How to end the roller coaster ride of high gas prices
Jul 19, 2022
Episode 716

How to end the roller coaster ride of high gas prices


From gasoline prices to decoupage, we’ve got a little bit of everything.

First, let’s start with gas prices. Yes, they’ve been coming down a bit lately, but gas prices are on a roller coaster, and the ride isn’t likely to end anytime soon.

“By participating in this global market for oil and gas, we have hitched our economy to a roller coaster ride that we don’t have any control over. We’re all part of one big market, and a policy change in Beijing or a war in Europe, those have the same effects on our prices as if something had happened here in the U.S.,” said Clark Williams-Derry, an analyst at the Institute for Energy Economics and Financial Analysis.

But what if there’s a way off this ride? Is there another way to put our energy economy together that doesn’t take consumers for a spin and shields us from the whims of the global market?

On the show today, the economic and geopolitical forces behind gas prices and why pivoting to renewables might be the only way out.

In the News Fix, we’ll discuss the actions the Biden administration is considering to fight climate change. We’ll also check in on an unusual economic indicator: What’s Apple up to?

Later, if you’re an ’80s music fan, you’ll love this hack a listener shared that he uses at the grocery store checkout line. And, what would you do with old, worthless baseball cards? Help out a fellow “Make Me Smart” listener, will ya? Plus, decoupage, anyone?

Here’s everything we talked about today:

If you’ve got a hack you’d like to share, email us at or leave us a voice message at (508) 827-6278 or (508) U-B-SMART.

Make Me Smart July 19, 2022 transcript


Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.


Kai Ryssdal: As promised, there’s the music.


Kimberly Adams: There is the music. Hello, I’m Kimberly Adams, and welcome to Make Me Smart, where none of us is as smart as all of us.


Kai Ryssdal: I’m Kai Ryssdal. It’s Tuesday, the single topic du jour today, as promised – I guess Friday was the last time we talked about this, maybe tomorrow or yesterday? I don’t even know. Anyway, gas prices. Yes, they’re coming down a little bit. And yes, everybody’s hoping they fall more. But look, how come they got so high? How come they’re taking so long? What’s going on? Help, please? That’s what we’re gonna do today.


Kimberly Adams: Yes, indeed, we will get help, because we all need it. For a variety of reasons, not just to understand gas prices. But in terms of gas prices, at least there are a bunch of economic geopolitical factors that go into how much we pay to fill up our tanks, at least if you have a gas vehicle and you’re not on board with electric yet. And a lot of them we don’t really think about until something goes wrong. And you’re driving down the road and looking up at the 10-foot letters that say, you know, 525 or something like that. Anywho. In order to help make us smart about this is Clark Williams-Derry. He’s an energy and finance analyst at the Institute for Energy Economics and Financial Analysis. Welcome to the show.


Clark Williams-Derry: Hey, thanks. Thanks for having me.


Kimberly Adams: So when I go to fill up my motorcycle, or chi goes to fill up his minivan.


Kai Ryssdal: …to the coolness of the two hosts of this program, let me just say.


Clark Williams-Derry: Well, yeah, none needed.


Kimberly Adams: What are some of the big drivers of the prices that we’re paying for a gallon of gas?


Clark Williams-Derry: Yeah, well, it’s a good question. Well, there are some things, some components of the of a gallon of gas, the cost of gas that are kind of fixed. I mean, I’m thinking here of taxes. Taxes are set by both federal policy and state policy. And then there’s the cost of getting the gasoline to the gas station, it’s, you know, the cost of distribution and marketing, that’s getting the gasoline from the refinery to the gas station, and then running the gas station. But more or less. Even if all the rest of the gasoline were free, it would still cost about $1 in taxes and distribution and marketing costs, just for gasoline. And then on top of that, there’s two other big costs. There’s the cost of crude oil. So the cost of the crude oil, well, that varies dramatically. I mean, during COVID, people may have heard that oil prices in the US briefly turned negative, which was crazy. That almost never happened before, where the US crude oil price went negative. So it’s really variable, it’s sort of a roller coaster ride, you never know how much you’re going to pay for in the oil markets, you know, as soon as you think you have a bid on it, something changes and the prices skyrocket or fall. And then on top of all of that, there’s a cost of refining the gasoline. There’s, you know, obviously big refineries sprinkled around the country that turn crude oil into gasoline and other refined products, like diesel or jet fuel, that sort of thing. And what’s been really interesting recently, is that, the price that we’re paying to refiners has been going up dramatically. And the reason for that is, well, frankly, it’s the Ukraine war. It has scrambled the global supply chains, it’s created sort of chaos in where oil and gas are sourced. Because, you know, the US basically blocked all imports of Russian oil and Russian products that are sometimes used as refinery inputs. Same thing in the UK, and then recently, Europe has done the same thing. And so, you know, that meant that there’s some refineries that can’t get access to their normal streams of crude oil, and the result is that there’s been a scramble and sort of bidding up the price that the refiners that can get access to oil are able to charge for the service.


Kai Ryssdal: So is it fair to say that refining is a differentiator this time on high prices between this and other areas? I mean, you know, you remember when oil was $147 a barrel. So is refining the issue this time?


Clark Williams-Derry: It really is. I mean, obviously, oil prices are high right now, but they’re not as high as they’ve ever been. That was, as you pointed out, in 2008, it was even more expensive than now. But what’s different now is refining. And, and there’s a lot of talk, a lot of sort of chatter, about what’s been happening in the US refining sector. There’s a little bit of a dip in refining capacity that happened in 2020, 2021, during the COVID pandemic, you know, the depths of it. Basically, there are a lot of refiners that weren’t making money because nobody was buying much gas or jet fuel. And so they just, they shut down. There’s actually one refiner that in I believe 2019, at a series of accidents, explosions and other mishaps in the Philadelphia area, the refinery, and it went offline. So there’s been a lot of attention paid to the US refining picture. But really, what’s happening globally is much more dramatic. We’ve seen declines in refinery capacity in Europe. And then Europe got a lot of its oil from Russia, and now it doesn’t want that oil. And it also got a lot of refined products from Russia, and now doesn’t want to use that refinery capacity. And so there’s really, it’s this sort of the outflows of the Ukraine crisis that have created this sort of scramble for refinery capacity around the world, a replumbing of supply chains, if you will. And that is what really boosted the prices for refined products and the amount that refineries can charge.


Kimberly Adams: So you and Kai kind of touched on this just now. But there’s this idea that this is not as expensive as oil has ever been. And yet prices got pretty high. And now oil prices are down below $100 a barrel for the first time since April. And yet, nevertheless, gas prices are still relatively high. So what’s up with that?


Clark Williams-Derry: Well, there’s this phenomenon in – not just in oil markets or gasoline markets, but in commodity markets in general, called rockets and feathers. Rockets means that oil prices tend to skyrocket very quickly and move up very quickly. But on the way back down, prices sometimes sort of float down, they drift down like a feather. So rockets is quickly rising prices and feathers is sort of slowly drifting down prices. And this is a phenomenon that’s been observed in a lot of different markets. And that includes the oil markets. But I actually have taken a look at this. And, you know, there’s a lot of talk about rockets and feathers in terms of – well, when oil prices rise, gasoline prices rise very quickly along with it. And then when oil prices fall, gasoline prices fall more slowly. And so there’s this idea that, you know, maybe the oil industry or gasoline refiners or somebody is gouging the public. This may be happening, but it’s not, you know, it doesn’t happen as much as you might think. If you look at over time, the history, there’s a pretty tight correlation between oil prices or changes in oil prices, and then subsequent changes in gasoline prices. The delay is not that much, that sort of feathers not drifting down, it’s a pretty heavy feather there. And you know, the other thing to remember about this is that, a lot of this rockets and feathers phenomenon, this idea that oil prices rise fast and fall slowly or gasoline prices rise fast but fall slowly, some of that is just a cognitive phenomenon. We notice when oil prices rise, we notice when gas prices are going up, because, you know, it’s pain at the pump. And of course we noticed, because as you pointed out, we see the price of gasoline everywhere, it’s the one price – you don’t see the price of milk all over the place, you don’t see the price of a loaf of bread or a pair of jeans or something like that. But you see gasoline prices everywhere, so we noticed that. We’re sort of keyed into them, because it is the one price. And for some people, it’s like the one sort of economic indicator to pay attention to when gas prices are up. They think the economy is doing badly. So because we have all this cognitive attention on gasoline prices, we notice when they rise but we don’t, frankly, don’t pay as much attention when they fall. So at any rate, I think the rockets-and-feathers phenomenon is real, but it’s just a small part of this overall view that people have of gas prices.


Kai Ryssdal: I’m here to tell you, everybody notices now when they’re falling. I don’t get off the highway without checking the price at my local Shell station. Look, let me ask you about a supply question. Oil is a global market, right? We, all 8 billion whatever it is of us need it. What do you make of the arguments that some – mostly on the right – are saying, are offering when they say, Look, we could get out of this energy price spike thing, if only we would produce more. We could become energy and oil self-sufficient, and that would take care of all our problems? Do you buy that?


Clark Williams-Derry: Well, it’s, frankly, I mean, the US has never produced as much oil and gas as it produces right now. And the result is actually been that we have never been more tied to the global price of oil. You know, there’s just one market oil globally. Well, actually, prior to the Ukraine war, there’s just one market. Now, there’s kind of a two-tier market with, you know, Russian oil selling at a discount and everything else selling at a premium. But you know, the price we pay here in the US is the same price roughly that the market is charging in Europe and in Asia, there’s just really one market. And you know, the US does export a lot of our oil, and we import a lot of oil, really important. We export a lot of refined products, we have gasoline and diesel, and we import a lot. And so we’re really just part of this one big market. So anything we do on the supply side in the United States just kind of gets diluted across this giant global market. And frankly, the fact that we’re producing more and more oil doesn’t necessarily protect us from oil price spikes, or what’s happening in in Russia, or what’s happening in Europe, or what’s happening in China. You know, really, like it’s, essentially by participating in this global market for oil and gas, we have hitched our economy to a roller coaster ride that we don’t have any control over. Because, you know, we’re all part of one big market and a policy change in Beijing or a war in Europe, those have the same effects on our prices as if something had happened here in the US.


Kimberly Adams: You know, and that’s the argument that a lot of people advocating for less reliance on oil and more reliance on clean energy we’ll use, that we’re too tied up in this market that we can’t control, not to mention, you know, the literal flames all over the planet due to climate change.


Clark Williams-Derry: Right, right. I mean, I personally, I happen to have an electric car. And my fuel comes from a public utility. You know, I live in Seattle, and our electricity comes from Seattle City Light. You know, we’re lucky enough here that the public utility owns generating facilities and owns some hydropower dams, we have the transmission lines. Now, I’m not saying this is a perfect system. But, as a result of all that I have a lot more control over my energy costs than I would if I had a gasoline car. And we’re, you know, we’re basically subject to the whims of the global markets. In my opinion, a shift from oil and gas to renewable energy is more likely to give us control over our prices, it’s more likely to insulate us and isolate us from the vagaries of the global market, and keep our prices in check and predictable in in ways that you really can’t do, if you are essentially competing against wealthy Asian nations or European nations that suddenly have a supply or demand shock. You know, we’re really at the mercy of a global market when we’re relying on oil and gas. But when we are just producing our own electricity, you can’t export that so much and so we have a lot more control over our prices.


Kimberly Adams: Clark Williams-Derry, an energy and finance analyst at the Institute for Energy Economics and Financial Analysis. Thank you very much. I learned a lot.


Kai Ryssdal: Thanks a lot.


Clark Williams-Derry: Oh, of course. Thank you.


Kimberly Adams: Drive a minivan, Kai.


Kai Ryssdal: Well, I’m fine with driving a minivan. Let me just say, I’m fine with it. I’m kind of bored with it now. I get 20.2 miles a gallon, which is egregiously low. Yes, I know. But four kids to haul around and a couple of dogs and you know, whatever, and we just don’t have that in the house. So, if you’re in the market for a heavily used Toyota Sienna, you know, hit me up on Twitter. No, I’m just kidding. It’s a joke. I’m not using this podcast for personal financial gain. Anyway. Anyway.


Kimberly Adams: I was just saying before we hopped on that, you know, it’s so weird to be having this conversation about gas prices with just these heat waves and just global warming literally banging us over the head all over the planet at the moment, and –


Kai Ryssdal: And the idea that we are not throwing in 1,000% on green and renewables and getting ourselves off fossil fuels as fast as we possibly can. See. also my point yesterday about a certain senator from West Virginia. It’s unbelievable. It’s amazeballs. Truly.


Kimberly Adams: Dangerous amazeballs at that. Flaming ones even. Okay, I’m done. Let us know what you think. Did all this make sense to you? Does it land with your understanding of the market? Especially that sort of consumer psychology part of it – of people paying more attention to the prices going up and down. And what surprised you? So our number is 508-827-6278, also known as 508-U-B-SMART. You can also send us a voice memo at And we will be right back.


Kai Ryssdal: All right, we’re gonna do some news. Ms. Adams, you go first.


Kimberly Adams: Yeah, because mine are very related to the conversation that we just had. You know, he made a reference at the very end to the bifurcating oil markets. It’s generally one market. But now we kind of have two, with Russian oil being sold at a discount, and then the oil market for everyone else. I saw this story in Reuters today, where the National Iranian Oil Company and Russian gas producer Gazprom on Tuesday signed a Memorandum of Understanding worth about $40 billion, as they are working more closely together. These are two countries that are under active and pretty severe sanctions by, you know, the United States and Europe and other Western democracies. And they’re just taking their oil into their own arrangement, it seems. Their oil and gas, I should say. So I noticed that and then to the point about climate change, and the senator from West Virginia, as you discussed yesterday, it looks like President Biden is getting ready to issue an executive order, potentially as soon as this week. This is one of those – you know, as Washington loves to do it, sources say stories that’s being reported in multiple outlets, including the Washington Post. But this idea that now that Manchin has kind of torpedoed any chance, at least for now of getting climate into this latest package, now they’re turning to the Biden administration to do some sort of executive order, potentially declaring a climate emergency, potentially, you know, trying to limit drilling and directing more resources to, as you said, Kai, increase the amount of renewable energy that we produce in this country. But, you know, as with anytime a president issues an executive order, or tries to get things done in this way, without Congress, it opens the door to several things. Number one, legal challenges. And the inevitable lawsuits when you try to either do something or stop doing something in which there’s any kind of lobbying effort that wants to weigh in, which there always is. So there’s going to be lawsuits. And then of course, if a different administration comes in, they can roll it back. And so I’ll be interested to see what Biden tries to do or can do via executive order at this point to literally stop the burning. But I’m not too optimistic.


Kai Ryssdal: No, no. And I think your point about it being able to be undone by another stroke of another president’s pen is the tell right there, that this is not a not a sustainable policy. Sustainable in both ways. Okay, so I’ve got two reasonably quickies. I just, I just want to make people aware of them. Number one, I don’t know how many people remember the beginning of the pandemic. And one of the indicators that we all looked at and said, Oh, this is very, very bad. And it was Apple, saying that it couldn’t source things out of China, because the virus had started spreading there. And we had a supply shock, thanks to in part, Apple. This was like January before anybody was really, really serious about this thing. Well, now, lo and behold, here we have Apple again saying, Hmm, things might not look too good in the future. They have said yesterday, I think it was technically, that they are going to slow hiring, slow some spending on some of its teams, not the whole company, right, but part of Apple, parts of Apple, are not gonna hire as much, they’re not gonna replace people, and they’re not going to spend as much money because they fear an economic downturn. Now, does that mean a recession is coming? No. But Tim Cook runs one of the most valuable companies in the world. And and he’s a little worried. And I think that’s just a thing for everybody to pay attention to. I just want to make sure everybody saw that. And number two – and oh, my lordy be are you kidding? Because I would be fired if this happened to me and I was running an IT department. So I don’t know how closely you’ve been following the January 6 committee hearings. I know you have, Kimberly, I’m speaking to the broader audience here. But one of the things that’s been percolating the last couple of days, is the inability of the Secret Service to provide to the committee text messages about President Trump’s movements and actions on specifically the sixth of January. The Secret Service has said, Oh, we were in the middle of an equipment upgrade, and we can’t find them. And the committee subpoenaed the Secret Service on Friday and said, Give me the messages. And today the Washington Post’s Carol Leonnig, who’s incredibly well connected inside the Secret Service, the Washington Post is reporting that those texts are nowhere to be found. Cannot be found on the cloud, cannot be found on servers, cannot be found anywhere. And oh my lord. Oh my goodness. Are you kidding me? That’s it. Very bad look for the Secret Service.


Kimberly Adams: I was trying to find – I saw something you know, in the Post or the Times that the National Archives is now getting involved as well. This is, this is so wild. Like this is the Secret Service and the White House and the base level of document retention. Anyway. Astonishing. Okay.


Kai Ryssdal: Let’s. Mailbag. Do.


Kimberly Adams: Okay, so I guess it was last week, we were talking about digital coupons, and I went into great detail about my thoughts about digital coupons and couponing. So one of our listeners shared this hack.


Alex: Hey there, Kimberly. My name is Alex from Reno, Nevada, and I feel similarly too about the data harvesting used in digital coupons. Fortunately, there is a way around this. If we all use the same phone number, it becomes a lot more difficult to track this based on our purchases. So I use the phone number 867-5309, you know, after the Jenny song? You put your local area code in, and then 867-5309. And it works everywhere I’ve ever been. And you can get this week’s we discounts without that despicable marketing tracking nonsense. Thanks. Love the show! Bye bye.


Kai Ryssdal: 867- Yes. Anyway.


Kimberly Adams: You know what, I just realized I had a different song in my head. I was thinking of the much older one, which was like, beach foot 45789? It was like a 50s or 60s song where they had like, you know how they used to have like words in the beginning of phone numbers? So this is good, though. This is good. I also got a lot of people writing and saying you could use the white house phone number as a hack, and that’s always in there. Which, okay, I guess the White House is gonna get all the bonus points.


Kai Ryssdal: Alright, here we go. Here’s another one.


Ellen: Hey, make me smart team. It’s Ellen from Indianapolis, the crossroads of America. And I was listening to your recent podcasts from Friday. Thinking that it’s not going to be long before somebody figures out how to hack those BMWs and get their seat heating for free. Which I am totally supportive. By the way, congratulations Kimberly on getting make me smart. I love everything about you. You’ve got an infectious laugh, except for your one major flaw: you don’t like the cheese! Anyway, keep up the good work. Thanks. Bye bye!


Kimberly Adams: I told you people take that personally!


Kai Ryssdal: Can’t win them all! You have a motorcycle, but you don’t like cheese. Oh well. Oh well.


Kimberly Adams: We all contain legions.


Kai Ryssdal: Oh, my goodness. All right. As always, we leave you with this week’s answer the make me smart question. What is something you felt you knew but then found out you were wrong about? Here you go.


Max: Hey, this is Max from Brooklyn, New York. I’m calling with an answer to something I thought I knew but later found out I was wrong about. And that’s the fact that 99.9% of baseball cards are worthless. I was one of those kids growing up in the 90s. I thought oh no, I should never throw away my cards. I’ve heard the horror stories of people who had thrown away their cards as kids and always regretted it. So I’ve held on to them for 25 years now. I go back and try to sell my collection, turns out most of them are worthless. So turns out baseball cards are not a good store of value. And honestly, next step is trying to figure out what to do with the 18 boxes of cards I have in storage. Love the show. Thanks guys. Appreciate you making me smart.


Kai Ryssdal: You just got to hit the recycling Max because, yeah.


Kimberly Adams: No! People do a lot of really cool craft projects with it. Like if you’re a sports person, you could like wallpaper your wall with baseball cards, it would take forever ,but it would be a really cool look. Or you could like decoupage a table – you know what a decoupage is?


Kai Ryssdal: I don’t know what decoupage is, you fancy…


Kimberly Adams: So decoupage is when you take like some sort of paper good, and you basically take a lot of glue and you put your glue down, and then you put the paper product down, and then you put glue over it, and it creates a veneer over top of it. I had these two research advisors in college for my undergraduate research project, and when I graduated I decoupage them pen holders with pages from the Economist cuz I’m a dork.


Kai Ryssdal: You are a dork. Holy cow.


Kimberly Adams: So yeah, decoupage is fun. So find a good decoupager or wallpaper project for your baseball cards. You know, do something cool for a sports fan. Yeah!


Kai Ryssdal: There you go. Home crafty tips from Kimberly Adams on this podcast. My goodness. Send us your suggestions about home crafts, or maybe what Max can do with his baseball cards, I don’t know, take your pick. Voice Memo goes to our email at You can leave us a message at 508-827-6278, 508-U-B-SMART is another way to dial. What are you doing? You’re crinkling paper to do a little decoupage just right there? Is that what it is?


Kimberly Adams: Yes, that’s exactly what I’m doing. Prepping for my next project. Make Me Smart is directed and produced by Marissa Cabrera. Our intern is Olivia Zhao. And our Ellen Rolfes writes our newsletter and she’s amazing.


Kai Ryssdal: I wonder if she decoupages. Today’s program was engineered by Juan Carlos Torrado, Mingxin Qiguan is going to mix it down later. Ben Tolliday and Daniel Ramirez composed our theme music. The Senior Producer is Bridget Bodnar. Donna Tam is the Director of On Demand and apparently everything around here as well. Marketplace’s Vice President and General Manager – sorry a little inside marketplace joke – Neil Scarborough is in charge of everything. Of everything. He really is. It’s him. It’s him. Not Donna. For now.

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