Filling one’s tank with gasoline or diesel anywhere in the US costs more today than it did a few months ago and a lot more than it did a year ago. Fortunately, filling one’s tank in New Mexico and especially in Lea County costs less than it does in other areas of the US.
On Saturday, October 16, the national average for a gallon of regular gasoline was $3.325 up about five cents (5¢) per gallon from a week ago, reports the American Automobile Association (AAA). “Gas has nearly doubled since bottoming at $1.77 in April 2020,” states CNN’s Matt Eagn.
Today, the highest prices per gallon of regular gas in the US are found mostly on the West Coast and in Alaska at just under $4.50 a gallon. New Mexico is much more fortunate with the average price of a gallon of regular at about $3.2513 per gallon, about seven (7¢) per gallon below the national average.
Gas Prices in Lea County
In Lea County the price of regular per gallon at some stations is a little less. According to Gas Buddy, on Sunday, October 17, folks could pay $3.13 for a gallon of regular at the Shamrock station located at 600 West Marland Street in Hobbs and $3.05, cash only, at Valero located at 901 West Avenue D in Lovington. The price of regular per gallon in Eunice at Love’s, 16 Andrews Highway, was $3.20, and in Jal, only one price was listed – $3.32 per gallon at Pilot, 410 East Kansas Avenue.
Price of Gas at Seven Year High
During the pandemic when movement from place to place was restricted, energy costs were low. According to a recent CNN report, things are getting better with the pandemic, the world economy is reopening and energy prices are on the rise, with gas prices at a seven year high. CNBC echoes the same message at its website. The rebounding demand tied with gas shortages has drivers paying the highest prices at the pump they have paid in more than seven years.
“You’re not imagining things. The price of gas is getting absurd. Unfortunately, it’s going to go even higher before things get better – and there’s no telling where the ceiling might be,” states Fortune magazine contributing writer Chris Morris in an article posted on Fortune’s website.
Higher Prices for All Forms of Energy
Not only are the prices at the pump up, other forms of energy are also more expensive than a year ago. “Crude oil has risen 64% this year to a seven-year high. Natural-gas prices have roughly doubled over the past six months to a seven-year high. Home heating oil has risen 68% this year. Coal prices are at records,” states an article in the Wall Street Journal.
Close to home, the US West Texas crude benchmark has crossed the $80 mark, reaching the highest price recorded since November 2014.
The point is that oil and gas prices are up, and they are expected to keep going higher and higher, foreshadowing an expensive winter.
What Do Higher Energy Costs Mean for Lea County Residents
Current high oil and gas prices not only add to daily driving costs for Lea County residents, but they also increase the cost of electricity, not to mention the cost of everyday living. One major contributing factor is that a large percentage of New Mexico’s electricity is produced by hydrocarbons, primarily natural gas.
Not all of this, however, is bad news for Lea County residents. It is important to remember that Lea County is at the top of the list in the US when it comes to oil and gas production. The fact that the price of oil and gas is surging upwards is considered by many locals a positive, not a negative, for the county. Higher oil and gas prices mean more exploration and drilling which, of course, results in more jobs and a stronger Lea County economy.
This being said, county residents still do not escape the reality that with higher energy costs, the cost of all goods and supplies is up. Simply said, it costs more to exist today than it did a year ago, and economists predict that costs will continue to increase.
Causes of the Current Surge in Energy Prices
The cause of higher energy prices, which most call woes, is an inertia in the supply line. During the decline of demand that evolved during the coronavirus pandemic, less oil and gas were produced than the amount necessary to match demand. Then, hurricane Ida caused damage to refineries on the Gulf Coast. As demand increased, supply failed to keep up with the demand. Conspicuously absent from the news is that Mexico’s second largest oil refinery is shut down, which is exacerbating the shortages.
In the time of reduced demand refining capacity was reduced and some wells were shut-in. To restore production and increase refining capacity are not simple matters of flipping a switch. Wells which have been shut-in often require considerable maintenance, as do refineries, to restore the pre-shutdown production levels. All of this takes time, and during the process supply does not meet demand.
What The Future Has In Store
Many experts are suggesting that inflation will increase significantly during the coming months due to rapidly rising energy costs. Even amid concerns about climate change and the shift away from coal as an energy source, the price of coal is hitting record highs and production is increasing to fill the economic void created by soaring oil and gas prices.
Bank of America is predicting $100 a barrel for Brent crude this winter. This factor is particularly bad news for American drivers. Gasoline prices in the USA are based on the price of Brent crude. With Brent crude more costly, so will be gasoline.
The global energy market has many moving parts. The US, however, has been insulated to a degree from the global energy market because of its oil and gas production and reserves. This factor only postpones the inevitable leveling of the global markets.
Unfortunately, experts are predicting that the situation will continue to worsen with no solution in sight due to the growing global energy crisis. As an example, China is currently experiencing rolling blackouts and has increased coal production to stave off the energy crisis, while searching for more oil contacts to fill the gap.
The trickle down effect of higher oil and gas prices are felt across the board due to increased transportation costs of consumables. Often, even locally produced items find their prices rising in concert with those being transported from much longer distances.
The increase in all these prices are naturally felt more severely by those who are more economically disadvantaged. Those who live paycheck to paycheck in Lea County will definitely feel the pinch this winter, and the county’s cities and social resources will need to find creative means of dealing with the problems caused by higher energy costs. Let’s keep our fingers crossed that solutions will be found.
Photo by Alexander Mils // Unsplash
