I didn’t understand why the democratic Senators were so angry at the oil executives during the last hearing. These people all claim to want to reduce the use of oil in order to save the environment. It seems to me that one effective way to reduce the use of a given commodity is to raise the price.
It shows a lot of hypocrisy to claim to want 2 $ per gallon oil and reduce the use of oil simultaneously. That really can’t be done.
It is not hypocrisy if it is two different subjects.
For example, the vast majority of economists
and environmentalists oppose ‘gas tax holiday’ ideas. This is because refinery capacity essentially fixed and maximized in summer. So, basic economics would seem to suggest that the bulk of the tax savings would go to oil companies, not consumers, and any nominal savings that gets to consumers would just encourage additional consumption.
The situation with oil companies is that they are pulling in record profits at the same they are receiving $18-20B in tax breaks. If someone is on ‘corporate welfare’ at a massive scale, then they should be prepared to explain that they are, in fact, acting in the public’s interest as well as their own. Since the Enron bankruptcy came to light, there are also legitimate questions about price fixing and exploitation in many segements of the energy market, including oil.
The price of oil is going up, and the long term trend is clear. We have legitimate global competition for oil and little to suggest supply will outpace demand without significant technological change. The mantra about ANWR, for example, can confuse people about its actual significance. ANWR would take a decade to develop and its estimated capacity would be less than the difference between what Saudia Arabia currently produces and its maximum demonstrated capacity. Planning for this seeming reality is important. For example, we could look at the cost/return of spending $1T on a war/occupation in the middle east (and counting) vs. spending $1T on alternate energy research - both in terms of energy effectiveness and in terms of national security.
But being gouged on something as critical as energy during a time of war and of economic slowdown is also important. Remember, about 20-25% of the cost of gasoline right now has nothing to do with supply and demand and everything to do with investment speculation in the commodities market. This is actually the opposite of why we have commodities markets in the first place (to stabalize pricing with items of fluctuating supply) and a legitimate point of discussion in terms of appropriate government regulation. Similiarly, it is legitimate to question rather an industry needs massive government subsidy in a era of record profits, particularly when long term energy and security needs would both seem to suggest that investing in alternatives to the industry may be more to the common good.