"I have a mind like a steel... uh... thingy." Patrick Logan's weblog.

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Sunday, March 09, 2008

gas and heartburn

Joe Gregorio on the price of gas...

A doubling or tripling of the relative price of gas is inevitable, and is probably the best long-term thing that could happen to the country, fully realizing that in the short term it's going to be painful.
Carter set a goal in the 70s of importing no more foreign oil than the levels at that time. He was belittled, and then we got Reagan. Reagan took Carter's solar panels down from the White House. No oil company bag man could be seen with those.

Now here we are 30 years later, *subsidizing* the oil companies while they "earn" record profits.

I don't know all that much about Carter, but now I think as a president there are a few things he's under-appreciated for. I voted for John Anderson in 1980, my first presidential election. I was the typical Anderson voter -- a socially left-leaning college student, from a fiscally right-leaning family.

Had America the leadership with the foresight and fortitude back then, and since then, we may have been able to have gradually increased the tax on oil to fund strategies toward Carter's vision of more, cleaner, energy self-sufficiency. Ultimately there are many powerful, near-sighted, self-centered forces that interfere with that kind of grand vision and strategies.

Maybe the only way to get to such a future is to stumble into it. "When the student is ready, the teacher appears."


DavidM said...

The regulations are extremely high for the oil industry. With such barriers to entry is it any surprise that only a few successful companies exist?

The government takes 3-5 times in taxes what the oil companies make in profits per barrel of oil. Why are private profits which fund pensions, 401ks, stocks etc "bad" but the Feds' take is ok?

We have just started the first refinery to be built here in 30 years. We pay other countries to do something we have become too environmentally squeemish to do here.

We should elect politicians with the leadership to stop locking down drilling and refineries. There is no way to 'conserve our way' to energy independence(short of wrecking the economy down to its 1980 levels).

Patrick Logan said...

"Why are private profits which fund pensions, 401ks, stocks etc "bad" but the Feds' take is ok?"

Oh, I see: "it's for the children"!

Did I say private profits are bad? I did not intend to. The oil industry is just out to make a profit like everyone else, working the system to their advantage, and there's nothing new, or even wrong, about that. (Well, some actions are wrong or morally questionable from a few in the industry, but by and large they are just corporations out to make money.)

However the oil industry is also different -- their costs are highly subsidized, mostly indirectly (what if the oil companies had to fund their own military explicitly?). And they are a natural resource, some of which comes from public US land -- at a steep discount to market prices. Oil is much more of a public, social, governmentally critical industry than, say, farming or even logging.

I'm not suggesting complete nationalization would be any kind of a good solution. What I am trying to say is that had we taken these issues seriously in the 1970's then your "no way to conserve our way to energy independence without wrecking the economy" argument would be negated -- we would have attempted to gradually built an economy to meet our shared objectives.

DavidM said...

Speaking of subsidies, Bush's ethanol stuff has done virtually nothing except raise the price of corn, and by extension the cost of anything which uses corn: milk, beef, chicken, etc.

It looks to be a much worse subsidy than any oil subsidies-at least drilling oil doesn't raise the price of other goods.

Dr Walter E Williams has a good article on it today:

And while I agree that most subsidies are detrimental to free markets oil is a regulated industry: I can't go into business competing with Exxon/BP/whoever without Washington's say so. If you end the subsidies end the Federal regulations as well.

Patrick Logan said...

"at least drilling oil doesn't raise the price of other goods."

David -- I'll give you credit for your enthusiasm. Unfortunately you seem a bit blinded by that enthusiasm.

Best wishes. I don't think we're in complete disagreement.

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Portland, Oregon, United States
I'm usually writing from my favorite location on the planet, the pacific northwest of the u.s. I write for myself only and unless otherwise specified my posts here should not be taken as representing an official position of my employer. Contact me at my gee mail account, username patrickdlogan.