Last week I was in Central Florida, marveling at gas prices that hovered right around $2.03 a gallon at many stations. When I came home, my neighborhood convenience store was offering it for $2.68.
Let’s launch an investigation.
As silly as that sounds, it’s not out of line with how Americans tend to react to the supply-demand-politics-and-terrorism influenced ups and downs of the prices we pay at the pump.
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You don’t have to look far to see this in action. One month ago, two Republican state lawmakers in Michigan started calling for an investigation into the sudden rise in gas prices, which experts blamed on problems that caused the temporary shutdown of a refinery, according to the website nwitimes.com. Prices had risen to an average of $2.96 per gallon in Michigan and a whopping $3.16 in Illinois. Conspiracy was in the air. Then the winds changed.
Today, the average gallon in Flint is $2.26, according to gasbuddy. In Chicago it’s $2.69. Lawmakers and state attorneys have moved on to other things.
Not to be outdone, two weeks ago in Alaska a state representative called for an investigation because prices remained above $3 per gallon there despite the cost of a barrel of oil being much lower than it was in 2007, when prices were $2.40 per gallon. TV station KTVA noted that such an investigation during a period of high prices in 2008 revealed nothing illegal.
State officials likely would find a similar result today, but prices in Anchorage are down to $2.88, so we may never know.
Utah isn’t immune to this crisis-conspiracy way of thinking. As far back as 1989 I was writing news stories about the state attorney general asking for an investigation into rising prices.
When prices come down again, people smile, exhale and act as if they knew there was nothing to worry about. Then they forget they ever were angry. State government officials hope the experts’ predictions of gas falling close to $2 a gallon will come true some time before Election Day in November, when many Utahns will be asked to approve local gas tax increases.
Clearly, this would be no way to run a national energy policy, if we had such a thing.
Richard Nixon was the first president to address anything known as an energy crisis. In 1974, he unveiled Project Independence, which he said would, by 1980, “take us to a point where we are no longer dependent to any significant extent upon potentially insecure foreign supplies of oil.”
He ended that speech by saying, “Years from now, let us look back upon the energy crisis of the 1970s as a time when the American spirit reasserted itself for the lasting benefit of America and the world.”
Today, the United States has repositioned itself as the world’s leading producer of oil, but that came about because of private-sector breakthroughs in extraction, not any government program. Meanwhile, concerns about pollution and global warming have led to a smattering of alternative-fuel vehicles on the road, but sales of sport utility and other large vehicles are climbing again.
It may be counter-intuitive, but now would be a good time to enact greater incentives to spur the kinds of breakthroughs that make alternatives affordable. Instead, states hike taxes to build and maintain new roads, while Congress seems content to let the good times roll.
Six years ago, during a similar time of sagging prices, I interviewed T. Boone Pickens. He was convinced natural gas was the way to defeat terrorists. Today he has spent more than $100 million to bring that about, according to Time magazine. He has called on every candidate for federal office to focus on creating a national energy plan.
In 2009 he recited an old cliché to me: “If you're going to plant a tree, the best time to do so was 20 years ago. You'd have a great tree now. But the next best time to plant it is today."
But today, prices are falling, so we keep the seeds locked away. A U.S. dominated oil market does not mean we have escaped volatility. It just means we won’t call for silly investigations for awhile.