It’s always entertaining to watch how a big spike in oil pricesmakes such a wide array of people in this country dance as if theywere on strings. From presidential candidates franticallyscrambling their energy policies to soccer moms trading in theirExpeditions for hybrid cars, the ravenous thirst for oil has peoplein the United States, once again, by the wallet.
Or so it seems.
But “high prices” at the pump are all relative, and comparedwith much of the civilized world, we’re enjoying a relative firesale. However, among all the other rollbacks on civil liberties inthe interest of avoiding Terror, we still haven’t lost ourconstitutional right to bitch – and in an election year, people aregoing to be paying very close attention to a concentration ofbitching on any one subject.
If anyone from Western Europe – where gas tends to run in the$4-6 per gallon range – could hear Bob Taxpayer from Portlandwhining about paying $1.95, they would probably be pressed not tostart laughing hard enough to accidentally drive their dieselPeugeot off the side of an Alp. Compared to red-blooded Amurricans,they’re much more used to paying high taxes on gasoline and drivingsmall, fuel-efficient cars. But people here, in the country that isthe largest consumer of oil on the face of the earth, always seemto have an inexplicably difficult time coming to terms with theidea that they don’t have infinite access to a finite resource.Well, now it’s wake-up time. Again.
The per-barrel price of oil just hit an all-time record onFriday and came within fifty cents of it again on Monday. Thisisn’t simply because of antics at the national casino on WallStreet that are beyond the understanding of anyone without aneconomics degree and a lot of letters after their name.
A big part of the problem is supply and demand. The spareproduction capacity of the member nations of Organization ofPetroleum Exporting Countries is at a level below where it wasduring the 1973 oil crisis. Additionally, oil consumption levelsare at an all-time high, and concerns over terrorism and terroristattacks hang over some of the supply lines from the Middle East. Totop that off, even the more stable suppliers like Russia are havingdifficulties. Russia’s largest petroleum exporter owes billions ofdollars in back taxes and is teetering on the verge ofbankruptcy.
While consumers continue to wail and gnash their teeth, nobodyseems to have a very effective solution ready. So far, thepresident hasn’t been very vocal about what he plans to do aboutgas prices. To be fair, he’s been pretty busy trying to reform theintelligence community so that it can more effectively run downleads on discarded four-year-old al-Qaida terror plots. He’s alsono doubt been concerned with the small matter of running aneck-and-neck presidential campaign.
The loyal horse-faced opposition has been more ambitious on thesubject. John Kerry recently revealed his energy policy “solution,”which involves throwing sacks of money at the problem for the nextten years, $30 billion worth of sacks, to be exact. So we’d betterstart stocking up on extra-large sacks.
“We can control our own destiny, we can create the jobs oftomorrow and we can make sure that no young American in uniformwill ever be held hostage to our dependence on oil from the MiddleEast,” Kerry said in a recent speech. I only read it in print, butafter seeing the Democratic convention I can totally picture himdelivering such a line in person – waving his fist and projectingthe general demeanor of someone in the throes of an unusuallyvigorous attack of Irritable Bowel Syndrome.
From a metaphysical standpoint, “we can control our own destiny”is pretty shaky when applied to any subject, but never mind that.The real problem is that he wants to spend $5 billion onsubsidizing alternative fuels that are the subject of hardly anyinterest from consumers. And $10 billion on subsidizing the autoindustry to develop more fuel-efficient cars at some point down theroad. And a billion for this, and a billion for that…
Nobody wants to risk political paralysis and suggest it, but Isuspect there might be only one real fix and that’s slapping a bigEuropean-style tax on gas. As I mentioned before, there’s no pointin pining for a reprieve on the supply. Jacking the price up thatmuch would actually be enough to make a sizable dent in demand.
Otherwise, prices will reach Euro levels on their own muchsooner than anyone would like to believe.