Nigerian Oil Production Plummets; Gasoline Demand Vs Gasoline Consumption; Update On Project Titan -- May 7, 2016

Gasoline demand may be a "red herring" (see next story) but the Nigerian oil output plunge is anything but a "red herring."  Bloomberg is reporting:

Nigeria is suffering a worsening bout of oil disruption that has pushed production to the lowest in 20 years, as attacks against facilities in the energy-rich but impoverished nation increase in number and audacity.

Chevron Corp. said on Friday it had shut down about 90,000 barrels a day of output following an attack on an offshore platform that serves as a gathering point for production from several fields. Even before that strike on Wednesday night, Nigerian oil production had fallen below 1.7 million barrels a day for the first time since 1994.

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Q: Is Gasoline Demand A "Red Herring"?

A: No

Regular readers know my thoughts on gasoline demand. I consistently use EIA data.

However, there may be other data out there that suggests gasoline demand in the US is not rising as fast as suggested by "gasoline production" data provided by the EIA.

See this article at oilprice.com. A couple of excerpts:

• U.S. production of gasoline is 908 kbpd more than the post-Financial Collapse low in January 2012 but is 542 kbpd less than the peak in July 2007.
• Meanwhile, net gasoline exports are at record high levels. Exports have increased 1,443 kbpd since June 2005.
• So, consumption has increased but remains far below pre-2012 levels. Production is again approaching earlier peak levels but most of the increased volume is being exported. The belief that U.S. consumption is approaching record highs is simply not true.
• Americans are driving more than ever before. Vehicle miles traveled (VMT) reached an all-time high of 3.15 trillion miles in February 2016.
• VMT have increased 97 billion miles per month (3 percent) since the beginning of 2015 and gasoline sales have increased 187 kbpd (2 percent). The rates of increase are not proportional.

Much, much more at the link. Archived.

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The Apple Page

Apple is seeking large expanses of real estate in the Bay Area for its "autonomous [self-driving] automobile project. See map at the linked site. 

Apple is looking to purchase "large expanses of real estate" in the San Francisco Bay Area for its much-rumored car project, codenamed Project Titan. Google parent company Alphabet and several car manufacturers, such as Tesla and Mercedes Benz, are also on the hunt for more space, according to Hudson Pacific, one of the Bay Area's largest landlords. 

While the size Coleman references is fairly big, car production plants tend to be even larger. Tesla's Fremont, California factory is 5.3 million square feet while Ford's Flat Rock, Michigan plant, one of its smaller factories, is 2.9 million square feet. For comparison, Apple's new headquarters is 2.8 million square feet while Google's Mountain View campus is 4.8 million square feet.

In recent months Apple has been leasing more space repeatedly for its car project in the Bay Area. In March, Apple leased a former Pepsi bottling plant in Sunnyvale, California. The Cupertino company has also leased and purchased several smaller, secret buildings likely being used to develop Apple Car technologies. In January, Apple gained approval from the San Jose city council to develop a 4.15 million-square-foot campus in the city. 

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Income Equality

New hires with barely a high school diploma and no experience are now approaching wage levels nearer the salaries being paid their mid-level managers with decades of experience.

People who thought "income equality" met narrowing the pay gap between the CEO and newly hired high school graduates were, should we say, a mite wrong?

Unfortunately, we now know what was meant by income equality.

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Income Equality

At least one multi-billionaire is doing his part to bring back a bit of income equality to New Jersey.

He's moving.

The New York Times is reporting: 

Our top-heavy economy has come to this: One man can move out of New Jersey and put the entire state budget at risk. Other states are facing similar situations as a greater share of income — and tax revenue — becomes concentrated in the hands of a few.

Last month, during a routine review of New Jersey’s finances, one could sense the alarm. The state’s wealthiest resident had reportedly “shifted his personal and business domicile to another state,” Frank W. Haines III, New Jersey’s legislative budget and finance officer, told a State Senate committee. If the news were true, New Jersey would lose so much in tax revenue that “we may be facing an unusual degree of income tax forecast risk,” Mr. Haines said.

The New Jersey resident (unnamed by Mr. Haines) is the hedge-fund billionaire David Tepper. In December, Mr. Tepper declared himself a resident of Florida after living for over 20 years in New Jersey. He later moved the official headquarters of his hedge fund, Appaloosa Management, to Miami.

New Jersey won’t say exactly how much Mr. Tepper paid in taxes. But according to Institutional Investor’s Alpha, he earned more than $6 billion from 2012 to 2015. Tax experts say his move to Florida could cost New Jersey — which has a top tax rate of 8.97 percent — hundreds of millions of dollars in lost payments.

Mr. Tepper, 58, declined to comment on his move. He does have family — his mother and sister — who live in Florida. But several New Jersey lawmakers cited his relocation as proof that the state’s tax rates, up from 6.37 percent in 1996, are chasing away the rich. Florida has no personal income tax.