Every day, we pass by at least one truck delivering goods across our country. It probably barely registers, as this is a common sight — and no wonder. Nearly three-quarters of all the goods delivered in America are transported by truck. In Nevada, we are even more reliant on trucking, with 94 percent of our goods delivered by truck.
Our economy simply would not survive without the trucking industry.
Unfortunately, this industry — one that our nation and economy relies urgently upon — remains heavily dependent on the price of oil. According to the American Trucking Associations, fuel remains one of the greatest costs for the trucking industry as it works to deliver life’s essentials. This has proved to be problematic in recent years, as price and long-term volatility have prevented truck drivers and companies from predicting their expenses.
Even worse, when fuel prices rise, so do the prices of virtually all consumer goods. This means that the price of oil has a two-fold impact on the average American: higher prices for the consumer products we need, as well as higher prices for the energy that fuels our vehicles and heats our homes.
The impact on the economy is staggering: increased costs for businesses and households mean tighter budgets, decreased productivity, fewer jobs and smaller revenues. The result is a negative bottom line for everyone — from governments to businesses to individuals.
On the other hand, low fuel prices — like the ones that we have seen lately — will achieve the exact opposite, with lowered costs for businesses and households alike, allowing for more disposable spending, greater productivity, higher employment and increased revenues, all of which is a clear boon to everyone’s bottom line.
Indeed, the ATA calculates that each 1-cent drop spurs industrywide annual fuel savings of $350 million. Diesel recently averaged $2.15 a gallon, down from $2.85 12 months ago.
This is why it is critical for Congress and President Barack Obama to work to support responsible energy policies that will ensure that reasonable fuel costs are maintained for the long term, ultimately translating to lower consumer costs for all.
Predictability in fuel prices will support not just the average American and businesses such as the trucking industry, but also the entire U.S. economy. And the best way to lower fuel prices and offer future predictability is to increase domestic production of oil. In fact, current low oil prices are a direct result of increased U.S. oil production.
The Energy Information Administration recently reported that the U.S. imported roughly 370 million barrels of crude oil in 2014. While that is a sizable and commendable 19 percent drop over the past four years, it is still far more than we should be importing from foreign sources that are chaotic at best and volatile at worst. In other words, one of our most important resources is dependent upon stability in some of the most unstable places in the world.
Yet we continue to have incredible untapped reserves right here at home. Take for example offshore Alaska. Experts estimate that U.S. Arctic waters contain 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Unnecessarily restricting access to these resources limits the ability to advance a long-term energy plan. By taking steps now to grow even further our domestic energy production, resources such as Arctic energy could stabilize our fuel prices and ensure budget predictability for businesses and households nationwide for decades to come.
As the holiday season reminded us with the millions of packages shipped across our nation, trucking is critical to our lives and our economy. Trucking, though, just like the rest of our economy, relies upon dependably low fuel prices to keep expenses in line. Our policymakers must do everything in their power to ensure fuel prices are contained. With the vast potential that exists in the waters off Alaska, it’s clear that domestic energy production can fuel not just the trucking industry, but also the entire American economy.
Paul Enos is chief executive officer of the Nevada Trucking Association.