As we move into the second month of quarantine, the public has continued to social distance, staying in their homes and only going out for the necessities. Life has been halted. Everyone but the essential workers have stopped going to work, creating a stark drop in commuting. This decline has resulted in an abundance of gas, which in turn makes the gas prices cheaper than they’ve been in years. High production, paired with low consumption, makes the perfect recipe for yet another economic disaster looming in the wake of the coronavirus pandemic.
Low gas prices aren’t typically the kind of thing the general population would be concerned with; however, the decrease in demand for oil and gas holds significance for Wyoming. Dr. Benjamin Cook, MBA Program Director & Assoc. Lecturer in Economics stated,
“While affordable and accessible electricity and fuel can be important agents of positive economic growth, unfortunately in the current environment, low gasoline prices are symptomatic of the wide-scale destruction of oil demand throughout the world due to entire economies shutting down. This is never a good thing. Locally in Wyoming, the irony of low gasoline prices at any time, regardless of the reason, is that a significant share of our State and local government revenues come from oil production. When I fill up my tank and see that I saved $20 on low prices, I think about whether it is causing jobs to be lost in our State or if our University and K-12 budgets may be put under pressure.”
The decrease in gas prices is more relevant to states that typically have more travel than Wyoming, such as California and New York. Therefore, the decline in gas prices isn’t as large of a concern for Wyoming as the influx of crude oil in the State is. “More important for this State would be the price of crude oil (to which the price of gasoline is naturally related). At current crude prices, there won’t be much new development, which isn’t great for the State,” according to Chuck Mason, Associate Dean and Professor for the College of Business Dean’s Office at U.W. Crude oil is a significant source of energy and can be turned into petrochemicals such as gasoline and diesel. Crude oil is exceptionally substantial for Wyoming’s economy, as it contributes to jobs in the fuel industry, employing over 22,000 people in Wyoming, according to the U.S. Energy and Employment Report for 2019.
For the first time in over 15 years, oil prices have a national average below two dollars a gallon. According to data gathered from GasBuddy on April 20, 2020,
“For the first time in GasBuddy’s 20 year history, we have two cities that are averaging under $1 per gallon… Not a single station under $1, but the entire city average… Over 120,000 gas stations are selling gasoline under $2/gal today, with nearly 40,000 stations under $1.50/gal. The most common gas price across the country stands at $1.69 per gallon.”
For now, low gas prices aren’t the primary concern of our society. Despite the unfortunate impacts it’ll have on the economy and the ways in which it affects employment, at least the prices are low. The reasons why aren’t something to be happy about, however, we can be positive about the simple fact that gas prices are low, and hope the economy stabilizes soon as we move out of this pandemic.
