The Energy Plan

So I've been meaning to write a little about the latest plan from the Senate leadership on cutting prices at the pump.

But honestly, it's hard for me to get excited about.

Included is a $100 rebate on gas per year. At 18.4 cents per gallon in taxes, that's like getting a break on taxes for about 30 fill ups. Plus to get it will be no doubt byzantine. Yawn.

Taxing oil producers? Senators should know better than that. Companies don't pay taxes! Sure, they fill out the forms, but where does that money come from? That's right! The consumer!

Another call for drilling in ANWR, which is long overdue.

``We have been trying for years to do something about supply without their help,'' said Senator John Thune, a South Dakota Republican, said of the Democrats.

``We wouldn't be in the situation we are in today'' if President Bill Clinton had not vetoed legislation in 1995 to open the Arctic refuge to drilling, said Republican Senator Rick Santorum of Pennsylvania.

It's all too easy to blame Democrats for the high price at the gas station. Though Ann Coulter does a pretty bang up job of it.

I would be more interested in what the Democrats had to say about high gas prices if these were not the same people who refused to let us drill for oil in Alaska, imposed massive restrictions on building new refineries, and who shut down the development of nuclear power in this country decades ago.

But it's too much having to watch Democrats wail about the awful calamity to poor working families of having to pay high gas prices.

Imposing punitive taxation on gasoline to force people to ride bicycles has been one of the left's main policy goals for years.

For decades Democrats have been trying to raise the price of gasoline so that the working class will stop their infernal car-driving and start riding on buses where they belong, while liberals ride in Gulfstream jets.

Oh, and the hysterical global warming shrieking must end. Other types of shrieking to curtail would include "exhorbitant profits", "price fixing!" and "BushCo oil buddies". It's nonsensical and ungrounded in reality, and worst of all, it's lazy.

Ultimately it's all our fault. It's both a supply and demand problem. There's not enough supply, and there is too much demand.

Increasingly supply is at multi-fold.
1) Open up drilling in more areas of the country (not just ANWR, though we're pretty much right next door). It also creates jobs. Tons of them.

2) Diversify refining locations. Putting a large percentage of our refining capacity in one spot that's in the crosshairs of storms is silly. One large storm takes it out. Severely curbing supply. Dumb.

3) Diversify the kind of supply. E85 and other blended fuels are a start. Biodiesel, obviously. Even CNG. The trouble is, those alternate fuels are not necessarily price competitive with petroleum. (This is also a chicken-egg problem, as well.)

4) Something like 70% of the world's oil reserves are under the control of state-owned industries. Central planning of business is very effective in collosally screwing things up. Where's the motive for those "companies" to extract or produce as much as possible? Plus there wouldn't be political reasons to jerk production levels around. The oil companies just want to get it out of the ground and down the pipeline.

That's a tougher problem to fix, however. ("war for oil" and all that)

Decreasing demand again has multiple facets.
1) Stop driving as much... car pooling, or saving your errands for one day is a start. Most of us can do that, at least.

2) Use hybrid tech. More MPG means more less need to tank up.

3) Easy to do is inflate your tires, drive the speed limit and use cruise control.

4) Some dollar level exists where driving will decrease because the price is too high. Isn't that what the climate change people (ie liberals & Democrats) want anyway?

In the end, we're all swimming in the stream of the energy market and government forces only tend to push prices in one direction. The wrong way.

Oil and Energy Posted by AlexC at April 28, 2006 3:20 AM