What if, for a moment, you could hook your car up to your house every night - and refuel it with the same natural gas you use to heat your house, cook with, and heat your water heater. Moreover, what if you could refuel your car for about half the current price of premium unleaded gasoline. And finally, what if that fuel was produced, by and large, within the United States.

Essentially, that is what the proponents of natural gas vehicles running Compressed Natural Gas (CNG) say could be our future. Clean, abundant, and cheap energy that is better for the environment and better for the national economy. Is it too good to be true? Well - not exactly, but there are some real possible benefits to switching, at least in the interim, on natural gas vehicles.

In many urban areas in the United States, the bus systems,  utility vehicles (garbage trucks, street cleaners, etc.), and many school buses, run on CNG versus diesel or gasoline, and it is also employed sometimes in light-trucks and small delivery vehicles (some of FedEx vehicles I’ve seen run on CNG). In the US, Federal tax credits are available for buying a new CNG vehicle. Use of CNG varies from state to state. In California, where CNG is prized because of its low-emissions, CNG is used extensively in local city and county fleets, as well as public transportation (city/school buses), and there are 90 public fueling stations in Southern California alone. And, it’s cheaper than gas too. Although natural gas prices are rising, compressed natural gas is available at 30-60% less than the cost of gasoline, as a rule of thumb, in much of California. It is unclear if these discounts would remain if there was a heavy increase in the demand for CNG vehicles (laws of economics suggest it wouldn’t be a stable price curve, but rather, it would jump to equilibrium points over time, but I will get to that in a minute).

If you really want cheap gas - how’s less than buck a gallon sound? The state of Utah offers a subsidised statewide network of CNG filling stations at a rate of $0.85/gge (GGE is gallon gas equivalent as measured by the thermal energy unit of BTU), while gasoline is above $4.00/gal. Elsewhere in the nation, retail prices average around $2.50/gge, with home refueling units compressing gas from residential gas lines for approx $1.50/gge. Other than aftermarket conversions, and government used vehicle auctions, the only currently produced CNG vehicle in the US is the Honda Civic GX sedan, which is made in limited numbers and is available only in California at the moment.

For those who want to stop paying money to “foreign oil” - US natural gas is a veritable godsend. While in 2005, the U.S. imported over 65 percent of the oil it used, 97 percent of the natural gas used in the U.S. was produced in North America (85 percent from the U.S. and 12 percent from Canada).  Every gallon equivalent of natural gas used in vehicles is one less gallon of petroleum that has to be imported. It is because of this, champions of improving domestic energy supply, like T. Boon Pickens, have come out strongly in favor of CNG as an alternative source of energy.

However, CNG is by no means a panacea to solve our energy demands. First, let’s talk a bit about the direct drawbacks of CNG when physically compared to octane (gasoline). Compressed natural gas vehicles require a greater amount of space for fuel storage than conventional gasoline power vehicles. Since it is a compressed gas, rather than a liquid like gasoline, CNG takes up more space for each GGE (Gallon of Gas Equivalent). Therefore, the tanks used to store the CNG usually take up additional space in the trunk of a car or bed of a pickup truck which runs on CNG. This problem is solved in factory-built CNG vehicles that install the tanks under the body of the vehicle. This likely translates into overall lower “gas equivalent milage” in some cars than if running on regular gasoline as the fuel efficiencies are not offsetting the additional weight. Moreover, the lesser thermal value per volume of CNG to octane would also mean that our cars would have less range, and would need to be refueled more often than gasoline vehicles.

Second, there are potential unforseen consequences to having such a rapid rise in CNG use. The primary form of LNG (Liquified natural gas) and CNG is for heating homes, water heaters, cooking, etc. The heating of homes is by far the largest component of CNG use in the United States. Just as many people found out “what eats corn” when biofuels jumped in popularity, people would readily find out how much natural gas they use at home when their fuel bills double or triple as demand rises. For example, my own modest gas bill is about 95 dollars a month. I would expect that bill would go up by as much as 100% if all of a sudden it was fueling 10-20 million car trips a year. If the current price of GGE gas is about $1.50-2.00, and it truly becomes an equivalent to gasoline, we would expect that the prices between the two markets for the same use would equalize. What this means in real terms is that while the price of gasoline may fall to 3 dollars a gallon - the price of natural gas will go up - probably also to about three dollars a gallon. This means that it will be much more costly for people to heat their homes, run their stoves, and heat their hot water (among other things). Every winter, fuel oil prices are always an issue of political contention for Congress. Imagine the entire US complaining about the high price of natural gas to heat their homes. The reality is - there is no escaping the fact that energy costs - whether it comes from gasoline, kerosene, diesel, or natural gas. If all of a sudden people start using CNG in great numbers - the price of the natural gas is going to rise.

That doesn’t mean I think we shouldn’t strongly look at natural gas a possible short-term solution. There are several strong reasons why CNG could be a good substitute in the short term.

While I’m not much of an “environmentalist whacko” - if that is your thing - then CNG is your wet dream. Per unit of energy, natural gas contains less carbon than any other fossil fuel, and thus produces lower carbon dioxide (CO2) emissions per vehicle mile traveled. While cars running natural gas do emit methane, another principle greenhouse gas, any increase in methane emissions is more than offset by a substantial reduction in CO2 emissions compared to other fuels. Tests have shown that CNG cars produce up to 20 percent less greenhouse gas emissions than comparable gasoline vehicles and up to 15 percent less than comparable diesel vehicles. Exhaust emissions from a typical car powered by CNG are much lower than those from gasoline-powered vehicles. For example, the natural gas-powered Honda Civic GX is recognized by the U.S. EPA as the cleanest commercially available, internal-combustion vehicle on earth.  The Civic GX is rated by the California Air Resources Board as meeting the very stringent AT-PZEV standard.  In addition, dedicated CNG automobiles produce little or no evaporative emissions during fueling and use. In gasoline vehicles, evaporative and fueling emissions account for at least 50 percent of a vehicle’s total hydrocarbon emissions. So if you want to save gas and money and the environment - then CNG is your panacea fuel.

Second, natural gas is generally an abundant resource that could wind up powering all of our cars for quite a long time. According to the Potential Gas Committee of the Colorado School of Mines (the most authoritative body on the subject), in 1990, total U.S. recoverable natural gas resources was 1,172 trillion cubic feet (Tcf). That was about a 60 year supply at the 1990 level of natural gas production. Since then, we have produced about a quarter of that gas (314 Tcf ). In 2006, the Potential Gas Committee estimated the size of the recoverable natural gas resources was 1,525 Tcf - an 80 year supply. How is that possible? The answer is that improvements in our knowledge of gas geology, improvements in production technology (such as horizontal drilling, 3D seismology and even 4D seismology) and changes in energy economics keep changing the definition of what is recoverable.

For example, prior to 1990, the recoverable natural gas resource estimate did not include natural gas trapped in coal formations (referred to as coal bed methane)since it was not considered economically recoverable. However, technology improved, and, in 2007, coal bed methane accounted for 10 percent of domestic production of natural gas.

Another example (that is evolving right now) is natural gas from shale formations. Like coal bed methane, geologists have long known about gas in shale, but it was not considered economically recoverable. Changes in production technology and economics have changed the situation completely. The majority of the growth in the recoverable natural gas estimate is gas from shale. Further, evaluation of the potential of gas from shale is only in its early stages. It is expected that the amount of recoverable natural gas from shale will grow considerably.

It is expected that, as production technology continues to improve, the U.S. recoverable natural gas resource base will continue to grow as fast (or faster) than production. The world has more natural gas than petroleum, and natural gas resources are more evenly distributed. As a result, a growing number of countries have discovered indigenous natural gas resources that they are interested in selling in the international market. Meanwhile, the demand for natural gas from countries with a limited domestic energy resource base (e.g., Japan, Korea) is increasing. So it is expected that worldwide trade in natural gas will be expanding steadily.

The direct impact of this on the United States will be very limited. The world market for natural gas is very different than that for petroleum. With petroleum, America imports almost three-quarters of what it uses and all the oil used is affected by the worldwide oil price. On the other hand, the U.S. natural gas market has the following characteristics: (1) the vast majority of the natural gas used here is produced here, and (2) except for one small exception, the United States and Canada have no ability to produce and sell their natural gas on the international market via LNG (liquified natural gas - a substance similar in many respects to “propane” that is used in BBQ’s and RV’s). As a result, the U.S. and Canada are largely isolated from the international market and the world clearing price for natural gas. In other words, supply and demand in America - not the world price — determines the average natural gas price in America. As a case in point, during the first part of 2008, the price of natural gas in the U.S. was significantly less than the world price for natural gas. As a result, the U.S. LNG importation terminals were only operating at 20 percent of their capacity since they couldn’t “bid away” LNG from other countries.

There are no plans to build any LNG export terminals in the U.S. and, because of all the domestic U.S. natural gas resources, the U.S. will continue to rely on its own its domestic supply to satisfy the vast majority of its domestic demand.

So perhaps we should really thing about the possibility of using CNG gas for our cars. It’s cheap, economical, and although over the long-term the price of gasoline and CNG will likely stabilize, it may be the best alternative in the short-run to gasoline. Auto makers need to look at CNG carefully, and natural gas companies need to work with the auto industry to make it possible (and safe) to refuel at home. Personally, I think the natural gas car is an excellent idea - and one that could be readily adapted (within a 3 year span) to have a major impact on the price of gasoline in the US and the demand for foreign oil.

Final upcomming post - Why the United States needs a Comprehensive Energy Policy.

On Friday, the first unavoidable evidence that the credit crunch continues burst forth to center stage. The Office of Thrift Supervision (OTS) and the Federal Depositors Insurance Corporation (FDIC) were forced to take control of IndyMac Bancorp, Inc. IndyMac’s failure marks one of the largest bank failures in history, and is the largest bank failure since Continental Illinois National Bank and Trust Company failed in 1984. Moreover, the quasi-governmental lending/underwriting institutions for home loans - Federal Home Loan Mortgage Association (Freddie Mac) and the Federal National Mortgage Associatoin (Fannie Mae) - are under severe liquidity pressures and  the Treasury will come to the rescue of the institutions to the tune of $15 billion. If there were any doubts that the economy is precariously placed, the Fed and the Treasury running out of options (and time) in attempting to balance growth and liquidity, and the credit crisis danger still ever present, Friday should have eliminated them.

IndyMac has roughly $18 billion in deposits - ostensibly a large portion of which ($16B) are FDIC insured deposits in some form. Current estimates are that the bank’s failure may cost as much as $9B dollars from FDIC funds. The FDIC operates to protect the public against bank failure, and to prevent exactly what happened to IndyMac. IndyMac failed (oddly in part because of Sen. Charles Schumer making statements that the bank’s demise was at hand) because depositors withdrew their cash from the bank in a bank panic, thus, causing the bank to be insolvent. However, even without the Schumer-induced bank panic, IndyMac was badly hit by the mortgage lending meltdown (IndyMac’s origins beginning with Countrywide Financial) and had lost as much as a billion dollars in the mortgage meltdown. The mortgage losses combined with the bank panic caused the bank to become insolvent last Thursday evening, and the OTS was forced to take the bank into receivership immediately on Friday.

Is the IndyMac case isolated? Probably not, but I have significant faith that the banking system by and large will be able to weather what I expect is the final storm of credit issues. While Bank of America, Chase, and CitiBank, all suffered large losses in the mortgage markets - those banks were able to stay ahead of the surge of losses and refinanced their operations by raising funds, or by attracting additional capital. However, the IndyMac implosion should serve as reminder that the mortgage meltdown continues and that the US banking system remains under considerable strain as liquidity continues to be an issue for many institutions.

I suspect that there are significant numbers of banks that are invested in mortgage paper. The fact that IndyMac is the first to go doesn’t mean it’s the last to go. I suspect there are a smattering of banks that are suffering. I suspect that there are a string of middle-capitalized banks (perhaps 100 maybe 200 nationally) that will not be able to get out from under the paper they have on their books. These banks will ultimately wind up going into receivership, or trying to fund out their loans through the special Fed programs or through Freddie/Fannie swaps. If they will be able to is not yet known - but they are likely out there and the FDIC is probably watching for signs of weakness to ensure that another “savings and loan” crisis - where banks hid their financials from the Fed - doesn’t occur a second time. While the S&L crisis was going to be expensive - it was in part SO expensive because the bankers hid their numbers from the regulators. In this case, I suspect OTS and FDIC are watching the banks with high mortgage portfolios closely.

What is more disturbing to me is the crisis occurring in Freddie Mac and Fannie Mae. Those institutions are primarily responsible for securitizing home loans and making the secondary markets for mortgage-backed securities function. If the Fed is going to “bail them out” - then the underlying secondary markets and the overall ability of the market to securitize home loans may be bottoming out. I mean - we’re talking about the two largest lenders in the United States for mortgages. Fannie Mae and Freddie Mac either hold or back $5.3 trillion of mortgage debt. That’s about half the outstanding mortgages in the United States.

Federal officials again threw their support behind the government-sponsored enterprises; the Treasury pledged to expand its current line of credit to the two companies and the Federal Reserve said it will provide additional loans if needed.

Treasury Secretary Henry Paulson also said the government could, if needed, buy equity capital in the companies, whose stocks lost half their value last week. The Treasury’s moves would require congressional approval.

What the Government appears to be doing is figuring out who’s going to be in the lifeboat. The reality is - the Fed is near tapped at 90% capability. The Treasury is facing a double whammy in that borrowing costs are skyrocketing, while its demands for spending are also increasing. In short - they’re both running out of options to monetize the crisis and keep pumping in money. Today, it is obvious to me they decided they’re going to be saving Freddie and Fannie - but companies like Lehman may be on their own. Moreover, as banks fail - the FDIC will honor its responsibilities - but it may not go out of its way to ensure that depositors over 100K are taken care of and get their full value.

In short - its a mess… and its continung to unwind.

America is facing a serious long-term energy crisis. The price at the “pump” that people are so traumatized by is really the short-term symptom of a longer term problem. As the largest of the two “third world” nations industrialize, India and China, billions of people are rapidly increasing in their wealth, standard of living, and their energy demands. As a result, the long-term demand for energy is increasing, and despite small changes here and there in the price of oil, gas, and coal, overall, the price of energy will go up unless we dramatically change how America obtains energy for growth.

T. Boone Pickens, is perhaps one of the most notable “oil men” standing up and saying something I believe deeply - while we must drill here, drill now, and maximize our oil output - we must also invest in America and develop a comprehensive strategy for satisfying our long-term energy demands. T. Boone Pickens’ website - Pickens Plan - lays out very starkly the problem we are facing:

America is addicted to foreign oil.

It’s an addiction that threatens our economy, our environment and our national security. It touches every part of our daily lives and ties our hands as a nation and a people.

The addiction has worsened for decades and now it’s reached a point of crisis. In 1970, we imported 24% of our oil. Today it’s nearly 70% and growing.

As imports grow and world prices rise, the amount of money we send to foreign nations every year is soaring. At current oil prices, we will send $700 billion dollars out of the country this year alone - that’s four times the annual cost of the Iraq war.

Projected over the next 10 years the cost will be $10 trillion - it will be the greatest transfer of wealth in the history of mankind.

America uses a lot of oil. Every day 85 million barrels of oil are produced around the world. And 21 million of those are used here in the United States.

That’s 25% of the world’s oil demand. Used by just 4% of the world’s population.

Can’t we just produce more oil?

World oil production peaked in 2005. Despite growing demand and an unprecedented increase in prices, oil production has fallen over the last three years. Oil is getting more expensive to produce, harder to find and there just isn’t enough of it to keep up with demand.

The simple truth is that cheap and easy oil is gone.

Not to dispute the great oil man - bowing to his instincts - I’m not entirely ready to admit that we have reached peak oil in the United States. I do believe peak oil may have been reached in Saudi Arabia - the primary source of world oil. Thus, his basic conclusion that “the cheap and easy oil is gone” is correct. Even if we open up America’s drilling grounds, or the Bakken Formations, or the other shale oils found in the United States or territories, is not simple to extract and ultimately will just stabilize, not lower in the long-term, prices for oil-related products and compounds.

Thus, Picken’s proposes a simple concept - wind power.

I’ll be honest, my first instance of seeing wind power oddly enough was at Guantanamo Bay, Cuba. Because the United States cannot rely on Cuba for water, power, or sewer, it generates its own. It has generated its own utilities since Castro cut off the water back in the 1960’s. When the United States undertook detention operationst at Guantanamo - the base’s size quadrupled in the number of people. A small backwater base of a few hundred suddenly had close to 4000 people on it. That growth placed incredible stress on the water and power facilities. The way the Navy decided to deal with the immediate power issue was to set up a few windmills on the top of the highest hills at GTMO. I watched them get built over the times I visited GTMO during my time at DoD. At the end, the windmills at GTMO provided a large share of the power used by GTMO. A simple solution. I admit they are god-awful ugly looking - and humungous. But - three windmill towers provided about a third of the energy that the base was using when they were all fired up running full tilt. That’s pretty impressive.

Wind power is growing in popularity as an alternative to fossil fuel and one of the best of the renewable energy sources. The use of wind power requires wind turbines. Wind turbine generators do little to harm the environment and are far preferable in this regard to fossil fuel. The only disadvantage is that they cannot be used everywhere. In order to effectively use turbines to generate wind power you would need an average wind speed of at least 13 miles per hour. Now, the conditions for wind power don’t occur anywhere…

Lucky for us - according to Mr. Pickens - the middle of the United States is ideal for such wind generation. Pickens website details:

Studies from around the world show that the Great Plains states are home to the greatest wind energy potential in the world - by far.

The Department of Energy reports that 20% of America’s electricity can come from wind. North Dakota alone has the potential to provide power for more than a quarter of the country.

Today’s wind turbines stand up to 410 feet tall, with blades that stretch 148 feet in length. The blades collect the wind’s kinetic energy. In one year, a 3-megawatt wind turbine produces as much energy as 12,000 barrels of imported oil.

Wind power currently accounts for 48 billion kWh of electricity a year in the United States - enough to serve more than 4.5 million households. That is still only about 1% of current demand, but the potential of wind is much greater.

I think wind power, solar power, coal, natural gas, nuclear power, all of it needs to be considered. For someone like Mr. Pickens to have decided that Wind power is worth developing suggests to me that it may finally be mature enough to deploy in a serious commercial manner. Thus, I commend efforts like Mr. Pickens and I fully support what he wants to accomplish.

The reason why is a simple one. In one of Mr. Pickens’ advertisements - he talks about how each year we are transferring $700 billion in energy costs to foreign powers. Let’s be clear about who that money is going to - it’s Hugo Chavez, it’s Iran, it’s Nigeria, it’s Angola, and others.  The wealth transfer that will occur because of oil empowers enemies of the United States. The debt we have to incur in order to finance the energy costs is empowering our competitors like China. It is a national security problem as serious as the GWOT or the war in Iraq to limit our dependence on oil supplied by countries who have long-term hostile intent to the United States.

Drilling is going to help. Improving fuel efficiency of cars is going to help. But in the long run - we need to figure out how we’re going to fuel the engine of America. We need a long term plan - and people like Pickens are going down the right path.

Continuing without developing a long-term energy plan for America is the equivalent of taking a star off the flag and giving it to our enemies.

Now I know recession is close at hand. When the purveyors of sex, drugs, and cheap thrills hit the skids - you know the rest of the economy can’t be too far behind. America’s most outrageous city, Las Vegas, is facing a growing multitude of problems, and they all boil down to a single, unavoidable point: what happens in Vegas isn’t enough to pay for Vegas.

With Americans cutting back on luxuries, and the price of gasoline and airline tickets rocketing, the so-called “Vegas vacation” is facing the axe. This week, as the nation celebrated Independence Day, major hotels were taking stock of a fall in all-important room occupancy rates from their usually impressive 95 per cent levels to nearer 80 per cent. More worryingly, new figures showed gambling revenue has also dropped – a further 3 per cent this month – starting a price war between worried firms anxious to lure punters back. Hotel rooms, which last year averaged $130 each, now go for less than $100.

To quantify the Vegas slump, look to the stock market. Shares in casino operators, the engine room of an economy reliant on its liberal attitude to public morality, have been losing value like a down-on-his-luck gambler down to his last dollar.

Las Vegas Sands, which controls the Venetian and Palazzo resorts on the famous “miracle mile,” has dropped below $50 a share, a third of its value last September. MGM is at $28, down from over $100 a year ago. Wynn resorts, owned by billionaire Steve Wynn – neared $70, from almost $180 last year.

This week, in an attempt to prevent financial meltdown, Nevada’s Tourism Alliance convened an “Air Crisis Briefing” in an effort to prevent airline plans to halve the number of flights to the resort. However, with the airlines struggling to just stay solvent - it is unlikely that they’ll have cheap flights to destinations like Vegas.

The city’s gut-busting “eat all you can” buffets are also being scaled back to account for the US’s 4 per cent food inflation. Where a long queue of obesity once trailed across The Bellagio hotel restaurant’s ornate carpets, demand for its famous (but now pricey) lunch buffet had on Thursday slowed to a trickle. In what sounds suspiciously like a panic measure, the Golden Gate Hotel this month even said it was doubling the price of its signature 99 cent shrimp cocktail.

For the locals of Las Vegas, the downturn is no joking matter. The growing unemployment crisis, MGM just axed another 400 middle-managers and more layoffs are on the way, plus a downturn in the tips that form a significant portion of the Vegas economy, is driving down the local economy and leading to a massive swing in the economics of the once thriving desert suburbs.

Local bankruptcies have quadrupled. The property market, which rode the wave of a boom for most of the past decade is now below its peak by anything from a quarter to a third (depending on whose figures you believe), while Nevada now boasts, if that is the right word, the nation’s highest foreclosure rate.

“The current rate of overall unemployment in this state is 6.2 per cent, the highest since May 1994,” said Jered McDonald, an economist with the Nevada Employment, Training and Rehabilitation Department. “Las Vegas seems to be getting the worst of it. Other parts [of the state] aren’t so bad; in fact the gold-mining industry is booming, so the drop in employment in big metropolitan areas is actually bigger than that figure suggests.

“With the high oil prices, people don’t have much disposable income to spend on gaming and entertainment. So we are looking at a short-term slump, certainly. In the longer term, everything depends on what’s going to happen to oil prices.”

And speaking of unemployment, apparently the hookers are having a hard time of it as well. “This year already we’ve seen the Minx closing, the Mensa club closing, and the Crazy Horse closing,” says Dolores Eliades, owner of the OG, the second biggest “adult cabaret” venue in the world. “By another 12 months from now, I expect another two or three major venues will have gone.

“We’ve seen a drop in custom here too: maybe 180 people coming in when before we got 200. It’s a difficult business, but the girls still have to make a living. We will survive because we own our own premises, we have a good name and location, we don’t buy on credit, and we’ve been around for a long time. But we’re very lucky in that respect.”

Dolores Eliades says the history of Las Vegas shows it will find a way to adapt and survive. “Historically, Las Vegas is able to withstand the problems of the rest of the country. When people face hard economic times, they come here to get away from their problems. In the US, people are escape artists, and they deal with problems a little differently from the rest of the world. I believe the history of this town proves I’m right, I really do.”

Historically, California and Nevada have always been at the tip of the pendulum in the economic swings - much higher than the rest of the nation when the highs are “high” and much lower, when the lows are low.

It all spells bad news for Vegas. I’ll tell you this much - what happens in Vegas, probably won’t probably stay in Vegas when they stop paying their bills.

Starbucks, the nation’s left-wing-nutjob-8-dollars-a-cup-of-joe shop, has finally figured out the economy is slowing down. I suppose when gas costs more than four bucks a gallon - getting that mocha frappachino for six bucks doesn’t seem like such a good idea. Starbucks Corp. announced today it will close 600 company-operated stores in the next year. The move marks a rather dramatic downsizing of the company’s stores - closing close to a fifth of all stores it opened since 2006.

Some are attributing the mocha-meltdown to a “faltering economy.” I would just point out that for all this talk about recession - we’re still not there yet. Recession is defined by economists as two quarters of contracting GDP output. We have not yet experienced that. We have experienced significantly slower growth than we’re used to the last four or so quarters, and in this country, that’s just as bad for many people. But recession? Not yet.

I didn’t watch Olberman tonight - but I’m sure he had a brain aneurism blaming Bush for destroying Starbucks. It’s the war in Iraq that has caused the economy to falter, and now, my left-wing-nuta-chino wih half-half-decaf-global warming footrpint reduced calorie coffee isn’t profitable. Actually, knowing Olberman, he’s probably blaming Haliburton.

But the reality is that it isn’t the weakening economy, or Bush, or Haliburton that blew up Starbucks. The less crazed Dunkin’ Donuts continues to do well - selling coffee, oh and here’s a novel idea, donuts too. Moreover, I haven’t noticed local cafe’s all of a sudden boarding up and moving out in the DC area. So what happened to poor old Starbucks?

Starbucks was a victim of its own greed and stupidity. Many of the slated stores are essentially “in their own pocket” with other Starbucks. I mean - here in DC alone, I did a quick search on Google and there were 18 Starbucks shops in the DC “proper”. I’m not talking about the DC area - Fairfax, Prince Georges, etc., I’m talking about only in the “diamond.” I mean, you can hardly go a block in DC without running into Starbucks!

DC has a population of about 600 thousand. That means there was one store for about every 33 thousand people. Consdering every man, woman, and child in DC does not drink coffee - especially the kids - figure that’s one store realistically per every 15 thousand. Compare this to someone like Wal-Mart. They have 20 stores from Indian Head, VA, through DC to Balitmore, from Annapolis to  Chantilly, VA. That’s an area of roughly 3.5 MILLION people. That means that there is one Wal-Mart per 175,000 greater-DC area residents. Considering people think of Wal-Mart as being “everywhere,” - reality is, if Starbucks tried to cover the same area as Wal-Mart, they’d need 106 stores - or five times the number Wal-Mart has. Now, while there is a good deal of commuting in to DC - I don’t think the District goes from 500 thousand to 3 million residents during the day.

I’m sorry - but who the heck drinks that much coffee that we need a Starbucks on every block in DC?

It’s not the recession that is killing Starbucks, it’s the open-up a store every 30 feet management style they’ve been following. Everything is all fine and rosey, till people wonder, “hey, what the hell does my cup of joe cost as much as my commute to work!” combined with - wow look I can see three Starbucks while sitting in Starbucks drinking my over-priced cup of mocha-lefty-chino - that forced this decision.