Gas Prices Are Still Too Low!

Gas Prices

There has been much talk recently about the “problem” of high gas prices. It’s becoming difficult to keep up with all the proposed solutions. US President George W. Bush and presumptive Republican presidential nominee John McCain recently suggested we life a federal moratorium that prevents coastal drilling. Mr. Bush has also stepped up his fight to begin poking holes in a pristine Arctic wildlife preserve. Those ideas may go far to win the vote of the stupid class, but they will not do anything to reduce prices at the pump.

Yes, we need to reduce our dependency on foreign oil. But that’s not the worst effect of our addiction to the sweet black stuff. Worse than geopolitical instability and a flailing economy is the devestating impact combusting fossil fuels is having on our environment. Domesticating our oil supply will do nothing to decrease the release of CO2 into the atmosphere.

John McCain and Hillary Clinton both proposed a gas tax vacation this summer to reduce the burden rising fuel costs is having on the American family. Few proposals could be more stupid and short sighted. What we need is for the American people to abandon their gas-guzzling sport utility vehicles and start using public transportation whenever possible.

What we really need is, as Barack Obama suggested, a Apollo/Manhatten Project class push to develop clean renewable alternatives. The longer gas prices remain affordable to the American people the longer it will be until real money is invested in alternatives.

The federal government needs to immediately pass legislation that would set a minimum gas price that would rise incrementally to $7 per gallon by 2010.  Automobile manufacturers would instantly retool to meet customer demands for fuel-efficient alternative energy vehicles.  Scientists and engineers would immediately be put to work developing better fuel cells and batteries.  Alternative energy companies would spring up to develop the technologies to supply the increased demand for clean electricity.

It would be expensive, yes, but it would be the best investment in America’s viability since The New Deal.  High paying jobs would be created.  Education would improve in the areas of math and science.  Our air would be cleaner.  America’s reputation around the world would be strengthened.

The increased revenue from the gas tax could be used to improve infrastructure; invest in research, development and education; and offset the cost burdens on the poorest Americans.  It wouldn’t be easy, initially, but it’s the right thing to do.  Our current addiction to oil and the policies which enable it are unsustainable.

13 Comment

  1. […] chiquimonkey wrote an interesting post today onHere’s a quick excerptJohn McCain and Hillary Clinton both proposed a gas tax vacation this summer to reduce the burden rising fuel costs is having on the American family. Few proposals could be more stupid and short sighted. What we need is for the American … Read the rest of this great post here […]

  2. […] chiquimonkey wrote an interesting post today onHere’s a quick excerptJohn McCain and Hillary Clinton both proposed a gas tax vacation this summer to reduce the burden rising fuel costs is having on the American family. Few proposals could be more stupid and short sighted. What we need is for the American … […]

  3. Yes, we have the same ridiculous situation here – the mass media and the politicians carrying on about the “problem” of high fuel prices. As you say, it’s just populist, unthinking, little picture garbage.

    Not sure about your idea of legislating for minimum prices – although it might work in theory, the side effects (the people that introduced it getting kicked so far out of office it’s not funny) would be too costly for any politician to contemplate.

    I think we’ll find that the natural increases that are occuring anyway will be enough to continue to stimulate investment in alternatives – albeit more slowly than perhaps is desirable.

    Also, the exponentially developing, compounding, “cross-enabling” effect of new technologies (better, faster computers and software; lighter, cheaper, more efficient solar panels; lighter, cheaper, safer, more efficient batteries and fuel cells) may soon give us some real alternatives to the current generation of personal transportation.

  4. @Steven – Of course such a strategy would require an enormous amount of political capital and would need to come from the very top. The American people need to be educated about the realities of our situation. Most people know little more about the issue than the price they see at the pump.

    I disagree with your analysis about natural increases. It is somewhat inevitable, yes, but public policy makes all the difference. There was a huge innovative push in the early 70s when OPEC doubled the price of crude and gas was being rationed. Then prices came down and innovation ceased. If we increase production (foreign or domestic) to drive down price or if petroleum is subsidized, the incentive to innovate disappears. Research and development monies only exist in the private sector when there is consumer demand. High gas prices are the only thing that has proven to create that demand.

    My opinion was partially influenced by this an other articles proposing essentially the same thing, albeit to a lesser extreme.

    Mr. Bush, Lead or Leave
    THOMAS L. FRIEDMAN, NY Times, June 22, 2008

    In addition to alternative forms of personal transportation, we need to invest in our public transportation infrastructure. The rail system in the US is essentially non-existent as an option for business commuters. A push toward urbanization and telecommuting is also badly needed and would go a long way to reducing our carbon footprint.

  5. For a long time I’ve thought higher gas prices would be good for America…and the world. My first exposure to the idea of a government mandated price floor was Thomas Friedman’s NY Times column, Truth or Consequences, on May 28, 2008.

    Imagine for a minute, just a minute, that someone running for president was able to actually tell the truth, the real truth, to the American people about what would be the best — I mean really the best — energy policy for the long-term economic health and security of our country. I realize this is a fantasy, but play along with me for a minute. What would this mythical, totally imaginary, truth-telling candidate say?
    For starters, he or she would explain that there is no short-term fix for gasoline prices.

    This candidate would note that $4-a-gallon gasoline is really starting to impact driving behavior and buying behavior in way that $3-a-gallon gas did not. The first time we got such a strong price signal, after the 1973 oil shock, we responded as a country by demanding and producing more fuel-efficient cars. But as soon as oil prices started falling in the late 1980s and early 1990s, we let Detroit get us readdicted to gas guzzlers, and the price steadily crept back up to where it is today.

  6. I was reading an article in Scientific American (Roping the Sun, Tim Hornyak, July 2008, pg. 22) today about space-based solar arrays and found a bit that relates to this discussion.

    U.S. interest in the concept of orbiting power stations has waxed and waned since it was introduced decades ago. NASA began studying space-based solar power after the mid-1970s oil crisis but axed its research program in 2001. The recent spike in energy prices, though, has rekindled interest. In a feasability study released last October, the U.S. National Security Space Office urged that the U.S. immediately develop space solar power systems. It noted that “a single kilometer-wide band of geosynchronous Earth orbit experiences enough solar flux in one year to nearly equal the amount of energy contained within all known recoverable conventional oil reserves on Earth today.”

    The relationship between investment in alternative energy and the price of a gallon of gasoline is direct.

  7. Jodi Clayton says: Reply

    I agree with you in theory (hey, we agree on something! A miracle! :-)), but what about the impact on the poor and the working classes? The public transportation system outside of large urban centers is non-existant, and for these people who live paycheck to paycheck depend on gasoline to survive. I think it would be difficult to care about the environment when you don’t know where your next meal is coming from. I agree that all the proposed solutions are stupid and short-sighted, but isn’t there a solution where the poor don’t once again get the shaft?

  8. @Jodi – Thanks for stopping by. Certainly the solution to the strain of high gas prices isn’t to delay the inevitability of that strain. The government would provide tax credits to the poorest Americans to offset the burden in the very near term. That tax credit would be appropriated from the increased fuel tax revenues.

    Perhaps the poorest Americans would stop smoking cigarettes or purchasing lottery tickets so they could afford their gas and “next meal”.

    Americans who make between $24,000 and $36,000 a year smoke at twice the rate of those earning $90,000 or more.
    ~TONY HORWITZ, NY Times, June 17, 2008

    State governments have played a role. They aggressively hawk their lottery products, which some people call a tax on stupidity. Twenty percent of Americans are frequent players, spending about $60 billion a year. The spending is starkly regressive. A household with income under $13,000 spends, on average, $645 a year on lottery tickets, about 9 percent of all income.
    ~DAVID BROOKS, NY Times, June 10, 2008

    The poor could also eat less McDonald’s and drink less Coca-Cola. Consider the positive effect that would have on the obesity epidemic. They could also ride a bicycle. Even small towns without public transportation have bicycle stores.

    Poor Americans today are far better off than the poor of a few generations ago. Poor is relative. The poorest poor today carry mobile phones and watch cable television at home.

    The “working classes” will be able to afford $7 a gallon gasoline. Very few of them need to drive an F-150 pickup truck.

  9. Scientific America published “A Solar Grand Plan” that would wean us of imported energy about as fast as the future off shore drilling proposed by McCain and Bush. Not only would it be cheaper then the millions upon millions of barrels of imported oil it would provide lots of new jobs. Unfortunately just last week the Dept. of Interior put a two year moratorium on any new solar power plants on federal land so environmental studies can be done. We know the environmental damage that drilling for oil, mining for minerals and coal as well as grazing cattle does to federal land but they allow it
    anyway. I guess that just shows how powerful their lobby is.

    The Scientific American article is several pages long so I didn’t cut and paste it here but if you would like to read it here is the link.
    http://www.sciam.com/article.cfm?id=a-solar-grand-plan or here http://tinyurl.com/2vygvs

  10. @Mack – Thank you for that. I did read the article in the January issue (I’ve been a longtime subscriber). Very good stuff.

  11. […] we need is to continue on this path.  The federal government, as I’ve said before, needs to implement policies that will insure gas prices will continue to increase.  It’s […]

  12. […] posts: Are We On an Oil Diet? Gas Prices Are Still Too Low! Recipe for Success: Higher Gas […]

  13. […] posts: Are We On an Oil Diet? Gas Prices Are Still Too Low! Recipe for Success: Higher Gas Prices $1.999 Per Gallon of […]

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