Link to article here.

Toll road profits used on streets
$120 million to be spent on ‘connectivity’ projects next year
By RAD SALLEE
Houston Chronicle
November 8, 2007
Harris County will spend an unprecedented amount of its toll road profits next year to build and upgrade roads and streets, some of them miles from any toll booth.

Call it the third stage of evolution for the Harris County Toll Road Authority, an evolution driven by the struggle to survive.

When voters and County Judge Jon Lindsay began the toll road system in 1983, the idea was simple: We’ll build this road, and when it has paid for itself, we’ll make it a freeway.

As other toll roads followed, the tempting revenue stream begat another idea: When these are paid off, we’ll keep on tolling them and pool the money to build more toll roads.

Starting in 2001, Commissioners Court set aside $20 million paid by toll road users each year to build and improve roads and streets that connect to the tollway system. These annual allocations have helped build more than 80 such “connectivity” projects.

On Sept. 20, the court quietly boosted the annual connectivity allotment to $120 million — double the previous high of $60 million in 2004, and one-fourth of the tollway system’s net revenue.

The increase signals that toll road funds likely will be a major tool for general road building for the foreseeable future.

Despite their name, the funds increasingly have been spent on projects with no connections to toll roads and even on roads that provide an alternative to congested tollways.

A map of connectivity projects to date includes, for instance, improvements to a trucking route between Texas 146 and the Port of Houston docks at Barbour’s Cut, about seven miles from the East Sam Houston Tollway.

Harris County Judge Ed Emmett said a toll road connectivity project on Clay Road will help get people from fast-growing Katy prairie subdivisions to north-south arteries such as Fry Road. These connect to the Katy Freeway, and from there one can reach the tollways.

The county road system as a whole “feeds the toll roads,” Emmett said. “This will help complete the grid.”

As county Infrastructure Director Art Storey put it, “Today’s remote project is right in the middle of things tomorrow.”

Architect Christof Spieler of the grass-roots Citizens Transportation Coalition said he has no problem with using money paid by toll road users to build free roads.

But if government is providing new roads to access new subdivisions in the Katy Prairie, he said, it is making that housing artificially cheap.

Seed money

Precinct 3 Commissioner Steve Radack said the money is greatly needed, as is more road capacity near fast-growing subdivisions on the prairie. Clay Road is one of the most congested in his precinct, he said.Radack noted that connectivity funds also can be used as seed money to attract private investment, as other county dollars were used in an $8 million project to extend Kingsland from the Grand Parkway (Texas 99) to Katy-Fort Bend Road at Katy Mills Mall.

The county is contributing $1.3 million of the Kingsland funding, Radack said. “The rest is private sector.”

Spieler said that, although he opposes suburban sprawl, he likes Radack’s idea of having developers — and ultimately the homebuyers — take on that cost.

Still, he said he would like to see more of the connectivity money used for “infill” projects in Houston and other municipalities. These retard sprawl, and often are more cost-efficient, he said, since the street, drainage and utility infrastructure already may be in place.

“The county spends hardly any of its road budget inside the city limit, although we in Houston pay the same county taxes,” Spieler said.

Emmett and Storey said the big increase in the connectivity budget stems in part from the county’s wrangling earlier in the year with the Texas Department of Transportation.

For the first time, TxDOT sought payment from the county for use of state rights of way for toll roads. TxDOT also put the entire state on notice that it lacks money to expand local roads — a situation unlikely to change soon.

“Some of these road projects would have been funded through the state in the past, but the state has told us they’re not going to spend any money,” Emmett said. “So, rather than us wait around and wring our hands, we said ‘nope, we’re going to get started.’ ”

Another reason for the increase, Storey said, was the decision county officials faced in 2005 over whether to sell, lease or hang onto the toll road system. Financial consultants had said it might bring $20 billion if sold.

Fateful decision

Commissioners decided to keep the asset and ensure that its revenues continue to be spent in Harris County. Even with the connectivity budget increase, Storey said, there will be enough revenue left to maintain the existing tollways and fund at least some of the six projects authorized by the Legislature this summer.These include extending the Sam Houston Tollway from the Eastex Freeway to U.S. 90, extending the Hardy Toll Road from Loop 610 to downtown, building high-occupancy toll lanes along Hempstead Highway and adding toll lanes to Texas 288.

A list of connectivity projects proposed for FY 2008-09, which begins March 1, was not available as Commissioners Court has not decided which will be built or how much each precinct will get.

Link to article here.

Technology Eases the Ride To Higher Tolls
By DAVID LEONHARDT
New York Times
July 4, 2007

There is a stretch of the Garden State Parkway that used to feel like the tollbooth capital of America. In a span of 100 miles — from Pascack Valley, in northern New Jersey, to Barnegat, along the coast — eight different toll plazas greeted drivers. In much of the rest of the country, you wouldn’t find any tolls on a 100-mile stretch.

I spent a good part of my childhood summers at the Jersey Shore, and the tollbooths on the parkway always seemed to be a cruel final obstacle between me and the beach. Every 15 minutes or so, our car would have to stop yet again to drop a measly quarter in a bucket.

The ride is very different today, thanks mostly to the electronic toll system known as E-ZPass. At four of the tolls along the Garden State, the system is so sophisticated that cars barely have to slow down. A little box attached to the car’s windshield sends a message to a computer reader looming over the road, and money is then deducted from an electronic account.

I imagine that some of the children being driven to the Jersey Shore today won’t even look away from their DVD players as they glide through a toll. And I’m quite certain that very, very few of them will remember, decades from now, how much the Garden State tolls cost back when they were young. As a result of E-ZPass and its ilk, even many adults don’t notice the cost of a toll.

Which raises an interesting question: If you don’t know how much you’re paying for something, will you notice when the price goes up? Or has E-ZPass, for all its benefits, also made it easier for toll collectors to take your money?

A young economist named Amy Finkelstein started thinking about these issues a few years ago when she and her fiancé were driving back and forth between Boston, where they were living, and New York, where they were going to be married. So she collected decades of toll records from around the country and found a clear pattern.

After an electronic system is put in place, tolls start rising sharply. Take two tollbooths that charge the same fee and are in a similar setting — both on highways leading into a big city, for instance. A decade after one of them gets electronic tolls, it will be about 30 percent more expensive on average than a similar tollbooth without it. There are no shortage of examples: the Golden Gate Bridge, the George Washington Bridge and the Tappan Zee Bridge, among them.

”You may be less aware you’re paying the toll,” said Ms. Finkelstein, now an associate professor at M.I.T., ”but you’re paying a higher toll than you used to.”

The implications of this go well beyond highways. We increasingly live in an E-ZPass economy, in which bills are paid online, corporate cafeterias are going cashless and people take along their debit card, instead of cash, when they leave the house. Last year, 55 percent of consumer spending was done electronically, mainly with credit and debit cards, while checks accounted for less than 25 percent and cash only 20 percent, according to Visa. As recently as 2003, only 45 percent of spending was done electronically.

The E-ZPass economy is indisputably more convenient. It saves time and frustration. But the old frustrations that came with cash also brought a hidden benefit: they forced you to notice that you were spending money. With electronic money, it’s much easier to be carefree.

Marketers understand this dynamic well, which is a big reason they promote refillable gift cards and other forms of money that don’t feel like money. Part of what’s so intriguing about Ms. Finkelstein’s work is that it suggests that government officials may be coming to understand the dynamic, too.

The idea that hidden taxes — and tolls are really a kind of tax — could lead to higher taxes goes back decades. Milton Friedman famously came to regret his role in creating the withholding system for income taxes during World War II, because it eventually made people forget how much they were paying in tax. ”It never occurred to me at the time,” he wrote in his autobiography, ”that I was helping to develop machinery that would make possible a government that I would come to criticize severely as too large, too intrusive, too destructive of freedom.”

Even economists who don’t share Mr. Friedman’s political views agree with the larger point that how taxes are collected, and not just the underlying tax rate, matters. ”We need to take seriously the possibility that people are not paying attention to the tax code,” said Raj Chetty of the University of California, Berkeley, who has been conducting some fascinating experiments on semi-hidden taxes.

Mr. Chetty argues that the complexity of today’s tax code ends up aggravating inequality. Both rich and poor families face a dizzying spectrum of tax laws, from carried-interest rules to the earned-income tax credit. But affluent families are better able to navigate the system, often by hiring an accountant. Also, the little day-to-day taxes, like highway tolls, mean a lot more to a moderate-income family.

Ms. Finkelstein obviously can’t prove that electronic tolls cause prices to rise by making drivers less aware of them. Neil Gray, the head of government affairs at the International Bridge, Tunnel and Turnpike Association, disputes her argument and says setting tolls is more complicated than Ms. Finkelstein suggests.

But she makes a spirited case for her conclusion. She has considered a number of alternate explanations for the increases and says the evidence doesn’t support them. At the very least, electronic systems do seem to make it easier for toll collectors to increase prices.

There is one notable exception to the trend, though: the good old Garden State. Tolls on the parkway itself have increased only once in the last 50 years, back in 1989, when they were raised to 35 cents. (In the last few years, the price at each tollbooth has doubled, but highway officials have also removed half of the tolls, keeping the effective price unchanged.) Even after E-ZPass, the Garden State Parkway remains a relative bargain.

Of course, Ms. Finkelstein discovered that tolls don’t usually rise as soon as an electronic system arrives. The increases tend to come a number of years later, once electronic payment becomes old hat.

On the Garden State, the first E-ZPass system was installed in 1999. And guess what New Jersey’s governor, Jon S. Corzine, has recently been talking about? Raising the tolls on the parkway for the first time in almost 20 years.

Once a liar, always a liar!

Several years ago Texas Gov. Rick Perry put on his ten-gallon Stetson, saddled-up his tax-paid plane and rode all over the state lobbying to eliminate what he and his special interest health care industry called “frivolous medical malpractice lawsuits.”

Texans were promised that if they voted for this proposal, they soon would see a reduction in the costs of health care and medical related services.

Well, just as in the most recent proposed amendment election where only 8 percent of all registered voters approved ALL 16 amendments, back in 2005 Perry and his good ol’ boys got what they wanted. Proposition 12 was approved and Texans were duped.

Looking at it 2 years later you don’t have to be an Einstein or brain surgeon to see that Perry was touting another pack of lies, just as he did this time re: Proposed Amendment 15, a.k.a., “the cure for cancer.”

Also 2 years ago Perry lobbied to deregulate higher education tuition, promising Texans that doing so would decrease the cost of a college education while making institutions more competitive. That proposition was approved also. After 3 successive tuition increases since the proposal was accepted, tuition costs are the highest ever in the state.

In another 2 years Texans again will see what a load of buffalo chips their governor REALLY is regarding Prop. 15.

By the way, I just got another letter from Blue Cross & Blue Shield of Texas telling me that they have to increase my family’s premium again and another notice from the University of Texas stating it regrets having to increase my children’s tuition!

Peter Stern of Driftwood, Texas, a former director of information services, university professor and public school administrator, is a political writer well-known and published frequently throughout the Texas community and nationwide. He is a disabled Vietnam veteran and holds three post-graduate degrees. 

Link to article here.

Wall St. selloff continues…
FED CHIEF TELLS CONGRESS ECONOMY MAY SLOW SIGNIFICANTLY
By Paul LaMonica, CNN Money Editor
November 8, 2007

In testimony before Congress’ joint economic committee, Federal Reserve Chairman Ben Bernanke says the central bank is concerned about credit crunch and rising oil prices.

NEW YORK (CNNMoney.com) — Federal Reserve Chairman Ben Bernanke, warning that higher inflation and weaker economic growth could be in store, told Congress Thursday that the central bank is keeping a close eye on the subprime mortgage crisis and recent spike in oil prices.

Bernanke, testifying before Congress’ Joint Economic Committee, said in written testimony that since the Fed last met on Oct. 30-31 and decided to cut interest rates, “financial market volatility and strains have persisted.”

“Incoming information on the performance of mortgage-related assets has intensified investors’ concerns about credit market developments and the implications of the downturn in the housing market for economic growth,” Bernanke said in his prepared remarks.

He also expressed concern that the rise in energy prices – oil is now trading at about $97 a barrel – could lead to both higher inflation and weaker levels of economic growth.

“In addition, further sharp increases in crude oil prices have put renewed upward pressure on inflation, and may impose further restraint on economic activity.”…

Link to article here.

Gas Prices Hit $4 In California

SACRAMENTO, Calif. – The American Automobile Association of California says some drivers are now paying $4 a gallon for regular unleaded gasoline. Crude oil prices hit an all-time high Wednesday, above $98 a barrel and analysts say with worldwide oil demand rising — it is still not clear just how high prices will go. In Salinas, AAA recorded an average of $3.39 per gallon. Santa Cruz is at an average of $3.37 per gallon.

KSBW checked and found gas in Gorda, south of Big Sur, is even higher. Drivers there are paying $5 for gas. Over the past two weeks gas has gone up 15 cents in California alone, according to AAA.

This demonstrates the disconnect between the ballot box in a low turnout election today and the growing public sentiment against TxDOT and the direction the Governor and Legislature is taking our highway system….down the path of billions in debt for toll roads that cost 3-4 times as much to build and 20-30 times more expensive to use!

Link to article here.

Dallas voters endorse Trinity toll road
November 6, 2007
By BRUCE TOMASO / The Dallas Morning News
The Trinity toll road lives.

With all but a handful of Dallas precincts counted late Tuesday, a ballot measure to kill the high-speed highway inside the Trinity River levees was losing by a 53-47 margin.

The vote means the city’s Trinity River project, an ambitious plan to transform the barren river corridor, will proceed as planned. In addition to the highway, the project includes increased flood protection, a downtown park and other recreational amenities.

Proposition 1 would have forbidden construction of any road inside the river levees unless that road were four or fewer lanes, had a speed limit of 35 mph or less, and provided direct access to the riverside park.

The language was written expressly to kill plans by the city and the North Texas Tollway Authority to build a high-speed toll road inside the levees.

The Trinity toll road – officially known, much to the chagrin of its opponents, as the Trinity Parkway – would run from U.S. 175 southeast of downtown Dallas to where State Highway 183 branches off from the Stemmons Freeway near Texas Stadium.

The road is envisioned by its designers as a reliever route to help ease congestion along Stemmons and in the freeways that meet in the Canyon and Mixmaster along the southern edge of downtown. State highway planners have said that construction of a reliever route is necessary if work is to proceed on a $1 billion project to untangle the Canyon and Mixmaster.

Nothing in Proposition 1 would prohibit construction of a reliever highway elsewhere. Dallas City Council member Angela Hunt, who led the fight to kill the Trinity road, said she was not against building a high-speed toll road; she was just against building it next to the downtown park that is planned inside the river levees.

At the McKinney Avenue Contemporary theater, where Ms. Hunt was gathered with about 150 supporters, the crowd was taking the early vote numbers in stride.

Former Dallas City Council member Craig Holcomb, a staunch supporter of the Trinity project as currently conceived, called the early totals “a great sign.”

Supporters of the road argued that no good alternative routes existed. The best of a bad lot, they say, would be to run the highway along where Industrial Boulevard and Irving Boulevard are today.

That alignment would require the displacement of more than 230 existing businesses, according to the North Texas Tollway Authority.

Dallas Mayor Tom Leppert and others said acquisition of those business properties through condemnation would result in lengthy and costly litigation with property owners. The NTTA estimates that building the toll road along Industrial would cost at least $300 million more than building it inside the river levees, where the right or way is unobstructed and already owned by the city.

But none of those arguments were persuasive to those who simply thought it foolish to build a toll road next to a park.

Ms. Hunt often joked in debates that she didn’t know of anyone who wanted to have a picnic next to the Dallas North Tollway. Former mayoral candidate Sam Coats, another opponent of the Trinity Parkway, said at one debate that by voting yes, Dallas residents could send this message to the power structure: “You’re not going to screw up this park by putting a tollway in it.”

Until a year ago, the Trinity toll road hadn’t figured in a public conversation, and certainly not a heated one, in a long time. Voters had approved a Trinity road – albeit narrowly – as part of a 1998 bond issue. The proposal withstood several rounds of lawsuits by environmentalists. And in 2003, the Dallas City Council unanimously adopted what became the working design for the toll road – four lanes where it would pass through the central city, six lanes elsewhere, all of them on the downtown side of the river corridor.

Planning along those lines was proceeding – perhaps agonizingly slowly, but without controversy.

Then along came Ms. Hunt, an energetic young trial lawyer with a knack for asking questions and little patience for ambiguous answers.

After her election in 2005, Ms. Hunt was appointed by Mayor Laura Miller to the City Council’s Trinity River Project Committee. As Ms. Hunt tells it, as she attended committee meetings, she grew increasingly frustrated by the lack of precise information from the city staff on the costs and timetable for completion of the Trinity project.

In particular, she said, she grew concerned that the cost of the toll road was spiraling out of control – it’s now $1.3 billion and climbing – while other aspects of the Trinity project, notably the downtown park, remained woefully underfinanced.

The final straw, for her, came last November. That was when the U.S. Army Corps of Engineers informed the city that the toll road would encroach farther into the park. In the wake of the Katrina disaster, the Corps had grown leery of the city’s plans to build the road into the side of the levee – the Corps’ engineers wanted it moved so it didn’t touch the levee at all.

That realignment would reduce the size of the downtown park by more than 40 acres.

Ms. Hunt said enough.

In March, she announced that she would lead a campaign to let voters decide whether to keep or scrap the toll road. In June, she and volunteers from the group she’d started, TrinityVote, turned in boxes of signed petitions to the city secretary.

Ms. Hunt needed 48,000 valid signatures to force her measure onto the ballot. More than 52,000 names that she turned in were validated, and on Aug. 15, the City Council reluctantly approved placing Proposition 1 on the ballot.

The election pitted Ms. Hunt against the mayor and many prominent civic and business organizations. All 14 of her fellow council members opposed her referendum. So did the entire county commissioners court, the entire North Texas congressional delegation, and every Chamber of Commerce in the city. When making his first council committee appointments as the new mayor, Mr. Leppert made a point to exclude Ms. Hunt from the Trinity River committee.

Former Mayor Ron Kirk opposed the anti-tollway measure. So did former Mayor Miller. So did Ed Oakley, the former council member who ran against Mr. Leppert for mayor. So did Veletta Forsythe Lill, Ms. Hunt’s predecessor as the councilwoman from District 14 and her onetime political mentor.

Her opponents raised and spent far more money. The Dallas Citizens Council, representing the leaders of the city’s most prominent businesses, gave $200,000 to the Vote No campaign, by far the largest single donation to either side.

None of that seemed to faze Ms. Hunt. From the beginning, she reveled in portraying the TrinityVote campaign as a populist one, in which the little guy would have his say, no matter what the downtown suits thought about it.

“There are some politicians who want to pave the Trinity,” she said on the day TrinityVote turned in its petitions. “But as of today, that decision is no longer in their hands. … They’ll get a chance to vote on this at the polls like everybody else. But their vote won’t carry any more weight than yours.”

Link to article here. Government goes to those who show up, and with low turnout once again and a dizzying number of amendments to sort through, most didn’t make the effort to educate themselves and go vote so the bad guys win again.

I can tell you who did show up…those wanting the taxpayer-funded government handouts. Like, the highway lobby and bond investors. When you look at the vote totals for the highway bonds versus the other props, a good 20-30% of the vote was shaved off compared to the margins the other amendments passed with, and we did that with next to no resources. Couple that with more vague ballot language that doesn’t mention the words “toll roads,” and TxDOT and the road lobby get their magic potion to rope in enough employees and hookwink enough un-informed voters (who don’t even know that bonds are debt to be repaid with our tax dollars requiring a staggering amount of interest) to get their amendment passed.

TxDOT keeps winning the proverbial taxpayer lottery considering the Legislature just DOUBLED TxDOT’s bonding capacity to $6 BILLION in SB 792 only months ago. It was NO ACCIDENT that proponents failed to mention that while pushing Prop 12 and opining about the lack of funds for roads.

Measures to fund highways, student loans OK’d
By Peggy Fikac
Express-News Austin Bureau
November 06, 2007
AUSTIN — Billions of dollars in bonds for highways, student loans, parks, lockups and other projects, more light on lawmakers’ votes and new protection for family-violence survivors were approved by voters in Tuesday’s election.

Backers celebrated passage of the constitutional amendments as step forward for Texas, although Rep. Warren Chisum, R-Pampa, House Appropriations Committee chairman, kept a certain perspective.

“Each one of them has importance of its own,” he said, but added, “There’s nothing on there that the government would up and quit running over.”

Some supporters and opponents of the ballot proposals, however, waged their arguments as furiously as if the very existence of government depended upon their passage.

The money

The bond proposals pitted advocates of state projects against fiscal conservative groups wary of the debt that must be repaid with interest.The biggest bond proposal, Proposition 12, authorized up to $5 billion for highways and for the first time will allow state road debt to be repaid with state general revenue. Supporters called it crucial to help meet state road needs because gas tax revenue falls short and there’s a hot dispute over how much toll roads should be used. Critics of the Texas Department of Transportation’s toll plans said the agency wasn’t to be trusted with the additional money.

Proposition 4, with a majority of the vote in early returns, would authorize up to $1 billion for a range of government projects. Among them are a new Texas Youth Commission lockup, potential new prisons if state leaders give the OK, repairs to state parks and the Battleship Texas, renovation of facilities for people with mental retardation or mental illness, and new Department of Public Safety regional offices in Rio Grande City, McAllen and Lubbock.

The prison portion of the proposal drew opposition to the entire package from the Texas Criminal Justice
Coalition, which said new prisons are unnecessary. Supporters said it’s important to have the option to build if more prison space is needed and that the other projects are important.

Two proposals would drive more money to programs that help students and people who live in poor areas of the state.

Proposition 2, which was approved, would allow up to $500 million in bonds for student loans in a program that depends on students’ loan repayment to support itself. Sen. Judith Zaffirini, D-Laredo, vice chairwoman of the Senate Finance Committee, said, “I think it will open doors for low-income college students.”

Proposition 16, with a lead in early returns, would authorize an additional $250 million to build water and wastewater infrastructure for economically distressed areas.

The victims

Supporters of Proposition 13, which passed, aimed at providing better protection to family violence victims, citing the San Antonio shooting death of Evairene O’Connor by her ex-husband.Matthew O’Connor, who was due in court for violating a protective order, posted bond and got out of jail, then headed to his former wife’s apartment, killing her and fatally shooting himself, said proposition supporters Rep. Joe Straus, R-San Antonio, and Bexar County District Attorney Susan Reed.

The proposition will allow judges to deny bail to someone accused of a family violence offense if the person had previously been out on bail but had bond revoked for posing a threat. Or judges could deny bail to someone accused of violating a protective order.

The lawmakers

To shine more light on legislative action, Proposition 11 will require lawmakers to record their votes on final passage of all legislation except some local bills. The lawmakers’ votes will be placed in House or Senate journals for public review and be available on the Internet for at least two years.House and Senates rules already require record votes on final passage, but backers said the constitutional amendment will prevent the requirement from being lifted in the future.

The proposal won’t require record votes in other key areas, such as when preliminary approval is given to legislation. Open-government groups supported it as an important step forward.

Link to article here.

Getting the feeling our transportation & energy policies are unsustainable? You’re right! It’s like our politicians are taking our country off a cliff and no one is doing anything about it. See how these oil prices mean toll roads are NO LONGER FINANCIALLY VIABLE here.

Oil Hits $97 on Bombs, Demand Prediction
Crude Prices Soar Past $97 a Barrel on Middle East Bombings, Government Demand Expectations
November 6, 2007
By John Wilen, AP Business Writer

NEW YORK (AP) — Oil futures jumped to a new record above $97 a barrel Tuesday after bombings in Afghanistan and an attack on a Yemeni oil pipeline compounded the supply concerns that have driven crude prices higher in recent weeks.
Those concerns were further fed by a government prediction on Tuesday that domestic oil inventories will fall further this year while consumption rises.

Oil was already up before news of the blasts in northern Afghanistan that killed 64 people and the attack in Yemen. Severe weather forecasts for the North Sea, expectations that domestic crude supplies fell last week and the weak dollar all contributed to the latest move upward.

While Afghanistan doesn’t produce much oil, traders watch for the possibility that any escalation in the conflict there between U.S. armed forces and Islamic militants could spill over into other countries, disrupting oil supplies out of the Middle East.

John Kilduff, vice president of risk management at MF Global UK Ltd., noted that the attack in Yemen “has disrupted a pipeline that carries 155,000 barrels a day of crude.”

Meanwhile, investors believe crude supplies are declining in the U.S. Analysts surveyed by Dow Jones Newswires predict, on average, that crude oil inventories fell by 1.6 million barrels last week. The Energy Department’s Energy Information Administration will issue its weekly inventory report on Wednesday. Oil futures’ rise above $90 a barrel has been fueled in part by two weeks of unexpected declines in inventories.

On Tuesday, the EIA predicted oil consumption will rise in the fourth quarter and next year despite higher prices, and that inventories will fall.

“Strong demand, limited surplus capacity, falling inventories and geopolitical concerns continue to weigh on the market,” the EIA said in its monthly Short-Term Energy Outlook.

The weak dollar, which fell to a new low against the euro Tuesday, is also lifting oil prices. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

Light, sweet crude for December delivery rose $2.63 to $96.61 a barrel on the New York Mercantile Exchange Tuesday after earlier rising as high as $97.07, a new trading record.

Other energy futures also rose Tuesday. December gasoline futures jumped 5.52 cents to $2.4363 a gallon on the Nymex, while December heating oil futures added 6.46 cents to $2.6085 a gallon.

Natural gas for December delivery fell 13.8 cents to $7.861 per 1,000 cubic feet on the Nymex on predictions for mild temperatures next week in the Midwest and Northeast, and expectations that inventories, already at record levels, will continue to rise.

In London, Brent crude rose $2.59 to $93.08 a barrel on the ICE Futures exchange. A number of North Sea oil platforms were being evacuated Tuesday in advance of expected severe weather.

At the pump, meanwhile, gas prices continued to rise, following oil’s 39 percent price jump since August. The national average price of a gallon of gas jumped 2 cents overnight to $3.024 a gallon, according to AAA and the Oil Price Information Service.

Separately, the EIA reported that diesel fuel prices reached a national average of $3.303 a gallon, a new record.

On Wednesday, analysts also expect the EIA to report that gasoline inventories rose by 200,000 barrels during the week ended Nov. 2, while supplies of distillates, which include heating oil and diesel fuel, fell by 500,000 barrels.

The analysts expect that refinery use grew by 0.8 percentage point to 87 percent of capacity.

Oil inventories likely fell due to a suspension of output at Mexico’s state oil company Petroleos Mexicanos, a major crude exporter to the United States, which temporarily shut its ports last week due to severe weather.

“The oil market is really supported by the tight inventories in the U.S. market and the general expectations for the inventory report this week are that the crude inventories will likely fall,” said Victor Shum of Purvin & Gertz Inc. in Singapore.

Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on the how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.

Associated Press Writers Pablo Gorondi in Budapest and Gillian Wong in Singapore contributed to this report.