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By Robert Rapier on Jun 7, 2012 with 11 responses

Why Gas Prices are Higher in the West

I have been traveling for the past week and have not had a chance to do an episode of R-Squared Energy TV. It will return next week. For this week, I thought I would share the video for a recent appearance I made on Insights on PBS Hawaii. The topic was The Price of Gas:

As gas prices continue to climb, Hawaii drivers are experiencing pain at the pump. Guests will discuss the forces that affect global gas prices and why Hawaii has the highest prices in the nation. The panel will also explore energy alternatives that could help reduce the islands’ dependency on foreign oil, as well as innovative solutions from the auto industry.

I was joined on the program by host Dan Boylan and guests Patrick “Rick” Ching, President of Servco Automotive; Richard Parry, President and CEO of Aloha Petroleum, Ltd.; and Kang Wu, Economist and Senior Fellow at the East-West Center.

While the main issue we explored was why gasoline prices in Hawaii are so high relative to the rest of the country, as I explain in the video it is an issue that impacts all states west of the Rockies. A key reason that prices west of the Rockies are higher than they are east of the Rockies is because there is no pipeline connection to bring oil from the new production sites to the West Coast. Further, Japan’s shift away from nuclear power has them using more petroleum to fuel their power plants, and that has tightened up supplies of light, sweet crude oil.

Also discussed was the issue of high oil prices in general.

Link to Original Article: Why Gas Prices are Higher in the West

By Robert Rapier

  1. By Tom G. on June 7, 2012 at 3:07 pm

    Hi Robert:

    This PBS presentation was an excellent substitute for your weekly video. There is only one thing wrong with the presentation; it should have been on national TV in prime time on all the networks at the same time.

    I joined Consumers Energy & R-Squared Energy to learn and that has certainly been the case. I knew almost nothing about the oil industry before joining the site and participating in a few of the discussions. But the biggest advantage of participating in the site has been the ability to learn from subject matter experts like yourself just how complex our energy system is.

     

    Thank you for bringing us this PBS presentation. We should all be able to learn something from the program.

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    • By Robert Rapier on June 7, 2012 at 3:56 pm

      Tom, I haven’t watched the entire episode, but in the clips I have seen I can see that I need to work on my facial expressions. I look very uncomfortable. My wife said I look mad all the time. I thought those other guys all looked pretty relaxed in comparison.

      There was a huge response to the episode. They said they normally have 3 people answering the phones; for this episode they had to put extra people on. At the end we had a huge stack of cards that we didn’t get to. But that probably means we will do a follow-up episode in the not-too-distant future.

      RR

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  2. By Sam Geckler on June 7, 2012 at 8:06 pm

    Robert,

    I enjoyed the video very much, and it’s funny too think about someone so knowledgable in the field being worried about how they look. However that is normal; nobody realizes what they look like on tv!

    On another note, when do we get to know more details about what you’re up to at Merica?

     

    Thanks for all you do to promote energy education!

     

    Sam

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  3. By Russ Finley on June 8, 2012 at 1:03 am

    Nice show. You look perfectly fine on TV. I’d say you look earnest, not angry.

    The fuel cell car will never happen because of the cost of moving and storing hydrogen. Hydrogen may one day be generated and by intermittent power plants like wind and solar and stored to be used to smooth out supply, but even using it for that is presently prohibitively expensive. To pipe it to and store it at gas stations and then pump it at high pressures into cars …forget about it.

    Electric cars won’t become common until battery prices drop. At some price point consumers will start buying them in large numbers because they will pay for themselves in fuel savings. I drove my Leaf 120 miles yesterday because I was able to plug it in twice between errands and commuting. Anyone who consistently spends that much time in a car has my sympathy.

     

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    • By Biocrude on June 14, 2012 at 11:38 pm

      Russ, 

       

      Completely agree about whatever you are driving, if you are doing 120 miles per day, it is incredibly stressful on your body.  

      Also, I like Amory Lovins viewpoint that if we lightened the GVW of EVs, we could put much smaller battery packs in them, make them out of carbon fiber and get them cheaper than economy ICE vehicles.  That is a key part of the solution.  

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  4. By FG on June 8, 2012 at 9:49 pm

    Well, that was pretty good.

    Quite informative without getting too technical. And the panel was well chosen, by competences rather than points of view. I think the subject would have gained from a 5 or 10 minutes segment on the whole chain, production, crude quality, refining, retail. I imagine a few viewers were probably nonplussed by the sweet crude and sulfur business…

    And yes, you looked quite tense compared to the other guys. You need a bit more practice. If you have the time, it’s sometimes a good way to train for public speaking, to tape yourself, take note of the quirks and the kinks and redo a take to improve on delivery, posture, etc. More R-Squared Energy TV episodes !

    In any case, thanks for posting that and helping inform the public.

     

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  5. By mac on June 12, 2012 at 11:08 am

    Robert,

     

    Glad to see you jumped into the conversation when it touched on your expertise.

    Loved the Hawaiian shirts.  I have at least a half dozen of them (and wear them) even though I live here in Texas.

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  6. By Biocrude on June 14, 2012 at 11:34 pm

    Robert,

    Three words for your future youtube videos: more Hawaiian shirts.  

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  7. By Ralph on June 17, 2012 at 1:27 am

    People in the west are more likely to invest in consumer owned solar rooftop PV. The more dollars the energy moguls can suck out of their wallets, the less likely they are to secure their own energy production from free sunshine.  Undermine the economy and keep the status quo in place. Especially in the western desert areas where sunshine falls on millions of acres of earth. What a hilarious waste of a free and abundant resource.

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  8. By mac on June 17, 2012 at 3:29 pm

    RR

    Thanks for mentioning the logistical problems and related expenses involved with actually getting oil to market, a subject often ignored, even on the Oil Drum, when discussing oil prices.  It’s not just a question of comparative production expenses,  Saudi versus West Texas  versus Bakken.  It should be  “Price to Marketplace”.

    We import natural gas from both Canada and Mexico for convenience and price considerations,  just as the East Coast U.S.A. imports LNG,  yet Alaska exports LNG to Japan.

    We also buy electricity from Canada for similar reasons.

     

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  9. By Tom G. on June 17, 2012 at 3:40 pm

    We also have electrical inter-tie connections to Mexico.  

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