In the wake of Hurricane Harvey, the average price of a gallon of gasoline nationwide spiked by 25 cents, with some states seeing an increase of as much as 42 cents per gallon. This is the largest increase in a single week since the 49-cent jump following Hurricane Katrina in 2005. The fact that the entire nation’s fuel infrastructure can be disrupted by a localized single event is deeply concerning. In fact, our economy is disproportionately reliant on oil —10 of the previous 11 U.S recessions were preceded by a spike in oil prices (and subsequently gasoline). Indeed, as Michael E. Webber, deputy director of the Energy Institute at the University of Texas at Austin noted: “The hurricane did what terrorists could only dream of and [took] a third of U.S. refinery capacity off line for days on end.”
This begs the question: What can the U.S. do to reduce its vulnerability to the threat posed by future natural disasters, terrorist attacks, or other events that could cause gasoline prices to spike? Environmental groups such as the NRDC advocate for increased vehicle efficiency, a transition to electric vehicles, and smart infrastructure planning. Meanwhile industry groups like API champion expanding and improving our domestic energy production and infrastructure. With the exception of a widespread transition to electric vehicles—something that is still decades away—neither approach solves the problem, which is our overwhelming dependence on a single commodity.
To truly reduce our vulnerability, we need an open market where drivers have access to multiple fuels. This reality could be achieved by easing barriers to entry in the fuels market and promoting vehicles that operate on multiple fuels. The means to achieve this objective already exist. Today, there are 26.8 million alternative fuel vehicles on the road in the United States, the majority of which are flex-fuel vehicles that can run on both gasoline and ethanol. Additionally, the Department of Energy’s Co-Optima program is already working to find ideal alternative fuels and integrate them with advanced engine technology and then into the marketplace. However, given that 88% of the energy used in the transportation sector comes from oil-derived fuels, we still have a long way to go.