5 The Price at the Pump
Over the past two years, Americans have paid as little as $3.19 per gallon of gas to as much as $3.92. (That’s when gas prices are taken as a national average—of course prices vary greatly state to state, with some CA and NY residents paying nearly $5 a gallon at times.) Twice over the course of the last year rates dipped to less than $3.25 and then soared past $3.75 again. Some of this can be explained by the annual summer “driving season” price hikes and some of it by refinery shutdowns. Prices are also affected by events occurring thousands of miles overseas, whether they involve violent battles or peaceful negotiations. Overall, Americans also simply seem to be driving less.
4 America Is a Major Gasoline Exporter
Common perceptions of the United States are that we import significantly more fuel than we produce, and certainly more than we export. When considering unrefined crude oil, that remains true, with our main imports coming from Canadian crude supplies. But when considering refined fuel ready for use in vehicles and machinery, America is actually one of the world’s major exporters. We export millions of barrels of refined gasoline every month with November slated to set export records. Ironically, some of our major clients are the very nations which produce huge amounts of crude oil, such as Venezuela and Nigeria.
3 The Chinese Are Turning Against Coal
Chinese policymakers are finally listening to their smog-choked constituents and acknowledging that burning countless tons of coal to fuel the rapid progress of their developing nation is relying on 19th century technology for 21st century growth. Many Chinese cities are enshrouded by clouds of polluted air so dense that life as usual simply cannot continue: roads are often closed, school days cancelled, airports unable to operate, and, in a dramatic case from last month, the entire city of Harbin, a northeastern city with well over five million residents, was almost entirely shutdown by the polluted air.
2 Global Oil Prices Dropped After a Deal With Iran
Domestic businesses and consumers alike will soon feel the ramifications of negotiations held between Iran and the United States, France, Britain, Russia, Germany and China. In the deal, which the assembled world powers hope will curb Iran’s nuclear program (a program Iran disputably claims is for peaceful purposes), the Iranians have agreed to halt development of their nuclear capabilities for at least six months. The agreement essentially kicks the issue down the road, but it provides breathing room and, with the slight easing of sanctions against Iran, may see more oil on the open market, thus sending global prices downward.
1 The Fracking Boom
If there is any one factor having the most profound effect on fuel and energy today—both in terms of price and production—it is the boom in oil and natural gas production ushered in by widespread use of hydraulic fracturing. This controversial method of oil and gas extraction sees great amounts of water and a cocktail of chemicals forcibly injected into buried pockets of oil and/or gas which is then captured above ground. With fracking, as the practice is often called, the United States has finally tapped into the vast stores of potential energy trapped within its landmass. We now sell fuel all over the world and domestic rates have dropped. But the environmental cost of this invasive practice may not be understood for generations, and, as we have seen time and time again, today’s innovation can develop into tomorrow’s malady—just look at the city of Harbin.