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Shaw: Gasoline prices need to go up

FARGO -- I hate so say this, but …

Gasoline prices need to go up. Especially if you live in North Dakota. Like all of us, I love paying $1.45 a gallon for gas. I never thought we’d ever see prices this low again. The cost savings at the pump really adds up. However, if you look at the big picture, it’s not worth it. I’m losing more than I’m gaining.

With oil prices having plummeted to around $30 a barrel, the stock market has tanked. For those of us who have worked for dozens of years, our 401(k) plans and other investments have taken a huge hit. Whatever I’ve saved at the pump, I’ve lost more elsewhere. I don’t know why the stock market likes higher oil prices, but it does.

In North Dakota, the low cost of oil is the major reason for the unprecedented $1 billion shortfall. The reduction in oil activity has dramatically meant less money coming to the state from oil, income and sales taxes.

Gov. Jack Dalrymple acted responsibly in reducing spending by 4 percent, and tapping $497.6 million from the state’s Budget Stabilization Fund. However, this all means significant cuts at the state’s colleges and universities, and all state agencies. Almost certainly there will be job reductions and program cuts.

This is a big problem, although it’s manageable for now. However, what happens if extremely low oil prices continue for another year or two? The Budget Stabilization Fund won’t be able to make up the difference. Deeper cuts would have to be made to essential areas such as education, human services, public safety, flood protection, road construction, and infrastructure. More revenue would have to be looked at such as raising tuition, fees and taxes. Not good choices.

North Dakota has done fine without oil before, and will certainly survive this downturn. I sure don’t want to go back to $100 a barrel oil, and $4 a gallon gas prices. Still, maybe $60 a barrel would be a happy medium. One expert says that would mean gas at about $2.35 a gallon. This would likely be good news for our investments, our state and for many of us, our jobs.

If I was 20 years old, had no retirement funds and lived in Boston, I would love gas prices to stay as low as they are. However, as a baby boomer living in North Dakota, the price of oil must go up.

  • President Barack Obama’s plan to impose a $10-a-barrel tax on crude oil is a bad idea. Bad for consumers, bad for trying to increase oil production and bad for North Dakota. This is hardly the time to put more roadblocks in front of the slumping oil industry. Production needs to be encouraged, not discouraged.
  • The next time I’m looking for a guest speaker, I’m going to pass on Carolina Panthers quarterback Cam Newton. 

Shaw is a former Fargo TV news reporter and director who writes a weekly column for Forum News Service. Email him at jimshawtv@gmail.com.

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