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Why electricity demand is falling, and what it means
reneweconomy ^ | 6 March 2014 | By Nathan Lim

Posted on 03/06/2014 10:48:25 PM PST by ckilmer

Why electricity demand is falling, and what it means

By on 6 March 2014
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It is a multi-generational truth that electricity consumption only increases. This is best seen in the US where, since 1949, electricity demand has marched upward in a nearly uninterrupted pattern with the country never experiencing two consecutive years of negative growth.

Even here in Australia with data going back to 1961, we have never experienced two consecutive years of negative growth either.

image

Figure 1 – US and Australia Electricity Consumption (Billion Kilowatt hours)

Electricity demand falls in USA in four of last five years

However, in the US, how is it that in four of the past five years to 2012, electricity demand has indeed fallen? In fact, the same unprecedented softening in electricity consumption is happening in many places around the world (Figure 2).

image(1)

Figure 2 –Compound Annual Growth Rate for Electricity Demand for Selected Countries

Source: Bloomberg, national statistical departments. Long term is: Australia – 51 years; US – 63 years; Japan – 20 years; Germany, France, Italy and UK – 22 years.

Why has electricity demand fallen?

While the global financial crisis and subsequently weak economic environment are partially to blame for the decline, we believe there are three other contributing factors:

1. Rise of distributed generation

2. Increasing energy efficiency

3. Behavioural changes

Distributed generation is a term to describe the shift away from producing energy near a fuel source (which is typically far away from consumers) to producing near the consumer. The best example of this is solar panels on rooftops, where electricity is produced and consumed onsite.

No power bill from rooftop solar panels – getting consumers off the power grid

This can be extended to other forms of micro generation and energy storage, which collectively reduce energy lost from long distance transmission and harden the system against unplanned outages. Much of the micro-generation (rooftop solar panels, microturbines, fuel cells and Combined Heat and Power (CHP) units) is occurring behind the meter, meaning consumers are reducing their use of grid power. As explained by Edison International, it has seen the consumption share of industrial users in Southern California go from one-third of total electricity consumption to only 10 per cent as many installed super-efficient CHP units onsite.

Rooftop solar installations are now doing the same thing with residential and commercial electricity demand, as they swap local grid power with self generation and, in some cases, even put excess power back into the grid. Solar power and CHP units are both established technologies and within financial reach of much of the population, indicating this trend will continue.

LED light bulbs use up to 90 per cent less electricity

The most efficient watt is the one you don’t use because it uses no resources to produce it at all. This simple idea is embodied in energy efficient products and services, which is gaining significantly more attention. LED light bulbs use up to 90 per cent less electricity as a comparable incandescent light bulb. Insulation in your home immediately cuts energy bills. Recycling an aluminium can uses 95 per cent less energy than making it from virgin materials. Collectively, these efficiency measures are impacting consumption as the high cost of energy brings the issue sharply into focus for consumers and businesses. The price of energy is not going lower and, as a precious resource, it just makes sense for its use to continue to be carefully rationed.

Perhaps because conservation and the environment have become mainstream issues, utilities are telling us they are seeing behavioural differences between their younger and older customers. While an older customer would simply turn on the aircon when it is hot, younger customers are increasingly just opening a window. While their evidence seems to be more anecdotal than scientific, the Australian Bureau of Statistics noted in a recent study of social trends that four out of five people (80 per cent) who reduced their electricity usage reported this was due to efforts to conserve energy.

In contrast, saving money and lifestyle changes was given as a reason only about one in five times (20 per cent). Attitudes take a long time to form and to change but once entrenched are difficult to dislodge. We suspect a new generational trend is becoming entrenched that recognises our individual actions have ramifications for the collective.

Winners and losers in energy market

How energy is produced, transported and consumed is in constant flux due to a multitude of factors. These factors will result in winners and losers.

Just as falling electricity consumption is bad for the owner of a generator, the winners will be those companies that reduce a customer’s dependence on the grid.


TOPICS: Business/Economy
KEYWORDS: electricity; energy; gridparity; solar; solarpower
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1 posted on 03/06/2014 10:48:25 PM PST by ckilmer
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To: ckilmer

It’s called a major recession.


2 posted on 03/06/2014 10:54:29 PM PST by 2ndDivisionVet (I will raise $2M for Sarah Palin's next run, what will you do?)
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To: 2ndDivisionVet

Yup. Meat consumption will show a sharper drop.


3 posted on 03/06/2014 10:57:00 PM PST by Psalm 144 (My citizenship is not here, Pharaoh.)
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To: thackney; SunkenCiv

fyi


4 posted on 03/06/2014 10:58:49 PM PST by ckilmer
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To: ckilmer

I don’t suppose higher electricity prices have anything to do with it.


5 posted on 03/06/2014 11:14:14 PM PST by ModelBreaker
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To: ckilmer

Use a home generator to increase electricity.1 KW in 2 KW out.


6 posted on 03/06/2014 11:14:25 PM PST by plainshame
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To: ckilmer
Finally!

The yellow line and the blue line have come together to form...

GREEN!

7 posted on 03/06/2014 11:35:50 PM PST by who_would_fardels_bear
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To: ckilmer

I know several families who are now heating with wood during the winter & others who are supplementing with wood since electricity is too high, especially when they’re fighting to keep food on the table & a roof over their heads in this economy. I guess that’s why the EPA is going after wood stoves .....


8 posted on 03/07/2014 12:05:46 AM PST by Qiviut (It's hard to be a donk if you're sane & it's hard to be a pubbie if you have any integrity.)
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To: ckilmer
The CFL bulbs did it!


9 posted on 03/07/2014 12:06:34 AM PST by Daffynition ("If you think you can do a thing or think you can't do a thing, you're right." ~ Henry Ford)
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To: Daffynition; All

I converted my 4 story row house to all CFL’s 20 years ago. My bills then were around $28, and immediately dropped to $18. That was over $100 a year savings in 1995. So I figure I have saved at least $3,000, plus the bulbs that don’t wear out for 5 to 8 years.


10 posted on 03/07/2014 12:27:44 AM PST by gleeaikin
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To: All
While an older customer would simply turn on the aircon when it is hot, younger customers are increasingly just opening a window

This has got to be one of the dumbest sentences I have ever read.

These kids today understand so much better than us spoiled old people. We don't realize how good we had it when we were young.

11 posted on 03/07/2014 12:53:50 AM PST by j. earl carter
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To: ckilmer

I suppose the large increase in homelessness has nothing to do with it. {{{snicker}}}


12 posted on 03/07/2014 1:03:06 AM PST by stilloftyhenight (...staying home isn't an option.)
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To: 2ndDivisionVet

Bingo.


13 posted on 03/07/2014 1:28:43 AM PST by MrEdd (Heck? Geewhiz Cripes, thats the place where people who don't believe in Gosh think they aint going.)
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To: 2ndDivisionVet

However, in the US, how is it that in four of the past five years to 2012, electricity demand has indeed fallen?>>>>>>>>>>>>>( article)>>>>>>>>>>

It’s called a major recession>>>>>>>>>>>>>>>>>>( yours)>>>>>

And if the Obama socialist evolutionary trend is allowed to continue, we will look just like North Korea does at night
via satellite photos. A black hole in an otherwise prospering world.


14 posted on 03/07/2014 1:41:49 AM PST by Candor7 (Obama fascism article:(http://www.americanthinker.com/2009/05/barack_obama_the_quintessentia_1.html))
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To: ckilmer

The collective and careful rationing are mentioned in this propaganda piece. Not hard to figure out where these folks are coming from.


15 posted on 03/07/2014 1:59:13 AM PST by Foundahardheadedwoman (God don't have a statute of limitations)
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To: gleeaikin

CFL’s last 5 to 8 years except you can’t fricken see.


16 posted on 03/07/2014 2:28:01 AM PST by webheart (Watch out for the bots! They will disagree with you!)
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To: ckilmer

Older people simply turn on the aircon while young people open a window? That is just a bunch of bullcrap. Old people die instead of using air conditioning, because it costs too much. Young people don’t turn on the “aircon” because it is already on, they never turn it off. And nobody gets up from a game of Call of Duty to open up a window.


17 posted on 03/07/2014 2:32:53 AM PST by webheart (Watch out for the bots! They will disagree with you!)
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To: ckilmer

The new EnergyStar Telescreens make a difference.


18 posted on 03/07/2014 2:35:57 AM PST by Fresh Wind (The last remnants of the Old Republic have been swept away.)
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To: 2ndDivisionVet
It’s called a major recession.

Tangent to this...

Spoke with an old friend days ago in the power-generation industry, i.e. those that design and make the plants. I asked are we setting ourselves up for brown-outs with taking all this coal off line? "Yep" was the answer. Those in the biz know, long term this is not good. If I understand this correct, yes we got lots of Natural Gas, but I am not sure they have the pipelines to handle the volume they will need if we get more of them with a -20 winter like we had here in the mid-west and on the east coast this year...

19 posted on 03/07/2014 2:44:38 AM PST by taildragger (The E-GOP won't know what hit them, The Party of Reagan is almost here, hang tight folks....)
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To: ckilmer

“...demand falling and what does it mean?

Higher prices to pay for built in costs of production.


20 posted on 03/07/2014 2:46:04 AM PST by kanawa
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To: plainshame
Use a home generator to increase electricity.1 KW in 2 KW out.

You're gonna have to esplain that.

21 posted on 03/07/2014 2:55:42 AM PST by raybbr (Obamacare needs a death panel.)
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To: 2ndDivisionVet

Exactly. Major production requiring a lot of electricity is down as well as homeowners now watching what they use electricity for and when.

The government will tell us “green” and energy efficient products for appliances and consumer items (e.g., those effing CFLs) are the main reason. But we know better.

The media will fall on their pens at the altar of Obama rather than put the blame where it belongs.


22 posted on 03/07/2014 2:57:42 AM PST by Gaffer (Comprehensive Immigration Reform is just another name for Comprehensive Capitulation)
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To: gleeaikin

My experience is the CFLs do not last like they say they will. There are electronics inside the base that perform the same function as the ballast in a conventional fluorescent light and they always seem to be the failing components. I get maybe 2 years if I’m lucky....


23 posted on 03/07/2014 3:00:19 AM PST by Gaffer (Comprehensive Immigration Reform is just another name for Comprehensive Capitulation)
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To: ckilmer

Closing factories and sending the production to other countries contributes to a significant reduction in the demand for electricity.


24 posted on 03/07/2014 3:06:26 AM PST by Soul of the South (Yesterday is gone. Today will be what we make of it.)
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To: raybbr
You need one of these...


25 posted on 03/07/2014 3:07:12 AM PST by Fresh Wind (The last remnants of the Old Republic have been swept away.)
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To: 2ndDivisionVet

This is the real answer.


26 posted on 03/07/2014 3:36:22 AM PST by pas
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To: gleeaikin
plus the bulbs that don’t wear out for 5 to 8 years.

You are getting 5-8 yrs? I must be buying the wrong brand.

27 posted on 03/07/2014 3:39:03 AM PST by catfish1957 (Face it!!!! The government in DC is full of treasonous bastards)
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To: taildragger

I work in a large power plant in NYC. We can burn natural gas or #6 fuel oil. Since the spike in oil prices in 2007 and the drop in gas prices, we’ve almost exclusively burned gas.

However, during this colder than usual winter, we’ve been at top load on oil only due to gas restrictions. In fact, the district operator even asked us to fire up the unit that was in the middle of a turbine outage because it could burn oil. They must have been desperate.

FYI our ability to burn oil in the future is in question due to ever increasing regulations. Well at least until there is a black out during the next brutal winter...


28 posted on 03/07/2014 3:42:59 AM PST by OA5599
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To: catfish1957; gleeaikin
plus the bulbs that don’t wear out for 5 to 8 years.

You are getting 5-8 yrs? I must be buying the wrong brand.

We are seeing about a year before the cheap azz HV power supply blows up. YMMV, but probably not.

Fight the Free Sh☭t Nation

29 posted on 03/07/2014 3:46:08 AM PST by Mycroft Holmes (<= Mash name for HTML Xampp PHP C JavaScript primer. Programming for everyone.)
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To: OA5599

Interesting, So when demand for gas is up, you sorta take a back seat. That is horrid that oil is being restricted as well. These people making these decisions are fools, they have no idea what they are doing which leads you to the fact it is deliberate to destroy us, without a power grid that has over capacity for planned and un-planned shutdowns, we will be a 3rd world nation shortly. Which fits with the fundamental transformation and us getting our comeuppance.


30 posted on 03/07/2014 3:48:35 AM PST by taildragger (The E-GOP won't know what hit them, The Party of Reagan is almost here, hang tight folks....)
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To: gleeaikin

Thank you for the info....I’m about to buy some CFLs today for my kitchen lighting.

Is there a brand you recommend better than another?


31 posted on 03/07/2014 4:02:08 AM PST by Daffynition ("If you think you can do a thing or think you can't do a thing, you're right." ~ Henry Ford)
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To: ckilmer

The joke around here is the water company pushed and pushed for people to conserve water...you’d save money ...they told us. So millions did what they were told...and water use declined and rates declined for a while.

Now we’re seeing skyrocketing rates for the little water we use. When a local talkshow host challenged the water company and sewer company...

They said the massive rate increases were due to “over conservation” which was causing insufficient income to maintain the systems. LOL.

I look to reports like this about electricity and our failing power grid to also be the direct result of the ‘green agenda’ too. The unintended consequence of ‘over conservation’ that doesn’t account for a minimum of use to maintain the systems, nor the inexpensive sources that have historically made the most financial sense (ie. coal).


32 posted on 03/07/2014 4:02:45 AM PST by EBH ( The Day of the Patriot has arrived.)
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To: ckilmer
I couldn't be because of all the closed factories, stores and idled machines. Naw, couldn't be. I'm sure that for instance, Detroit uses just as much energy as it ever did.
33 posted on 03/07/2014 4:25:20 AM PST by Colorado Doug (Now I know how the Indians felt to be sold out for a few beads and trinkets)
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To: EBH

I’d suggest they take a look at our industrial meltdown and out sourcing needs. U.S. industry has been greatly downsized and there is no longer a demand for electricity in the American manufacturing fields. Better take a look at the Chinas need for electrical power to see where the demand REALLY is.


34 posted on 03/07/2014 4:26:47 AM PST by DaveA37
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To: ckilmer

I agree with the other posters that the “Great Recession” is the number one reason for the decrease in electrical consumption.

That said I think the business world has gotten much better at efficiency. They’ve had to. The fat days of the 1990s and early 2000s are gone. Sales people used to stop by my office almost every week asking me if I wanted to go to lunch or wanted tickets a ball game. That has come back a little bit but not nearly to the scale it used to be at. Thousands of companies are living on much thinner margins than they used to and they are running as lean as possible.

Cutting fixed budget items like your electrical costs are hugely important to businesses right now. I’ve never seen it as much a priority as it has been the last few years.


35 posted on 03/07/2014 4:52:34 AM PST by Pan_Yan (Who told you that you were naked? Genesis 3:11)
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To: Progov
Better take a look at the Chinas need for electrical power to see where the demand REALLY is.

I wonder about that for two reasons. First, during this long term recession I wonder if the market for cheap Chinese goods is nearly what it was. My second question would be is there a good way to determine what China's electrical demand really is? I've no doubt that any numbers their government would supply would be as phony as the economic data they release.

36 posted on 03/07/2014 4:56:37 AM PST by Pan_Yan (Who told you that you were naked? Genesis 3:11)
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To: gleeaikin

I’m an electrician and can tell you CFLs are crap. If you want long lasting cheap lamps, just pick up LEDs, they’re more expensive, but those will last far longer.


37 posted on 03/07/2014 4:59:58 AM PST by Bulwyf
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To: ckilmer

Deetroit, large areas in St Louis, Memphis, Baltimore, Philadelphia are no longer populated


38 posted on 03/07/2014 5:01:32 AM PST by bert ((K.E. N.P. N.C. +12 ..... History is a process, not an event)
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To: Bulwyf

The LED bulbs are known for RF interference and power line noise generation. No thank you.


39 posted on 03/07/2014 6:09:39 AM PST by George from New England (escaped CT in 2006, now living north of Tampa)
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To: George from New England

Not in my experience. I guess if you can still find the old regular bulbs that’d be good.

LEDs will save you a pile though after the initial setup costs.


40 posted on 03/07/2014 6:15:36 AM PST by Bulwyf
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To: 2ndDivisionVet

“It’s called a major recession.”

You got it 100% exactly right.

40 percent of energy generated in the industrialized world is used by buildings. Less economic activity equals fewer buildings.

http://www.eia.gov/tools/faqs/faq.cfm?id=86&t=1


41 posted on 03/07/2014 6:20:22 AM PST by sergeantdave
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To: Bulwyf

I use the 20 years old technology of x10 signals no the power line. Some LED bulbs, as well as certain CFLs, send noise back into the power line and make signal controls unreliable.


42 posted on 03/07/2014 6:51:19 AM PST by George from New England (escaped CT in 2006, now living north of Tampa)
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To: George from New England

You must have some AC induction somewhere in the route.

At the end of the day though, we should use what we like without the government forcing something down our necks.

I’ll catch up with you later, off to hunt some wolves.


43 posted on 03/07/2014 7:02:18 AM PST by Bulwyf
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To: EBH

I look to reports like this about electricity and our failing power grid to also be the direct result of the ‘green agenda’ too. The unintended consequence of ‘over conservation’ that doesn’t account for a minimum of use to maintain the systems, nor the inexpensive sources that have historically made the most financial sense (ie. coal).
..................
Yeah, you got it. Over half the new electrical generation installed in the USA is solar or wind a large percentage of the solar is off grid. Which takes revenue away from grid maintenance which drives up the costs to the fewer remaining end users. At a certain point the economics of off grid vs grid are going to swing in favor of off grid and the grid will implode.

Curiously the same thing is going to happen in obamacare as fewer healthy people are available to cover the costs of sick people —the costs to people left on the network will rise to where they become prohibitive.


44 posted on 03/07/2014 7:20:56 AM PST by ckilmer
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To: ckilmer

We are going to put in solar in our new place in the mountains. Its not going to be tied to the grid thats for sure.


45 posted on 03/07/2014 7:51:56 AM PST by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped.)
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To: taildragger

The first to achieve winter rolling-blackout the northeast U.S.?


46 posted on 03/07/2014 12:19:41 PM PST by Ozark Tom
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To: 2ndDivisionVet

The goal of the elitist left is that the peasants not be able to afford energy/electricity/travel/heat/AC AT ALL.


47 posted on 03/07/2014 12:22:31 PM PST by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; cardinal4; ColdOne; ...

If true, it has to do with economic downturn, not LED and CFL bulbs.

One of the facts of life regarding conservation is, conservation leads inexorably to systemic growth in demand. Gasoline rises to $4? Drivers go fewer miles, even if passenger miles rise due to carpooling, public transit, etc. Some autos with higher fuel economy are sold.

As gasoline remain the same, the threshold of pain rises, and miles driven start to rise to the original levels; and drivers with more fuel efficient vehicles start to drive more miles, rationalizing that they aren’t spending as much on fuel and/or burning as much as they used to.

When the price declines to $3 from $4, driving increases, and carpooling and use of public transport goes down (pooling ones transportation is a grossly inefficient use of time, except in a very few very urban areas, such as LA at rush hours).

I find my electric bill rises in winter, but the fuel oil bill rises above $600 a month, so the extra juice to run the furnace blower doesn’t register by comparison.

Thanks ckilmer.


48 posted on 03/07/2014 6:01:35 PM PST by SunkenCiv (https://secure.freerepublic.com/donate/)
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To: SunkenCiv

Carpooling?

My wife, son and I work for the same company and my son only lives about two miles away. We have different responsibilities and therefore work different hours. I go in early, she works late and his hours are at the whim of the structural design department.

We can’t make car pooling work, so how can it really work for anyone else unless you work in an 8 to 5 factory?

Car pooling will never work in Texas.


49 posted on 03/07/2014 6:22:34 PM PST by Eaker (Sweat dries, blood clots and bones heal so suck it up buttercup.)
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To: bert
Deetroit, large areas in St Louis, Memphis, Baltimore, Philadelphia are no longer populated

True, but the people didn't disappear. The population (legal + illegal) continues to increase. And all those people are using juice to some extent. The census estimates show an additional 13m people from 08 to 13.

50 posted on 03/07/2014 6:33:16 PM PST by nascarnation (I'm hiring Jack Palladino to investigate Baraq's golf scores.)
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