Monday, June 23, 2008
Oil Prices... High Enough?
So, how about those oil prices? Isn't that what everybody is talking about? I think they aren't high enough. Want to know why? I haven't seen any significant push for our representatives in Washington to make any meaningful effort in alternative energy development. Perhaps $8 or $9 per gallon, as our European friends are currently paying, would finally push us to act. How about $15? $20? Do I hear $30? Surely, with our technological prowess, we are able to develop a suitable battery for electric cars. We do hear about technological breakthoughs here and there, but not at the scale I would expect from a frustrated America. Last time we were truly frustrated, we put a man on the moon. Have we lost the will? What do you think?
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I think we are at (or within a few dollars of) that threshold now. Any higher prices than that, IMO, would very likely have unintended negative consequences.
A gas tax is the only way to raise the price beyond the free market prices in a manner which would not enrich the oil companies or the speculators. (And why stop at gas? Why not tax oil, too.) However, such a tax is regressive in nature, which means it would affect the poor more than the rich. Liberal law makers would not allow this. And conservative law makers would not approve of increasing taxes anyway. So this is a difficult task. (Maybe there could be an energy credit on one’s income tax.)
What the government can do, however, is provide various incentives and awards for energy consumption and innovations. (Private industry is doing the former already to varying degrees. For example, LIPA gives rebates for installing A/C systems above a certain efficiency rating.)
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