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John Daley ReportingAre you ready for gasoline priced $3.30 a gallon? Get ready. Thanks to the indefinite shutdown of the largest U.S. oil field, you can expect prices to rise.
For consumers, it may seem like deja vu. Last year, when Hurricane Katrina nailed the Gulf Coast, gas supply was disrupted and prices soared. Now comes news that North America's largest oil field is being shut down because of pipeline corrosion. With 8% of crude oil production going off-line, is this like Katrina North?
Raymond Levey, Director, Energy & Geoscience Institute: "No doubt prices are going to be going up as a result of taking four hundred thousand barrels of oil off the market."
Ray Levey of the U of U's Energy & Geoscience Institute has a sample of Prudhoe Bay oil. He says supplies of it feed California's huge market, which will need to be replaced. That, in turn, will push prices up. The question is, how much?
Ray Levey: "I've heard upwards perhaps 30 cents. That's going to depend on all kinds of market demand issues and any other geopolitical events that could land on top of this one, you might say."
Utah may not feel it quite as much as the rest of the country because we don't get any of our supplies from Prudhoe Bay. 10% is produced in-state. 25% comes from Canada's tar sands. The rest comes from Colorado, Wyoming and Montana.
Still, because of growing global demand, don't expect a return of cheap gasoline.
Lee Peacock, President, Utah Petroleum Assn.: "It's a finite resource. We keep finding more. Technology improves, but the demand is growing so fast, I think the days of cheap energy are done."
Energy analysts say pipeline repairs could last months. Expect prices to spike within weeks.
The average price of U.S. retail gasoline was $3.04 today, according to AAA. That's near its all-time high of $3.06, reached Sept. 5 after Hurricane Katrina struck the Gulf Coast.
