Energy and gasoline problems

- Ignore all the spin. This is happening all over the world at an accelerating pace. The entire nation of Ghana has suffered a complete power failure twice in the last week. Japan's grid is collapsing mightily. Manila and Mindanao are browning and blacking out for days at a time now... (even as corporate-owned press tries to convince people it's the fault of speculators). 

This is what was predicted by giants like Richard Duncan, Ph.D. So, heads up America... The lights are going out a lot sooner than you think. And they won't be coming back after a few flickers. -- Get your shit together. 

 -- MCR

AEP Formalizes Plant Closures, Power Grid Trouble Ahead?

24/7 Wall Street,

22 March, 2012

American Electric Power Company (NYSE: AEP) is making its closure plans official.  The power generator and utility has made its notifications to the PJM Interconnection and Southwest Power Pool to retire more than 4,600 megawatts of coal-fueled power generation.  This move is “primarily to comply with a series of U.S. Environmental Protection Agency regulations” and the company was required to file its plan for plant retirements prior to PJM’s auction in May 2012 that will set electric generation capacity prices for June 2015 through May 2016.

This is no happy day for AEP and it marks a change that other power generators and utilities will have to consider around their coal-fired power plants.  AEP further noted that these retiring units were required to run to meet peak demand last summer and it warns that there is little new generation is scheduled to come on-line prior to the retirement dates that will replace the lost capacity.

AEP also said that it plans to install or upgrade emission control systems on more than 13,000 MW of capacity.

Here is a list of the closures:

• Conesville Plant Unit 3, Conesville, Ohio – 165 MW;

• Big Sandy Plant Unit 1, Louisa, Ky. – 278 MW;

• Clinch River Plant Unit 3, Cleveland, Va. – 235 MW;

• Glen Lyn Plant (two units), Glen Lyn, W.Va. – 335 MW;

• Kammer Plant (three units), Moundsville, W.Va. – 630 MW;

• Kanawha River Plant (two units), Glasgow, W.Va. – 400 MW;

• Muskingum River Plant Units 1, 2, 3 and 4, Beverly, Ohio – 840 MW;

• Picway Plant (one unit), Lockbourne, Ohio – 100 MW;

• Philip Sporn Plant (four units), New Haven, W.Va. – 600 MW;

• Tanners Creek Plant Units 1, 2 and 3, Lawrenceburg, Ind. – 495 MW; and

• Welsh Plant Unit 2, Pittsburg, Texas – 528 MW.

It is probably worth noting that AEP said this plan is different from the near-6,000 megawatts of anticipated retirements that it announced last June, due to the retirement of the 450-MW Sporn Unit 5 in February 2012 and due to AEP’s decision to request regulatory approval in Kentucky to retrofit the 800-MW Big Sandy Unit 2 with environmental control equipment rather than retiring the unit.

Now that shares are back off of the highs, AEP trades at only about 12-times this year’s expected earnings.  The company already raised its dividend late last year and it still seems to have room to raise its dividend for the years ahead.  The dividend yield is now 4.9% for investors buying today.

Today’s move was mostly expected and AEP shares are down 0.2% at $38.15 against a 52-week trading range of $33.09 to $41.98.  This stock remains one of our Model Dividend Stocks for 2012 and it remains one of our picks to own for the next decade.

Gasoline shortage hits Egypt, drivers lose tempers waiting in long lines at stations

Daily Reporter,

22 March, 2012

CAIRO — Across Egypt, long lines of cars and trucks snake around the corner from gas stations, drivers spend the night in their vehicles waiting for fuel at the pumps, and gas stations attendants complain of receiving only half their usual quantity of fuel — or none at all.

Days into an increasingly acute fuel shortage, Egyptians are starting to feel the squeeze. 

Drivers are searching frantically for fuel, only to find gas stations sold out of key grades of gas.

 In rural areas, witnesses say scuffles and knife fights have broken out among frustrated drivers. Some have even fired guns in the air.

The reasons behind the shortage — or even if there is one — are not clear. The government blames any shortfall on profiteers reselling subsidized fuel on the black market. Many Egyptians, however, accuse the authorities of trying to cover up what they say is the government's mismanagement of an ailing economy.

Petroleum Minister Abdullah Ghorab flatly dismissed talk of a shortage, saying fuel supplies exceed demand. He said the crisis stems from "mistrust between the government and the citizens," according to the state-run MENA news agency.

Another Petroleum ministry official, Hani Dahi, was also quoted by MENA as saying that there is "a rise in the illegal use of fuel" and calling for tighter security measures to prevent black market dealers selling subsidized fuel at higher prices.

However, the manager of one gas station in Fayoum, a city south of Cairo, put the blame squarely on the government's shoulders and its stewardship of the economy.

"I used to get a daily supply of 30,000 liters (7,900 gallons) of diesel, now I get 13,000 every three days," said the manager, who asked not to be identified. "Any talk about smuggling is a sheer lie because if there is enough fuel in the market, none would buy from the black market."

"Why blame the people? Why don't you put it as simple as this: We don't have foreign currency to buy the fuel," he added.

Egypt's economy has been badly battered by the political turmoil following last year's uprising that ousted longtime leader Hosni Mubarak. Political instability and violent street protests over stalled reforms have hammered the tourism industry, a key source of foreign currency, and caused foreign investment to plummet.

Egypt's budget deficit is expected to reach 114 billion Egyptian pounds ($19 billion) in the fiscal year to June 30, some 8.7 percent of gross domestic product. The country is negotiating a $3.2 billion loan from the International Monetary Fund, and looking at other steps like selling state-held land, to help patch up the budget.

The fuel crisis is the second in Egypt since January, and may open the backdoor to changing the state subsidies on fuel and other basic commodities, which cost Egypt some 100 billion Egyptian pounds a year. On Thursday, Egypt's petroleum minister used the current crisis to call for revisions to the subsidies.

Two months ahead of presidential elections, the shortage also has fueled finger pointing between Egypt's military-backed government and Islamist-dominated parliament. Some lawmakers accused the government of fabricating the crisis to embarrass parliament.

"The military council, through its government, is telling the people, 'Look, your representatives are not able to solve your problems,'" said Essam Sultan, a lawmaker from the Islamist al-Wasat party.

The country's wider economic malaise is increasingly taking a toll on Egyptians in their daily life, with rising inflation and unemployment now compounded by the fuel shortage.

In Cairo, several gas stations were shuttered Thursday, while lines of cars waited for hours in line at those still pumping.

In Fayoum, a gas station assistant described a daily scene of dozens of cars parking overnight at the station until a fuel truck arrives.

"People amass like ants. All carrying plastic jerry cans and attack," he said. The worker, who asked not to be identified, added that on one occasion angry taxi drivers opened fire in the air while police stood nearby. "The crisis has turned people into thugs."