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Pain at the pump | OPINION
Have you noticed what’s happening to gas prices? Even with discounts at Costco, Safeway or Freddy’s it’s scary. On Feb. 21 the Fourth Street Shell and Standard posted $3.79 for regular, the same as the Grove Street Union 76. Tulalip’s Chevron megastation was low at $3.66 per gallon.
The price of gasoline invaded a conversation in the Y locker room the other day. Frank kicked it off by asking, “Why is it that we pay 40 cents more per gallon than they do in Spokane?” Everyone had an opinion. Every opinion was different. It bugs me when there’s no apparent cause behind a real issue so I went to work.
If you’re following this issue, you know that there’s no end to the theories. Jacqueline Leo of Financial Times wrote, “U.S. refineries are switching over from winter to summer fuel, which is more expensive to produce.” But that doesn’t explain the difference between Seattle and Spokane.
A McClatchy editorial blamed speculators in the energy market. “Like locusts ravaging fertile crops, gasoline prices are soaring again and eating away at purchasing power of ordinary Americans.” Still no light shed on the Seattle-Spokane difference.
Oil Analyst Fadel Gheif focused blame on the “possible” disruption of the Middle East oil supply. Others say Wall Street has taken over the market to control supply and demand. No one, it seems, is willing to tell us why the pricing of gasoline isn’t more even across the map.
Is it because of the location of refineries? No, because gas sold near the Ferndale refinery is notoriously high-priced. Is it cheaper near transportation hubs? No, because prices in heavily populated rail centers are typically somewhat higher. Is it local gas taxes? No, there aren’t any yet but soon might be. Then what’s going on?
I asked myself, how is Spokane different from Seattle? It’s higher and drier, but that shouldn’t count for anything. It’s a smaller market so, according to economies of scale, Seattle should have cheaper gas. No help there. Could Spokane’s abundant sunshine have something to do with it? Not likely. But what about the political difference? Spokane is staunchly conservative while Seattle is Democratic to the core.
Could politics really have anything to do with it? It seemed worth looking into since money and politics are so intertwined that stepping on one causes the other to complain. I started by pulling up the Washington Post’s voting-results map that paints Democrat and Republican strongholds in blue and red. Some states are covered with one color while others, like Washington, are divided. Then I accessed the GasBuddy.com site that lists current average gas prices for all states and about 165 cities.
When the average of 10 totally Blue states was compared with 10 all-Red states, Blue state drivers spent $3.835 per gallon against $3.547 for Red states for a $0.288 per gallon advantage for the Reds. In no case was Blue-state gas less expensive than Red. Interesting, but the results fall so far short of a scientific study that they must be taken as nothing more than ... interesting.
Next, I looked at split-states, like Washington where the west votes Democratic and the east is Republican. My question was, do gas-pricing comparisons for Republican vs. Democratic cities in states other than Washington behave as they do for Seattle and Spokane? Working with the GasBuddy data for cities, I paired seven random Blue cities with seven random Red cities. (Only seven states on the red-blue map seemed conveniently split to allow this.) Blue cities are shown first, followed by Reds:
WA: Seattle $3.749 vs. Spokane $3.336
IL: Chicago $4.105 vs. Peoria $3.857
TX: Austin $3.620 vs. El Paso $3.419
CA: San Francisco $4.205 vs. Fresno $4.074
IA: Cedar Rapids $3.750 vs. Sioux City $$3.701
AZ: Phoenix $3.619 vs. Flagstaff $3.622
NY: New York City $4.052 vs. Syracuse $3.933
Even considering oddball Arizona, Blue cities are charged 16.5 cents more per gallon than Reds. That difference isn’t as profound as the 28.8 cents per gallon when comparing entire states but the rough consistency makes one wonder. Has politics intruded on gas pricing or have I stumbled upon an amazing run of coincidence? I leave it to you. See what you come up with using sources of your own choosing.
Granted, it was a struggle to stay objective here. A friend once accused me of leaning so far left that I walk in counterclockwise circles, By that measure, Big Oil leans so far right that it orbits clockwise. The politically neutral question becomes, is gas pricing immune to ideological differences?
The type of results shown above could only happen with petroleum products because petroleum is the only industry that’s vertically integrated from subterranean oil pools to the gas in your tank. When all that falls within one business plan, look out!
I have to admit that linking power politics with selective gas pricing is a pretty wild idea. On the other hand, Big Oil does have the clout and tools to do just that, if it wants to.
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