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Former big oil CEO warns of $5-a-gallon gasoline

This nation is headed for $5-a-gallon gasoline by 2012 because of ill-conceived energy policies shaped by political whims, warns John Hofmeister, the former CEO of Shell Oil.

In comments made to an energy industry publication, Hofmeister predicted little or no new drilling in the Gulf of Mexico in the wake of the BP oil spill. At the same time, global demand for oil will grow and supplies will become tighter, Hofmeister told Platts Energy Weektelevision during a Platts energy forum in New York.

Since retiring from Shell in 2008, Hofmeister has headed a nonprofit group in Texas called Citizens for Affordable Energy. Hofmeister has criticized both the energy industry and environmentalists for taking one-sided positions. He criticizes politicians for avoiding tough choices to placate voters.

EPA puts off decision on more ethanol in our gas

Drivers worried about too much corn in their tanks needn't fret, yet.

The EPA agreed with automakers and other engine manufacturers today that more testing is needed to determine whether American cars would be damaged by a proposed increase in the concentration of ethanol allowed in gasoline, Bruce Siceloff reports on our Crosstown Traffic blog.

The agency said it hopes to rule by mid-2010 on an ethanol industry petition to approve 15 percent ethanol (E15) for gas-fueled cars and trucks, up from the current 10 percent (E10) standard.

Read the full blog post here.

The Pantry ekes out a profit

The Pantry this morning announced that sales and profit fell during its fiscal third quarter, as gasoline prices rose and the recession hurt merchandise sales.

The company, which moved its headquarters to Cary from Sanford this summer, is the largest convenience-store chain in the southeast, with more than 1,600 stores in 11 states.

Net income for the quarter ended June 25 was $43,000, or break-even on a per-share basis. During the same quarter last year, net income was $10.7 million, or 48 cents a share.

Revenue fell 34 percent to $1.63 billion. That was slightly less than analysts had expected.

In addition to higher wholesale gas prices, which eat into profit, the results were affected "by the ongoing economic softness in our markets and by higher tobacco excise taxes," said CEO Peter J. Sodini, who plans to retire this fall.

Bad gas has a happy ending

Uh oh, Sharon Lineberry said. Bad gas!

It wasn't a bad burrito. It was a tainted tankful of unleaded that stopped Lineberry's van on May 5 after she had driven about a mile from a Wilco-Hess station on Trawick Road.

She had it towed to a garage, and the mechanic gave her the diagnosis.

The good news is that Wilco-Hess did the right thing, Lineberry said later.

I stopped by the station yesterday afternoon and was very pleased with the response I received. It was in fact a widespread problem -- the clerk at the station said they had received a bad shipment of gas at 2 a.m. Tuesday and started getting calls by about 6:50 a.m. They closed the pumps at about 7 a.m.

The clerk at the local station faxed my information to Wilco-Hess' corporate office, and someone from the office called me within an hour. They're sending a check to completely cover the cost of the bad gas and the repairs I needed.

 

Regular supply

It's been over three weeks since Hurricane Ike hit Houston. North Carolina is still reeling.

Did anyone think the gasoline shortage here, widely traced to storm-related shutdowns of Houston-area oil refineries, would last this long? If so, more power to them. State officials certainly didn't seem to think so, since they've offered little but reassurances for days. It's about over, they say; the pipeline is full again.

Except that plastic grocery bags still cover two thirds of the pumps at many gas stations, particularly west of Raleigh. Although fewer stations are out of gas than was the case a week or two ago, most have only regular to sell. And prices, while not extreme, are above the national average.

Not to discount the seriousness of the storm-related disruptions, but could this be a quiet protest by suppliers against North Carolina's anti-price gouging law? Put another way, is that law part of the problem?

One thing drivers have learned is that today's engines, even if designed to run on premium, do pretty well on lower-priced regular. One thing state officials should learn is that they've been too optimistic about when things will return to normal. Ike has sent us a message we need to consider.

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