Washington, D.C. – In a new report released today by Consumer Energy Alliance (CEA), the organization warns policymakers that recent geopolitical turmoil and global oil price instability could negatively affect U.S. consumers and one of the largest energy-consuming industries in the United States, the transportation sector. Geopolitical events continue to directly affect global energy markets and will continue to do so in the U.S. if oil is transported into the country from foreign nations.
The report, titled “Fueling America’s Energy Consumers,” examines how fuel price increases negatively affect American consumers and their ability to work, travel, buy affordable products and pay their bills. High transportation costs also hurt American businesses by increasing their operational expenses and overhead – costs which are often passed on to the consumer through price increases.
The chief mitigating factor helping U.S. families is the on-going U.S. Energy Revolution and the impact it has on helping to maintain lower prices for U.S. consumers.
While fluctuations in global energy markets are part of the problem, CEA believes that policymakers should continue to consider American energy resources as the solution. Currently, the United States has large amounts of oil and natural gas resources on federal lands onshore and offshore, as well as technologically feasible renewable energy solutions. These resources can be developed safely, efficiently and responsibly, with great care taken to protect the environment.
Highlights from the report include:
- The transportation sector is the largest energy-consuming segment in the U.S., accounting for nearly 30 percent of the nation’s energy use in 2017. In 2017, oil and natural gas provided approximately 92 percent of the total energy used to power these modes of transportation.
- S. is still importing crude oil and petroleum products from other nations to meet demand. In 2017, the U.S. imported a little more than 10 million barrels of crude oil and petroleum products per day.
- In 2017, the average American household spent around $1,765 on gasoline. In 2018, the cost of gasoline is expected to increase by $133 per household – setting families back nearly $1,900. The U.S. is expected to spend nearly $365 million on gasoline in 2018 – an increase of more than $60 million since 2016.
- More than 3.6 million heavy-duty trucks are needed to move the 10.5 billion tons of freight transported across the nation on an annual basis. Moving that freight requires more than 15 billion gallons of gasoline and nearly 39 billion gallons of diesel fuel every year. In 2015, the trucking industry paid more than $105 billion for diesel fuel.
- Approximately 50 to 60 percent of a vessel’s expenses are allocated for fuel costs. A typical Trans-Pacific cargo carrier can expect a fuel bill of over $3.3 million for a 28-day voyage. With the expansion of global markets, the use of cargo ships will continue.
- A one-cent increase in the average price of diesel fuel can add another $350-$370 million per year in fuel costs for the shipping industry – costs which are felt across the supply chain.
- The price of jet fuel has increased over 58 percent from June 2017 to June 2018. For every dollar-per-barrel increase in the cost of oil, the airline industry’s fuel bill goes up by $420 million.
“This report highlights the often-overlooked fact that oil and natural gas provide the majority of energy used in the transportation sector, and when the price of oil rises due to external factors like supply disruptions and geopolitical events, that means the price of transportation fuels also rises,” CEA President David Holt said. “While the United States has been undergoing an energy revolution over the last decade, keeping prices much lower than they would otherwise be, it is still importing a fair amount of crude oil and petroleum products from other nations – making it reliant on imported oil to ensure American consumers and businesses meet their transportation needs.”
Holt added, “Americans have witnessed this firsthand during this summer’s hot vacation months, with the cost to fill up pinching not only consumers’ wallets at the pump but also in the air as airlines adjust for the rising cost of jet fuel through higher airfare. For most of these families, reducing the amount they spend on gasoline is not an option. All too often, this usually means choosing between filling up on gasoline for work and other day-to-day commutes or paying for household essentials, such as groceries or rent.”
“Everyone from working mothers trying to pay their bills to small retailers who spend a large percentage of their revenue on fuel costs must have a stake in making sure we meet our energy needs, and it needs to be a top priority for our policymakers to ensure we do,” Holt continued. “Any policy that helps directly expand U.S. energy development and provides environmental protection is good for American families and businesses. By continuing to support sensible energy policies that responsibly utilize our abundant and affordable domestic energy resources, we can provide further relief to American families and businesses.”
For the final report, click here.
About Consumer Energy Alliance
Consumer Energy Alliance (CEA) brings together families, farmers, small businesses, distributors, producers and manufacturers to support America’s energy future. With more than 450,000 members nationwide, our mission is to help ensure stable prices and energy security for households across the country. We believe energy development is something that touches everyone in our nation, and thus it is necessary for all of us to actively engage in the conversation about how we develop our diverse energy resources and energy’s importance to the economy. Learn more at ConsumerEnergyAlliance.org.