In most parts of the country, the latest spike in oil prices is hitting in the midst of a relentlessly cold winter, and consumers are being squeezed. To offer just one example of how this is playing out, heating oil distributors in Maine say a growing number of customers are struggling to pay for the fuel needed to warm their homes. Increasingly, they are enrolling in payment plans and making purchases in small increments rather than filling up their tanks.
Truckers in Minnesota are discovering that higher diesel fuel prices are having a pretty immediate trickle down effect in the form of lower salaries from employers attempting to offset higher expenses.
And in Arizona, even though gas prices remain below the national average, they have, at close to $3 a gallon, reached a point that routine commutes are getting costly.
These stories – three snapshots of what higher oil prices mean for anyone trying to work, run a business, or just maintain a household – are common all around the country. Most of us are all too familiar with the way that rising oil prices impact our lives. As the recent discussion of the world oil market has focused on the uprising in Egypt, it bears reminding that these events are touching all of us in our own backyards.
Prices have fortunately not reached the peaks seen back in the summer of 2008, but this time there are other worrisome factors: the bitter cold weather and the ongoing unemployment crisis. After three years of a slugglish economy, many consumers have little if any discretionary income. Businesses are also operating close to the bone and often cannot afford to absorb higher operating costs.
In a compelling op-ed in Politico last week, Randall Luthi, the President of the National Ocean Industries Association connected the dots between the unrest in Egypt and your wallet:
As a jittery world watches Egypt, we Americans need look no further than our own shores to find the answer to a disruption of a big source of oil. We import around 60 percent of our oil, with an estimated 20 percent from the Middle East. Saudi Arabia sends just under one million barrels of oil per day. Untapped and unexplored oil and gas resources off the U.S. coast contain an estimated 44.4 billion barrels of oil and 183.2 trillion cubic feet of natural gas.
Luthi titled his piece Mideast unrest no cause for oil hike, but his actual point is that the unrest we see half a world away need not impact the prices for basic necessities here at home. Under our current energy policy, all of us remain at the mercy of events far from our shores and out of our control. As Luthi says, “The Obama administration is apparently content to bet our energy security on the shifting Mideast political sands.”