Oh No! Gas Prices Are Falling!
Every time the price of oil drops, the demand for that same product increases and the demand for alternate fuels, decreases. Why are gas prices falling?
China Daily reported that “oil dropped more than 6 percent to below $88.00 a barrel on Monday as a global market rout churned concerns that faltering fuel demand could slow further.”
In other words, we aren’t buying enough, so it’s time to lower the price. But can anyone other than the people vested in that market honestly say that we don’t use enough oil?
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In his new book “Hot, Flat, and Crowded”, Thomas L. Friedman writes “When I asked Rick Wagoner, the chairman and CEO of General Motors, why his company didn’t make more fuel-efficient cars, he gave me the standard answer: that GM has never succeeded in telling Americans what cars they should buy.” Thomas goes on to say , “But what the Detroit executives never tell you is that one big reason the public wanted SUVs and Hummers all those years was that Detroit and the oil industry constantly lobbied Congress against raising gasoline taxes, which would have shaped public demand for something different.”
European countries have been imposing high gasoline taxes for years, and when I was serving in Germany in the early 90’s, a gallon of gas was $6.84 a gallon, and that was 20 years ago! The result is that European countries have demanded smaller and smaller cars.
As of this writing, Gasoline in Denmark is about $9.00 a gallon, compared to $3.65 in the United States. (Up from $2.50 a year ago and down from $4.50 two months ago.) It seems like $9.00 a gallon gas in Denmark would decimate it’s economy right? Since 1981, there economy has grown 70 percent while energy consumption has been flat. In 1973, Denmark got 99 percent of it’s energy from the Middle East. Today, it gets zero.
We’ve become spoiled in the United States. We have grown up thinking that the oil that runs everything from our cars to our industrial complex, is cheap, inexhaustible and politically neutral. But we have come to an age where we realize that oil is in short supply, expensive, environmentally damaging and a political nightmare.
So with these realizations, instead of following the success of countries like Denmark, Brazil and Germany, we continue to lower the price, to fuel the demand, to use more of what we are running out of.
The Republican saying “Drill more, use less” doesn’t work. If we want more of the same Environmental devastation, financial crisis, repeated bailouts, and political situations like wars, terrorism and starvation, then all we have to do is…nothing.
I say it’s time to raise the price of Gasoline in this country. It’s time to drive this economy toward a sustainable energy program that will benefit our economy, our lives and our environment.
Photo courtesy of WiseOwl via Creative Commons License
If there is a bright side, outside of the obviously horrible results, our faltering economy will do more for conservation than any additional ‘morality’ or ‘lesson’ taxes could ever achieve. You are basically asking for the government to intrude in the process of innovation. Wide-scale implementation of solar before the disasterous environmental side effects of its manufacturing are adressed through technology? Please God, no.
“Every time the price of oil drops, the demand for that same product increases…” Wrong. The price for oil dropped because demand dropped (or is expected to drop). If people actively find ways to use less gas, the price drops - that is the nature of supply and demand, and nothing to whine about.
After what the Government did to the financial markets, why would anyone ever advocate sending them more cash?
Since a bunch of rich people in both the private sector and in Government have completely screwed the pooch, why is it considered a good thing to take more non-rich peoples money and give it to the rich people who have caused this crisis in the first place?
They have completely failed to Govern wisely and you want to send them more cash and keep poor people from living an easier life, which is what artificially raising gas prices via taxation will do.
With a higher gas tax, oil producers won’t get less money. Nor will fat cats in Government. Poorer people or those with less disposable incomes? Screw them! They need to pay up so you can tell them how to live their lives! They need them to be poorer so they’ll be forced to do what you want them to do, without your fingerprints on it. Where do you get off?
I consider anyone who would take more money directly out of my pocket for no other reason than to fund their pet enviro experiment no better than a common thief. Or a Communist. But I repeat myself.
Beware the lifestyle moralists who want to make poor peoples lives harder just so they can drive a flexfuel car.
Unfortunately, what determines a “true” price are market forces. Government meddling in the markets is what produced the real-estate bubble. Simply picking a price that gas should be at is absolute nonsense.
As far as the current price not effecting things, ridership on public transportation has risen with the price of gas. Apparently people aren’t willing to pay as much to go driving.
I suppose we should also only tax certain usages of fossil fuels so we can manipulate results. Thusly, home heating oil wouldn’t be taxed, but gasoline would. Well, I would rather not have somebody telling me what to buy and how to use it.
Why don’t you just pay more, if you feel so bad about it? While you’re at it, you can pay more income taxes too to your favorite politician. I’m sure he/she/it will accept the check.
Denmark is about the size of my back yard. $6 or $9 doesn’t make much of an impact. Try living outside of the metro echo chambers where it takes half a day of driving to leave the state.
East-coast city-dwellers have no idea how big their own country is.
Oil is a fine fuel and the US government has distorted the markets by imposing ridiculous restrictions based on phony environmental concerns.
It is the same US government that distorted the housing markets by imposing ridiculous affirmative action subprime mortgages on us and you see how that worked.
Perhaps the government should just leave us the hell alone?
Markets and consumer choice should determine what we drive and what we consume.
Only a top-down, socialism-loving, bureaucracy-loving, burdensome regulation-loving Democrat could possible support higher taxes on anything.
So Denmark has seen it’s economy grow by 70% since 1981. Sounds great. The US economy has grown by almost 300% since 1981, in 2000 year dollars. So it would seem that artificially high tax based costs of energy does have a deleterius effect on economic growth.
Drill baby drill!
The reason Denmark doesn’t import crude oil from the Middle East isn’t because they aren’t using very much, it is because starting in about 1980 they drilled for oil. So apparently Gas 2.0’s answer for us is to follow Denmark’s example and drill offshore. http://tonto.eia.doe.gov/country/country_energy_data.cfm?fips=DA
I wonder if the great Friedman thinks the government should increase the taxes on newsprint? After all it is killing the forest. Smart people read the blogs because it is real news and great for the planet!