This week I spent $65 filling up a tiny car in Oakland, CA, and that was at the off-brand "cheap gas station" in town. I'm not alone - California is experiencing record high gas prices, jumping 50 cents a gallon in one week and shooting well above $5 in some parts of the state, prompting Senator Diane Feinstein to call for a federal investigation into the price spike.
Seriously, what the heck is going on here?
We won't get a reliable explanation answer from the fossil fuels industry, whose typical response to these all-too-frequent spikes is, "More drilling + less environmental protection = cheaper gas prices."
First off, we know a few things about gas prices and drilling. There is "no statistical correlation between how much oil comes out of U.S. wells and the price at the pump," according to a 36-year analysis of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by the Associated Press. U.S. oil production is at a 10-year high, with no significant impact on prices.
We should also note that the uber-wealthy oil companies are pocketing record profits of $500 million every month from Californians, and nationally, an additional 25 cents in the price per gallon of gas at the pump every three months equals an additional $5 billion in profits for the big five oil companies.
Could California's landmark fuel standards and environmental protections be the culprit? The oil industry is quick to make the argument that the pain is self-inflicted.
Here's my issue with this argument: there is no such thing as "cheap gas". Someone is going to pay the bill for less environmental protection, and we all know who it is.
I've written numerous times that Latinos, low-income folks, and other disadvantaged communities are disproportionately paying the price for burning fossil fuels in both economic, and more prominently, public health costs. In fact, California is home to the top 5 most polluted cities in the country according to the American Lung Association, and Latinos make up more than half of all residents in these polluted cities. Add to this the threat posed to all communities by climate change and extreme heat, which exacerbates pollution and public health issues like asthma and other respiratory diseases.
One of the top reasons for all of this devastating pollution is vehicle emissions.
So what now? How do we help all communities, including Latinos who are bearing the brunt of the pain, become less vulnerable to price spikes and public health hazards?
The short answer: We need functional, alternative options to increase mobility and decrease fossil fuel use.
Chief among those options should be investments in alternative fuel vehicles and public transit. And here is the exciting part, it is already happening in California. My colleagues at the Environmental Defense Fund have laid out a terrific analysis of how California's aggressive clean fuel standards help us hedge against spikes in gas prices. Likewise, the Natural Resources Defense Council has produced a bold vision for investing in the state's transit infrastructure. These are excellent starting points for conversations that focus our attention on decreasing our vulnerability and using less fossil fuel.
This current gas-price frenzy feels like just another blip on the yearly debate over high gas prices and who is to blame. While no one can really predict what gas prices will look like in the future, we do know that we will all continue to be subject to price spikes and public health impacts until we realize some fundamental truths: Fossil fuels make us vulnerable, oil companies profit from price-spikes, and strong environmental laws will result in better air quality, more investments in transit, and cleaner, more sustainable fuel sources.
We are paying for fossil fuels with our wallets and our health - there is no such thing as "cheap gas".
Jorge Madrid is a policy fellow with the Environmental Defense Fund, based in San Francisco, CA. He is on the Board of Directors for Voces Verdes, the national independent, non-partisan voice of Latino leaders for the environment.
Not every barrel of crude costs the same to extract as the next.
I doubt it as you seem to think that since this country has more oil being produced now than over 20 years ago that prices should be dropping. Yet you make NO acknowledgement that population in this country has eaten away at that gain almost exactly in increased demand. Add into the mix that we get a LARGE amount (and we have for well past your 20 year period) of our oil from other countries. Those other countries don't give one wit about this country and will sell to the highest bidder.
So when we massively and artificially increase the population of this country through immigration we also massively and artificially increase the demand for oil. Since domestic production has not increased MORE than demand the price increases. Since demand worldwide has increased dramatically that price has gone up even more. So we get higher prices - period.
You want the prices to come down? Then support sustainability and NO population gain for this country through stopping all but those few immigrants we desperately need (think select scientists/doctors) and stopping all the rewards and incentives to breed.
You could also support the expansion of CNG use for vehicles. We have a massive supply of that fuel here and the price is reasonable - about 1.70 a gallon.
The cost of the crude alone is about 2.56 a gallon now. Add in over 60 cents a gallon in taxes.
Refining, distribution, marketing and profits all together make up about 1.40 a gallon. We know most profits run about 4% or so for big oil and that means about 16 cents a gallon.
Of course the stations also make a profit, the refinery makes one and the big rigs that deliver it make some too. But out of 1.40 all the profits combined can't be a lot - I really have no idea how much total but I'd bet (and most people agree) no more than 50 cents - less than the taxes.
Really?
How much would I have to pay you to ride a bike 15 miles to a store to buy groceries for me?
In the middle of winter, 5 degrees, 1 foot of snow. 5 bags of groceries. 3 family members.
My car does it for me, including stereo, TV, DVD, heat, air, soft/heated leather seats, etc.
Total gas cost? $2.
For what you get, gas is EXTREMELY cheap and convenient.
Toyota gets technology to produce hybrid vehicles without rare earths - The Mainichi Daily News
Green Car Congress: Hitachi develops 11 kW permanent magnet motor without rare earth materials
Green Car Congress: Nissan announces Green Program 2016; targeting cumulative sales of 1.5M zero-emission vehicles across Alliance; new fuel cell electric vehicle with Daimler, new Nissan PHEV
Green Car Congress: Audi unveils e-gas project: synthetic methane from the methanation of green hydrogen; series production of CNG models in 2013 powered by e-gas
Green Car Congress: Mercedes-Benz F125!: fuel cell plug-in hybrid with Li-sulfur battery and structure integrated hydrogen storage with MOFs
I own an alternative fuel vehicle. These vehicles cost a premium. Part of the reason I bought it was so I could drive to work in the car pool lane. Starting November 10, I no longer get to use the car pool lanes that I use to get to work. It's an experiment to raise more money. I'll switch back to my Jeep Wrangler with over sized tires November 10. It's not very clean but with the OVERSIZED TIRES merging is much less stressful!
I'm wondering when the state will start taxing my new solar panels.
Hey in this state they change the rules so often I can understand why they have to have a special Proposition 39 to slow businesses from leaving this state!
In 2008 May, before presidential debate and political events makes people's opinion biased, http://money.cnn.com/2008/05/01/news/international/usgas_price/ CNN money writer Steve Hargreaves, wrote, "Gas price: It's all about government policy. Gasoline costs
roughly the same to make no matter where in the world it's
produced, according to John Felmy, chief economist for the
American Petroleum Institute. The difference in retail costs,
he said, is that some governments subsidize gas while others
tax it heavily.
In many oil producing nations gas is absurdly cheap. In
Venezuela it's 12 cents a gallon. In Saudi Arabia it's 45.
The governments there forego the money from selling that oil on the open market - instead using
the money to make their people happy and encourage their nations' development...."
The big difference being: As less and less coal/oil is used to make electricity for cars... the electric cars are already in place... and instantly benefit, week by week to a cleaner America, WITHOUT having to buy new cars again and again.