For the past two weeks, the world’s eyes have been fixed on Egypt. As peaceful protests began to draw crowds in the tens of thousands, and violence erupted as the protesters started to clash with one another, Tahir Square has had everyone’s full attention. But while glued to the television screens watching the chaos in a city thousands of miles away, many people may have missed a direct consequence of the unrest right here at home: soaring gas prices.
This past weekend, prices for gasoline were well over $3 per gallon around Ann Arbor, and the story is the same throughout much of the country. A member of Kuwait’s Supreme Petroleum Council said yesterday that the turmoil in Egypt could push oil prices to over $110 per barrel, according to a Feb. 6 Reuters article.
These price increases shed light on how fragile the international oil market is. Oil prices aren’t going up because of an actual change in the market. They’re going up because of anxieties about a potential change in the market. The protests in Egypt threaten the stability of the entire Middle East region. And disregarding the danger this poses to all the civilians caught in the middle of these disputes, any changes in the stability of the region could make getting oil at a “reasonable” price, or getting it to the United States at all, extremely difficult. That is why prices are going up. Oil companies want to prepare for there to be a real reason for them to go up.
What’s arguably most absurd about the situation is that Egypt barely produces any oil, and yet their political volatility is able to completely shake up the entire Middle East oil industry. The biggest tangible threat is that Egypt could cut the flow of the Suez Canal oil pipeline that passes near Cairo. But while this canal is functioning properly despite the country’s unrest, the fear of what could happen is enough to raise prices.
While Americans have been riveted by the images they’ve seen on the news of the chaos in Egypt, the United States’s involvement in the country’s struggle has been, by most standards, minimal. And given that domestic gas prices are still on the rise despite our nation’s relative neutrality, it’s in our best interest that we stay out of it. Many people have been calling for a more serious response from President Barack Obama, but it makes sense that he is staying mum. You can’t go into a business meeting pushing and shoving, and Egypt’s government is a business client for the U.S. and it’s important that we remain on good terms with this client no matter who’s in charge. As far as the nation is concerned, democracy in the Middle East is good, but cheap oil is better.
The situation in Egypt is by no means the first international issue that has threatened the stability of U.S. gas prices. Yet we never learn. While candidate after candidate has campaigned on the platform of ending America’s dependency on foreign oil, we’re nowhere near reaching that goal. Any progress we have made toward economic recovery will be derailed if Americans are consistently paying $3.25 per gallon for gasoline and heating their homes at unmanageable costs. The U.S. needs energy reform now. The business as usual of crossing our fingers and hoping that Middle Eastern leaders like Americans enough to do reasonable business with us isn’t working. And as we saw from the summer’s BP oil spill, the domestic oil market isn’t working too well either.
As far as the environmental aspect of the issue, we’re actually moving backward. Sen. John Barrasso (R-WY) has introduced a bill that would keep the Environmental Protection Agency from regulating carbon emissions. This bill would prevent the federal government from doing anything to get America’s carbon footprint under control. And if we’re under no obligation to reduce our carbon emissions, we have no reason to make real efforts to shake our dependency on oil.
Egypt is moving toward a solution to its conflict, and as things calm down, oil prices will decrease and the world will move on. But the U.S. can’t afford to return to complacency. We need to start investing in renewable energy options and think seriously about the environmental impact of our lifestyle. Our use of petroleum and our role in the market currently operates at an unsustainable level, and we need to make adjustments sooner rather than later.
Michelle DeWitt is the co-editorial page editor. She can be reached at dewittm@umich.edu.