How Vulnerable is Your State to an Oil Price Spike?
It's an age-old pattern: when the price of oil rises, we start hearing all kinds of talk about eliminating the nation's dependence on foreign oil, and anti-oil company populism runs high. When oil prices fall, Americans tend not to care so much. But the threat of an oil price spike to the economy remains very real nonetheless. So it's worth taking note of the National Resource Defense Council's new report (pdf), which details just how vulnerable various US states are to an oil spike. As you can see in the graph above, how vulnerable different states are to an oil shock varies pretty significantly--the NRDC's report is based on what percent of the average person's income is spent on gasoline in a given state. As you can see, the highest is Mississippi, where residents spend more than 6% of their income on gas. Here's a look at the numbers of the top 20 most vulnerable states to an oil price spike:
Interesting stuff. But what if prices were to rise--say, to the peak levels they reached in June 2008? Good question--and that's exactly how the NRDC modeled a potential oil spike. Here's what that graph above would look like in that case:
From the report:
Drivers in Mississippi last year spent more than 6 percent of their income on gasoline, while citizens in Connecticut and New York spent only about 2.5 percent of theirs. If prices spiked again, Connecticut and New York drivers' spending on gasoline would go up moderately, to around 4.3 percent; Mississippi drivers, on the other hand, could see their spending on gasoline skyrocket to more than 11 percent.And here's what the breakdown would look like after the spike:
Needless to say, this makes (yet another) strong case for paring down oil dependence--one big reason we need clean energy reform--but more specifically, it should be an incentive for the elected representatives of the most vulnerable states to take a particular interest in addressing the problem.