Welcome to summer, wanna buy some gas? I was watching the Lehrer Newshour show last week when a representative from an oil industry trade group explained that gas prices in Chicago are sky-high because area oil wholesalers had not prepared themselves for the summer demand. Does that explain things? The Chicago gas wholesalers forgot this year that summer follows spring. Maybe they were hoping Hell would freeze over and the Cubs would finally win the pennant.
Not gonna happen, not this year. The Cubs are 14 games back in the NL Central and the oil companies have both the administration and Congress investigating the price of Midwest gas. Some people blame OPEC, some say it’s the EPA – I have a different theory. I think the Chicago wholesalers started counting SUVs on the Dan Ryan Expressway and “Holy Cow, those tanks are two out of three cars on the road,” and that’s all it took.
Have you ever been to Chicago in the summer? After 36 hours in that city in July, you would trade the next ten years of your life for enough gas to take you somewhere, anywhere, else. This is, however, an election year, not a good year to stiff gas buyers in one of America’s most politically active cities.
You could stay home and run the air conditioner, but now that it’s almost July, we can expect the blackouts to start any day. The outages will probably strike in an arc from Chicago, through the Great Lakes, across New England and down to the Middle Atlantic states. How do I know? Well, those areas were among the 25 states that had blackouts last summer and very little has changed since then.
Electric utilities in the U.S. are in the midst of massive deregulation and privatization. Soon your electric utility will be as annoying and unreliable as your long distance service. Doesn’t that sound appealing?
Anyhow, as the utilities wait to see how this privatization scheme shakes out, few of them, and none in the east, have invested in new power plants since 1990, because as they navigate the transition from public to private, the utilities don’t want to get stuck with the costs of the new plants. So, while supply has remained locked at 1990 levels, demand has been growing for ten years. Given that state of affairs, how can anyone be surprised when the lights go out?
So maybe you think this will be a passing thing, that the sooner we can get electric utilities deregulated, the sooner the invisible hand of the free market will come into play and relieve our summertime misery.
Or not. A deregulated electric industry, like any other commercial enterprise, will use its control of markets and chokepoints to extract as much profit from the system as possible. So, depending on where you live, you may have power on the hottest and coldest days of the year, and pay dearly for it, or you may not, because the juice has gone to the highest bidder and that highest bidder is not you.
So gas prices are high this summer, and maybe that’s OK. Maybe that means we’ll decide whether the trip is really worth it or decide to take the bus, or walk around town. Maybe the air quality in our cities will be a little better thanks to the greed of the oil companies.
Blackouts are a different story. Few people have died for the want of gasoline, but power shortages can kill. Last summer, 70 people died in one blackout. In Chicago, a few years back, summer heat killed 500 people.
It’s that life-dependent relationship we have with electricity that caused us to form utilities as public trusts in the first place.
Some things are too important to leave to the free market.
Summertime Blues
Welcome to summer, wanna buy some gas? I was watching the Lehrer Newshour show last week when a representative from an oil industry trade group explained that gas prices in Chicago are sky-high because area oil wholesalers had not prepared themselves for the summer demand. Does that explain things? The Chicago gas wholesalers forgot this year that summer follows spring. Maybe they were hoping Hell would freeze over and the Cubs would finally win the pennant.
Not gonna happen, not this year. The Cubs are 14 games back in the NL Central and the oil companies have both the administration and Congress investigating the price of Midwest gas. Some people blame OPEC, some say it’s the EPA – I have a different theory. I think the Chicago wholesalers started counting SUVs on the Dan Ryan Expressway and “Holy Cow, those tanks are two out of three cars on the road,” and that’s all it took.
Have you ever been to Chicago in the summer? After 36 hours in that city in July, you would trade the next ten years of your life for enough gas to take you somewhere, anywhere, else. This is, however, an election year, not a good year to stiff gas buyers in one of America’s most politically active cities.
You could stay home and run the air conditioner, but now that it’s almost July, we can expect the blackouts to start any day. The outages will probably strike in an arc from Chicago, through the Great Lakes, across New England and down to the Middle Atlantic states. How do I know? Well, those areas were among the 25 states that had blackouts last summer and very little has changed since then.
Electric utilities in the U.S. are in the midst of massive deregulation and privatization. Soon your electric utility will be as annoying and unreliable as your long distance service. Doesn’t that sound appealing?
Anyhow, as the utilities wait to see how this privatization scheme shakes out, few of them, and none in the east, have invested in new power plants since 1990, because as they navigate the transition from public to private, the utilities don’t want to get stuck with the costs of the new plants. So, while supply has remained locked at 1990 levels, demand has been growing for ten years. Given that state of affairs, how can anyone be surprised when the lights go out?
So maybe you think this will be a passing thing, that the sooner we can get electric utilities deregulated, the sooner the invisible hand of the free market will come into play and relieve our summertime misery.
Or not. A deregulated electric industry, like any other commercial enterprise, will use its control of markets and chokepoints to extract as much profit from the system as possible. So, depending on where you live, you may have power on the hottest and coldest days of the year, and pay dearly for it, or you may not, because the juice has gone to the highest bidder and that highest bidder is not you.
So gas prices are high this summer, and maybe that’s OK. Maybe that means we’ll decide whether the trip is really worth it or decide to take the bus, or walk around town. Maybe the air quality in our cities will be a little better thanks to the greed of the oil companies.
Blackouts are a different story. Few people have died for the want of gasoline, but power shortages can kill. Last summer, 70 people died in one blackout. In Chicago, a few years back, summer heat killed 500 people.
It’s that life-dependent relationship we have with electricity that caused us to form utilities as public trusts in the first place.
Some things are too important to leave to the free market.