(Radio Iowa) – While there’s plenty of grumbling in Iowa over gasoline prices being well north of four-dollars a gallon, University of Iowa Professor Tyler Priest, who teaches a course on U-S energy policy, says a much larger problem is coming into focus.
“Diesel prices have doubled. They’ve risen much faster than gasoline prices because they’re traded globally and the seasonal demand is less easy to predict,” Priest says. “Increases in diesel prices are going to be transmitted throughout the economy more than increasing gasoline prices.” Priest notes that diesel fuel has much different applications and is used in long-haul trucking, marine shipping, agriculture and industry. Triple-A says diesel is averaging five-dollars 36-cents a gallon in Iowa, that’s up more than two dollars a gallon from this date a year ago.
Priest says another critical fuel, liquefied natural gas (LNG), is also going to be in shorter supply. After the initial U-S attack on Iran, Iran retaliated against other nations, including Qatar, a major producer of L-N-G. “Even if the Strait (of Hormuz) is open, the liquefied natural gas exports are not going to resume immediately, if not for years,” Priest says, “because of the damage to Qatar’s LNG facilities.”
Reports this week show 17-percent of Qatar’s L-N-G export capacity was knocked out, and repairs may take three to five years. Losses are projected at 20-billion dollars a year for Qatar. Back in Iowa, six in ten homes use natural gas for heating, while many aspects of the agricultural industry rely on the fuel. “Natural gas is the feedstock for petrochemicals, for fertilizers, for all sorts of other things,” Priest says. “Iowa farmers are feeling the impacts of rising fertilizer prices.”
Farmers are also having to pay more for diesel to run their tractors and other machines during this planting season. Priest’s primary research interests are in the history of oil, energy, energy policy, globalization, and business. His latest book, “Offshore Oildom,” examines the political significance and controversies over U.S. offshore oil and gas extraction.
