in 2021, EIA Reports

The prices of energy, crude and gasoline all increased in 2021 from 2020, the U.S. Energy Information Agency reported. Prices increased because of higher demand and a range of other factors. By the end of 2021, commodities on the energy index traded 59% higher than they did on the first trading day last year on the S&P Goldman Sachs Commodity Index (GSCI), the EIAreported.

GSCI is a commodity index that tracks the performance of global commodities markets. It’s a weighted average that’s updated every year. In 2021, the energy index comprised 54% of the GSCI, with the two crude oil benchmarks, the West Texas Intermediate (WTI) and Brent, accounting for approximately 70% of the energy index. WTI crude oil accounts for the largest share of the overall GSCI of more than 21%. Most GSCI commodity indexes increased by roughly 20%, with only the precious metals index declining in 2021. On a percentage basis last year, the energy index increased by more than double than the industrial metals index did. The only GSCI commodity that increased more than the energy index was coffee.

Prices for petroleum products RBOB and ULSC increased the most in 2021, trading higher by 67% and 64%, respectively, compared to 2020. RBOB is a reformulated grade of gasoline used as the benchmark for gasoline trading; ULSD is ultra-low sulfur diesel used as a benchmark for heating oil trading. Prices for crude oils on the WTI and Brent increased slightly less, by 62% and 55%, respectively, in 2021.

Several factors contributed to the higher energy commodity prices last year, the EIA noted, including weather disruptions such as the February freeze in Texas and Hurricane Ida, which greatly impacted production in the Gulf. Other factors included increased demand for gasoline and diesel and an ongoing demand for crude oil and natural gas greater than the rate of production.

Crude oil prices increased in 2021 with the spot price of Brent crude trading at $50 a barrel at the beginning of the year, increasing to $86 a barrel by late October. The 2021 Brent annual average of $71 a barrel was the highest it had been in the past three years. The WTI’s average was $3 a barrel less than Brent’s in 2021.

According to EIA’s December 2021 Short-Term Energy Outlook estimates, U.S. crude oil production in 2021 decreased by 0.1 million barrels a day from 2020 and by 1.1 million barrels a day from 2019. The EIA also estimated petroleum inventories decreased by 469 million barrels globally in 2021, “likely the largest annual inventory withdrawal since 2007.” Rising crude oil prices and increased gasoline demand also contributed to the highest national average price for retail gasoline since 2014. The national average increased to $3.01 a gallon in 2021, with retail gasoline increasing by more than a dollar a gallon over the course of the year. At the beginning of 2021, the national average retail gasoline price was $2.25 a gallon. It then passed the $3 a gallon mark on May 17 after disruptions to the Colonial Pipeline. Gas prices continued to increase throughout 2021, with the average price peaking at $3.41 a gallon Nov. 8. The average retail price was $3.28 a gallon by the end of the year, more than a dollar more than it was at the start of the year, EIA reported. The lowest average of $2.67 a gallon was in the Gulf Coast states, with Texas reporting some of the lowest gas prices all year. The highest average of $3.70 a gallon was on the West Coast, with California reporting some of the highest gas prices.

From Jan. 4 to Dec. 27, 2021, retail gasoline prices increased by 88 cents a gallon in the Midwest, $1.20 a gallon in the Rocky Mountains and $1.32 a gallon on the West Coast, the EIA reported. The spike in prices in the Rocky Mountains and West Coast resulted from refinery closures in those regions, which led to reduced output of gasoline and lower gasoline inventories, the EIA noted. Less production was compounded by the fact that demand increased due to more visitors traveling to national parks, also putting a strain on already lower gasoline inventories, causing prices for delivery and prices at the pump to go up.

One major contributor to high retail gasoline prices last year was high crude oil prices, the EIA pointed out. The average crude oil price for 2021 was the highest it has been since 2018, due to reduced U.S. refinery capacity, and low gasoline inventories that couldn’t keep up with demand.

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an insurance company estimate from another database program and nothing matches.

“The reality is that we’re never going to get an exact result from three different database products,” said Gredinberg. “They all talk differently and have different logic and P-pages. They will never line up to each other.”

He said it’s the estimator’s job to understand the system they are using in order to explain and justify the estimate to the vehicle owner.

Gredinberg encourages repairers to talk to vehicle owners on the front end, use the estimating system the way it is intended, and capture all of the included and non-included items.

“At the end of the day, the goal is for the consumer to get their vehicle fixed with the least amount of friction possible,” he said.

Gredinberg strongly encourages the industry to share any database by submitting a database inquiry: https:// degweb.org/deg-database-parent/ submit-a-database-inquiry.

Pete Tagliapietra, product director at NuGen IT, an OEC Company.

Pete Tagliapietra, product director at NuGen IT, an OEC Company, talked about leading-edge technologies, such as machine learning, computer vision, robotics automation and artificial intelligence (AI).

“What’s unfortunate to me is how these technologies seem to be left behind as far as collision repairers are concerned,” said Tagliapietra.

He challenged collision repairers to think outside of the box.

Tagliapietra shared an idea of using these technologies to capture images of a damaged vehicle and immediately access all of the OEM information required by a collision repairer to repair it.

In the current environment, Tagliapietra said repairers have access to individual OEM repair information through the manufacturers’ websites. However, each OEM has its own format, and repairers often don’t know what to look for and where to find it. Alternatives include accessing information through OEM 1Stop; a third-party provider, such as ALLDATA or Identifix; or via estimating systems repair lines.

He talked about the possibility of accessing OEM repair information via computer vision. In this scenario, digital images of the vehicle damage would be uploaded to a computer vision central server. Once the images are analyzed, a collision shop could have the information available through the OEM website or a third-party provider within seconds.

“The premise of the idea is to give collision repairers all of the information needed to create a complete blueprint of the automobile before the estimate is written,” explained Tagliapietra.

In addition, reporting capabilities would be available. “Over time, you would be able to look at a certain year, make and model and understand what repair procedures are typically being used to repair that vehicle.”

Tagliapietra said all of this is possible with the technology available today.

“When you look at all of the different repair information opportunities, none of them bring all of the information that you need as a collision repairer to have access to them,” he said.

By using computer vision, Tagliapietra said collision repairers would immediately know all of the necessary repair procedures to include if a pre-and post-scan is required, as well as a recalibration. They would also have access to manufacturers’ position statements before writing the estimate and repairing the vehicle.

He encourages the industry to leverage the same technology used by other industries, such as insurance.

“Dreaming big is something we need to do in this industry,” said Tagliapietra. “Otherwise, we’ll fall behind and, in some cases, fall further behind.”

Michael LoPrete, vice president of global operations at Plastfix Inc., talked about sustainability and the future impact on collision repairers.

LoPrete shared a broad definition of sustainability, which he described as meeting the needs of the present without compromising future generations’ ability to meet their needs.

“I think about sustainability as a journey to a place where we are able to complete vehicle repairs while

Michael LoPrete, vice president of global operations at Plastfix Inc.

eliminating all of our current waste streams,” said LoPrete. “I don’t think that there is a point that we’ll ever be finished.”

He shared what he referred to as the 3R’s of sustainability, in order of importance: reduce, reuse and recycle.

Examples of reduce include repairing something rather than replacing it, and conducting online training rather than incurring travel time. Reuse also refers to repair vs. replace, and LoPrete used the example of purchasing a new cell phone as soon as it is introduced, even if a person’s current device is working perfectly well. Recycling is often the first thing that comes to mind when people think of sustainability, but LoPrete said it has the smallest impact on sustainability initiatives.

He introduced the term “recoverability,” which he described as an item that has the capability of being recycled and then converted to a new product of the same type, such as glass or aluminum.

“The recoverability rate on those items is nearly 100%,” he said. With plastics, recoverability is less than 5% and includes specific products such as water and soda bottles.

The automotive aftermarket is reportedly the No. 2 generator of polypropylene waste globally and recoverability is close to 0%.

LoPrete said green consumers are driving the increased awareness of sustainability, and Greta Thunberg is a leading spokesperson for Generation Z.

“Generation Z looks at the world through the lens of the sustainability triple bottom line, which includes economy, environment and society,” he said. “Every decision they make tends to have filters that pass through all three of those things.”

Many say Generation Z is demanding industries be more responsible and accountable for their actions.

“The ones who do it in a meaningful way are positioning their businesses well to move forward,” he said. “The ones who delay taking action will have to catch up eventually because that segment of the population is only going to become a larger and larger piece of the audience out there.”

Moving forward, LoPrete encourages industry stakeholders to work together and make sustainability part of their strategic thinking to reduce the amount of waste being generated while still producing safe repairs.

“While we can do things individually that will make a difference, the reality is that the greatest impact will come if we work together,” he said. “Sustainability needs to be a topic of discussion; it can’t be left undiscussed.”

He challenged the industry to do the following: • Make sustainability an agenda item during meetings • Appoint a subject matter expert within your organization • Track and record your current waste and look at trends • Identify pathways for improvement • Involve other stakeholders in your conversations • Share initiatives broadly across your organization

“If we begin thinking about sustainability from this perspective, we can make progress that will shape legislative actions, rather than being subjected to requirements from outside of our industry,” said LoPrete. “There will be winners and losers across the stakeholder chain. The green consumer will make sure that happens. They will support the ones that make the right choices.”

Learn more about the SCRS Repairer Driven Education series: https://rde.scrs.com.

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