Monday, February 23, 2009

Gas Prices in the US

Gas Buddy has an interactive map of gasoline prices for every county in the 48 most important states in the US.

You can also zoom in to see even more fine-grain data, like this. Handy! You can know just what neighborhood, and even what specific gas station in town to go to to get the cheapest gas. At the broader scale, you can clearly see the effect state-level policies have on the price of gas - something that not a few New York drivers who live close to the New Jersey state line are keenly aware of. As usual, the West Coast leads the way on priciness, thanks mostly to higher taxes in those states (though those of you in Europe will chortle at $2.20/gallon being considered "pricey" - it generally costs several times as much in England, for instance).

And, while prices are barely half of what they were last summer, before the global economy (and therefore global demand) did it's coyote-over-the-cliff impersonation, they're starting to creep up again. Weirdly, though, this is despite the fact that oil prices continue to fall. What gives? This, evidently:
The benchmark for crude oil prices is West Texas Intermediate, drilled exactly where you would imagine. That's the price, set at the New York Mercantile Exchange, that you see quoted on business channels and in the morning paper.

Right now, in an unusual market trend, West Texas crude is selling for much less than inferior grades of crude from other places around the world. A severe economic downturn has left U.S. storage facilities brimming with it, sending prices for the premium crude to five-year lows.

But it is the overseas crude that goes into most of the gas made in the United States. So prices at the pump will probably keep going up no matter what happens to the benchmark price of crude oil.
Even oil drilled in North Dakota and Canada is going for about $10 more per barrel than the stuff from Texas, which accounts for the higher prices in the northern Great Plains.

Of course, the prices paid at the pump are only the direct costs of gasoline. There are also the indirect costs of a massive military apparatus which is necessary to maintain access to oil supplies in the middle east; the cost to human development of oil-funded rights-suppressing governments from Africa to Asia; and the long-term and incalculable costs of the global warming processes that are being furthered every time we fill up our tanks. Those costs don't mount on a spinny little dial right before our eyes, so we tend not to count them, of course. But they are very real, and growing with every passing year.

Having said that, gas in the US is still extraordinarily cheap. Consider:

Refined gasoline costs less than bottled water. (UPDATE: see comments for a different take on this point) Prices have a lot of room to grow. And with a commodity as inherently valuable as oil, the chances are near to certain that, in the long run, they will.


Anonymous said...

"Refined gasoline costs less than bottled water. "

Love the blog, and like the post, but this last part is repeating an urban myth that does more harm than good.

If you purchased water in 20 oz increments, yes, a gallon would cost more than a gallon of gas. But when you buy a jug gallon of water it's cost is far less than gasoline. Example:

Chachy said...

Anon - the link didn't work for me, but thanks for that observation; I think you're right. But most bottled water is bought in 20 oz or so increments, so in terms of (price paid/amount consumed), I think it's valid to say oil costs less than bottled water. Also, bottled water is like the ultimate example of a product that's bought with discretionary spending. It's not something that needs to be bought by anyone, except in rare cases. The fact that oil - literally, the very lubricant of the global economy, and a necessity for very many purposes - is priced in the same range suggests both that the price has a lot of room to grow and that our lifestyles have a lot of room to adjust to greater scarcity (i.e., higher prices) of oil.

Anthony said...

I wonder how the demand for heating oil in the northern hemisphere plays in to this? That is the usual reason given for higher prices in the winter...

Chachy said...

I'm not sure. Demand for heating oil ought to drive up the price of crude, but if it did then that would drive up the price of gasoline commensurately, right? But with all this extra stuff in inventory, maybe it wouldn't matter as much.

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