Alaska: Higher Gas Prices Just the Beginning

Alaska: Higher Gas Prices Just the Beginning

November 12, 2021

At least Alaska isn’t California.

Alaskans who have gone to pump gas in the past few weeks have no doubt felt a sense of ‘sticker shock’ when the dials stopped spinning.  With standard unleaded gas now averaging $3.68 a gallon in Anchorage, $3.81 in Fairbanks and $3.61 in Juneau, we’re significantly over the national average of $3.41. 

Our statewide average of $3.72 a gallon is the sixth highest of the 50 states, trailing Oregon, Washington, Nevada, Hawaii and California, whose $4.65 per gallon average is downright depressing.

A year ago, our average price was $2.49!  How could things change so much, so quickly?

It is simple Economics 101 and deals with the laws of supply and demand.  First, despite the naysayers, we’re well on the road to recovery from COVID-19.  People are getting out, traveling, meeting face-to-face again, and that is driving demand, which always raises prices, and can significantly do so if supplies don’t increase. 

That leads us to the supply side of the equation, and where the majority of the problem lies.  Since taking office, President Biden has waged an all-out assault on traditional energy sources and the workers who help bring oil, gas, coal and mined materials to market. 

Especially regarding oil and gas, he has cancelled the Keystone XL pipeline, which led to more costly transport of the extracted oil and gas to refineries, and ultimately, market.  Alaskans are well-aware of his day-one executive order shutting down the near-term viability of ANWR’s Coastal Plain.  His ‘leadership’ in the departments of Interior and Energy created market chaos with leasing and production restrictions, including in the National Petroleum Reserve-Alaska (NPR-A).

Those actions and numerous others have strained supplies; so much so that the President and his administration have taken to asking OPEC – certainly not a friend of our country on so many levels – to come save us by increasing OPEC’s production and exports!  The President should have seen this coming – attack suppliers and watch supplies dwindle – but his team seems oblivious to the fact that they caused this situation.

The last time our gas prices were this high was when – get this – Joe Biden was Vice President!  Unfortunately, the trend line isn’t looking any better, as per-barrel oil pricing is expected to continue to climb throughout the winter, which will ultimately lead to even higher gas prices.

So, Alaska, as you go to the pump, be glad you aren’t California, but remember the good ol’ days of energy independence, supply meeting demand without market interference by a federal administration, and prices nearly $1.25 a gallon less.

Here’s hoping – never a great strategy – that the Biden Administration changes course and allows for increased production of domestic oil and gas.