Rising gas prices demonstrate the need for offshore development

Washington Examiner | Randall Luthi | June 11, 2018

The Memorial Day holiday weekend marked the start of vacation season for millions of American families. Many of the 37 million Americans who hit the road reached deeper into their pockets than in recent years to fill up their vehicles. Gasoline prices are rising and are already about 52 cents higher than they were this time last year, threatening to put a squeeze on summer vacation plans.

The rising cost of gasoline is an indication that the chickens have come home to roost. In recent years, a combination of low commodity prices, regulatory overload, a sluggish economy, and high inventories of crude oil resulted in an extended period of low gasoline prices enjoyed by consumers. However, after years of slashed energy exploration budgets and fewer new production projects combined with an energy-hungry, rising, global middle class and not-in-my-backyard energy policies means that energy supplies are falling behind energy demand.

This is bad news for states that depend on tourism dollars, like Florida and California. More expensive fill-ups at the gas station and higher air travel costs mean families have less money to spend once they arrive at their vacation destination, if they go at all. Nearly 40 percent of respondents to a survey from the fuel-tracking app GasBuddy said that high gas prices are already impacting their summer travel plans. With prices threatening to exceed $4 per gallon in some areas, today’s high gas prices would cause the Griswolds to think twice about packing up the Family Truckster and driving from Chicago to California.

Even in the best of times, Americans who can least afford higher gas prices are the most acutely impacted. Americans, on average, are now spending 2.8 percent of their disposable income on gasoline. That’s up 2.3 percent from last year and rising. This increase is even more significant for the working poor, who spend a higher portion of their income on commuting than most Americans.

Read full op-ed here.