What will the oil spill mean for gas prices?
Easy answer: Short term, nothing. Long term, it all depends.
By Adriene Hill
Those of you still driving SUVs can rest easy, for the time being. The amount of oil spilling into the Gulf is insignificant when you’re talking supply and demand (the environment is a different story). Prices won’t jump in the short run, according to Tom Kloza from the Oil Price Information Service.
It’s the intermediate and long term that gus-guzzler-lovers may need to worry about.
According to Chris Dillman from Tradition Energy, there a chance that the oil spill could interfere with shipping lanes — disrupting the ability of tankers to get crude oil to refineries.
In the long run, the spill could slow the growth of offshore oil exploration and drilling — which could have significant price impacts. Kloza says future regulations could slow the pace of growth of offshore drilling and push prices up after 2010. Dillman thinks any move to slow offshore drilling will be short-lived; the desire for domestic oil supply and the jobs that go with it will quickly trump any concerns about dead birds and oysters.
(Dillman’s prediction is already coming true in Louisiana. Check out Governor Bobby Jindal’s letter challenging the deepwater drilling moratorium.)
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.