EconoMonitor

Peterson Institute for International Economics

Gasoline Prices and Electoral Politics in the Age of Unconventional Oil

With average US gasoline prices approaching $4 per gallon, markets are trying to gauge the impact of high oil costs on a fragile US economic recovery. Some analysts have argued that surging unconventional oil production in North America will make this price spike less harmful than those in the past. But for the political class, it’s not the nationwide picture that matters as much as what’s happening state-by-state. And it’s here that the domestic oil boom has particularly interesting effects.

Growing unconventional oil production—tight oil in the US mid-continent and tar sands in Canada—is rapidly remaking the North American energy map. US output has increased by 20 percent over the past three years, after more than 35 years of steady decline. And Canadian output has grown by 16 percent, most of which is exported to the United States. Infrastructure bottlenecks have left much of this supply stranded in Middle America, creating a significant price disparity between interior states and those on the coast.

This week average US gasoline prices reached $3.76 per gallon—dangerously close to the psychologically important $4 threshold. But the national average covers up a more than $1.20 per gallon price range across states, with drivers in my home state of Wyoming paying $3.21 a gallon while motorists in California and Hawaii are shelling out $4.34 and $4.38 a gallon, respectively. In figure 1, I’ve mapped what each state pays for gasoline (y-axis) against their position on political guru Charlie Cook’s Partisan Voting Index (x-axis). Circle size represents each state’s electoral college votes and the color indicates Gallup’s view on the state’s contestability in the 2012 presidential election.

Figure 1 The bluer the state the higher the price
Average gasoline price (y-axis), partisan voting index (x-axis), and electoral votes (circle size)

figure 1

All but three states considered electoral locks for President Obama face gasoline prices higher than the national average, and all but three Republican strongholds pay less than average at the pump. While this isn’t good news for Democrats’ pocket books, it doesn’t necessarily harm their election prospects this November. What matters is how swing states are faring, and here the picture is more mixed. Florida, Pennsylvania, Michigan, and Nevada are paying more than the national average, and these four account for 71 electoral college votes (table 1). The remaining eight swing states pay less than national average (though not much less in the case of Ohio, North Carolina, and Wisconsin) for a total of 80 Electoral College votes.

Before Republicans get too excited about figure 1, it’s not the price of gasoline alone that matters to drivers, but how much they buy. And while my parents in Wyoming get the cheapest gas in the country, they have to drive six hours each way to find a half-decent shopping mall. If you map gasoline expenditures as a share of personal income against the Partisan Voting Index (as I have done in figure 2), you get a much different picture than the one displayed above. High gas prices are hurting Republicans more than Democrats, even though Republicans pay less per gallon at the pump. Among swing states, Michigan, North Carolina, and Iowa are getting hit hardest, while Colorado and Pennsylvania are faring relatively well.

Figure 2 The redder the state the higher the bill
Gasoline expenditures as a share of personal income (y-axis), partisan voting index (x-axis), and electoral votes (circle size)

figure 2

Now for some states, higher gasoline prices are not all bad: they mean more revenue for local oil producing firms. Indeed, some energy analysts see a point in America’s future where the benefits to domestic oil producers of high prices offset the costs to US oil consumers. While I am skeptical the country as a whole will reach that point within the next couple decades, it may have already occurred for a handful of US states. Figure 3 maps the net monthly impact of a $10 increase in crude oil prices on state per capita income against the Partisan Voting Index, assuming all oil production revenue is kept in-state. This is an unrealistically optimistic assumption—much, if not most, of the revenue upside from an oil price spike gets passed to shareholders who are scattered around the country and the world. On the consumption side this is a simple arithmetic calculation based on state-by-state oil demand data, not a macroeconomic modeled outcome. And within a given state, the people paying more at the pump aren’t necessarily the same ones benefiting from a booming oil patch. But it’s a useful additional variable when analyzing state-to-state differences.

While the vast majority of US states lose from higher oil prices—and lose big—six states could potentially gain. Five are Republican strongholds—Alaska, North Dakota, Wyoming, Mississippi, and Alabama. And in another three Republican states—Texas, Louisiana, and Montana—oil revenue could mitigate a meaningful amount of the pain from higher oil prices. There is no meaningful oil production in Democratic states save California, which means that adding in oil production balances out the picture painted in figure 2. Among swing states, Colorado and New Mexico have good sized oil operations which, in New Mexico’s case, might be enough to come out ahead when oil prices rise. For the real political junkies, I’ve provided specific estimates for all three variables discussed above (gasoline prices, gasoline expenditures relative to income, and per capita oil production) in table 1.

Figure 3 Do some states gain from high oil prices?
Net impact on monthly per capita state income of a $10 increase in crude oil prices, assuming all production revenue stays in the state and excluding macroeconomic effects.

Table 1 Battleground breakdown

Gasoline prices Gasoline expenditures Oil production Electoral votes

price per gallon vs. US average
(percent)
percent of personal income vs. US average
(percent)
barrels per capita vs. US average
(percent)

Florida $3.80 100.8 4.2 101 0.1 2 29
Pennsylvania $3.78 100.2 3.7 89 0.3 5 20
Ohio $3.74 99.2 4.5 106 0.4 6 18
Michigan $3.94 104.5 5.2 123 0.6 9 16
North Carolina $3.75 99.6 4.9 117 0.0 0 15
Virginia $3.65 96.8 4.1 99 0.0 0 13
Wisconsin $3.76 99.8 4.4 104 0.0 0 10
Colorado $3.23 85.8 3.2 76 8.0 114 9
Iowa $3.67 97.5 5.0 118 0.0 0 6
Nevada $3.81 101.2 4.1 98 0.1 2 6
New Mexico $3.57 94.7 4.6 110 37.0 527 5
New Hampshire $3.71 98.5 4.6 110 0.0 0 4

Source: AAA, EIA, BEA, Rhodium Group estimates
 

This post originally appeared at the Peterson Institute.

25 Responses to “Gasoline Prices and Electoral Politics in the Age of Unconventional Oil”

RobertOctober 31st, 2012 at 5:10 am

Gas prices should be closely monitored. This would enable you to predict future price hikes like in the aspect of food, transportation and almost all aspects of industry. I think it would give you more authority to have a say in this topic if you've taken oil and gas courses. It comprehensively discusses pertinent details about oil and gas.

niceMay 21st, 2016 at 10:55 am

It will be safe to imply you will be getting stalled as a result of old Bundy/mechanical precious time card tickers and even paper timesheets? Is guidebook administration of your energy and participation allowing it to be hard to put together your loan? In the event that absolutely yes.low cost mobile

niceMay 21st, 2016 at 10:56 am

It happens to be safe to suggest that you are currently getting stalled from old Bundy/mechanical instance card tickers not to mention paper timesheets? Is instructions administration of energy and participation which makes hard to create your investment? In the big event that absolutely.visual fusion

niceMay 21st, 2016 at 10:56 am

Tucked across the Atlantic Coastline between Ny and Pa, New Jacket is a part of probably the most densely-populated regions of america. The Township associated with Old Bridge is really a bedroom neighborhood for Manhattan along with other major places like Edison, Princeton, as well as Newark.noworries luxury auto

niceMay 21st, 2016 at 10:57 am

Tucked over the Atlantic Shoreline between Nyc and Philadelphia, New Shirt is section of just about the most densely-populated aspects of the usa. The Township regarding Old Bridge can be a bedroom local community for Manhattan and also other major locations like Edison, Princeton, and also Newark.auto rentool

niceMay 21st, 2016 at 10:57 am

Have you been in a brand new country and looking for some enjoyable company devoted solely for your needs? Are a traveling company man having a full schedule throughout the day and too many hours of spare time at evening?best dating advice formen

asimshahJune 3rd, 2016 at 9:35 am

This type of Paris screen will convene Louis Vuitton’s past and active. See the best way Louis Vuitton and also Marc Jacobs grown this article label, from it’s conception and appear when Vuitton what food was in the helm during the entire 19th millennium, to your contemporary ready-to-wear alternatives created during Jacobs’s 13 decades as modern director. http://www.followthefashion.org

asimshahJune 3rd, 2016 at 9:35 am

Anita and also Stewart created their want house within a perfect area. They liked emailing his or her neighbors given that they took their unique evening guides. Everyone knew one other. It was an actual neighborhood. http://www.freehomepickup.org

asimshahJune 3rd, 2016 at 9:36 am

Doggy meals labeling and also dog food regulation requirements are most likely not an issue that you look at regularly nevertheless if you’re 14 lover they’re something you will need to make imperative that you understand. http://www.dublinfoodgrowing.org

asimshahJune 3rd, 2016 at 9:36 am

Just about any relationship involving two companies, either folks or companies, cannot always be established except previous to some gang of rules. These rules could possibly be unenforceable norms or maybe customs in the group or maybe society, or a number of explicit laws by using a binding and also enforceable pro. http://www.cufelaw.org

asimshahJune 3rd, 2016 at 9:36 am

Doggy playthings are a crucial supply for virtually any pet. They’re suitable for teething pups and pertaining to spending a long time bonding with your four-legged closest thing friend unique to let loose and still have fun so as to teach procedures. http://www.recycledpetssocal.org

asimshahJune 3rd, 2016 at 9:37 am

A corporation doesn’t exist within a vacuum. Many people-a firm, hospital, charitable group, or govt agency-is just shaped over the society in which it ended up being made. Your ideals, ways linked to thinking, and customs in the culture, amidst other aspects, are reflected from the structure and also behavior linked to organizations on the inside that life style. http://www.thesecretofstyle.net

asimshahJune 3rd, 2016 at 9:37 am

Diamonds will almost always be in structure and fashion. Signifying female’s wonders, your female feels full after boosting diamond accessories. Diamonds incorporate extra splendor to just about any material including gold, silver or maybe platinum in which they usually are fixed. Diamond’s shimmer is unmatchable in fact it is aura own always utilized women. http://www.fashionablysocial.net

niceJune 27th, 2016 at 6:05 am

To get have happen to be the patient of a personal injury caused by just someone’s negligent decisions? Then choosing apersonal problem lawyer is next thing you will need to take when it comes to receiving any financial damages you are entitled to. <a href="http://www.employmentandlabourlaw.org” target=”_blank”>www.employmentandlabourlaw.org

niceJune 27th, 2016 at 6:05 am

Brand new have become the recipient of an injury caused as a result of someone’s negligent routines? Then selecting apersonal accident lawyer is now you have to you want to take near receiving that financial salary you need. <a href="http://www.halfpricelawyers.org” target=”_blank”>www.halfpricelawyers.org

niceJune 27th, 2016 at 6:05 am

Completely new have long been the person of an accident caused from someone’s negligent procedures? Then uncovering apersonal trauma lawyer is the next growth phase you have got to take in opposition to receiving typically the financial reparation you require. <a href="http://www.internetprivacylawyer.org” target=”_blank”>www.internetprivacylawyer.org

niceJune 27th, 2016 at 6:05 am

Do you have have really been the casualty of a personal injury caused just by someone’s negligent pursuits? Then searching for apersonal problems lawyer is the next measure you require to take closer to receiving all the financial recompense you merit. <a href="http://www.new-bankruptcy-law.net” target=”_blank”>www.new-bankruptcy-law.net

niceJune 27th, 2016 at 6:05 am

Have you have been the victim of an injury caused by someone’s negligent actions? Then finding apersonal injury lawyer is the next step you need to take towards receiving the financial compensation you deserve. <a href="http://www.advancedlawyer.net” target=”_blank”>www.advancedlawyer.net

upstracking1May 20th, 2017 at 6:42 am

Thank you for the information you provide, it helped me a lot! it's great that I known this site! Can you sharing some updates on how you have made this powerful post!
It will be easier to track your mail and know exactly what should be in your likhousps hold mail each day.The read more is introducing a new program called Tracking Delivery.The program is similar to tracking a package which is going to deliver.Once package delivered it will be information will be updated. read and click

kemiSeptember 1st, 2017 at 9:23 am

About half an hour before the Toys 4 Tots Run was motorcycle mirrors with indicators due to start Saturday, a tractor stopped south of the intersection of highway foot pegs for motorcycles Lyon County Road 9 and Minnesota Highway 19. The tractor was towing a trailer decked out biker gloves online with picnic tables and awnings. Once it pulled over by the Rolling Hills Wildlife Management Area, members of motorcycle wheel spokes suppliers the Kesteloot family settled in to watch and wait.

Most Read | Featured | Popular