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 EXECUTIVE DIRECTOR'S MESSAGE: GREETINGS & SAL-UTATIONS! 

RISING PRICES, THE KEYSTONE PIPELINE, TRAFFIC ACCIDENTS & SAFETY INSPECTIONS

It’s not news to you reading this that the price of gasoline has been increasing.  In the last month, the average price of gas has jumped nearly 25 cents per gallon at the rack.  This is part of a much larger and longer trend that I expect will continue from last year into this year, and for many years to come.  Why?  I’d say the main reason for the immediate price jumps is increasing geopolitical tensions and uncertain domestic production of oil and natural gas. 

For years we have been hearing about Iran’s nuclear program and their increasing ability to build a nuclear weapon.  Now it seems the situation there may finally come to a head in the next few months.  The Iranian government has recently been talking about and even practicing closing the Strait of Hormuz, a narrow water way which connects the Persian Gulf to the rest of the world.  If they decided to do so, it would severely constrict oil shipments from countries like Kuwait, Iraq and others including Iran itself.  Much of the rest of the world isn’t doing too well either.  Many people don’t know it, but Nigeria is a leading exporter of oil to the United States.  They have been experiencing riots and unrest in the last few weeks related to religious tensions and high gas prices. 

When oil investors suspect there is even the possibility of some kind of unrest hurting oil production, they get jumpy and bid the price higher.  Just look at what happened last year with Libya.  They only supply about 2% of the world’s oil.  Compare that to the fact that nearly one third of the world’s seaborne oil trade passes through the Strait of Hormuz, and you can see why prices are climbing upward. 

This all makes it pretty clear that we need to start relying on oil drilled from friendly soil.  That’s why I’m so disappointed by President Obama’s decision to cancel the construction of the Keystone XL Pipeline.  It’s always sad to see your elected leaders cave in to try and score political points with the extremists in their base just to get reelected.  This pipeline would have transported oil from Canadian oil sands down to the Gulf of Mexico where it could be refined and shipped throughout the country.  Unfortunately, some environmental whackjobs are living in a fantasy land, thinking that by preventing this pipeline from being built, it will prevent that oil from being drilled and burned.  What they fail to realize in their ignorance is that Canada will happily continue to drill this oil and then send it over to the Chinese.  And on top of that, it will be shipped to China by oil tanker, something that poses a greater threat to the environment than any pipeline!  The same amount of oil is burned and drilled; only it’s the Chinese who have greater energy security instead of us. 

These same environmental extremists are also pushing people into getting fewer oil changes done.  In California they have gotten the state government to start advertising (maybe this is why their government is bankrupt) to motorists that they don’t need to get their oil changed every 3,000 miles.  You may have noticed already that your customers are coming in for oil changes less often.  Expect this idea to become more widespread. 

The point is the pie is shrinking, and everyone wants the same size slice.  Consumption in the US continues to go down as motorists are driving less in response to the high prices while the government is mandating more fuel efficient cars.  One thing that gives me some comfort about high gas prices is that the continually poor economy will prevent them from rising as high as they would otherwise. 

I recently found a quote from Energy Secretary Steven Chu that crystallized something I’ve been trying to articulate for decades.  “When the price of oil goes up, we push the panic button. When the price of oil goes down, we push the snooze button. And this is not a really good plan.”    Plan to read and hear me repeat Secretary Chu’s quote often.   Since I was an Exxon dealer during the 1979 Iran oil embargo,  I have learned how true that statement is, and now I plan to sing that message as often as I can.  No matter where the price of oil goes day to day, I am not going to take my foot off the gas pedal of pushing for you to consider how to sell more alternative energy at your location.   Every factor is showing that the price of gasoline is going to continue its upward trend for years to come.  We will likely see prices of over $4 per gallon this year, and that’s not counting any significant overseas developments in the next 11 months. 

Now imagine if you were selling alternative fuels at the same time.  Just this week I was sent a picture of a compressed natural gas station open to the public in South Jersey that was selling CNG at the price of $1.99 per gallon equivalent!  Can you even remember the last time you had the number 1 posted in the dollar column of your street sign?

Yesterday I sent out a press release regarding the release of data by the state police that showed there was a big uptick in the number of traffic related deaths in 2011, breaking a 5 year trend of declining fatalities.  Though we can’t know what the exact reason was for this increase, I think it’s reasonable to speculate that the elimination of safety inspections in August 2010 may have had a role to play.  I know from my own experience that there are a whole lot more cars on the road with brake lights out.  I’ve heard from many of you about motorists who are putting off needed safety repairs because they know they can’t be denied a sticker anymore.  It’s a terrible problem and it may be costing people their lives, which is exactly what I argued strenuously when Governor Christie chose to eliminate safety inspections.  Even though there aren’t safety inspections anymore, the law still requires motorists to keep their car running in good condition.  You can read the press release by clicking HERE.

Thanks for listening - See you next week!

Regards,
Sal Risalvato
Executive Director

NEWS AROUND THE STATE

1/19/2012:
Iran warns region against "dangerous" stance on Hormuz
Iran has threatened to close the Strait of Hormuz, used for a third of the world's seaborne oil trade, if pending Western moves to ban Iranian crude exports cripple its lifeblood energy sector, fanning fears of a descent into wider Middle East war.  Tehran, which denies suspicions it is seeking nuclear weapons, was riled earlier this week when Saudi Arabia asserted it could swiftly raise oil output for key customers if needed, a scenario that could transpire if Iranian exports were embargoed.

1/18/2012:
Keystone XL pipeline rejected by Obama administration
President Barack Obama rejected the Keystone XL pipeline on Wednesday, saying it would not “serve the national interest” to grant a permit on the 60-day timeline that Congress imposed at Republicans’ insistence in December.  Hours before the announcement, environmental groups that consider Keystone a potential ecological disaster were signaling their glee with the expected decision. Meanwhile, congressional Republicans and GOP presidential candidates accused the administration of placating its green allies ahead of creating U.S. jobs.

1/17/2012:
Governor proposes tax relief for everyone: 10% across the board; in conjunction with education overhaul
Using his record over the past two years as evidence of his way forward, Gov. Chris Christie this afternoon in his State of the State address proposed a ten percent tax cut for all New Jerseyans in conjunction with deep impact schools reforms.  "We cut 375 programs in that first fiscal year, saved two billion dollars for the taxpayers, and brought Jon Corzine’s budget into balance," Christie said at the halfway point of his gubernatorial tenure, reflecting on the work of two years.

1/17/2012:
Jon Bramnick replaces Alex DeCroce as Assembly Minority Leader
In a caucus meeting this morning, Republicans unanimously chose Bramnick (R-Union), who as conference leader had been the second highest ranking Republican in the Assembly, to take over the post that had been held by DeCroce.

CLICK HERE TO READ MORE ARTICLES IN OUR “NEWS AROUND THE STATE” ARCHIVE 

MEMBER BENEFIT PARTNER MESSAGE

TMP Energy Solutions
Another Way to Save on Your Energy Bills

We have had a number of NJGCA members successfully reduce their rate per kWh   signing up through our energy saving program. We know it’s difficult to collect 12 months worth of previous electric bills to get an “accurate” analysis when comparing a variable rate to a fixed rate, but we now have another option available. 

This new solution is a power purchase option; the other program is still in full force and has saved members thousands of dollars. If you sign up for the power purchase option, you will be grouped with other NJGCA members until the minimum KW demand is acquired. By pooling the member’s usage together, you will be able to take advantage, as large energy users do, and receive a lower kWh rate.

Each member will receive their own contract. Each member is responsible to sign and return the agreement the day it is received in order to secure the price for their group.

Please do your due diligence, so when you receive the proposal and the agreement you will be able to make an intelligent decision.

If by chance, you still want us to assess you bills, to give you a price to compare, we will require12 months of your most recent utility bills.

There are no bills required, but we would still like to have one bill per meter on file to check account #’s, meter #’s  service addresses and other pertinent information incase there is a problem.

The term of the agreement is for 12 months. During this term period, you will have price protection against any energy price increases along with a low fixed kWh rate.

If you are interested in becoming part of this power purchase option, please contact Phil Apruzzi at the NJGCA.

Remember when you sign up your energy through the NJGCA Energy Program, TMP makes a considerable donation to the NJGCA Scholarship Fund through their proceeds. This has no affect on your rate, and costs you nothing out of pocket.

We hope to help hundreds of NJGCA members reduce their utility costs by participating in this and our other cost reduction programs.  Our purpose, in the endeavor, is to help NJGCA members lower their energy costs while supporting the NJGCA Scholarship Fund. 

Contact Phil Apruzzi at 973-376-0066 or email Phil at phil@njgca.org. Mention that you are interested in saving money on your energy bills. NJGCA & TMP Energy Solutions will handle all the rest.