By By Janet Little Cooper
Gas prices are at record highs around the Atmore area and with relief at the pump nowhere in sight gas suppliers and residents brace for the worst as the summer traveling season begins.
"I am having a hard time being optimistic about the gas prices," owner of Diamond Oil Gasoline Roy White said. "Summer driving is about to start and more fuel is going to be used from now until September. People don't want to cut back on their going. Our demand for fuel is exploding and we have a lack of inventory to fill that demand."
The current national average for a gallon of gas is $2.92, according to AAA, nearly 70 cents higher than the price one year ago.
Locally in Atmore, Diamond Gasoline stations are selling regular unleaded at $2.84 and premium at $3.04. According to White, his pumps highest point was at $2.86 for unleaded.
Atmore resident Whitney Dailey thinks that the gas prices are 'outrageous,' while Claude Watson believes the price will 'eventually go down.'
"I think they need to come down," Mid Riley said. "You can't hardly make it around here at these prices."
White certainly understands the frustrations of his customers.
"We get all the complaints about the high prices," White said. "People think we are making a lot of money off of it, but we are not. We are not the bad guys in this. We get a small percentage out of the price per gallon. The major oil companies are the one's making the money and they are making it off the commodities market."
White made the decision last year to close a couple of his stations due to the lack of supply due to Hurricane Katrina.
"We would have to have another catastrophe to see that happen again," White said.
The unrest in the Middle East and Nigeria and the tense relations with Venezuela are however, weighing heavy on White's mind as he watches the cost of fuel escalates almost daily.
"We just can't keep up with the demand," White said. "We are dependent on foreign oil which is unstable. Twenty-five percent of our oil comes from the Persian Gulf and with the unrest in the Middle East we aren't going to be able to keep up. We need to find other reserves in the United States. Exploration and refining has to increase to bring us out of this. There has not been a refinery built in the United States since 1975."
According to White more than 800 federal permits must be acquired to start building a refinery in the United States.
"The president is proposing to do a lot of things to lower the rising prices," White said. "He gave a short term solution to a long term problem by not putting any more fuel in the federal reserves for a couple of days and he is trying to get the EPA to ease up on some of the regulations required in building a new refinery. This is a long term problem and some things can and need to be done to fix it."
President Bush announced last week that that he would ask the EPA to ease clean air restrictions temporarily, but Roger Chapman fuels marketing manager of The Legions Place, a refinery in Huxford, said those regulations are going to catch up sometime.
"The EPA's not going to let the president hold off on those forever," Chapman said.
Those regulations call for a switch to gasoline formulated with cleaner-burning ethanol, but ethanol production has not been able to meet demand.
"I'm directing EPA Administrator (Stephen L.) Johnson to use all his available authority to grant waivers that would relieve critical fuel supply shortages," Bush said Tuesday in a speech in Washington. "And I do that for the sake of our consumers. If Johnson finds that he needs more authority to relieve the problem, we're going to work with Congress to obtain the authority he needs."
Bush also ordered a temporary halt in deposits to the U.S. Strategic Petroleum Reserve – the nation's emergency stockpile of government-owned crude oil.
Our strategic reserve is sufficiently large enough to guard against any major supply disruption over the next few months," Bush said. "So by deferring deposits until the fall, we'll leave a little more oil on the market. Every little bit helps."
That measure probably won't affect oil prices much at all, Chapman said. "That's more of a political move," he said.
Gas prices are high for a variety of reasons – many of them complex, Chapman said.
Unrest in the world, especially the Middle East where most of the world's oil is produced, affects the price per barrel.
Meanwhile, larger countries like China and India are becoming more stable – and therefore their demand for oil is increasing, Chapman said.
And at home, U.S. oil companies are still reeling from the effects of two catastrophic hurricane seasons.
What's happening in the world almost always has some effect on oil prices, Chapman said.
"Every time there's some bad news" oil prices are affected, he said.
And that includes the war in Iraq, he said. "I think there's probably 10 to 15 dollars worth of war premium in the barrel right now."
But that doesn't mean the gas prices picture is completely bleak, Chapman said. He noted that the wholesale price of gasoline – what it costs before dealers have to add in transportation costs, taxes and other fees – has declined a bit in the past two days.
And while demand is increasing every day, "We're not going to run out of oil tomorrow," Chapman said. "We have enough for years."
According to Chapman, 75 percent of his oil comes from Midrock Operating just outside of Castleberry.
Atmore resident Kenny Robinson, field supervisor of Midrocks oil wells said that he is glad to be a part of the oil production used in the local economy.
"We produced more than 130,000 barrels of oil here last year," Robinson said. " We have a pretty good little field here. The oil we pump here goes to refineries in Jay and to the Leigh Place in Huxford where it is turned into diesel and winds up in our local economy."
One hundred percent of that refined oil stays in Escambia County, Baldwin County and some in Florida according to Chapman. He also said that 90 percent of it is consumed within a 100 mile radius of Atmore being used primarily by farmers, loggers and trucking companies.