<span style="color: black"><font size="3"><font face="Times New Roman">Well frequent fliers for oil companies may feel inconvenienced by Continental Airlines&rsquo; decision to join the Star Alliance with the likes of United Airlines and Lufthansa. <span>&nbsp;</span>The switch is another move by Continental to strengthen its position at a time when fuel price shock is setting off mergers between long-time partners Northwest and Delta Airlines. </font></font></span><span style="color: black"><font size="3"><font face="Times New Roman">In his frequent flyer blog in the Chronicle, Houston Departures, Bill Montgomery reports that the alliance switch won&rsquo;t have any immediate impact on frequent fliers. If they travel on other carriers in the Skyteam alliance, like Delta and Northwest, they&rsquo;ll still earn miles. But about a year from now, after the change to Star things could change. <span>&nbsp;</span>His question for frequent flyers is: will Continental move <span>&nbsp;</span>its first grade upgrade policy in line with United&rsquo;s less generous standard.</font></font></span><span style="color: black; font-family: Verdana"><a href="http://blogs.chron.com/houstondepartures/"><font size="3" color="#800080">http://blogs.chron.com/houstondepartures/</font></a></span><span style="font-size: 10pt; color: black; line-height: 150%; font-family: Verdana">Right now Continental upgrades its elites when seats are available. Of course top-tier platinum fliers get the upgrades first, but if you're a silver elite flying at an off-peak time, you still have a shot at getting a seat up front. On United, elite members earn certificates when they fly and then can redeem them for upgrades. </span>

<p><font face="Times New Roman" size="3">The longtime tension between Texas and the Corn Belt is alive and well.</font></p><p><font face="Times New Roman" size="3">Yes, you should care. <span>&nbsp;</span>It&rsquo;s all about fuel costs and what&rsquo;s for dinner. (It&rsquo;s too early for football).</font></p><p><font face="Times New Roman" size="3">Texans are mad about all the corn going into ethanol, which is directly contributing to the high price of a steak.</font></p><p><font face="Times New Roman" size="3">Today Texas Gov. Rick Perry is headed to Washington to call on the Feds to loosen the federal mandate to produce ever more ethanol, because the price of corn has surged after floods wiped out an estimated 3 million acres of corn. This story by Brett Clanton of the Chronicle explains the issue well: </font><a href="http://www.chron.com/disp/story.mpl/business/5852747.html"><font face="Times New Roman" size="3" color="#800080">http://www.chron.com/disp/story.mpl/business/5852747.html</font></a></p><p><font face="Times New Roman" size="3">Anything that slows the growth of ethanol is a bad idea for the lobbying group that champions the fuel: The Renewable Fuels Association. </font></p><p><font face="Times New Roman" size="3">The regional lines are easy enough to draw in this battle.</font></p><p><font face="Times New Roman" size="3">The Midwest grows enormous amounts of corn and farmers love the high prices that come with the strong demand by ethanol makers who use&nbsp;it to make grain alcohol.</font></p><p><font size="3"><font face="Times New Roman">Texas&rsquo; number&nbsp;one farm business is fattening cattle, making us a huge corn importer. More expensive corn makes it harder to turn a profit fattening livestock.</font></font></p><p><font face="Times New Roman" size="3">The bottom line is, with flooding we pay more for steaks.</font></p><p><font face="Times New Roman" size="3">But regional lines get blurry when an economist at Texas A&amp;M was asked about what ethanol has to do with higher food costs. Despite the Governor&rsquo;s well-publicized ties to A&amp;M, a biofuels impact study by David Anderson, an economist at Texas A&amp;M blamed higher prices more on higher oil prices than ethanol.</font></p><p><font face="Times New Roman" size="3">This report at </font><a href="http://www.afpc.tamu.edu/pubs/2/515/RR-08-01.pdf"><font face="Times New Roman" size="3" color="#800080">http://www.afpc.tamu.edu/pubs/2/515/RR-08-01.pdf</font></a><font face="Times New Roman" size="3"> points to a number of factors behind good inflation, from rising world demand to the high cost of fertilizers made of oil and gas. </font></p><p><font face="Times New Roman" size="3">As for a mandate change, that sounds like a political non-starter. How many lawmakers want to run headlong into the corn lobby during an election year?</font></p><p><font face="Times New Roman" size="3">But maybe the fact that the price of a bushel of corn has nearly doubled in the past year will do the job. Like the farmers hit by corn price shock, the ethanol makers will need to be significantly raising their prices to cover that steep increase. Getting that done can hurt the bottom line in the short run, and reduce demand over the longer haul.</font></p><p><font face="Times New Roman" size="3">Anyone doing the numbers on a new ethanol plant that depends on corn is going to have factor in the recent spike in corn prices, to $8 a bushel, which could make the projections look less rosy. That alone could put a crimp in growth in that business.</font></p><p><font face="Times New Roman" size="3">But what do you think? When you pay more for beef or chicken, do you blame ethanol? Given the price of crude is there a better option?</font></p>

<p><font face="Times New Roman" size="3">It&rsquo;s getting easy to be blas&eacute; about oil price predictions. </font></p><p><font face="Times New Roman" size="3">At this stage any price now seems possible for a gallon of gasoline.<span>&nbsp; </span>And there&rsquo;s no getting around paying more so why dwell on an annoying fact of life?</font></p><p><font face="Times New Roman" size="3">But the story in the Houston Chronicle quoting Amy Jaffe of James A. Baker III Institute of Public Policy on what $200 a barrel oil could do to increase the pump price is worth doing some contemplation, and a little calculation.</font></p><p><a href="http://www.chron.com/disp/story.mpl/business/5854650.html"><font face="Times New Roman" size="3" color="#800080">http://www.chron.com/disp/story.mpl/business/5854650.html</font></a></p><span style="font-size: 10pt; font-family: Verdana">If oil reaches $200 a barrel as some analysts have said it could, forget $4-per-gallon gasoline. Think $6.64, according to a Rice University analysis of the link between prices of crude and gasoline.</span> <p><font face="Times New Roman" size="3">I did some math. The kind they teach in grade school. And since I was riding Metro &ndash; it&rsquo;s a long story to do with a car in the body shop and my son --- I kept it simple by doing the calculations based on $6.50 a gallon.</font></p><p><font face="Times New Roman" size="3">Initially I thought, if you have a 16 gallon tank, a fill up would break $100 -- $104 to be exact, which I&rsquo;d assume is stunning the first time it happens at least.</font></p><p><font face="Times New Roman" size="3">But then I stated thinking of the cost per mile. I love unit costs. I can even figure out how many meals I can get out of a meatloaf. (It tastes better than you think).</font></p><p><font face="Times New Roman" size="3">In this case the gap between the savings on a fuel efficient car and a gas hog grows truly astounding.</font></p><p><font face="Times New Roman" size="3">At $3 a gallon it&rsquo;s a difference you can live with to have the leg room and indulge in the fantasy that your SUV will be pulling your boat to the lake soon. At that price the cost per mile is 7.5 cents at 40 miles per gallon and 30 cents per mile at 10 miles per gallon. A wide gap but on a 100 mile trip that&rsquo;s $7.50 versus $30. The $23 difference seemed painful when gasoline first broke $3, but now looks like a deal.</font></p><p><font face="Times New Roman" size="3">Currently prices are hovering above $4, which means that trip ranges from $10 for the 40MPG care up to $40 for the gas hog &ndash; a $30 gap.</font></p><p><font face="Times New Roman" size="3">But at $6.50 a gallon the gap grows really painful. The cost for that trip in the 40 mpg car is $16.25, or nearly $49 less than the $65 cost in the 10MPG vehicle, which at that price can be described as a monster.</font></p><p><font face="Times New Roman" size="3">Given that people are turning away from low mileage vehicles with prices above $4 per gallon, could a $6.50 a gallon&nbsp;<span>&nbsp;</span>price spur what now seems like extreme behavior, like a riding a bus? After all, even the owner of a car getting 40 miles per mile is paying more than $16 to drive 100 miles, which is a commute for a lot of people in Texas.</font></p><p><font face="Times New Roman" size="3">Suddenly employers would start looking at a four-hour car-trip to visit a client like it&rsquo;s a big deal.</font></p><p><font face="Times New Roman" size="3">Are you making changes already in your driving life? </font></p><p><font face="Times New Roman" size="3">Do you feeling like your mileage rate at work is covering the real cost of your trips? </font></p><p><font face="Times New Roman" size="3">Is this all to horrible to even think about?</font></p>

<p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">Airline fares are getting to be like a bad joke where you have to wait for a long time to get the punch line. Blame that on high oil prices.</font></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">&nbsp;Some airlines are starting to quote fares on</font><font face="Times New Roman" size="3"> a cost-plus basis &ndash; the fare plus the fuel surcharge.</font></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">Delta is giving new meaning to the phrase rewarding its most loyal customers. The &ldquo;free tickets&rdquo; earned by frequent flyers now come with a surcharge. This ranges from $25 for most U.S. and Canadian flights to $50 on international routes. It will take effect Aug 15. <a href="http://news.delta.com/article_display.cfm?article_id=11101"><font face="Times New Roman" size="3" color="#800080">http://news.delta.com/article_display.cfm?article_id=11101</font></a></font></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">And this week British Airway is offering a tantalizing fare to London -- $160 round trip &ndash; but there&rsquo;s a catch. Bill Montgomery, writer of the Houston Chronicle&rsquo;s blog Houston Departures, points out there&rsquo;s also a $426 fuel surcharge to pay, and $150 or so in taxes and fees. </font><a href="http://blogs.chron.com/houstondepartures/2008/06/fare_sale_to_london_and_dont_f_1.html"><font face="Times New Roman" size="3" color="#800080">http://blogs.chron.com/houstondepartures/2008/06/fare_sale_to_london_and_dont_f_1.html</font></a></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">&nbsp;</font><font face="Times New Roman" size="3">This all reminds me of those folks who call and tell you you&rsquo;ve won a free trip, but to get them you owe a couple hundred bucks for shipping and handling.</font></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">Granted jet fuel prices are getting ever more punishingly high. And based on his obsessive shopping of fare sales, Montgomery said the $754 round trip cost of the flight from Houston to London isn&rsquo;t a bad deal. But the $160 rate just totally fails to convey anything like the actual cost.</font></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">Delta explained its move by noting the cost of jet fuel has nearly doubled and this is just one of many ways to making up for that increase. (In case travelers hadn&rsquo;t noticed). They said it was a temporary measure, which would be &ldquo;reevaluated&rdquo; if energy prices fall.</font></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">Certainly the reaction of other airlines could also make it temporary but lately fee increases have mostly been embraced by the competition.</font></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">But frequent flyers include the corporate fliers who will pay fares that would convince a vacation traveler to drive instead, or fly on Sunday morning at 6 a.m. This program could alienate the few people most able to pay up to fly.</font></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">Since this program takes effect in mid-August it&rsquo;s time to cash in those miles before the surcharge hits. <span>&nbsp;</span>Those miles you wanted to use to fly to Hawaii, ehh, maybe Birmingham Alabama in July would be good because it&rsquo;s going to be hard to find an open seat in the peak summer travel season.</font></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">It should be noted also that late last year Delta announced it was paring the number of seats available for those booking &ldquo;award flights&rdquo; on popular routes</font></p><p style="margin: auto 0in" class="times"><font face="Times New Roman" size="3">Oh and as far as Delta is concerned Puerto Rico is an international destination so the fee is $50, but it&rsquo;s a $25 fee on tickets to Hawaii because it&rsquo;s one of the 50 states. In the greater scheme of things I guess that all makes sense.</font></p><span style="font-family: Arial"><font size="3">&nbsp;</font></span>

<strong><span style="font-size: 8.5pt; color: black; font-family: Verdana">&nbsp;</span></strong><span style="color: black"><font size="3"><font face="Times New Roman">So what will it be like to sit in the car with a tiny carbon foot print?</font></font></span> <p style="margin: 0in 0in 0pt" class="MsoNormal"><span style="color: black"></span></p><p style="margin: 0in 0in 0pt" class="MsoNormal"><span style="color: black"></span><span style="color: black"><font size="3"><font face="Times New Roman">This article in the New York Times shows brainstorming on that question shows the options included an engine option that sounds odd, but with fuel prices this high any idea sounds kind of plausible.</font></font></span></p><p style="margin: 0in 0in 0pt" class="MsoNormal"><span style="color: black"><font face="Times New Roman" size="3"></font></span></p><p style="margin: 0in 0in 0pt" class="MsoNormal"><span style="color: black"><font size="3"><font face="Times New Roman"><strong>&nbsp;</strong></font></font></span><span style="color: black"><font size="3"><font face="Times New Roman">I&rsquo;ll just write it down, a car engine powered by compressed air. </font></font></span></p><p style="margin: 0in 0in 0pt" class="MsoNormal"><span style="color: black"><font size="3"><font face="Times New Roman"></font></font></span></p><p style="margin: 0in 0in 0pt" class="MsoNormal"><span style="color: black"><font size="3"><font face="Times New Roman">Well it&rsquo;s not all hot air. The air sharply cuts the emissions by helping to drive the pistons, reducing fuel use. One tank of compressed air will go for 125 miles. This from the New York Times explains the idea from a French designer:</font></font></span></p><strong><span style="font-size: 8.5pt; color: black; font-family: Verdana"><a href="http://www.nytimes.com/2008/07/09/business/worldbusiness/09greencar.html?pagewanted=1&amp;ref=business"><font color="#800080"><a href="http://www.nytimes.com/2008/07/09/business/worldbusiness/09greencar.html?pagewanted=1&amp;ref=business">h</a></font></a></span></strong><strong><span style="font-size: 8.5pt; color: black; font-family: Verdana"><font color="#800080">ttp://www.nytimes.com/2008/07/09/business/worldbusiness/09greencar.html?pagewanted=1&amp;ref=business</font></span></strong> <blockquote><span style="color: black"><font face="Times New Roman" size="3">&nbsp;</font></span><span style="font-size: 8pt; font-family: Verdana">Guy Negre, a motor engineer and founder of MDI Enterprises, a company that studies new technologies and production concepts to reduce the environmental impact of carbon dioxide, invented a compressed-air engine in 1996. The engine emits one-third the carbon dioxide of conventional motors of the same size. Cold air, compressed in tanks to 300 </span><span style="font-size: 9pt; font-family: Verdana">times</span><span style="font-size: 8pt; font-family: Verdana"> atmospheric pressure, is heated and fed into the cylinders of a piston engine. No combustion takes place, meaning there is no pollution, although the energy needed to compress the air may still come from polluting oil- or coal-burning power stations</span></blockquote><span style="font-size: 14pt; font-family: Georgia"></span><p style="margin: 0in 0in 0pt" class="MsoNormal"><font face="Times New Roman" size="3">It all sounds odd, but then again hybrid engines seemed like a needlessly complicated power system when they first came out. One argument that his may be for real, is these engines will be offered as an option next year on the car sold by Tata Motor next year, called the Nano. </font></p><font face="Times New Roman" size="3">&nbsp;</font><font face="Times New Roman" size="3">Don&rsquo;t expect to see it here, most of these 2-cylinder cars with a $2,500 price tag will mostly be sold in India. But if this air powered engine works, the idea could spread. With gasoline and worries about carbon emissions both high, designers in the United States are more open than ever to ideas that used to seem a bit strange.</font> <p style="margin: 0in 0in 0pt" class="MsoNormal"><font face="Times New Roman" size="3"></font></p><p style="margin: 0in 0in 0pt" class="MsoNormal"><font face="Times New Roman" size="3">I</font><font face="Times New Roman" size="3">f nothing else having a car on the road might bring some reality to talk of the &ldquo;air car&rdquo; which I&rsquo;ve seen described as a car with no emissions, which isn&rsquo;t the case. But even a super efficient Nano has its downside. This blog post from Information Week </font><a href="http://www.informationweek.com/blog/main/archives/2008/02/worlds_cleanest.html" title="Information Week"><font face="Times New Roman" size="3" color="#800080">http://www.informationweek.com/blog/main/archives/2008/02/worlds_cleanest.html</font></a></p><p style="margin: 0in 0in 0pt" class="MsoNormal"><font face="Times New Roman" size="3">points out that by selling an ultra-affordable car, Tata could popularize driving in the country where few people now own vehicles. So even if the air car version caught on, this populist auto experiment could mean more gasoline demand, keeping oil prices high and carbon emissions rising. </font></p><p style="margin: 0in 0in 0pt" class="MsoNormal"><font face="Times New Roman" size="3"></font></p><p style="margin: 0in 0in 0pt" class="MsoNormal"><font face="Times New Roman" size="3">Well such is progress. </font></p><p style="margin: 0in 0in 0pt" class="MsoNormal"><font face="Times New Roman" size="3"></font></p><font face="Times New Roman" size="3">&nbsp;</font><font size="3"><font face="Times New Roman">Do you expect to be shopping for an air car some day?<span></span></font></font>

<p style="margin: 1.5pt 0in" class="MsoNormal"><font face="times new roman,times" size="3">Oil prices can be used by an airline as an excuse to do just about anything.</font></p><p style="margin: 1.5pt 0in" class="MsoNormal"><font face="times new roman,times" size="3"></font></p><p style="margin: 1.5pt 0in" class="MsoNormal"><font face="times new roman,times" size="3">Here&rsquo;s proof. U.S. Airways has said it will stop offering movies on all but its longest flights to save on jet fuel. </font><font face="times new roman,times" size="3"><a href="http://ap.google.com/article/ALeqM5iFR9HPI_cEqiDQHpDpdwtUEFKlmwD91QVHU81">This story</a> offers actual numbers. </font></p><blockquote><span style="font-size: 10pt; font-family: Verdana">US</span><span style="font-size: 10pt; font-family: Verdana"> Airways says it will start removing in-flight entertainment systems on domestic flights in November to save about $10 million annually in fuel and other costs. Spokesman Phil Gee says the movie systems weigh about 500 pounds each, forcing planes to use more fuel to get around the country.</span></blockquote><font face="Times New Roman" size="3">&nbsp;</font> <p style="margin: 1.5pt 0in" class="MsoNormal"><font face="times new roman,times" size="3">Somehow I got to think the other costs are the real decider here. I know it&rsquo;s a big airline but it&rsquo;s hard to imagine it would cost $10 million a year worth of fuel to carry the equivalent of two and half of me around the country on all its flights. Then Bloomberg provided the rest of the story &ndash; this was a loser because not enough people were shelling out $5 for the headsets</font></p><font face="times new roman,times" size="3">&nbsp;</font> <p style="margin: 1.5pt 0in" class="MsoNormal"><font face="times new roman,times" size="3">That makes me feel better. It suggests other people agree that there are better things to do that watch movies they likely didn&rsquo;t want to see when they were first run, or TV clip shows which are a form of video leftovers.</font></p><font face="times new roman,times" size="3">&nbsp;</font> <p style="margin: 1.5pt 0in" class="MsoNormal"><font face="times new roman,times" size="3">If other airlines take out the movie screens will that an improvement, or will it just mean more jerks blocking you in you seat while they watch DVDs on their laptops?</font></p><font face="Times New Roman" size="3">&nbsp;</font><font face="Times New Roman" size="3"></font>&nbsp;