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Kelly Hawes: Why gas prices are so high
By KELLY HAWES
Thursday, March 17, 2022 9:40 AM
ANDERSON – My dad once accused me of trying to wean my car off of gasoline. I had again run out of gas while trying to stretch that last bit of fuel a little farther.
I still press my luck occasionally. Just the other day, I coasted into a gas station with the gauge registering just above empty. I had seen the price going up, of course, but the total was still a shock. I had grown accustomed to a full tank of gas setting me back less than $40, but the price on this particular day was nearly $60. And that was before the price of a gallon went above $4.
I’m not alone in complaining. If you’ve spent any time on social media lately, you’ve no doubt seen lots of people lamenting the price of gas. Some blame Joe Biden. They point out that the United States was energy independent under the leadership of Donald J. Trump only to lose that distinction after Biden took office.
Those folks might want to check out the headline on Robert Rapier’s recent article for Forbes. “Surprise!” it says. “The U.S. Is Still Energy Independent.” Rapier, a 25-year veteran of the energy industry, says the export-import totals bounced back and forth in the last two years under both Trump and Biden. Some months, the United States imported more oil than it exported. Other months, it was the other way around.
“But, the full calendar years of 2020 and 2021 both turned out to be net export years,” he writes.
Still, some Biden critics blame cancellation of the Keystone XL pipeline at least in part for the recent rise in gas prices. In his own article for Forbes, financial analyst Mike Patton rejects that argument. He notes false claims that people like Warren Buffett are profiting from the pipeline’s cancellation because it means oil coming from Canada will have to be transported by rail.
Instead, he says, much of the oil will continue to move through the existing Keystone pipeline, which has plenty of capacity to handle the increased volume. “In short,” he writes, “the effect of this action on rising gasoline prices is negligible.”
So what is behind the rising prices? In an article for CBS MoneyWatch, Aimee Picchi says it all started with COVID-19. “When the pandemic first hit the U.S. in March 2020, demand for gasoline plummeted as Americans sheltered at home due to nationwide lockdowns,” Picchi writes. “The typical driver cut their driving in half, according to AAA.”
Excess supply meant cheaper gas. The average price of a gallon dropped to $1.94 in April of 2020. Production fell with the decline in demand, and then as the global economy began to recover, suppliers were slow to react.
“We’re nearing pre-COVID levels for consumption, but production is still lagging,” says Patrick De Haan, GasBuddy’s head of petroleum analysis. “OPEC didn’t start increasing production until July 2021. They were already too late. They were severely behind the curve.”
And then along came Vladimir Putin and the Russian invasion of Ukraine. “The U.S. imports less than 10% of its oil and gas from Russia,” Picchi writes. “So why are prices rising so much in the U.S. if the nation doesn’t depend on Russia for fuel?”
De Haan blames the larger global market. “When the U.S. issues sanctions, that has wide ramifications on the ability of Russia to export oil,” he says. “We don’t import a lot, but somebody else does, and we are making it difficult for Russian oil to flow to the global market, and prices are reacting to that.”
Picchi says it’s possible the average price for a gallon of gas could reach $5. It’s already above that in some places, such as California.
Maybe I really do need to find a way to wean my car off of gas.
Kelly Hawes is a columnist for CNHI News Indiana. He can be reached at kelly.hawes@indianamediagroup.com. Find him on Twitter @Kelly_Hawes.
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Christy Stutzman to seek 2nd CD
"This has been such a difficult week and amidst all of the heartbreak, there has been much speculation. I wanted to let everyone know that regarding the caucus and special election to fill the Indiana 2nd Congressional district seat left vacant by the sudden loss of Congresswoman Jackie Walorski, I will be making an announcement next Monday, August 15th. I would ask for your prayers."
- Former Republican legislator
Christy Stutzman
, on Facebook announcing she week seek the open 2nd CD nomination, which the caucus will take place at 11 a.m. Aug. 20.
State Rep. Curt Nisly
filed on Thursday with the Indiana secretary of state's office and Importantville reports that disgraced former attorney general
Curtis Hill
may run. The seat is open due to the death of
U.S. Rep. Jackie Walorski.
Stutzman resigned her Indiana House seat shortly after she was reelected to HD49 in 2020. Hill lost renomination for attorney general in June 2020. Nisly lost his GOP primary race in May.
Dean Swihart,
husband of the late congresswoman, has said he will weigh in to her successor.
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