Why Gas Prices are Higher in the West

I have been traveling for the past week and have not had a chance to do an episode of R-Squared Energy TV. It will return next week. For this week, I thought I would share the video for a recent appearance I made on Insights on PBS Hawaii. The topic was The Price of Gas:

As gas prices continue to climb, Hawaii drivers are experiencing pain at the pump. Guests will discuss the forces that affect global gas prices and why Hawaii has the highest prices in the nation. The panel will also explore energy alternatives that could help reduce the islands’ dependency on foreign oil, as well as innovative solutions from the auto industry.

I was joined on the program by host Dan Boylan and guests Patrick “Rick” Ching, President of Servco Automotive; Richard Parry, President and CEO of Aloha Petroleum, Ltd.; and Kang Wu, Economist and Senior Fellow at the East-West Center.

While the main issue we explored was why gasoline prices in Hawaii are so high relative to the rest of the country, as I explain in the video it is an issue that impacts all states west of the Rockies. A key reason that prices west of the Rockies are higher than they are east of the Rockies is because there is no pipeline connection to bring oil from the new production sites to the West Coast. Further, Japan’s shift away from nuclear power has them using more petroleum to fuel their power plants, and that has tightened up supplies of light, sweet crude oil.

Also discussed was the issue of high oil prices in general.