New Oil Vulnerability Report: Rising Gas Prices Increase Threat of Oil Dependence

While last summer's gas price spikes have finally faded in the rearview mirror, I was reminded this morning of how quickly things can change. At my local station, gas is creeping up to $2.62 per gallon. Nationally, in the last 20 days, gas prices have gone up by 19 cents, peaking around $2.60 per gallon on average. Especially with the economic recession - which has put millions of people out of work and hit everyone's wallets - these fluctuations have a direct impact on our daily lives.

Looking further back, gas prices aren't what they used to be. Ten years ago the average price for regular was a measly $1.20 according to the Department of Energy, and an online inflation calculator tells me it should cost just $1.55 now. The fact that it's much higher, especially when wages are headed in the other direction, means it still pinches most of us.

NRDC just released our third annual report about states based on their vulnerability to gasoline price hikes and the policy solutions they are applying to reduce the burden, and the report found that some feel the weight more than others. Last year Mississippi drivers spent almost three times as much as Connecticut drivers on gasoline, as a percentage of their income. Almost one-tenth of the average driver's budget went into the gas pump in Mississippi last year.

In 2008 drivers in every state saw the percentage of their income that went to gasoline go up since our first annual report in 2006. Next year's report will show the 2009 results, and while prices have eased somewhat they remain high by historical standards and stagnating incomes mean they remain onerous.

The top ten most vulnerable states featured in our report tend to be in the South and South Central regions of the U.S.:

  • 1) Mississippi
  • 2) Montana
  • 3) South Carolina
  • 4) Oklahoma
  • 5) Louisiana
  • 6) Kentucky
  • 7) Texas
  • 8) New Mexico
  • 9) Georgia
  • 10) Arkansas

We also rated states based on the policy solutions they deployed in order to reduce oil dependence and thereby to help shield consumers from price hikes and spikes at the pump. Policies reviewed would spur proliferation of cleaner, more fuel-efficient vehicles, gasoline alternatives, as well as fuel-efficient transportation choices such as commuter rail. Specifically, we gave credit to states for:

  • Hybrid and plug-in hybrid incentives;
  • Vehicle GHG emission standards;
  • State fleet efficiency programs;
  • Idling restriction programs;
  • Grants for research and development on clean cars and fuels;
  • Low-carbon fuel standards;
  • Renewable fuel standards;
  • Driving reduction targets;
  • Having an agency to coordinate land-development and infrastructure investments;
  • Growth management acts; and
  • Transit investments as a proportion of their transportation budget.

The highest ranking states (i.e., those that have adopted the most solutions) are:

  • 1) California;
  • 2) Massachusetts;
  • 3) Washington;
  • 4) New Mexico;
  • 5) Connecticut;
  • 6) New York;
  • 7) New Jersey;
  • 8) Pennsylvania;
  • 9) Oregon; and
  • 10) Florida.

Congratulations to these states. We hope that others will follow their lead. You don't have to believe what some say about how high prices might go to think we haven't seen the end of $4 a gallon gasoline. Governors and legislatures should take steps now to protect those of us who consume gasoline by adopting better policies.

However, states can't do it alone. Congress can help, particularly by enacting two big policy packages expeditiously:

  • 1) Comprehensive climate and energy legislation that caps and cuts carbon dioxide emissions, includes a low-carbon fuel standard, and requires regions to adopt oil-saving blueprints for future infrastructure and development. Establishing national global warming pollution limits that get tighter every year will guide federal and state policies to reduce our oil dependence. Meanwhile, carbon dioxide captured from powerplants and other sources can be used to enhance oil recovery from existing fields by billions of barrels, putting downward pressure on world oil prices and increasing our domestic production capacity.
  • 2) Fundamentally reformed federal transportation policy. Since the Interstate Highway System was completed, there has been no compelling, binding vision for federal transportation policy. Congress must enact national transportation legislation that includes: incentives for smart, transit-oriented development; assistance for states and regions to save oil; and ample funding for energy-efficient transportation alternatives, including rail and bus lines, bike paths, and sidewalks.

I hope you take a look at the report, and let us know what you think.