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Memorial Day Driving by the Numbers

How Big Oil Profits from Americans’ Vacations

SOURCE: AP/Rick Bowmer

Gas prices are displayed at a gas station in Portland, Oregon, earlier this month. Many Americans are altering their Memorial Day weekend plans to account for gas prices.

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Memorial Day weekend is an opportunity to remember and honor the countless sacrifices made by our men and women in uniform in order to protect this great nation. It also marks the traditional start of the summer driving season—when families pack their bags and pile into their cars or minivans to hit the road for destinations across the country. This weekend nearly 35 million Americans are expected to travel 50 miles or more to visit family and friends. Ninety percent of them will likely drive to their destination, filling up their tanks with expensive gasoline or diesel fuel before hitting the road.

The number of Memorial Day travelers is expected to increase by 1.2 percent—an estimated 500,000 more people—to 34.3 million travelers this year compared to 2011. But those travelers are projected to stay closer to home this weekend, with the average travel distance dropping by 19 percent. This may reflect the spike in gasoline prices earlier in the year, averaging around $4 per gallon at one point.

As we pointed out in our report—“Is Big Oil Rigging Gasoline Prices?”—the price of gas at the pump dramatically increased during the first quarter of this year despite the fact that domestic production was at an eight-year high, and domestic demand for oil and oil products was down.

Since reaching its peak in late March, the cost of a fill-up has fortunately receded. Gasoline prices fell for the sixth straight week to an average of $3.75 per gallon. Despite the fact that gas prices are 21-cents-per-gallon lower than they were this time in 2011, it is still a big bite out of many Americans’ budget. According to an analysis by the American Automobile Association, 47 percent of travelers said that high prices at the pump will impact their plans this Memorial Day.

This past week the American Petroleum Institute—the political operatives of Big Oil—released a “report” outlining its policy wish list. Some of the demands included the “opening of the eastern Gulf of Mexico, the Atlantic Outer Continental Shelf, and the Pacific Outer Continental Shelf” to oil and gas production.

If Big Oil gets its way, it could have devastating impacts on coastal tourism. Many of the areas that Americans travel to during the summer months would be vulnerable to oil spills similar to the 2010 BP Deepwater Horizon disaster that spewed nearly 5 million barrels of oil into the Gulf of Mexico, devastating the ecosystem and the Gulf economy.

The Outer Banks—an area that would be vulnerable to drilling located off the mid-Atlantic coast—attracts more than 7 million visitors each year. When surveyed, more than 49 percent of respondents said “beautiful beaches” are the main reason for summer visits there. It’s highly doubtful that tourists would flock to build sandcastles on oil-soaked beaches.

Likewise, those vacationing out west could find a peaceful kayaking trip disrupted by the 1,300 gas wells that Denver-based Gasco Energy, Inc., wants to drill in Desolation Canyon, Utah. This remote area on the Green River is an essential part of Utah’s tourism industry, which generates nearly $300 million annually in total state tax revenue from tourism.

Beginning with the Memorial Day weekend and throughout the summer, Americans will spend their hard-earned dollars traveling to visit family and friends, with many people taking the opportunity to enjoy the nation’s natural wonders. Meanwhile, Big Oil will be making huge profits off of Americans’ travel expenditures on fuel while at the same time fighting for increased drilling that threatens some of our most cherished vacation destinations.

Here is a by-the-numbers examination of what Big Oil will cost us this weekend:

An expensive holiday weekend ahead

  • 642 miles: Average distance Americans will travel this Memorial Day weekend
  • 804.5 million: Gallons of gasoline expected to be purchased over the three-day weekend
  • $113: Total cost of gasoline for an average trip this Memorial Day weekend [1]

Wall Street speculators drive up oil and gas prices

  • $92.60: Price of a barrel of oil on May 21, 2012
  • $20: The estimated price-per-barrel-of-oil increase due to speculation, according to Forbes magazine’s formula
  • $14.60: Additional gasoline expenditure for the average Memorial Day trip, thanks to speculation
  • 11: Number of quarter-pound hamburgers with buns for a Memorial Day picnic that you can make for $14

High pump price increases Big Oil profits

  • $33.5 billion: Amount of profit the five biggest oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell—made in the first three months of 2012
  • $1 billion: Estimated combined earnings the big five oil companies will earn over the three-day Memorial Day weekend if second quarter profits replicated first quarter profits

Increased drilling would destroy vacation spots for millions of Americans

  • 7 million: Number of tourists that visit the Outer Banks in North Carolina each year
  • 1 million: Number of people employed by Florida’s tourism industry
  • $4 billion:Value of the tourism industry in Utah, where Gasco Energy wants to drill 1,300 gas wells

Big Oil’s influence machine

  • $14 million: Total lobbying expenditures by the big five oil companies so far in 2012
  • $906,000: Amount given to Republican presidential candidate Mitt Romney by the oil and gas industry thus far in the 2011–2012 election season
  • $182,000: Amount given to President Barack Obama’s re-election campaign by the oil and gas industry thus far in the 2011–2012 election season

Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy, Jackie Weidman is Special Assistant for Energy Policy, and Celine Ramstein is an intern with the Energy Policy team at the Center for American Progress.

Endnotes

[1] This calculation is based on the most recently available fuel economy data (2009) for all passenger vehicles and SUVs/light trucks, and employs the U.S. Department of Transportation data on the composition of the passenger vehicle fleet, which is 57 percent cars and 40 percent light trucks. For more information, see: “Table 4-23: Average Fuel Efficiency of U.S. Light Duty Vehicles,” available at http://www.bts.gov/publications/national_transportation_statistics/html/table_04_23.html.

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