In Texas regular gasoline prices dropped below $1.75 a gallon, the lowest price in four years, the kids are out of school and no one is expecting you to show up at work (or even to work, depending). In normal times, able-bodied Texans facing this situation would heed the call of the road, load up the family vehicle and roll out before dawn to points unknown.
We do love a road trip, the longer the better.
Instead, we’re all gassed up with nowhere to go. Patriotic Texans, like Americans in much of the country, are stuck at home to halt the potential spread of coronavirus, or working harder than ever at jobs deemed critical for the health and welfare of humanity. It is an unnatural constriction on the freedom U.S. citizens have taken for granted, but one we accept for the good of the country.
Gasoline prices reflect the drop in demand for fuel, here and globally. Energy analysts at IHS Markit predict U.S. gasoline consumption will drop by as much as 50% during the shelter-in-place period. Folks are posting photos to social media of empty streets in Dallas, New York and other urban areas.
Across the U.S., regular gasoline prices last week were, on average, $2 a gallon, 69 cents lower than a year ago, according to the Energy Information Administration. But this is not a great opportunity to buy canisters of gasoline to store in the garage; gasoline only lasts a few months outside of professional storage, and who knows when we can get back behind the wheel again.
Diesel prices also dropped, but not quite as low or by as much, reflecting a different situation. The EIA shows the average U.S. diesel price hit $2.59 a gallon last week, down 49 cents year-on-year. Deliveries of critical and not so critical supplies continue. Grocery stores are scrambling to restock as customers fill their pantries and bathroom cabinets as the weeks at home roll on. A break on diesel prices is welcome as our demand for goods and deliveries ramps up.
The darker side to this story about prices at the pump is the impact on the Texas oil and gas industry, a critical component of the state’s economy. While the rest of the country has been bemoaning the decline in manufacturing and blue-collar jobs, Texas has been quietly growing its manufacturing base in the form of refineries and chemical plants. In the past decade, the crude oil refining capacity in Texas has grown, according to the EIA, 24% to 6.2 million barrels per day.
The decline in both oil and fuel prices due to the coronavirus pandemic portends dark days for the Texas production, refining and manufacturing jobs. The Railroad Commission is considering whether it has the authority to require oil companies to reduce production to prevent the industry from cratering. When a group of conservative, free-market-loving politicians is contemplating government intervention in a major industry, the situation is dire.
When Americans finally get to pack up their cars and hit the gas for cross-country adventure, there will be many reasons to rejoice.
