The Problem With Energy

Who knew that it was as much of a concern as it is?

By Gary S. Vasilash

Seventy-three percent of Americans worry—“a great deal/fair amount” about energy availability and affordability according to Gallup.

This is up from 54% in 2020.

And what is surprising is that Republicans and Democrats are probably closer on this this concern than anything else: 77% of Republicans are uneasy about energy affordability and 73% of Democrats.

According to the Energy Information Agency, the average price of a gallon of gas in the U.S. the last week of February 2020—before the lockdown—was $2.55 per gallon.

The average price of a gallon of gas in the U.S. the last week of February 2021—when things were lifting economically from the pandemic—was $2.71 per gallon.

And this from the EIA is worth noting: “In February 2021, OPEC+ cuts, combined with supply disruptions in the United States, contributed to monthly global petroleum inventory withdrawals that EIA estimates totaled 3.7 million b/d, the largest monthly withdrawal since December 2002. The Brent crude oil futures price averaged $63/b in early March leading up to the OPEC+ meeting, and the OPEC+ announcement put further upward pressure on crude oil prices.”

Yes, OPEC+ metering out their supply and a blizzard in Texas had consequences.

Another surprising stat from Gallup: 53% think there will be “a critical energy shortage” in the next five years.

How Fast Does a Truck Fall?

Remember expensive energy? It may return as a thing. . .

This chart complied by Michael Sivak of Sivak Applied Research clearly shows how bad things were last April—and one takeaway should be to note how quickly things can go south: we may think that major changes take a slow walk, but that’s clearly not the case.

Looks like AMTRAK is going to need a whole lot of help. (Image: Sivak Applied Research)

While there are improvements at the top of the chart, it is clear that modes of mass transportation (or at least transportation that takes more than a few people at a time, as air travel is not necessarily something everyone can afford, even if they’re opting for an airline that charges for every conceivable thing), are still languishing.

One thing that caught my eye is that red line: Gas prices. Note how there is an inexorable increase.

According to the Energy Information Agency, on March 8 the average price of regular in the U.S. was $2.771.

That is up $0.396 from a year ago.

While that is not a huge rise, take that increase, add in the dynamic of Sivak’s chart, and know that last week OPEC+ decided that it would keep a voluntary cut in oil output until at least April, and realize that the ever-rising sales numbers of pickups and full-size SUVs may resemble the left side of Sivak’s chart.