Gas prices have dipped below $2 a gallon in at least two Pierce County gas stations as both crude oil and retail gasoline prices continue to fall precipitously nationwide.

Those low prices are the latest evidence of a steep demand dropoff driven by a sickened economy and conserving consumers.

“This kind of drop is unprecedented in the history of the oil business,” said Tim Hamilton, director of an independent service station group, Automotive United Trades Organization and a well-known critic of the oil industry.

The average price of regular gasoline in Pierce County, which peaked at $4.34 a gallon in mid-July, fell to $2.22 Wednesday according to TacomaGasPrices.com, a Web site that tracks retail gasoline prices.

Average gas prices in Pierce County haven’t been that low since February 2005, according to price-tracking services.

The price refiners are charging dealers changes downward almost daily, Hamilton said.

“Prices to dealers are falling as much 20 to 25 cents a day,” said the oil industry critic.

The two sub-$2 gas prices appeared in two Gig Harbor stations, one at the Gig Harbor Costco and the other an Arco station.

In some states in the country’s midsection, gas prices dropped to $1.50 a gallon, according to AAA.
Behind the price reductions were crude oil prices that have fallen 60 percent since mid-summer when crude prices topped $147 a barrel.

Retail gasoline prices dipped for a 17th week since July 4, falling below $2 a gallon in a number of states and approaching $1.50 at some service stations. The price of crude fell again too, hitting a 20-month low.

Light, sweet crude for December delivery fell $3.08 to settle at $59.33 a barrel on the New York Mercantile Exchange, the lowest closing price since March 2007. Prices had dipped a dollar below that earlier in the day.

The sharp reduction in gas prices is putting more money back in the pockets of consumers who’ve suffered because of sharp stock and investment declines, rising unemployment and weak retail activity.

Industry analysts predict that gas prices are likely to stay down until demand, which is down 4 percent from its peak, revives again.

The U.S. Energy Information Administration predicted today that gas pump prices will average $2.37 a gallon in 2009. Just a month ago, that same agency predicted that gas would average $3.56 a gallon next year.

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Insurance fraud costs every Washington household $200-$300 annually. More than one-third of all automobile-crash injury claims involves fraud. Commit insurance fraud, a Class C felony, and you could be looking at five years in the slam and a $10,000 fine.

Such is the kind of thing you can learn at the newly refined fraud section at the state insurance commissioner’s Web site, www.insurance.wa.gov.

If you’d like to see a few examples of insurance fraud (the “religion” that sells bogus auto insurance policies, for example), or if you’d like to check the legitimacy of your insurer, or even check to see whether the used car you’re thinking of buying has ever been involved in a collision, then visit the site. If you prefer, you can also file a complaint, find more information or report insurance fraud at the site.

Navigate to the “fraud” section at the left of the homepage.

There you’ll discover that the commissioners Special Investigations Unit, formed in January, 2007, has in its first 18 months uncovered $1.8 million in insurance fraud. And if you’re looking for a job, navigate to the Job Opportunities section. The SIU is looking for a new director. The job pays upwards of $97,000 per year.

I’d still rather walk among the crowds, using feet rather than fingers. Not everybody agrees.

After an October report by the National Retail Federation said “November and December sales will rise only 2.2 percent to $470 billion, an increase that would fall well below the 10-year average of 4.4 percent holiday sales growth and would mark the most sluggish season since 2002,” word comes this morning from the group’s daily newsletter saying most of any holiday increase will come online.

“Online retail sales are expected to grow 12 percent, to $44 billion, according to Forrester Research,” the link says.

Among the reasons cited for the swing to the keyboard, the article mentions rising financial anxiety, tight credit availability and the omnipresent availability of stores. Also, the article mentions the ability, online, to compare prices.

But is there a site where you can sit on Santa’s lap? A site where you can hear carolers, smell peppermint sticks and taste hot chocolate? Okay, it’s easy to shop online, but it’s not really Christmas shopping. I do understand the concept of online community (right now we’re both here, after all), but I still prefer the one where I can walk around.

To hear Boeing tell it, many of the sticky issues are on the verge of resolution in talks with its engineers and technical workers' union, the Society of Professional Engineering Employees in Aerospace.

But the tune SPEEA is singing is entirely different.
Talks are running into problems, they told us.

This half-full, half-empty situation is natural. Boeing isn't eager to see another long strike like the one just concluded with its machinists union, and the union wants the company to think a strike is still imminent.

Boeing in a statement said the issue of what it calls "employment stability" is almost resolved. That same issue in the union eyes translates to "outsourcing," and it's probably the most difficult problem on the bargain table.

Both sides seem willing to extend their talks further if it will help them pound out a proposal that the union can recommend.

The original deadline, self-imposed by Boeing was Tuesday, but it looks as if the talks could continue under mediation until the week's end.

Any "best and final" offer will be voted on by mail by the 21,000 union members. The contract expires Dec. 1, but the union could keep on working even after a strike vote if it thought more talks could squeeze out more from the company.

Meanwhile, a high profile aerospace analyst, the Teal Group's Richard Aboulafia, is warning that union militancy could make the Puget Sound area the next former aerospace hub like Southern California and Long Island. Boeing could move its assembly operations to the South as it phases in new aircraft to find more compliant, non-union workers, he says.

Here's the link to his opinion piece.

The Tukish-German vacation airline SunExpress said today it intends to buy three new Boeing 737-800 aircraft.

The company earlier this year ordered two of the 737-800s.

The new 737s will raise the size of SunExpress' fleet to 20 aircraft. The airline is modernizing its fleet to cut fuel and maintenance costs.

One pleasant side effect of the lengthy delay delivery for Boeing's 787 Dreamliner: the company's 767 is bagging more orders.

Chile's LAN today announced orders for four new 767-300ER aircraft. The list price of those aircraft was $636 million.

LAN is buying those new twinjets to compensate for the late delivery of its 787 Dreamliners, a similarly sized, but more fuel efficient aircraft.

The 787 is now 15 months behind schedule because of supplier and design problems.

The 787 problems are giving new life to the 767 program which was virtually comatose before the Dreamliner issues.

This year, airlines have ordered 32 of the '80s-vintage 767s to augment capacity until their 787s arrive. The backlog on the 767 assembly line in Everett is now 76 aircraft, about six years' production at present rates.

Boeing has also proposed using the 767 airframe as a basis for a new Air Force tanker. A new competition on that project will begin once the Obama administration is in office.

Earlier this month Uzbekistan Airlines ordered 767s to give it new capacity while it awaits its 787s.

All Nippon Airways has also ordered 767s in lieu of 787 deliveries.

Boeing is likely giving those airlines go deals on the new planes to compensate them for the late deliveries. Expect most of those aircraft to come back to Boeing once the 787s are available.