Remember last year, when there was so much oil on the global marketplace, at precisely the same time demand for petroleum products was shrinking amid the coronavirus pandemic, that there was no place to put all the oil already had been pumped. Economics 101: Too much supply + too little demand = falling prices.
That lesson was driven home absurdly, when the market price for crude oil briefly fell “below zero,” if there really could be such a thing.
In essence, it meant oil producers would pay consumers to take the oil off their hands — in this case, “consumers” meaning anybody who could find some way to store the surplus petroleum.
A year or so later, we have the opposite problem. The price for oil products is climbing again, most evident in recent months at the gasoline pump, where the price per gallon is nearing $4 in some places, and is considerably more than a dollar per gallon higher than it was a year ago virtually everywhere in the country. Certainly that’s the case in Fremont County.
Back when oil prices were low, our state economy was taking a corresponding beating. Wyoming’s fiscal mechanisms are set up so as to rely heavily on tax revenue generated by energy commodities, oil prominent among them.
In 2020 our state legislators were stricken by the responsibility of having to try to manage state finances in the face of plummeting state revenues tied closely to the falling price of oil.
But, at least gas was cheap at the pump.
Today, the usual suspects are back, railing against the high price of a gallon of gas. Someone must be to blame, they shout, from the local gasoline retailer, to the greedy oil companies to, somehow, Joe Biden — a guy who rode public mass transit back and forth from Washington to Delaware for more than 40 years every regular work day of his life.
(Honestly, this is the guy being blamed for high gas prices? If everyone with access to good mass transit in big, urban states would do what he did all those years, the price per gallon of gasoline would plummet, and stay plummeted.)
But if that did happen, then Wyoming’s economy would be right back in the same doldrums as a year ago.
As it is, that higher price of gasoline coincides with a much rosier financial picture for Wyoming. Suddenly it appears we’ve got hundreds of millions of dollars in surplus again.
Our lawmakers are going to be stymied by a different problem this winter, it appears. What will they do with that extra money? For once, we’ll have one of those “nice problems.”
But it will cost more to fill the tank.
Remember this: When the price of gasoline is low, dragging down the state economy with it, there’s not a whole lot an individual consumer can do to improve his or her pocketbook situation.
But when the price of gasoline is high, meaning the state’s economy is stronger also, there are things we can do as individuals to ease the pain at the pump.
Drive less, drive smarter, share rides, combine chores and errands into one trip, and, for crying out loud, quit flooring it when the light turns green or when you come to a hill.
Well, what’s it going to be? Cheaper gas and a struggling economy, or a prosperous state with a high price per gallon?
The riddle persists, and it irritates us all, we creatures who, if we thought about it, would realize that of all the things in life we yearn for, the biggest might be having things both ways.
If you ever figure out how to do that, file a patent for it. The world will beat a path to your door.