With summer's fun, ozone and gas price hikes. And big oil profits
Memorial Day is the traditional beginning of summer for most people. Despite Memorial Day’s origins – a time for mourning the U.S. military personnel who have died while serving in the armed forces – the three-day weekend at the end of May is also a time when most Americans begin to turn their attention to summer activities.
If weather cooperates, the Memorial Day weekend is the first in the summer’s weekends of relaxation and fun. Those hotter days and more travel also mean something else: increasing gas prices and more smog.
This year’s gasoline prices are already creating pain at the pump for motorists.
Usually, the summer driving season means higher gas prices. The reasons? First, more people are driving which puts a strain on supply and second “summer gas” tends to be more expensive. Refineries switch the gasoline formula twice a year typically to a summer blend in mid-April (then back again after Labor Day).
The blend is really about the level of butane in the gasoline. Simply put, winter gasoline contains higher levels of butane. That butane is needed to help start a car in cold temperatures.
But in warm temperatures, gasoline with a lot of butane starts to evaporate quickly, producing ground-level ozone that can contribute to smog. Thus, summer gas has less butane and is replaced with a more expensive substitute.
This summer is looking to be even more expensive. Inflation, reduced fossil fuel production, supply chain issues and boycotts on Russian oil after the invasion of Ukraine, have all combined to boost the increase in gas prices.
As a result, prices at gas stations across the US have hit record after record over the past two weeks.
The average gallon of gas in the US hit $4.59, about 51% higher than a year ago, according to drivers’ group AAA data. Regular gas prices have never hit this level. And in California, AAA data showed, prices can be over $6!
A JPMorgan note recently stated that the average US gas price could surpass $6 a gallon this summer as driving season gets fully underway. Of course, higher prices could cut into driving rates, which could offset those increases, but prices will still rise.
Here in New York, expected gas price hikes could be somewhat offset by a gas tax holiday that starts on June 1st and goes through the end of the year. That “holiday” will shave about 16 cents off the price of a gallon of gas.
As mentioned earlier, “summer gas” is an attempt to reduce smog during summer months. “Smog” is created when sunlight warms gasoline vapors, vehicle exhausts and other chemicals, with the ground-level pollutant ozone being formed.
The ozone layer found high in the upper atmosphere shields us from much of the sun's ultraviolet radiation. However, ozone air pollution at ground level where we can breathe it causes serious health problems. Ozone aggressively attacks lung tissue by reacting chemically with it. Again a lot of ozone is the result of pollution from the burning of fossil fuels.
While the world suffers from the burning of fossil fuels – through exposure to ozone as well as the existential threat posed by global warming – there is one beneficiary: Big Oil.
The first three months of this year has been staggeringly profitable for the oil and gas industries. According to recent reports, during those three months the biggest companies racked up profits just short of $100 billion – in three months!
Why should the oil and gas industries rake in cash like that? Why should they profit while the planet, our lungs, and consumers’ wallets burn?
They shouldn’t and last week legislation was introduced by state Senator Liz Krueger and Assemblymember Jeff Dinowitz to claw back some of Big Oil’s windfall profits.
The legislation ensures that climate polluters pay for the damages that they have caused. The bill tags the oil companies for their relative share of the greenhouse gas emissions that are heating up the planet. Thus, the biggest companies would be assessed more than smaller ones. It is that fact that should make it impossible for the companies to pass any additional costs onto consumers.
Right now consumers are facing pain at the pump as well as in their gas and electric bills. At the same time, the oil and gas industry are raking in enormous profits. The Krueger/Dinowitz legislation will claw back some of the oil and gas industry's recent windfall profits and use them for adaptation costs that would otherwise be charged to state taxpayers and to do so without harming consumers’ wallets.
Approval of that legislation would be a real cause for a summer celebration.
Blair Horner is executive director of the New York Public Interest Research Group.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.