Economists Warn Coloradans About Rising Gas Prices Amid Invasion Of Ukraine
WELD COUNTY, Colo. (CBS4) – As Russia continues its invasion of Ukraine, economists and more are warning Coloradans that gasoline prices could soon soar well over $4 a gallon. Russia is a major producer and exporter of both gasoline and natural gas.
Though their product predominantly stays in and around Europe, experts in the oil and gas sphere have predicted that Americans will still have to pay a larger price at the pump.
"When there is a supply issue there it is going to cause ripple effects across the globe," said Dan Haley, President and CEO of the Colorado Oil and Gas Association.
Haley told CBS4's Dillon Thomas that the price of a barrel of gas skyrocketed after the invasion began. When COVID-19 first emerged, shutting down economies, a barrel of gas was priced at less than zero. However, in the years since, the price has hovered right around $65 a gallon.
"Just watching it last night (during the invasion) I was checking oil prices, and I saw oil prices were going up. It went over $100 last night for the first time in seven years," Haley said. "In the past when we saw prices get this high, you would see more activity and more rigs to produce that resource. And, we are just not seeing that happen in Colorado right now."
Haley said legislation introduced in 2019, and later signed by Gov. Jared Polis, has dramatically slowed Colorado's ability to produce both natural gas and gasoline.
Colorado is believed to have the second-largest natural gas reserve in the United States. The state is also a net energy export, meaning Colorado produces more energy than it consumes, allowing the state to export.
However, Haley said the ability to export has been hindered by legislation which made obtaining permits for drilling more difficult to obtain.
According to Haley only five permits were approved in the year of 2021. Before the legislation was formed Haley said there were times where more than 40 permits were approved per month.
President Joe Biden addressed the country on Thursday, just a matter of hours after Russia began its invasion. Biden told reporters that his administration was using every tool in their arsenal to try and prevent prices at the pump from inflating as a result of the conflict.
"We are taking active steps to bring down the costs, and American oil and gas companies should not exploit this moment to hike their prices to raise profits," the president said.
"When you see something like that happen you know there is going to be an immediate impact to Coloradans, and that is typically going to happen at the pump," Haley said. "We've got the energy we need right underneath our feet."
Haley admitted unleashing Colorado to further exploit natural resources in the state wouldn't make a dramatic dent in the possibility of gasoline and natural gas prices soaring. However, he did say that he believed there was a better opportunity to address the issue by finding more grounds for clean avenues to extract fuels.
"We are not going to solve a global energy supply crisis from Colorado no more than we can solve the climate crisis from Colorado. But, we can be a part of the solution on both of those things by generating more energy at home," Haley said.
