FRED WOLFERMAN: Too Cheap: We Need More Oil, and It Should Cost More
Gasoline is not too expensive. It isn't even expensive enough. Nevertheless we should, as Larry Kudlow cries ad nauseam, "drill, drill, drill."
We need all the oil we can get, and it needs to cost more.
How did I arrive at this unpopular and apparently contradictory conclusion? Simple. It's the only way we're ever going to have even a fair chance of maintaining something like our present lifestyle.
Think about it. For years Democrats, spurred on by environmentalists, have been telling us we ought to drive less, own more efficient cars and develop renewable energy resources. Now, those things are at least being talked about realistically, and some are even beginning to happen. Why? Because the cost of oil has skyrocketed.
So what is the Democrats' response? Barack Obama and others want to tap the strategic petroleum reserve and/or slap a windfall profits tax on "big oil" and pass the money out to help the poor buy gasoline. That is, they want to eliminate the cause that is producing exactly the effect they have been demanding.
The Republicans don't get off the hook either. They want to drill, all right, so the price of oil will come down. They're starting to talk about renewables, and some are probably even sincere, but the immediate election-year motive is to promise a reduction in the price of gas.
These people are all so committed to pandering to campaign contributors and voters that neither side will look past its own half-truth to offer the complete package we need.
The federal tax on gasoline should be increased to two dollars a gallon at the rate of a quarter a year for eight years. That money should be used exclusively to repair, not expand, our disintegrating transportation infrastructure and to subsidize the development of wind and solar energy. While we're at it, we should slap big taxes on natural gas, electricity, propane and water.
We should, at the same time, drill for oil and gas anywhere we can, with all reasonable environmental care. If the much talked-about subsidies for oil companies actually exist, they should be eliminated.
We should commence building nuclear power plants, and put the waste in the nine-billion-dollar (and counting) Yucca Mountain Nuclear Waste Repository in Nevada, over Harry Reid's prostrate body, if necessary.
You'll notice I didn't mention increasing mileage requirements for automakers. That is because, as is already becoming obvious, the marketplace will take care of that. The same is true for appliances, insulation, electronics, and whatever else consumes energy. We will not need volumes of environmental regulations; the increasing cost of energy will reduce demand for it quite nicely, except for the occasional Al Gore or Tiger Woods, who will continue to have big houses and airplanes because they can.
Then, to encourage work and enterprise at the same time we encourage energy conservation, we should reduce income tax rates. Let's use tax incentives, both up and down, to accomplish what years of squabbling over legislation has not.
Of course, it would be nice if China, India, and other emerging countries would stop subsidizing gasoline and clean up their environments. It would be nice, I suppose, if we all lived in adobe huts and eked a subsistence living out of the land, but it isn't going to happen -- at least not yet.
Environmentalism and energy efficiency are each other's mutual products. They will cost money to support, but will save money in reduced consumption. The balance may well be on the expense side, but there is no alternative.
I would much rather pay a high price for energy, in the form of an increased tax, than continue to borrow money from China to pay to oil producers. A tax spent domestically to rebuild infrastructure and develop energy sources would create literally millions of jobs at home and give the economy a far bigger boost than whatever drag high gas prices would cause.
I'm sure this will all be cogently debated in the coming campaign, and the voters will be presented with the opportunity to send a clear mandate to Washington to get its act together on energy. Aren't you?
Fred Wolferman lives in Southern Pines. Contact him by e-mail at firstname.lastname@example.org
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