The states of high gas prices

How oil-intense is your state's economy?

Posted by Eric de Place (Guest Contributor) at 11:30 AM on 21 Nov 2007

Read more about: energy | oil | economy | United States

Last time I checked, oil prices were hovering just below $100 per barrel. This reminds me of something I used to obsess about: high oil prices hit some places harder than others.

All else being equal, oil-efficient economies are more insulated from oil price shocks than are economies that require large oil inputs to function. I'm not talking about the amount of oil consumption, but about the "oil-intensity" of an economy. New York state consumes a lot of oil, and it also produces a lot of wealth. Other states, such as Louisiana, consume a lot of oil, but don't produce anywhere near as much wealth per unit of energy. (In fact, New York produces five times as much wealth per barrel of oil as Louisiana.)

Just so, when oil prices skyrocket, Rhode Island suffers less pain than Texas. And Massachusetts feels less of a pinch than Wyoming. So at the risk of oversimplification, I'll propose a little schema for the future:

If the future is likely to bring high oil prices, and
we'd like to remain prosperous, then
we should probably start weaning our economies from petroleum.

Brilliant, I know.

I guess one potential lesson here is that our big capital investments shouldn't expose us to decades of oil price shocks. (Yeah, I'm talking to you, highway.) They should insulate us from high oil prices. (Oh, hi there, compact walkable neighborhood.)

So, how do all 50 states stack up? Find out below the jump ...

For context, on average, the U.S. consumes 25 gallons of oil for each $1,000 of GDP it produces.

Gallons of oil per $1,000 of economic activity
1	New York	15
2	Rhode Island	17
3	Massachusetts	17
4	Colorado	18
5	California	18
6	Maryland	18
7	Illinois	19
8	Connecticut	19
9	Nevada	19
10	Delaware	19
11	Michigan	20
12	Arizona	21
13	Oregon	21
14	Wisconsin	22
15	North Carolina	22
16	New Jersey	22
17	Virginia	23
18	Minnesota	23
19	Ohio	23
20	Pennsylvania	24
21	Georgia	24
22	Washington	24
23	Utah	24
24	Florida	25
25	Nebraska	25
26	Idaho	26
27	Missouri	26
28	Tennessee	27
29	Indiana	28
30	South Dakota	28
31	New Hampshire	29
32	Iowa	29
33	New Mexico	30
34	Vermont	31
35	Kansas	31
36	Alabama	33
37	South Carolina	33
38	Arkansas	34
39	Oklahoma	34
40	Kentucky	40
41	West Virginia	41
42	Hawaii	41
43	North Dakota	43
44	Maine	44
45	Mississippi	46
46	Texas	47
47	Wyoming	48
48	Montana	49
49	Alaska	67
50	Louisiana	75

Obviously, there are about a trillion reasons for the way these rankings play out. (And keen-eyed readers may notice that energy-producing states are also the most oil-intense economies.) But it sort of doesn't matter why an economy is oil-inefficient. After all, it's not as if Kansas is going to get a discount on gas prices because it's rural and spread out. Rather, places that need a lot of oil to drive their economies will simply find it tougher to keep up if high prices become the norm.

As a postscript, the United States and Canada are two of the most energy-intensive economies in the world. Countries like Japan and Germany can produce two or three times as much wealth with the same amount of energy. So, all else being equal, when oil prices get high, the North American economy feels two or three times the pain as some of our principal competitors.

So there's your Turkey Day conversation starter. You're welcome.

I calculated the figures above using 2004 oil consumption data from the US Energy Information Administration, and 2004 gross state product data from the US Census Bureau.

For story: The states of high gas prices
10 Comments | Post a Comment

Addicted to oil, but do we want to kick the habit?

Frankly, I question whether we as Americans even want to use less gas. I mean, I know the people reading this blog do. I'm talking about the What's the Matter with Kansas types.

Join the discussion on global warming, recycling, and organic beer at The Green Miles!

by TheGreenMiles at 11:38 AM on 21 Nov 2007

'per barrel'

Surely Louisiana, and Alaska(!), make more literally per barrel than most other states. That is, their GDP might be low, but might be more oil-based.

Someone needs to hit the numbers again, looking at oil employment per state or something.

by odograph at 1:47 PM on 21 Nov 2007

better

Or reverse it, and look at states with both the lowest oil production and the poorest ratio of oil consumption to economic activity.

by odograph at 1:48 PM on 21 Nov 2007

Hawaii?

Hawaii's economy is almost entirely dependent on the tourist industry which is entirely dependent on fossil fuels to function. They have to import practically all their goods from several hundred miles away. How could they not be last?

by cosmoss at 2:33 PM on 21 Nov 2007

Are these the rich states of the future?

It would be interesting to see how these figures correlate with something like "average miles driven to work". Since 70% of oil is used for transportation, and 88% of Americans commute by car (see below), I assume transportation would account for a significant portion of the GDP intensity. That would perhaps explain why the top 3 states are relatively compact (with NYC biasing NY State). Though the next 2 states (Colorado and California) surprise me!

With regards to the country comparison you touch upon at the end of the article Lester Brown paints an even starker picture for the U.S.:

Some countries are much more vulnerable to an oil decline than others. For example, the United States--which has long neglected public transportation--is particularly vulnerable because 88 percent of the U.S. workforce travels to work by car.
Since options for expanding supply are limited, efforts to prevent oil prices from rising well beyond $100 per barrel in the years ahead depend on reducing demand, largely within the transportation sector. And since the United States consumes more gasoline than the next 20 countries combined, it must play a lead role in cutting oil use.

by Colin Wright at 8:07 AM on 22 Nov 2007

something's wrong here...

Instinctively, I find it difficult to comprehend how a hydro-power intensive state like Washington can be roughly 33% more oil intensive than California and other non-hydro states. The statistical analysis seems to be more of a blunt instrument than a finely honed study. On the other hand, this is cause for a deeper look into the issue.

by guade00 at 8:15 AM on 25 Nov 2007

oil is for transportation not power

Oil and hydropower both produce energy, but not for the same end use. Hydropower is used to create electricity while the vast majority of oil is burned directly by portable engines like those found in cars, trucks, and airplanes.

That's why it's possible for a state like Colorado, which gets at least 70% of its electricity from coal, to do better than Washington which gets most of its electricity from hydropower, on an oil intensity test.

Of course, as electricity is the largest source of energy use and greenhouse gases in most states, a fossil fuel intensity, or CO2e intensity test would likely tell a different story.

Enough with the half measures already!

by redefine at 2:55 PM on 25 Nov 2007
[ Parent ]

Still doesn't add up.

If Colorado gets 70% of its electricity from coal and Washington roughly receives the equivalent from hydro, the oil intensity should be (roughly) the same, so I'm not really convinced. And throw in western WA's well developed public transportation system and climate change awareness, something else is at play, the kind of economies, for example.

The "de Place analysis" shows us just that. It shows that the top ranking states are diversified, mostly service oriented economies, that are much less energy intensive, while the bottom ranking states are the opposite. Bluntly speaking, California and New York produce a lot of dollars, while Louisiana and Alaska, by comparison, do not.

by guade00 at 5:02 PM on 25 Nov 2007

oil has next to nothing to do with electricity

I agree that per capita income most definitely plays a role in the oil intensity, and by extension oil price vulnerability, of a given state's economy.

My point is that the amount of hydropower or other renewable energy resources that a state uses for electricity really does not.

According to the Energy Information agency petroleum accounted for 1.6% of electricity generation in the United States in 2006. Oil simply isn't a major source of electricity.

I only bother to point it out because individuals, organizations, and corporations advocating various American electricity sources (from coal to wind and solar) often give the impression that they will somehow end our dependence on foreign oil.

This notion is widely accepted as true and, unless we also retool our entire transportation system to run on electricity as opposed to oil (something I would certainly support), is patently false.

Enough with the half measures already!

by redefine at 10:25 AM on 27 Nov 2007

Western Washington

"And throw in western WA's well developed public transportation system..."

Hello!!! Where do you live? You can't be serious. The public transportation system in the Puget Sound area is horrible. Traffic jams in the Puget Sound area are one of the worst in the nation. You must not be from here. And I don't know why you need to be convinced of anything, especially when you make ludicrous comments such as this!

-Ricardo Parker

by rptizzle at 5:40 PM on 27 Nov 2007
[ Parent ]

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