Gas prices in Oregon have always been higher than in most other states, and this trend can also be seen in neighboring West Coast states. Oregonians have questioned why this is happening, especially given the existence of local oil wells. While the distance between the West Coast and the Gulf Coast oil production hub contributes to higher prices, other factors also play a role.
An important factor is that the West Coast lacks local sources of crude oil. Oregon, along with Washington and Hawaii, does not produce crude oil. According to the US Energy Information Administration, these states did not produce a barrel of crude oil in 2022. The same applies to Idaho, Nevada and Arizona, which are also of little relevance in terms of oil production. This is not a political decision, but rather due to the lack of significant oil reserves in these states.
In contrast, Alaska, California and Alberta (in Canada) are major producers in the Western and Pacific regions. In 2021, Alaska accounted for 3.9% of U.S. oil production, while California produced about 135,000 barrels. However, oil production on the West Coast is relatively small compared to the country’s three largest oil producers (Texas, New Mexico and North Dakota). North Dakota alone produced more oil in 2021 than all West Coast states combined.
Importing oil from distant sources also contributes to higher gasoline prices in Oregon. Although Alaska is a major oil producer, transporting oil from there to the West Coast incurs additional transportation and logistics costs. Additionally, the refining process that takes place on-site incurs costs that are passed on to consumers.
In summary, Oregon’s high gas prices are due to a combination of factors. The lack of local sources of crude oil in the West Coast region, distance from major oil producing areas, transportation costs and refining costs contribute to steadily higher prices.