Clean Energy Program | Memo

Déjà vu All Over Again: Why We Face More Pain at the Gas Pump

by Joshua Freed and Robert Walther

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Gas prices are rising higher, far earlier in the year than usual in the United States.

According to the Energy Information Agency, it cost 34 cents more on average for a gallon of gas in February 2012 than it did one year ago. In fact, in inflation-adjusted dollars, the last time gas prices were this high in the United States was at the beginning of the last century, just as a major war was winding down. It was 1918.

So why are prices jumping?

Contrary to what some in Washington are saying, it’s not due to a lack of domestic production, rampant speculation, or the absence of the Keystone XL pipeline.

In this memo, we explain why gas prices keep going up – and why some of the favored rhetoric to try to solve it are not likely to bring prices down at the pump any time soon.

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