In case you haven’t noticed, the gas prices have been a bit higher than usual. In fact, just yesterday crude oil prices hit another record high ($70.80/barrel) after Hurricane Katrina but a halt to all oil production in the Gulf of Mexico. And now that gas prices are quickly approaching $3 per gallon, most Americans either fuming or sulking at the pump. So much so, in fact, that the President is considering tapping into our strategic oil reserves to help alleviate prices.
Sheesh. What a bunch of cry babies. I say gas prices are still too low.
Ah, I see you are completely shocked and appalled. Allow me to explain. You see, in this lovely land we call America money is the single most influential factor in creating change. For example, low interest rates create more demand for housing and raise prices. At the other end of the spectrum, gas prices, if they get high enough, force people and businesses to adopt practices that conserve on fuel consumption rather than abuse it. And while gas prices are high enough to affect small changes, the significant changes that America needs will not come until gas prices increase to at least that of Europe.
What changes you ask? Well, look at the numbers. The United States is currently estimated to have a population of 295,734,134 people, which is approximately 4.58% of the world population. By contrast, the United States is by far the number one consumer of oil in the world at over 19.5 billion barrels per year. This over 25% of the world’s oil being used by less than 5% of its population and five times the consumption of any other single country in the world. And that’s not even per capita. All of this consumption, you can imagine, also leads to unbelievable emissions of greenhouse gases and other lung-collapsing nastiness.
Additionally, our addiction to oil has also put us at the mercy of some not-so-friendly counties around the world (ie. the Middle East). This, in turn, has also contributed to (do not read singularly caused) our own not-so-friendliness in the form of invasion and bloodshed.
All of this has got to stop. Oil consumption in America must be reduced, but the oil companies have so much influence in the government that change isn’t going to come easily. That’s why gas prices need to continue to rise.
The best idea I’ve heard so far I read in an article I found in The Washington Post circa “the 2004 ‘oil crisis’ that has pushed gas prices well over $2″. Pfff. Anyway, energy economist Philip Verleger proposes…
…what he calls a “prospective gasoline tax,” which would allow the country four years to get ready to do the right thing. Congress would enact a stiff tax of $2 per gallon, to take effect in January 2009, with further increases of another dollar in each of the following three years. To cushion the blow, the Treasury would borrow against the expected tax revenue to buy back the public’s gas guzzlers (defined as vehicles getting fewer than 25 miles a gallon) at their 2004 value.
Verleger estimates that this program could reduce U.S. oil consumption by almost 2 million barrels per day in the program’s first year and as much as 10 million barrels per day by 2020. At a stroke, that would reduce the power of the OPEC cartel and America’s vulnerability to turmoil in the Middle East. As a bonus, it would also reduce emissions that contribute to global warming and increase employment in the auto industry as all those gas guzzlers are replaced.
There’s one big problem with Verleger’s idea. It’s too sane. America likes roaring down Thunder Road, playing chicken with the oil cartel.
This is brilliant! The government will take in mega-bucks which can be used to pay of our insane amount of debt and bring additional stimulation to the economy while simultaneously reducing oil consumption, greenhouse gas emissions, and our dependence on OPEC and the like. What’s not to love?
So, GW, keep our strategic oil reserves in tact and let the price at the pump rise. We’ll all be better for it in the end. In the meantime, go get a TerraPass.