NEWS
Does your gas tank care about the Mideast conflict?
Looking for a print version?
Simply choose ‘Print’ on your computer and a printer-friendly document will be generated.
Also by Derek Montgomery:
Related Stories:
- UW football tickets will increase next year (March 1, 2004)
- Annual gas tax sparks debate in Wisconsin (April 1, 2005)
- War has various economic effects (October 10, 2001)
- War's economic effects (October 10, 2001)
Share This:
by Derek Montgomery
Monday, April 15, 2002
While recently projected gas prices for summer may be causing some car owners to grip their wallets, others shrug their shoulders. But in the light of escalating global conflicts concentrated in the oil-heavy Middle East, local gas prices can be viewed as an indication and result of current events.
Lawmakers have seen constituent concerns and say they are taking action. Wisconsin lawmakers are planning to introduce legislation designed to streamline and conserve the state’s energy resources.
The AAA automobile association of Wisconsin reports state consumers are paying an average of $1.48 at the pump compared to the national average of $1.41. State Rep. Spencer Black, D-Madison, announced Wednesday he would introduce legislation to plan for Wisconsin’s energy future.
“It is time for Wisconsin to create a streamlined system to plan for our energy needs in the 21st century,” Black said. “I am proposing a new effort to coordinate our energy investments to meet the needs of our families and our businesses at the lowest possible cost to our economy and to the environment.”
U.S. Reps. Paul Ryan and Mark Green, both Wisconsin Republicans, have sponsored legislation that will cut the number of fuel additive blends nationally from more than 40 to three.
They say the cuts will streamline the nation’s energy system, allowing states to share supplies of gas.
U.S. Sen. Russ Feingold, D-Wis., supports the reduction of fuel additive blends. Feingold said he believes the bill would greatly increase gas supplies to Wisconsin.
“Without many other gas reserves to draw on, Wisconsin will always face the potential of sudden price hikes at the pump,” Feingold said. “If we could draw on gas supplies from other areas of the Midwest, we could vastly expand the supply available to southeastern Wisconsin at any given time.”
UW-Madison history professor Kemal Karpat explained the link between local gas prices and the Middle East conflicts on which many economists rely for price analysis.
“Remember, the Saudis play a major role in deciding the price of crude oil, and as a result we are indirectly subsidized by them,” Karpat said. “They could raise prices if they wanted to, but they don’t want to hurt us. Raising the oil prices could be an indirect way to pressure the U.S. to find a solution to the Israel-Palestine struggle.”
But Karpat also believes Iraq’s recent decision to cut oil exports will have little effect on gas prices in the United States.
“The Saudis will make up for the portion that the Iraqis refuse to produce,” Karpat said. “For the time being, I don’t think there is much danger. In the long run, the danger from the Arabs using oil as a tool is always there.”
David Morgan, UW history and religious-studies professor, said he believes energy concerns will remain on the backburner as long as the Israel-Palestine conflict continues.
“The prices will depend on whether or not there is a shortage of supplies,” Morgan said. “My guess is while the Israel-Palestine conflict is an appalling pickle, it [will remain] the number one priority for the American government. Iraq’s oil must momentarily be on the backburner. The United States, in fact, gets a majority of its oil from Mexico. Of course, to lose the oil from the Middle East would be very serious.”
Experts also question the ramifications of current gas-worker negotiations in South America and their effect on the local economy. Oil workers there have gone on strike and cut off oil exports. Venezuela is the third-largest oil supplier to the United States.
