Black gold, Texas tea

May 21, 2007

Two years ago, motorists had the modest comfort of blaming record-high gasoline prices on the devastation wrought by Hurricane Katrina on Gulf Coast refineries and pipelines. Last week, the U.S. average for a gallon of gasoline hit $3.103, a nickel above the previous week and a new record high - with nary a zephyr to finger as the culprit. It may not be the sharp increase of two summers ago, but, like the frog who sits in a pot of slowly heated water, consumers are still getting poached.

The rising cost of crude oil is at least partly to blame, but growing demand for gasoline and other petroleum products, as well as political uncertainty in oil-producing states such as Iran, Nigeria and Venezuela, are factors, too. It is also customary for gasoline prices to rise in the spring - lower inventories, the switchover of refineries to EPA-mandated summer blend gasoline and increased driving are often cited as seasonal influences. But the recent jump in prices has exceeded the trends of years past.

The oil industry can point to many other factors, some of dubious culpability (among them, an 18-day French port workers strike in March that caused some European refiners to reduce production), but the underlying reality of too-limited supply and too-much demand is inescapable. The worldwide appetite for oil is growing faster than refineries can produce it. U.S. gasoline production has expanded since Katrina, but not by enough to offset the nation's increased appetite for all types of fuel.

In the midst of this imbalance, the fact that oil industry profits have soared should come as no surprise. Last month, Exxon Mobil reported record first-quarter earnings of $9.28 billion, 10 percent above the same period last year. Why? Because each barrel of oil the company pumps or refines fetches more money on the market than it ever has.

Make no mistake: The $3 gallon of gas is no novelty. While prices may decline slightly by Memorial Day, they're likely to rise again by summer. And while it's likely the world's refineries will produce even more gasoline than they do today, the days of plentiful oil have clearly come to an end. The best long-term solutions would promote both conservation and energy alternatives - something Washington hasn't done effectively.

For drivers, the only certain help would be to use less of this limited resource. That's easier said than done (decent mass transit would certainly make the task easier), but there are steps to be taken, from choosing more fuel-efficient cars to driving less aggressively and carpooling. Such policies not only save money, they also reduce pollution and promote a healthier lifestyle. Ultimately, that's got to be better than just getting boiling mad at the pump.

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