A friend of mine took this great picture of a recent storm that hit Chicago.
Cross posted on LITGM
Chicagoania
CNG Vehicle
I recently took a cab ride in an unusual vehicle. I talked to the driver and he told me that it ran on compressed natural gas (CNG). You can see the blue CNG logo below the Ford logo on the right side. The driver said that the vehicle was assembled overseas in Turkey.
Compressed Natural Gas (CNG) Fuel Prices & Performance
Per the driver – he filled up with approximately 8 “gallons” of CNG. This is measured as a “gasoline gallon equivalent” or GGE to try to provide an understandable metric for typical car owners. He said that this took him around 200 miles and cost around $2 per GGE. In Chicago terms this is probably about 1/2 the costs of what a gasoline powered truck would cost per mile (ignoring the higher acquisition costs of this custom SUV). This site shows the range of costs that customers are seeing per GGE. Per this site there are 6 CNG stations in Chicago with costs between $2 and $2.50 per GGE (costs are sometimes out of date by station and it is not always clear if prices are up to date). The driver also said that the power that the engine put out declined as it got emptier; I believe that this is different than how gasoline or diesel engines behave. The city of Chicago has a program to open CNG filling stations and subsidize cab companies to pay the extra up front costs of purchasing these customized vehicles.
The competitiveness of the CNG vehicles depends on several factors, most notably the price of natural gas. Since the price of natural gas is around $2 / MCF, it is at an all-time low. The price of natural gas (pre-fracking) peaked at around $14 / MCF, more than 7x its current price. Assuming that CNG “at the pump” moves with the cost of the underlying commodity, then you would go from about 1/2 the cost of gasoline (today) to up to 3x+ higher, if we had another price swing like that again in the United States, OR if we were exposed to the “market clearing” price of natural gas around the world.
Per this article in Reuters, the gap between the US rates and what foreign buyers (particularly Japan and Korea) are willing to pay is very significant.
The surge in gas output has made companies such as Chesapeake and Exxon Mobil’s XTO victims of their own success, unleashing a surplus of supply that could keep prices — and therefore profits — depressed for decades. For them, selling gas to Japan or Europe — which buys imported LNG at five or six times the domestic price of $2.50 per million British thermal units — is essential to continue expanding their U.S. business, creating jobs in the process. The shale gas boom is on track to support 1.5 million jobs across the United States by 2015, according to an industry-funded study by IHS Global Insight. Export licenses will make big winners out of some firms such as Cheniere, which last year secured the first and, so far, only export permit from the Energy Department.
Unsightly Rooftop Debris
In the city they don’t built out they build up. When you first move into your condo you are amazed at the city view (if you have one). But then, after a while, you start to notice the details.
While buildings may lavish effort on their facades and interiors, often times they forget the roof. After all, who cares what the roof looks like. Your neighbors up above, that’s who. Those in the middle of the photo collage, to give a feeling for all the condos in the mostly beige and white skyscrapers look down onto the smaller (mostly commercial) buildings. In the loop it is businesses looking at businesses while in River North and the Gold Coast it is mainly condos and hotels looking down on commercial buildings.
Upper left – ever wonder how they hang signs and lights off the side of the building? In this case it is a series of planters filled with concrete in a grid. At least they are neat, I guess. Upper right – there has been a puddle with floating debris (including that rope and those boards) up on that roof for SEVEN YEARS. I can’t believe it doesn’t drive the people beneath them crazy with leaking but, rain or shine, in all seasons, there is a big pond on that roof (in the winter it does freeze). Middle left – there is grass growing (it is dead now) in the large puddle on that roof. Middle right – a roof is a great place to store your cinder blocks, un-needed antennas, and the like, apparently. Also been there almost a decade. Lower left – a bunch of boxes and cartons have been strewn about on that roof for a while. Lower right – of all the rooftops this is the most amazing. That is a fully grown tree (in the winter it sheds its leaves) on the roof of the old firehouse. I have no idea how it gets enough purchase to stay on that roof in the high winds but it has been up there for at least seven years, changing with the seasons. Kind of like those trees that live on the rock face in the wilderness.
Dan asked me over at LITGM why I used the word “purchase”… I was using it as a synonym for “grip” which I thought I heard somewhere but maybe I am just confused.
Cross posted at LITGM
Chicago By Night
Navy Pier fireworks viewed from Aqua
Full moon and the Aon Building (formerly Standard Oil)
The John Hancock Building
The Playboy Building
Cross posted at LITGM
Unions and Illinois
Seeing a giant rat outside your business isn’t exactly a red carpet for enterprises considering locating in the state of Illinois, especially while states right next door like Indiana are “right to work” states.
Caterpillar is currently locked in a strike with their workers at a plant in Joliet.
Roughly 800 union members walked out of the Caterpillar Inc. plant in Joliet on May 1, rejecting a proposed six-year contract that would freeze their wages, double health care premiums and eliminate pensions and seniority rights.
Caterpillar has been battling unions in Illinois for decades. Caterpillar is very familiar with how to operate during a strike and they have retirees and trained engineers, replacement workers, and individuals who crossed the picket line to run the plant. Caterpillar claims that output hasn’t been impacted by the strike. Caterpillar recently closed a Canada plant after workers refused to accept reduced pay and benefits and… moved those jobs to Indiana.
Employers are incredibly leery about adding jobs that might be unionized; while they are often leery of leaving behind assets and customers that are on the ground, new and incremental investment is another matter, entirely.
When you go to Michigan today you can see the beautiful homes and the world-class universities that were funded by the industrial powerhouse that used to be the auto industry. Today the growth in that industry all happens in the south, in non-union states. Someday those states too will have the long term wealth, since industry spawns an entire ecosystem that you can see running in reverse in the heavily unionized “blue” states.
Unions used to say that their members provided higher quality products than non-union workers; in Illinois the construction unions still tout these supposed advantages (not that there is evidence that construction quality is higher in Illinois than in the non-union south). Today, however, union arguments move more towards “fairness” and this is not a convincing argument – it might work with public employers that often shy away from a fight, but for companies like Caterpillar with global operations and global competitors they need to strike a hard bargain else their competitiveness will slip away to foreign competition.
Cross posted at LITGM