Water Well Industry Faces Inflation, Increase in Fuel Prices

Published On: April 1, 2022By Categories: Newsline

A screenshot of solar production and consumption in 2021 at Bergerson-Caswell Inc. in Maple Plain, Minnesota. Image courtesy David Henrich, CWD/PI, CVCLD.

With the ongoing supply chain headaches and rise in water well materials and products, the industry also is trying to keep up with historic inflation and fuel prices.

Diesel fuel was in short supply due to a drop in global refining capacity because of the COVID-19 pandemic even before Russia invaded Ukraine.

According to CNBC, some analysts say there could be spot shortages of diesel fuel and prices may remain high even if oil and gasoline decline. In turn, the higher diesel fuel prices are pushing inflation, so much so that one analysist says it’s contributing 17% of the acceleration of goods price inflation.

“I’ve started to use the term diesel ‘crisis.’ It clearly is a crisis that’s happening before our eyes. I wouldn’t rule out lines, shortages or $6 (prices) in places beyond California,” Tom Kloza, head of global energy research at Oil Price Information Service, told CNBC. “I wouldn’t say it’s a shortage yet. Europe, I think they’re headed for a shortage.”

Gasoline prices have held steady toward the end of March, but the price of diesel continued to increase, with a national average of $5.12 per gallon as of March 12, according to AAA. The price of diesel was $2.03 less in 2021. The national average for unleaded gasoline was $4.23 per gallon on March 30, up from $2.86 in 2021.

“We are continually raising prices to try and stay ahead of all of the rising costs,” says National Ground Water Association Past President David Henrich, CWD/PI, CVCLD, president of Bergerson-Caswell Inc. in Maple Plain, Minnesota.

“We did take one interesting step in that we bought an electric vehicle. That, coupled with our solar roof, will eliminate fuel consumption for at least one vehicle in our fleet. We generate 30 percent more energy than we consume at our shop, so when the fuel prices started rising, getting the electric vehicle was a pretty easy decision.”

Henrich, who says the excess production from the company’s solar roof could power about eight electric vehicles (see snapshot image of 2021 production and consumption), received the used electric vehicle toward the end of March. He also purchased a new one that will arrive in the summer.

“Unfortunately, there doesn’t seem like there are a lot of other things we aren’t already doing—controlling idle time, economizing routes, and combining activities—to try and reduce use to control costs,” says Henrich, who serves on NGWA’s North Central Regional Policy Committee.

The U.S. Department of Energy found that an idling truck wastes nearly a gallon of fuel every hour. Driver behavior can have a major impact on a fleet’s fuel bill. In fact, reports show that every five miles per hour over 30 miles per hour burns an additional 20 cents per gallon of gas.

President Joe Biden announced on March 31 the record release of up to 1 million barrels per day of oil from the Strategic Petroleum Reserve. The length of the oil release will last for six months.

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To learn more about managing one’s business, click here to watch The Groundwater Foundation’s 2020 McEllhiney Lecture, “Running a Business or Doing a Job: Combining Professional Expertise with Business Savvy” by Jeff Williams, MGWC, CVCLD.

—By Mike Price

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