The Daily Tar Heel

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Thursday August 11th

'There’s no immediate solution': All-time high gas prices impact students, public transit

A person fills up their tank at a gas station on June 30, 2022. Gas prices in Chapel Hill have risen significantly over the past few months.
Buy Photos A person fills up their tank at a gas station on June 30, 2022. Gas prices in Chapel Hill have risen significantly over the past few months.

A year ago, average national gas prices hovered around $3 per gallon. This month, gas stations across the country displayed the highest average prices ever recorded.

In some areas of the country, average gas prices nearly reached $6.50 per gallon. In the Durham-Chapel Hill area, average gas prices reached a record-high $4.68 on June 11.

Zack Johnson, a rising UNC senior who commutes to Raleigh twice a week for his sales internship at Red Hat, said he spends about $150 on gas each month, despite carpooling with another intern.

Johnson added that, as a student and intern, spending a significant portion of his budget on his gas has hindered him from doing some things he wants to do. He says the price is not ideal but that he can afford it currently.

“At least they’re paying me, so I don’t see it as that big of a deal,” Johnson said.

President Joe Biden has proposed several potential short-term solutions to these high prices, including a three-month federal gas tax holiday, which would decrease nationwide gas prices by 18 cents per gallon.

The Biden administration has also released 30 million barrels of strategic oil reserves, but supply chain expert and N.C. State professor Robert Handfield said the extra gasoline in markets will barely make a dent in the supply deficit America is currently facing.

While increasing domestic production of oil has also been suggested, Handfield said oil output cannot be ramped up quickly.

“You don’t do it by snapping your fingers,” he said. “You have to drill, you have to find the oil. A lot of the shale drillers in the Midwest, they’ve used up a lot of the easy-access oils, so they have to go off after the other stuff, which is more difficult to find.”

The Organization of Petroleum Exporting Countries is responsible for about 40 percent of global oil production. Among OPEC’s members are Saudi Arabia, Venezuela and Iran – all countries with tenuous relations with the United States.

Handfield said OPEC reduced production when oil prices were low during the peak of the pandemic in an effort to increase prices and revenue. Since OPEC produces such a large portion of the world’s oil, he said the U.S. has to rely on OPEC.

“There’s no immediate solution,” he said. “The best possible solution is OPEC, which is what the Biden Administration is shooting for.”

Handfield said the Biden administration should reconsider its dismissal of the controversial Keystone XL pipeline, an oil pipeline which would have brought oil into the U.S. from Canada. 

The cross-national project was abandoned in 2021 due to concerns about its path through Native American land, potential leaks and other environmental costs.

“Pipelines are the safest way to transport oil, much safer than rail cars or oil tankers,” Handfield said. “It would allow us to buy oil from a friendly country, Canada, as opposed to Venezuela or Saudi Arabia."

Alternatives to an oil-powered society, such as making electric cars more accessible, have also been supported by the Biden administration.

Handfield said, though, that shortages of materials to build batteries are preventing large-scale energy transition in the short-term.

“The thing is, this isn't Joe Biden's fault,” he said. “It's not the government's fault. This is a supply chain problem, and the oil problems are just a function of the current state of the global economy. There's nothing that can be done about this.”

Along with individuals, public transportation is also affected by the rise in prices. Chapel Hill Transit has largely avoided the gas price hike so far, having negotiated a gas price deal during the peak of the COVID-19 pandemic. According to Chapel Hill Transit Director Brian Litchfield, that deal runs through the end of the year.

He said Chapel Hill Transit has been paying only about $1.70 per gallon of diesel fuel during the current contract. However, when the next round of negotiations begins next year, the market price for diesel fuel will be much higher, Litchfield explained.

This change in prices has to be accounted for in current and future budgets, he said.

“If we increase our budget by $1 million, it would be nice to say, ‘Hey, community, we have $1 million of new service that we’re going to provide,’” Litchfield said. “Unfortunately, when we see cost increases in fuel and other things like that, we have to increase our budget, but we’re not able to translate that into service improvements.”

Gas prices are slowly trending down, but still sit around $4.50 per gallon on average in North Carolina.

@ethanehorton1

@DTHCityState | city@dailytarheel.com

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