Why the Gasoline Shortage?
THE United States is running short of gasoline!
Such a statement sounded unrealistic a few months back. But not now. Some refineries have 20 percent lower reserves than normal for this time of year. Because of limited supplies some gasoline stations are padlocking their doors. Others open for only a few hours daily. Yes, the gasoline shortage is real.
What does this mean to you?
For one thing, it means that less gasoline, is available for the peak summer driving season. Also, Federal gasoline rationing may come. Even if government limitations do not materialize in some areas, dealers are already rationing.
Further, what gasoline is available is climbing higher in retail cost. The nationwide average price of regular gasoline in early spring was 37 cents per gallon. Experts predict prices of 55 cents per gallon in some places soon. And the retail price is expected to continue rising. Says the president of one oil company: “I’d be the most surprised guy around if I weren’t paying $1.25—and soon.”
Americans have become accustomed to thinking that supplies of crude oil, from which gasoline is made, are unlimited. Any seeming ‘gasoline shortage’ in the past only temporarily raised prices. New oil reserves were quickly sucked into the market, and costs again stabilized.
But now the U.S. production reserves of crude oil are gone! And, as the chart with this article shows, the U.S., like some other leading industrial nations, consumes far more oil daily than it actually produces.
The crude-oil situation for U.S. gasoline was aggravated by last winter’s fuel-oil shortage. Oil that would have been refined into this summer’s gasoline was funneled into fuel-oil production. If, in turn, too much crude oil goes into gasoline production this summer, in a few months there could be a repeat performance of last winter’s fuel-oil crisis.
But, why, it might be asked, do not the United States oil companies just drill for more oil? They answer that costs now make drilling all but prohibitive. Oil is no longer in easily accessible places. Another thing: domestic oil brings a low price. This is hardly an incentive for the companies to carry on extensive drilling. For such reasons the U.S. has had to go outside its own borders and import oil.
Traditional U.S. suppliers, such as Canada and Venezuela, have been unable to cope with greater U.S. oil demands. The country has therefore turned to buying more and more oil from Middle East countries. But even this step has not solved the country’s immediate problems. Why?
Other nations are also demanding mid-East oil, driving up its cost. Too, in recent years political and economic events in the Middle East have triggered further steady increases in oil prices.
Thus crude oil is no longer as readily available as it was once for the U.S.; this has greatly contributed to the gasoline shortage. But, then, there are also the industry’s refinery problems.
The United States does not seem to have the refining capacity necessary to produce more gasoline even if an abundance of crude oil does become available. And oilmen say that they cannot afford to build the necessary new refineries; none are currently under construction.
They also point to one more factor limiting refinery construction. Says one Sun Oil Company spokesman: “Every time an oil company wants to build a new refinery, another environmental group objects to it.”
On the other hand, critics contend that the oil companies could refine more gasoline with their existing facilities. They accuse the companies of purposely ‘creating’ the oil and gasoline shortage to gain economic advantage and to silence environmentalists.
But the gasoline shortage is more than a problem brought on by international politics and big business. The public, too, must accept part of the blame for the current situation.
The public has, for one thing, insisted on buying more and bigger automobiles. Americans now have 85 million cars. Many late-model cars, with their big engines, get much less mileage to the gallon of gasoline than did earlier models. Knowing that gas was cheap, they have bought more and driven more.
The public can therefore do its part to case this summer’s gasoline shortage somewhat. What can you do?
When traveling on the highway, drive 50 miles per hour instead of 60; that requires about 10 percent less gasoline. Avoid quick, jerky starts. Do not let the engine idle too long. Keep your car in good shape: engine well tuned, tires properly inflated, and wheels aligned. Avoid, when possible, using power-consuming ‘extras’ like air conditioning.
Plan the use of your car, lining up several matters that can be cared for on one trip. When possible, use public transportation. Or, walk—it can be good for you!
Such suggestions may or may not help to alleviate the gasoline shortage. But, whether they do or not, they can assist you personally to cope with a fuel-short summer.
[Graph on page 3]
(For fully formatted text, see publication)
DAILY OIL CONSUMPTION
DAILY OIL PRODUCTION
U.S.A.
Western Europe
Japan
0 5 10 15
(Millions of barrels)