Every year, news stories about US gasoline prices appear in the early spring and remain popular until the end of the summer driving season in September. But “pain at the pump” takes on special significance during presidential election years, as Republicans and Democrats use gas prices to attack one another’s energy policies and curry favor with voters. This year, the GOP is blaming the Obama administration for rising prices, but in 2008, it was Barack Obama, then a senator from Illinois, who was pointing his finger at Washington. Make no mistake, all such accusations rest on shaky ground. The price of gasoline is determined primarily by the price of crude oil (in February it accounted for 72 percent of the cost of regular unleaded and 65 percent of the cost of diesel), which is established by a global market over which US energy policy holds little short-term sway.
The 2012 campaign has already seen innumerable claims and counterclaims related to gas prices and domestic oil production. Journalists should be fact checking all those statements, letting their readers and viewers know whether they represent truth or spin. More often than not, however, they drop competing quotes into their stories without assessing their relative merits. This is lazy reporting that does a disservice to voters. We understand it can be hard to dig up the necessary background on deadline, especially while traveling. Here, then, is a Reporter’s Toolbox of primary sources of information related to gasoline prices and oil production in the US, which journalists can use to evaluate and clarify the political rhetoric.
The US Energy Information Administration (EIA) maintains a terrific website called Energy Explained, which provides easy to understand explanations of all of the country’s renewable and nonrenewable energy sources. The section on Gasoline is broken down into five subsections: Where Our Gasoline Comes From, Use of Gasoline, Prices and Outlook, History of Gasoline, and Gasoline & the Environment. The Prices and Outlook subsection is further divided into three parts, which campaign reporters will likely find most useful:
- • Factors Affecting Gasoline Prices: the cost of crude oil; taxes; refining costs and profits; distribution and marketing costs and profits.
- • Price Fluctuations: crude oil supply and prices; seasonal demand for gasoline.
- • Regional Price Differences: distance from supply; supply disruptions; retail competition and operating costs; environmental programs.
- • What’s up (and down) with gasoline prices?
- • Why don’t fuel prices change as quickly as crude oil prices?
- • What do I pay for in a gallon of regular gasoline?
- • Does EIA have gasoline prices by city, county, or zip code?
- • How can I find historical gasoline prices for each State?
- • Where can I find inflation-adjusted gasoline prices?
- • What is the outlook for gasoline prices for 2012 and for 2013?
Those wanting to dig deeper should turn to the EIA’s Petroleum & Others Liquids website. It includes the weekly Gasoline and Diesel Fuel Update and is denser than the overview/explainer pages, but contains hard data and analyses and projections for prices, crude reserves and production, refining and processing, imports/exports and movements, stocks, and consumption and sales. One of the more useful resources to be found there is the report This Week in Petroleum, which provides information about recent events affecting the petroleum industry and markets.
The Global Oil Market
Since the price of crude oil is the primary determinant of the cost of gasoline, it behooves reporters to know something about the global oil market. A good place to start is the EIA’s primer on Oil Market Basics, which includes chapters on supply, demand, trade, refining, stocks, and prices, among others. The administration also has a helpful page, “What Drives Crude Oil Prices?”, which is updated monthly and quarterly, and which analyzes seven factors that influence oil markets: supply from OPEC and non-OPEC countries (Organization of Petroleum Exporting Countries), demand in OECD and non-OECD countries (Organization for Economic Cooperation and Development), inventories and reserves, spot prices, and financial markets.