Thanks to America's overwhelmed oil pipelines, some lucky drivers in the Rockies are getting a big discount on gas.
Right now, it's very, very good to be a commuter in Colorado.
Gas prices have been on the rise for the past two months, as the international game of chicken between the West and Iran over Tehran's nuclear program has sent global price of crude oil up above $120 a barrel. In California, an average gallon of fuel now costs more than $4. In New York, it's about $3.90. Even in Houston, the gas-pumping heart of U.S. refining capacity, motorists are paying more than $3.50. The run-up has many contemplating whether gas prices could break the U.S. economic recovery, as they nearly did in 2011.
Yet up in the Rockies, as well as in parts of the Midwest, motorists have been getting spared, relatively speaking. As the map below from Gas Buddy shows, prices in states such as Colorado, Idaho, and Utah are lagging well behind the national average of $3.65. As the U.S. Energy Information Administration points out, prices in the Rocky Mountain region were actually falling towards the end of January, even as the rest of the country saw average fuel costs tick up.
It's not unusual for U.S. gas prices to vary by region, sometimes drastically. All sorts of factors come into play, including local regulations, taxes, and the distance from the nearest refinery. But those aren't the reasons behind the big discrepancies we're now seeing in American gas prices. There's a much bigger issue at play that speaks to the strange state of the country's oil supply.