Th
These are made with oil.
All of this is made possible by oil.
And not to mention all of the gas and diesel it took
to get these products to me.
Oil and gas prices affect all of our lives.
So it's no surprise that when
prices at the pump are pretty high,
a lot of adults get pretty stressed out.
This is
So prices at the gas pump have been pretty high
and two big events have contributed
to the rise in gas prices:
the COVID-19 pandemic and the war in Ukraine.
And because oil and gasoline
is such an important part of our lives,
big shifts in prices have huge implications.
So how are gas prices set to begin with?
Why is oil so important?
And will we ever get off fossil fuels?
To get some answers, I turned to some experts.
Hi, my name is Audrey Carleton.
I am an environmental journalist.
Hey, my name is Vijay Muralidharan.
I'm a Director of Consulting at
for fuel and alternate fuel.
Hello, I am Werner Antweiler.
I'm a professor at the University of British Columbia.
Thanks to them and a bunch of research,
I can take a crack at explaining this very complex topic.
The key to understanding the costs of gasoline
is understanding the price of crude oil.
And we're not talking vegetable oil here.
Crude oil is one of the three main fossil fuels,
along with coal and natural gas.
It is a key part of the fuel we put in our cars.
The reason crude oil is called a fossil fuel
is because that's literally what it's made of.
Most crude oil is found in parts of the world
that were oceans tens of millions of years ago.
Organic materials like plankton were buried deep underground
and heated up while being squeezed by increased pressure.
After millions of years, that plankton turned into crude oil
or other fossil fuels such as natural gas.
Crude oil is an incredibly valuable resource,
both financially and also in terms of its many uses.
Once refined, it can be used in loads of products,
including fuels like gasoline, plastics,
cosmetics, and even medicine.
So basically our whole world runs on dead plankton.
[gasp]
In 2020, Canadians used about
754,000 barrels of crude oil per day.
The U.S., the world's biggest user of oil,
used around eight million barrels per day.
[clang]
That's a lot of oil.
Coming out of the pandemic, there is increasing demand
for oil products such as gasoline, but not enough supply.
That's the main reason,
according to economists, for the price increase.
So why isn't there enough supply?
Let's start with the war in Ukraine.
Some countries, like the U.S. and U.K.,
banned Russian oil imports as a way of punishing Russia
for invading Ukraine.
Russia is one of the biggest oil producers in the world,
with Russian oil making up ten per cent of the global supply.
Banning that oil creates a supply and demand issue.
Less oil available, but still the same demand.
That drives up the price.
Canada doesn't use Russian oil, but...
Oil markets are international.
That means we are at the mercy of what is happening
all around the world because
there's really only one price of oil.
So what happens in Russia
affects the price of oil here, too.
COVID-19 has also played a role.
As things started to open up in the fall,
more people started doing more things.
And that resulted in drivers needing more gasoline,
driving up the demand.
Gas prices affect people's day to day lives.
First, higher gas prices make it harder
to afford to drive to work.
And the stuff we buy costs a lot more, too,
in part because companies are paying more for the fuel
to deliver our goods.
While a lot of people lose out and suffer
because of the higher prices at the pump,
that doesn't mean that there are no so-called winners.
In fact, while gas prices hit record highs,
oil and gas companies have made some big money.
Exxon Mobil,
is expected to report that they've made
9.3 billion U.S. dollars
over the course of the first three months of 2022.
U.S. Congress called some of the biggest oil companies
to Washington to explain some of these prices and profits.
Some politicians claim that these oil companies
are price gouging, using the war in Ukraine as an excuse
to raise prices and make more money.
But the oil and gas industry says that
they don't set the prices, the market does.
So now we know why prices are going up.
But what could help prices go down?
One way to drop prices is to increase the supply for oil.
This could be done in a few ways,
like tapping into oil reserves
or extracting more oil from the Earth.
Some politicians and members of
the oil industry say that pipelines,
like the cancelled
because it would allow for more Canadian oil
to be sent to the States.
But building a pipeline is neither a quick
nor temporary solution to the current problem.
It takes years to get a project off the ground and built,
and can cause some environmental damage
and community disruption.
Economists say that a decrease in demand
will happen naturally as prices go up.
I call it demand destruction.
At some point, gas prices will become so expensive
that people will restrict their use of it.
Demand will go down, and prices will follow.
Other, longer term ways to decrease demand
is for people to start driving more electric vehicles
and hybrids.
Electric vehicles don't need to be filled up at the pump,
and hybrid cars use gas, but are much more efficient,
so need less of it.
Electric and hybrid vehicles are greener than traditional ones,
but still use a lot of resources.
Reducing our use of cars and vehicles is also key,
especially in North America,
which is sometimes referred to as a car society.
Yes, let's move our cars to EVs, but let's also be driving less
and flying less and biking everywhere.
Another reason why gas costs so much in Canada:
taxes.
In Vancouver, where gas taxes
are some of the highest in the country,
drivers can pay up to 54 cents per litre in taxes.
To lower prices, governments can lower or get rid of fuel taxes,
but taxes help pay for services
like public transit and road repair.
High gas prices could actually
be a good thing for the environment.
That's a part of why carbon tax even exists to begin with,
to help fund green initiatives
and discourage activities that can cause climate change.
If fossil fuels costs more,
then greener solutions start to look more attractive.
[chimes]
So is it possible to get off oil?
Some of our experts say no, at least not anytime soon.
Oil is just too important
and a big part of every aspect of our daily lives.
The TVs, the cell phones, the outfits you wear,
they all have a touch of fossil fuel in them.
And to move away overnight is not going to be very simple.
I think it's going to be a very slow process.
Audrey Carleton says it's not only possible to get off oil,
but we have to if we want to
save our planet from climate change.
I think we really would have to
go hard on wind and solar and geothermal.
But I think, you know, there definitely is a day
when we're not reliant on oil at all.
So where does this leave the person
that's struggling to fill up their tank?
Well, individuals can make choices
that use less oil and gas.
Everything from walking and biking,
to buying clothes secondhand, to avoiding single use plastics.
Carleton says that taking individual actions
shouldn't take the responsibility off
the oil and gas companies.
For now, analysts think that
high gas prices are here to stay,
at least until the summer.
[ding]
But we're just going to have to wait and see.
One thing is for sure is that the world
is very dependent on oil,
and if anything disrupts the flow of it,
well, that affects people worldwide.
And that's it for
For
♪ ♪
This video was made using various sources
of news and information.
Thank you to our experts.
Audrey Carleton, Environmental Journalist
Vijay Muralidharan, Senior Consultant
Werner Antweiler, Director,
Sauder School of Business,
And also to Roger McKnight, Senior Petroleum Analyst
at
Additional research came from many sources,
including the
the