May 1, 2006
Filling up my car with $3 a gallon gas this weekend I remembered my younger days back in Indiana where I filled up my new Volkswagen bug for 29 cents a gallon. Even back then with gasoline at a very inexpensive price I recall people at the gas pumps commenting on how this oil located in the Middle East and other “foreign” countries somehow really belonged to Americans. It is a strange concept for people in other nations to understand. But, I really think a large percentage of American drivers feel that somehow this oil is “ours” but it just happens to reside under the ground in some of these foreign countries. Without sounding facetious, I really feel many Americans somehow truly believe that we are entitled to cheap gasoline. This is one of the huge problems of actually having an effective energy policy in the United States. It is hard to convince American drivers that we should sacrifice by paying higher rates if for some unexplainable reason we feel that cheap gas is part of our heritage. And, we get angry, mad and frustrated when this gasoline costs us too much - as we see it at the pump. President Jimmy Carter’s poll numbers sank to lower levels than the current president when Americans had to wait in long gas lines. It is obvious that the rising price of gas is a key reason - along with Iraq and Katrina - why President Bush’s poll numbers continue to slide lower. Look at what drivers in Europe are paying. They are paying double - $6 a gallon for gasoline in Germany and Great Britain and the customers are not complaining nearly as much as their American counterparts. Why? Europeans are used to high gasoline prices because their governments have added stiff gas taxes to each gallon of gas they purchase. European drivers know they have very little oil in Europe outside of the North Sea and Norway and realize that they have to pay higher prices to import this commodity. And taxes on gas are a way of life in Europe. It would be political suicide today for a candidate or officeholder to propose more taxes on gasoline. Instead we get harebrained ideas from the leaders of Congress of sending every American voter a $100 check to help them pay for gasoline. How ridiculous and simplistic not to mention not solving anything having to do with our energy shortfall. What is the solution to the rising cost of gasoline? Is there really a shortage of oil in the world or are the markets mainly concerned about the uncertainties in the countries where most of the world’s oil is produced? Could serious conservation policies work in the U.S.? Why aren’t we drilling for oil in Alaska and other places off the coast of Florida? Where are the politicians with some courage to actually advocate taxes on gasoline as a way of reducing the number of miles Americans drive? What is the elasticity of demand for gasoline? How high does the price have to go to actually change our driving habits? Are we addicted to driving no matter what the cost of the fuel? We will continue to live in the age of oil for decades to come so we better come up with some workable solutions to our growing energy needs. Alternative energy sources are being developed but oil is still the name of the game for energy and if you think about it many of the foreign policy decisions of the U.S. and European and other governments revolve around oil. There needs to be a strong political will to change our energy habits and at this point in time it is unlikely that a politician would survive who advocates new and higher taxes on our gasoline. Maybe politicians could explain that there really is nothing written in the American Constitution about not having to pay high gasoline prices. The answer: Politicians who will make the case for higher gas taxes and more conservation and auto firms who will stop building SUVs and other gas guzzlers. The outlook: More of the same. The world will continue to see high oil prices and to see ineffective political leaders unwilling to seriously tackle the energy issue head-on.
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