This article contains a correction.
Nearly 35 million Americans are expected to travel 50 miles or more this Memorial Day weekend to visit family and friends and enjoy the outdoors, according to AAA. Nearly 90 percent of them will likely to drive to their destination, filling up their tanks with expensive gasoline or diesel fuel before hitting the road.
Gasoline prices averaged $3.66 per gallon nationwide on May 21, 2013, which is 2 cents per gallon lower than they were a year ago when the price per gallon was $3.69. But experts predict that prices will plateau or increase throughout the summer, providing little relief at the pump for American families during this vacation season. These high prices enable the five biggest oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—to reap huge profits even though they are producing less oil worldwide than this time last year.
According to the Energy Information Administration, or EIA, the price of crude oil makes up 63 percent of the retail price of regular gasoline. Even though domestic oil production is booming, it has done little to protect Americans from rising gasoline prices because prices are set on the world market led by the Organization of the Petroleum Exporting Countries, or OPEC, cartel.
While U.S. oil production has grown significantly in recent years, domestic refiners are exporting more refined petroleum products so these fuels are unavailable to American drivers. U.S. refiners are currently exporting an average of 2.8 million barrels of petroleum products overseas every day, compared to 1.6 million barrels per day in 2008—less than half of today’s exports. The latest four-week export average included 828,000 barrels per day of “distillate fuel oil,” also known as diesel fuel, and 485,000 barrels per day of gasoline. Tom Kloza, chief oil analyst for the Oil Price Information Service, told the Chicago Tribune that “higher U.S. oil production and lower U.S. demand are being canceled out by exports.”
This Memorial Day weekend is the first big beach weekend since Superstorm Sandy damaged 94 percent of New Jersey’s beaches and dunes nearly seven months ago. Many communities, especially along the New Jersey coastline, are still rebuilding homes, schools, and critical infrastructure. A recent report from the Internal Displacement Monitoring Centre found that 39,000 families in New Jersey remain displaced by the storm.
As a result, coastal communities are scrambling to prepare for visitors who are expected to head to New Jersey’s beaches this holiday weekend. A recent report commissioned for the state’s division of travel and tourism noted that “infrastructure damage to key visitor areas [is] substantial” and that access “is still limited in some areas.” The tourism industry—which brought in $34.7 billion to the state’s economy last year could be impacted by fewer visitors this year as communities are still rebuilding and some beaches have not reopened.
Beginning with the Memorial Day weekend and throughout the summer, Americans will spend their hard-earned dollars traveling to visit family, friends, and the great outdoors. Meanwhile, Big Oil will be making huge profits off of these travel expenditures on fuel, while at the same time fighting for decreased public health and climate-change protections.
Here is a by-the-numbers look at what Big Oil will cost us this holiday weekend:
An expensive holiday weekend ahead for travelers
- 690 miles: Average distance Americans will travel this Memorial Day; 7 percent higher than the 2012 average.
- $105: Gasoline cost for an average trip this Memorial Day weekend.
Big Oil profits increase as Americans face high prices at the pump
- $30.2 billion: Earnings for the first three months of 2013—about $336 million per day—for the five biggest publicly traded oil companies: BP, Chevron, ConocoPhillips, ExxonMobil, and Shell.
- $1 trillion: Combined profits from 2001–2011 for the five biggest oil companies.
- $2.4 billion: Special federal tax breaks received by the big five oil companies in 2011.
- One minute: Big Oil makes more in one minute than what 95 percent of American households earn in an entire year.
- One-third: Proportion of the Big Oil profits used to repurchase their stock, which only serves to pad the pockets of senior executives and the largest shareholders.
- -2 percent: Reduction in worldwide oil production by the big five oil companies compared to one year ago.
Big Oil’s influence machine
- $71 million: Total direct federal campaign contributions from the oil and gas industry in the 2012 election cycle.
- 90 percent: Proportion of direct federal campaign contributions from the oil and gas industry that went to Republican candidates.
- $140 million: Total lobbying expenditures by the oil and gas industry in 2012.
- $50 million: Total lobbying expenditures by the big five oil companies in 2012.*
New Jersey’s tourism sector is essential for state’s economic growth
- $34.7 billion: New Jersey’s annual tourism revenue.
- 62 percent: Estimated percentage of tourism dollars that were spent at the Jersey Shore in 2008.
- 500,000: Number of Americans employed by New Jersey’s tourism industry.
- $1,420: Estimated additional annual tax that each New Jersey household would have to pay in the absence of state tourism dollars, in order to maintain current government revenues.
Climate-change fueled extreme weather impacts tourism
- 94 percent: Proportion of New Jersey beaches and dunes that were damaged by Superstorm Sandy.
- 27 million: Number of cubic yards of sand that the Army Corps of Engineers will replace along the New Jersey and New York coastlines to restore storm-damaged beaches. Thomas Herrington, professor of ocean engineering at Stevens Institute of Technology, said the amount of sand lost to Superstorm Sandy is “unprecedented” and equal to what is typically lost over the course of a decade.
- 4: Number of states with significant wildfires in their national and state forests as of May 20, 2013. (The states: California, Florida, Minnesota, and Montana.)
- 3,800: Number of acres currently burning through the Los Padres National Forest in California. As of May 20, 2013, the fire was only 25 percent contained.
- 1 million: Estimated annual visitors to the Los Padres National Forest between 2005 and 2009.
Big Oil behaving badly, again
- 210,000: Total number of gallons of tar-sands oil spilled by a pipeline leak in Mayflower, Arkansas, in March 2013. The failure of the nearly 70-year-old pipeline owned by ExxonMobil forced 83 people to evacuate their homes.
- 126,000: Number of gallons ExxonMobil had yet to recover as of early May. The same pipeline ruptured a second time on May 1, 2013 in Ripley County, Missouri, spilling 42 gallons of oil.
- $14 billion: Estimated minimum cleanup costs for BP’s Deepwater Horizon oil spill in 2010 that killed 11 oil-rig workers and gushed 210 million gallons of crude oil into the Gulf of Mexico.
- $75 million: Limit on liability that oil companies currently face for future offshore-oil blowouts regardless of actual damage.
Keystone XL pipeline won’t lower gasoline prices
- 0 (zero, nada, none): Guaranteed percentage of oil transported by Keystone XL to Gulf Coast refineries that will remain in the United States after refining into gasoline or diesel fuel.
- 0 (zero, nada, none): Impact of Keystone XL pipeline on U.S. gasoline prices. Christopher Knittel, professor of energy economics at the Massachusetts Institute of Technology, testified on May 16, 2013, in the House that, “There will be no appreciable changes in the world oil price, certainly not enough to base policy decisions on it.”
Jackie Weidman is a Special Assistant to the Energy team at the Center for American Progress. Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at the Center.
* Correction, May 28, 2013: This article incorrectly stated the total lobbying expenditures by the big five oil companies in 2012. The correct figure is $50 million.