Posts tagged “gas prices”
Falling gas prices around the country have motorists breathing a sigh of relief, but a Mitt Romney campaign that has used rising fuel costs as a weapon during the lead-up to the presidential election may not be so happy to see pump prices dropping.
After relatively small drops over the first half of October, residents of some states are seeing prices as low as $3.20 per gallon, a major decrease from the $3.84 many drivers were paying only a few short weeks ago. While acknowledging that the cost of fuel is difficult to predict over the long-term, analysts remain optimistic that prices will continue to fall, potentially as low as a national average of only $3 per gallon, a rate not seen since 2010.
Can Oil Supplies Grow Fast Enough to Keep Prices in Check?
I, along with my editor Sam Avro, recently conducted a broad-ranging interview with John Hofmeister, former President of Shell Oil and currently the head of Citizens for Affordable Energy, a non-profit group whose aim is to promote sound U.S. energy security solutions for the nation. In the first part of this interview Mr. Hofmeister spoke of A Difficult Decade Ahead For Oil Prices and Supplies. In this installment, he sets forth his vision of a sound energy policy for America.
The Hofmeister Energy Plan
Mr. Hofmeister’s plan consists of the following elements:
- Set a national objective in the United States to get back to the production level of the 1970s and 80s of 10 million barrels a day;
- Reduce our imports by 5 million barrels a day by using natural gas as an alternative to the internal combustion engine oil products:
- Use compressed natural gas for trucking to displace 2 million barrels a day of imported oil, and,
- Convert natural gas to methanol for flex fuel engines to reduce imports by another 3 million barrels a day;
- Continue the journey toward more higher efficiency automobiles and continue the journey to more electrified vehicles as well, both batteries and hydrogen fuel cells.
Koch Brothers fund campaign aimed at highlighting the rise in gas prices since President Barack Obama was inaugurated
With gas selling for more than $4 per gallon in some parts of the country leading up to the presidential election, one political activist group is looking to sway voters by offering them fuel at less than half that price.
Drivers lined up by the hundreds outside of Rainbow Markets in Reno, Nevada earlier this week to take advantage of gas priced at only $1.84 per gallon — the same price that was found on fuel pumps across the country when President Barack Obama took office in January 2009. (See also: How High Have Gas Prices Risen Over the Years?)
Organized by a group known as Gas Can Man and funded by the PAC Morning in America radio show and billionaire brothers David and Charles Koch, leaders of the Americans for Prosperity organization, the exclusive fuel deal was offered in order to highlight what those groups see as President Obama’s failed energy policies, policies they say have lead to untenable gas prices.
Think gas is expensive where you live? Some drivers in New Jersey and Pennsylvania visiting a Lukoil gas station in order to fill up their tank since yesterday have been facing prices of up to $9.99 per gallon. Luckily for those drivers, the posted price is an effort by Lukoil franchisees to protest high fuel costs passed onto them by their parent company; customers will only be paying about $3.80 per gallon at the pump. (See also: How High Have Gas Prices Risen Over the Years?)
The national average is currently at $3.83 per gallon, though AAA is expecting gas prices to begin falling steadily by mid-September.
In this week’s episode of R-Squared Energy TV, I answer two gasoline-related questions. One is on how ethanol is impacting current gasoline prices, and whether that increases the chances of a waiver for this year’s Renewable Fuel Standard. The other is on the impact of the Chevron refinery fire in California.
West Texas Intermediate crude oil, which had been selling for $105 a barrel at the end of March, fell to $80 a barrel last week, while Brent has come from $125 down to near $90. These price declines will translate into substantial savings for U.S. consumers in the weeks ahead.
Since Brent and WTI diverged, it has been Brent that matters for U.S. retail gasoline prices; this fact and the reasons for it were discussed here. A regression of the average U.S. retail gasoline price on the price of Brent over 2000-2012 captures the close relation (OLS standard errors in parentheses):
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.
In this week’s episode of R-Squared Energy TV, I answer the following questions:
- What are the chances that electric vehicles will be more than a boutique item, and will make up a noticeable portion of cars on the road by 2020?
- Do you agree with the recent report from the Natural Resources Defense Council (NRDC) that building the Keystone Pipeline will raise gasoline prices?
In this week’s episode of R-Squared Energy TV, I cover:
- Japan’s decision to abandon nuclear power (which will contend for the top energy story of the year — regardless of how it plays out)
- ConocoPhillips’ successful methane hydrates drilling test in the Arctic, and whether that means that methane hydrates will soon be a viable energy option
- The likelihood that gasoline prices have indeed peaked (for now)