Column: Kyle Troutman: Kyle Troutman: The cost of summer fun (05/21/22)
Summer is approaching and gasoline prices have been warmer than the weather.
The national average per gallon at the pump is the highest it’s ever been at $4.56, which luckily is 57 cents more than the nearest gas station as of this writing.
Still, that average rose 44 cents last month and $1.69 from last year, according to the Associated Press.
Why is the gas so high? There is no short answer to this question, but there are some things we can assess and draw conclusions.
The biggest culprit is – you guessed it – Vladimir Putin. But wait, shouldn’t President Joe Brandon, I mean Biden, have more control to prevent such dramatic increases?
Consider this, in 2021 the United States was the world’s largest gas producer, producing 11,184,870 barrels per day. If you missed the first estimate, I bet you will know who the second largest oil producer is. This is Russia at 10,111,830 barrels per day. Beyond that, Saudi Arabia produces 9.3 million, then there is a sharp drop in Canada to 4.5 million.
Gas prices began to take a more dramatic turn around February 27, the day Russia invaded Ukraine. On February 28, the United States Energy Information Administration (EIA) reported that gas was at $3.60 per gallon. A week later it was $4.10 a gallon. It hit $4.32 before falling back to $4.06, but is now at its all-time high.
This invasion triggered a response from the rest of the world. Should we buy oil from Russia as it invades another country? The resounding answer was no.
Because of this, the world lost 10% of its total oil. Lack of supply, plus high demand, equals higher prices. Less than 2% of US supply comes from Russia, but global oil markets have impacted that 2%.
We saw the opposite just two years ago. Oil prices crashed in 2020 amid global shutdowns related to the COVID-19 pandemic and stay-at-home orders. Low demand and high supply equals lower prices.
Many affordable trips were probably planned, and even taken by some, when they were more affordable.
Now, those who didn’t take those trips then are eager to take one now, creating the demand that allows prices to rise so intensely.
So what can we do?
On March 31, Biden released 1 million barrels of oil a day from the country’s Strategic Petroleum Reserve for six months. He says the answer is more supply, which makes sense. It also made two other exits from reserves without causing a major change in the markets.
This time, he said he expects gasoline prices to drop “quite significantly,” like 10 to 35 cents a gallon. For now, things seem to be going the other way.
There’s also something to be said for the relationship between gas and inflation, and the president’s hand in the latter part. Maybe we’ll save this for a different column.
The only way to have a more significant long-term impact on the oil supply is to dig it up and refine it yourself. Could we increase oil production inside the country? The short answer to that is yes.
The long answer involves a lot more talking about environmental impacts and navigating the morality of issuing more drilling permits and building refineries. Another topic also for another time.
So if there doesn’t seem to be any major relief coming, what other options are there?
You could bypass gas entirely with an electric vehicle.
At the Barry Electric Cooperative’s annual meeting recently, BEC Board Chairman David Cupps displayed his own personal electric vehicle, ready to tell anyone how it worked for him.
“I see these gas prices going up, and I’m not stopping to get any,” he said.
Cupps may be a few decades ahead of the curve because no matter who invades who or how many drilling licenses we issue, oil is limited.
According to the EIA’s International Energy Outlook 2021, global supply of crude oil, other liquid hydrocarbons and biofuels is expected to meet global needs through 2050.
After that, there is “substantial uncertainty about future supply and demand levels for liquid fuels.”
It’s 28 years old. My daughters will be 35 and 28. We will literally offer them a world different from ours in terms of energy consumption.
The problems of today must be addressed, but they must not overshadow what we need to do for our future.
Kyle Troutman has been editor of the Monett Times since 2014. In 2017, he was named William E. James/Missouri Outstanding Young Journalist for daily newspapers. He can be reached at 417-235-3135 or [email protected]