Matthew Paolini asked:
Gasoline prices have been steadily climbing for quite a while - though the costs around the nation have dropped slightly in the past week — and are threatening to become ‘the’ story of the summer. The countrywide average price for a gallon of unleaded regular gasoline now stands at just above 3 dollars, up a full 25 cents from one year ago.
Many are blaming the ‘Big Oil’ companies, who are reaping huge profits from the high gas prices. However, in an industry as complex as the oil/gas business it is difficult to figure out exactly what the causative factors are. Analysts have run the gamut, from accusing oil companies of pure greed, to complaining about the lack of domestic oil refining capacity, to acknowledging that the supply of oil may be decreasing globally — although those who believe the latter are certainly in the minority at present.
Gasoline consumers nationwide are justifiably worried about the rising prices. Recently in Texas the average price of retail gasoline rose for a 14th straight week. A weekly AAA-Texas gas price survey showed uneven price trends, with costs reaching record highs in some areas but going lower in others. AAA spokeswoman Rose Rougeau said that Texas cities Amarillo and El Paso recently set new record highs, while costs edged lower in eight other cities. Rougeau asserted that strong consumer demand, reduced domestic output because of refinery issues and lower gas imports apparently are all working to keep prices high.
In nearby Arizona, gas costs also recently rose for approximately 14 week in a row. According to an AAA-Arizona survey, the statewide average for a gallon of self-serve unleaded regular was 3 dollars and 9 cents per gallon. That’s a penny below last summer’s highest price, and getting closer to the all-time record of 3 dollars and 13 cent per gallon set in September 2005.
In relation to the theories of why gasoline costs keep going higher, the shortcomings in oil refining capacity seems to be the most popular response. Some industry observers blame Congress, saying that the legislators are preoccupied with forcing domestic automobile companies to meet unreachable targets for fuel efficiency, while not taking the time to address the oil refining issue. On May 8, the Senate Commerce Committee voted to raise fuel economy standards to an average of 35 miles per gallon in 2020 for cars and light trucks, with standards rising by 4 percent annually until 2030.
According to some industry commentators, Congress has discouraged the construction of new oil refining capacity through proposed legislation that punishes refiners when prices rise, that levies extensive and expensive permit requirements for construction of new refineries and expansion at existing sites, and that allows for a degree of tort risk.
Construction of more refineries would certainly ameliorate the problem of supply, but because they can be so damaging to the surrounding environment, it is very problematic to find a community that will approve of a new refinery. Under the logic of ‘NIMBY’ (Not In My Backyard), consumers like to purchase gasoline at low prices, but they don’t want a refinery close to home.
Gasoline prices have been steadily climbing for quite a while - though the costs around the nation have dropped slightly in the past week — and are threatening to become ‘the’ story of the summer. The countrywide average price for a gallon of unleaded regular gasoline now stands at just above 3 dollars, up a full 25 cents from one year ago.
Many are blaming the ‘Big Oil’ companies, who are reaping huge profits from the high gas prices. However, in an industry as complex as the oil/gas business it is difficult to figure out exactly what the causative factors are. Analysts have run the gamut, from accusing oil companies of pure greed, to complaining about the lack of domestic oil refining capacity, to acknowledging that the supply of oil may be decreasing globally — although those who believe the latter are certainly in the minority at present.
Gasoline consumers nationwide are justifiably worried about the rising prices. Recently in Texas the average price of retail gasoline rose for a 14th straight week. A weekly AAA-Texas gas price survey showed uneven price trends, with costs reaching record highs in some areas but going lower in others. AAA spokeswoman Rose Rougeau said that Texas cities Amarillo and El Paso recently set new record highs, while costs edged lower in eight other cities. Rougeau asserted that strong consumer demand, reduced domestic output because of refinery issues and lower gas imports apparently are all working to keep prices high.
In nearby Arizona, gas costs also recently rose for approximately 14 week in a row. According to an AAA-Arizona survey, the statewide average for a gallon of self-serve unleaded regular was 3 dollars and 9 cents per gallon. That’s a penny below last summer’s highest price, and getting closer to the all-time record of 3 dollars and 13 cent per gallon set in September 2005.
In relation to the theories of why gasoline costs keep going higher, the shortcomings in oil refining capacity seems to be the most popular response. Some industry observers blame Congress, saying that the legislators are preoccupied with forcing domestic automobile companies to meet unreachable targets for fuel efficiency, while not taking the time to address the oil refining issue. On May 8, the Senate Commerce Committee voted to raise fuel economy standards to an average of 35 miles per gallon in 2020 for cars and light trucks, with standards rising by 4 percent annually until 2030.
According to some industry commentators, Congress has discouraged the construction of new oil refining capacity through proposed legislation that punishes refiners when prices rise, that levies extensive and expensive permit requirements for construction of new refineries and expansion at existing sites, and that allows for a degree of tort risk.
Construction of more refineries would certainly ameliorate the problem of supply, but because they can be so damaging to the surrounding environment, it is very problematic to find a community that will approve of a new refinery. Under the logic of ‘NIMBY’ (Not In My Backyard), consumers like to purchase gasoline at low prices, but they don’t want a refinery close to home.
