Karl Honegger
by Karl Honegger
I recently paid $120 to fill up my SUV, bringing back memories of 2012 when I was a college student working two jobs to support my wife and newborn. It was difficult to balance the cost of rent, diapers, food, and gas. It felt like I’d been punched in the gut every time I left the gas station. Because I have a nine-year career under my belt, a master’s degree, and a professional certification, my income is higher. While it doesn’t hurt as much when I fill up my gas tank, I’m still reminded of how much the price of gas impacted my life. It still impacts me because my wife and I drive a full-size passenger van because of my eight-person family.
It is important to understand that it was a strange convergence of events that caused the price of gas to be so low the last decade. Why we used to enjoy low gas prices is because of three factors:
Senator Kevin Priola
Representative Matt Gray
The first is that the United States is one of the few countries where individuals are allowed to own the minerals in the ground. They can then sign contracts with oil and gas companies to drill and sell those minerals. This free market causes oil companies to be fiercely competitive. March of 2011, NATO commenced a seven-month bombing campaign in Libya and the country was tossed into a brutal civil war. This took almost 1,500 barrels per day of oil off the international market and helped support the price of crude oil for the next few years. Here is how this impacted the United States — oil producers decided that they were going to invest billions in exploring and developing shale oil fields where the cost of drilling for a barrel of oil is much higher. The scientists and petroleum engineers working for those companies then figured out ways to drive down the cost of drilling for shale oil. The United States ended up producing a higher percentage of the world’s supply of oil. This innovation was great for the United States but gave Saudi Arabia a headache.
This brings us to the second factor, Saudi Arabia and OPEC decided they would stop working so hard to prop up the price of crude oil by constantly cutting their own production. Instead, they would flood the market. From mid-2014 to early 2016 the price of crude oil dropped 70% as Saudi Arabia entered a risky battle with US Shale oil companies for market share. The Saudi’s won. This led to over 100 oil and gas companies declaring bankruptcy in 2020, including Whiting Oil and Gas which I used to work for. The bright side was that this oil war was saving American’s $180 billion a year.
The third factor that led to the low oil prices was that the world enjoyed some peace during the previous administration. The oil production of Libya came back on-line, and we managed to stay out of war with Iran. The combination of these three synergistic factors led to the low gas prices we used to enjoy. Those times will never return. Saudi Arabia is willing to keep oil prices high after winning their price war and demand for oil has recovered after last year’s government lockdowns. The cost of transporting our food to the grocery store, or driving to visit friends and family, or driving to work will remain expensive.
With this in mind, we must fight any new tax disguised as a fee on gas or transportation. The poor and middle class do not need to pay more at the pump as housing prices and out of control inflation continue to squeeze their budgets tighter and tighter.
The corporatists at Colorado Concern demonstrate how out of touch they are by giving Senator Kevin Priola their “In the Arena” award for his support of Senate Bill 260. This bill, sponsored in the State House by my Representative Matt Gray, creates an additional “fee” per gallon of gas. But the money doesn’t go to just roads, it’s also designed to funnel your money towards electrical vehicle “infrastructure” and to subsidize governments buying electric vehicles. Colorado Concern’s award is for the legislator whose “face is marred by dust and sweat and blood; who strives valiantly… who spends himself in a worthy cause…” If politicians like Priola did have any guts, they would have taken this bill to the voters as required by the Taxpayer Bill of Rights. Rather they chose the easy way out by calling a tax a “fee.” This form of sniveling cowardice is what big business interests at Colorado Concern want more of. Next time you are at the gas pump, give State Senator Priola or Representative Gray a call and let them know you don’t appreciate their “fee” on the gas you need to live your life. Colorado Concern may be funded by wealthy cronies who want politicians to do their bidding, but it’s time the voters let them know we’ve had enough.
Karl Honegger is on the Steamboat Institute’s Emerging Leaders Council and a board member of the Colorado Union of Taxpayers. He is a Certified Treasury Professional and works for a “tech-enabled” healthcare company as a Financial Reporting Accountant.
