Gas prices in context

Politicians possess some of the longest memories I’ve ever encountered. As someone who’s written political opinions for more than 20 years, I sometimes meet political operators still mad about something I literally forgot writing. Politics is a grudge business, with loyalty a commodity to be traded like oil and stored in strategic reserves.

And yet, political chatter seems to have no memory at all. Issues come and go like mild headaches. Sometimes ideas rage into a storm only to dissipate faster than flatulence in a wind tunnel. 

This is one of the most cynical things about the business. Politicians who forget nothing are bound to exploit the fact that most people don’t pay that much attention to politics. 

Lately, the issue that upsets many of our friends and neighbors is the price of gasoline. I hesitate to quote a price in this column because I’m writing this a week before it will run. But I’d bet that gas costs a lot today, given the current state of the world oil markets. 

Let’s review the situation. A major oil producing country, Russia, invaded a democratic neighbor over false accusations that their Jewish president is a Nazi. What they really want is territory and power. They have nuclear weapons, so the free world — the U.S., U.K., Canada, and European Union in particular — must use economic sanctions to try to topple Russia from the inside. The longer we can press Russia, the better chance Ukraine has to resist the invasion. 

At the same time, our country is emerging from a tough winter of high COVID-19 case rates with real hope of a much better spring and summer. People are planning vacations, buying plane tickets, and the general economic outlook appears very strong. But that increases demand. Gas prices always go up in summer because more people are driving. That’s how supply and demand works. Add a dose of post-COVID euphoria and you’d see prices spike even without the Russia stuff. With the Russia stuff, oof, we’re in for it. 

Believe it or not, the president — current, former, or the one before that — has relatively few tools to control gas prices. The market is a far more powerful indicator. No, approving permits for the Keystone XL pipeline would not have alleviated this particular situation. And no, the U.S. is not reducing its oil production. In fact, our American oil and gas industry is producing more than ever, and actually exporting oil. 

Oil companies could produce even more gasoline to bring prices down. They aren’t, though. Judd Legum of Popular Information quotes shale oil executives saying their stockholders demand they limit production to increase dividends. 

Even so, American gas is always cheaper than gas in Canada and Europe because we subsidize it and tax it lightly, by comparison. Those other countries have it worse, and yet somehow figure things out.

Gas above $4 a gallon isn’t a policy choice; it’s a market reality. Companies charge that much because they can and if they could charge that much but didn’t the people who run the companies would be fired. If you don’t like this, peruse some Marx at your local public library and consider your alternatives.

I distinctly recall gas costing more than $4 per gallon in the not-so-distant past. Right before the economic collapse of 2008, prices were that high, and approached that number again just eight years ago. In both cases, the prices were tied to economic booms and then fell when the economy cooled off.

Commodities sold on open markets are both incredibly dangerous and potentially profitable investments. The potential reward often outweighs the high risk, but the business requires a sort of cutthroat approach to really enjoy a big payday. We don’t need to imagine this; here on the Iron Range, iron ore demand controls an important sector of our entire local economy. Mild blips in the market can put people out of work or bring them back with only a few weeks notice. Oil companies are making hay while the sun shines, just like steel companies.

So what can be done?

Well, not to moralize, but I live 27 miles from town. We drive gas vehicles — a small SUV and minivan — and have managed this and other past gas price increases. My wife and I probably take 8-10 “trips” to town each week. When gas is at $4 per gallon, this equates to about $12 per “trip.” Nothing to sneeze at, but only $3 more per trip than when gas is $3. 

That means that eliminating just two trips to town — getting groceries after work instead of Saturday afternoon, for instance — puts us at even money. No loss. We could also eat out one less meal per week and more than make up the difference. I could even write one extra column — about gas prices, for instance — and sell that. Mmm, gas. Point being, we have options. Most folks do. The rest deserve our help.

I realize that putting $100 into your truck’s tank is painful. But what I don’t understand is the surprise.

Using giant trucks as commuter vehicles burns a lot of energy that doesn’t need to be expended for that purpose. When energy prices spike for any reason, but especially when they spike for uncontrollable reasons, you either have to be prepared to pay more or you need to think of ways to reduce your energy use.

No quick political fix will bring gas prices down overnight. The only people with that kind of power are oil executives. See how far you get with them. 

Drive less. Look at smaller cars, hybrids and electric vehicles next time you need a vehicle. Carpool. Combine trips. Live closer to your job if you can’t afford the drive. Or, pay for the privilege of not having to change your behaviors. Those are your options. 

Prices will come down. And then they will go up. And then down. Within a generation we won’t be using gas for over-the-road vehicles. I’m confident, however, that we will all be upset about something else by then.

Aaron J. Brown is an author and college instructor from northern Minnesota’s Iron Range. He writes the blog MinnesotaBrown.com and co-hosts the podcast “Power in the Wilderness” on Northern Community Radio. This piece first appeared in the Sunday, March 13, 2022 edition of the Mesabi Tribune.