In Our View: Action Needed on Gas Prices
Cost in Washington highest among 48 contiguous U.S. states
Tuesday, June 12, 2012
One year ago, the perceived culprit was unrest in the Middle East. This year, it allegedly is shutdowns at numerous West Coast refineries.Yet while the causes remain less than clear, one thing has been unchanged for more than 12 dreadful months: Gas prices in this part of the country are out of control. Washington has ascended to the dubious position of having the most expensive gas in the contiguous 48 states, with the statewide average standing at $4.21 per gallon as of last Friday. According to AAA, Monday's average price for a gallon of regular gas in Vancouver was $4.12.
Almost makes you long for the then-outrageous price of $3.84 last June. Or maybe not. Either way, something must be done that goes beyond grandstanding by politicians.
The latest example comes from Sen. Maria Cantwell, D-Wash., who last week sent a letter to regulators calling upon the Federal Trade Commission to examine the actions of refinery operators on the West Coast. Following the temporary shutdown of BP's Cherry Point refinery in Blaine after a February fire, refinery operators Alon, Chevron, ConocoPhillips, Shell, and Tesoro all had temporary closures at West Coast refineries for various maintenance projects.
The result has been a shortage of supply and incessantly high gas prices for consumers in the Northwest at a time when prices have been dropping throughout the nation.
According to a report from McCullough Research, market factors suggest that West Coast prices should have dropped to about $3.65 a gallon but have remained roughly 68 cents higher over the past several months. "At a differential of $.68 a gallon, this translates into a windfall profit of $43 million a day," the report said.
According to McClatchy Newspapers, Cantwell's letter to the FTC said that the Cherry Point fire should not have led to record-low inventories "unless other West Coast refiners failed to undertake actions that could have made up for the supply shortage."
And while the timing of such widespread closures seemingly warrants investigation, it would appear to be time for governmental action to supplant words.
In April 2011, Cantwell -- who sits on both the Senate Energy and the Senate Finance committees, and is chairwoman of the Subcommittee on Energy -- met with Clark County business leaders to receive their input regarding fuel prices. At that time, she blamed the Commodity Futures Trading Commission for failing to curb widespread futures speculation that had cropped up in the wake of social and political unrest in several Middle East countries.
Whatever the causes, high fuel costs are a yoke around the neck of businesses and social services. They hamper any hoped-for economic recovery by cutting into profits for local companies, limiting job creation, and reducing consumer spending. In the Northwest, high prices result in an increased percentage of dollars landing in out-of-state pockets.
Sen. Cantwell is to be applauded for bringing attention to this issue, but residents truly are in need of more than election-year politics. The time has long passed for Congress and the Obama Administration to provide relief for gas prices in Washington.
At this point, the supposed causes of persistently high gas prices do little to pique the interest of consumers.
We're more interested in seeing solutions.