Oil Vulnerability in the American City

Abstract

This chapter investigates the varying intersection of volatile petroleum markets and housing finance pressures with household socioeconomic status and urban structure, using six American cities (Atlanta, Boston, Chicago, Las Vegas, Phoenix, and Portland) as case studies. The chapter responds to two important economic phenomena seen over the past several years. The first is the sharp growth and volatility in global petroleum prices between 2004 and 2012, which mark a dramatic departure from predominantly stable and low prices seen since World War II. The result of the post-2004 oil price gains has been marked gains in the cost of fuel in most nations, which in turn have raised concerns about the effect of higher fuel prices on the household sector. Oil prices remain extremely volatile—rising from around $40 per barrel in 2004 to over $145 in mid-2008 before dropping to $30 per barrel in 2009 and then rising again to over $100 in 2011 and finally falling to $85 per barrel, where it sits today. The result has been higher gasoline prices in US cities of around $4 per gallon.