of money on Water Bills ( How Much Water Do I Use? ), what I didn’t mention is that we changed from a Natural Gas heated clothes dryer to a standard Electric Clothes Dryer, as part of this switch over. This was done mostly because getting a Natural Gas dryer in the model we had was going to be a big issue, and was going to delay delivery of the new washer.

I noted that my Natural Gas usage seemed to be dropping over time, but I also noted that my electric bill seemed to be increasing by that same amount (if not a little more), but this means that now I actually have an over $270 credit with Enbridge, I await to see what Ottawa Hydro will be asking for as an overpayment for my Electric Bill (hopefully they will not just take the money from my account).

No, I am not really saving any money here (I think if I am lucky it is a wash (pardon the pun)), but it is interesting to see what Enbridge will do about this credit. Right now I have a bill that states I have a large credit with them, will they simply leave the account credited for now and let the credit get consumed slowly by me not paying, or are they going to send me a cheque to settle the account?

Right now it seems the former is true, and they will revisit my account in the fall, so that means I should take the extra money I am saving and give it to Ottawa Hydro as overpayment to cushion the extra bill they will be hitting me with.

Interesting how these things work out. Did anybody get burned the other way by “equal billing”?

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Video: Energy Futures

Energy and what the future holds for Energy is an interesting topic, but one of the last people I would have thought there was a video talking about it would be Bill Gates, but sure enough Mr. MS-DOS (or was that CP-M?) has an opinion about what needs to happen in the area of power and energy going into the future.

Given the mess we are in currently in terms of reliance on non-renewable energy, and our inability to innovate a “better” energy source, this is an interesting talk (I do not agree with it, but it is interesting).

At TED2010, Bill Gates unveils his vision for the world’s energy future, describing the need for “miracles” to avoid planetary catastrophe and explaining why he’s backing a dramatically different type of nuclear reactor. The necessary goal? Zero carbon emissions globally by 2050.

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Random Thoughts: Things don’t go boom

Times they aren’t a changing

Given this week started with a possible disaster in New York, it seems to be ending with hopefully less oil being expelled into the Gulf of Mexico and a possible election on the horizon in Canada? The big financial news in Canada was possible Mortgage frauds in Western Canada (on BMO), but a possible election may cause a lot more interesting discussions for the coming summer.

What is new in the Financial Blogosphere? Just read on, Gentle Reader:

  • Michael James asks the lyrical question Do Stocks Only Go Up?, and the answer is, depends on when you look. If you only look at stocks on days when they go up, it might seem like that.
  • Preet asks Why Does Door Knocking Work? because parasites need to eat and there are far too trusting people out there as well. Anybody who comes to my door to offer something, without my solicitation is not welcome, but I try to make them go away in a polite way (some really don’t take the hint).
  • The Canadian Capitalist asks you to Nominate your favourite Canadian Investment Blogs, I note I am not mentioned anywhere, so feel free to start a write in campaign for yours truly (although I am not strictly an investment blog, am I?).
  • Lending Money through Kiva by the Million Dollar Journey talks about Kiva a non-profit lending organization for low-income entrepreneurs (from around the world). I always feel a little skepticism with these kind of firms, but I hope they are doing what they promise, because this is a great way for the afluent to help those who are in need directly.
  • What to do with your tax refund? Larry MacDonald posts a link to another bloggers ideas of what you should do with your refund. I was just glad I paid my wife’s owed money off before April 30th
  • Canadian Financial DIY talks about Retirement System Redesign Ideas (and I respect his opinions in this area, given he is retired), but it worries you to read The Peter Principles.
  • Ellen Roseman discusses Complaints about tax collectors and tax software where Ellen points out that even after you file, you may need to follow up to get all you deserve in your refund.
  • According to Gail V-O you are Flirtin with Disaster (to quote Molly Hatchet ) if you haven’t done an Emergency Dry-run which is a cornerstone of any plan, you need to at least attempt to walk through it to see if there are any major flaws in it, before you are in the middle of your disaster.
  • Promod from Riscario Insider has been enjoying CALU 2010 and has a post about Billionaire Sir Terence Matthews On How to Compete with India and China (Mr. Matthews is actually Welsh, not Canadian), interesting prescription, but at least it does not advocate ridiculous tarifs and taxes to keep North America competitive.

Enjoy a quiet weekend, put up your feet, and watch to see if we get a pop election call next week!

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