Gas prices are up again, and the first reason to jump to many people’s minds is the continuing war in Iraq and terminal instability in the Middle East. Made no mistake, getting a sizable portion of our critical oil from an unstable region drives prices up. But this time, it’s problems at home:
Analysts attribute this years high gas price to tight supplies. Refiners have experienced an unusual number of unexpected outages this year, which has kept gas inventories low. The Energy Department’s Energy Information Administration last week reported that refinery utilization increased to 90 percent. But that is well below the 94 percent to 95 percent of operating capacity analysts believe refiners must operate at to adequately meet summer driving demand.
It’s not a new problem; past articles have reported on some of the reasons:
- Oil companies squeezing more profits by keeping less unused refinery capacity in reserve and incurring less downtime with less preventative maintenance
- Community and environmental resistance to the construction of new refineries
- A concentration of refineries in the hurricane-prone southeast
As with anything, there are no simple solutions to high gas prices. Even if we were independent from foreign suppliers, we’d still have to face the realities of our bottlenecks at home.
