Thursday, March 20, 2008

The Price of Gas

No, it's not Photoshopped. I took this picture on Virginia Street yesterday, across from the University of Nevada, Reno. The other side of the sign showed actual gas prices.

Let's talk about gas prices for a bit. WARNING: Anti-leftie rant mode is now /on/.

There are plenty of people out there, me included, who are none too happy about having to pay the same price for gas that we pay for milk. Some people, though, let their Bush Derangement Syndrome carry them away into Lala-land.

Let's establish something. The President does not control the price of gasoline. Neither does he control the price of housing, the price of lettuce, or the price of widescreen televisions. The President is Chief Executive of the government of the United States, he is not omnipotent in the market. Lefties want the government to control everything through socialism or communism anyway, so believing the President currently can control oil prices certainly fits their world view. They just happen to be wrong. Notice how the President only affects the "bad" things, but doesn't get credit for "good" occurrences--unless the President is a Democrat, of course. But I digress. Let's try to focus solely on gas prices.

I'll grant that the President might be able to influence oil prices, and hence gas prices, through diplomacy with OPEC nations. I don't know of any evidence that any President has ever shown this influential ability, but let's not assume that it doesn't exist. That's a far cry from saying the President sets oil prices.

Tangential tidbit: do you know the four top countries from which the US gets oil? Here goes, and the list might surprise you. The US itself, Canada, Mexico, and Venezuela.

What? No Iraq? No Saudi Arabia? Not even Indonesia anymore? Kinda puts the lie to "we invaded Iraq to steal their oil", doesn't it? Some might wonder why we're paying such high prices for oil, then, when we're not getting any from Islamic countries. Well, my budding economists, it's a world economy out there. We don't buy much of their oil, but the rest of the world does. And, for the most part, oil is oil.

What's the primary reason oil prices are rising so much? There are a few, and I'm not sure anyone truly knows which is the definite #1 reason, if such a thing even exists. What we do know, though, is that India and China (incidentally, two countries exempted by the Kyoto Protocols) are embryonic economic powerhouses, and such economies currently require oil. Since we can only pump so much, there's a supply and demand issue. And from Economics 101 we learn that increased demand and flat supply generate increased prices.

We could increase our own US supply, but remember, it's a world economy out there. Becoming self-sufficient with oil wouldn't bring back $1/gallon gas, because the US companies that pump our oil could sell it for more on the open market. But we could, by increasing world supply, lower prices somewhat, as well as reduce our dependence on idiots like Hugo Chavez.

So where is this additional US oil? It's off the coast of Florida, where NIMBYism and environmentalists prevent us from drilling. It's off the coast of California, where NIMBYism and environmentalists prevent us from drilling. It's in ANWR, where environmentalists prevent us from drilling.

You want lower gas prices? Quit crying for sympathy from the oil sheikhs. Agree to increase domestic supply--or, decrease demand by switching to clean, cheap, eventually-plentiful nuclear-generated electricity.

There's also the issue of the value of the dollar. I know this may come as a surprise to our friends on the left, but the President doesn't control the value of the dollar. That's set on an international market, and unless you want the President to conduct some "cowboy diplomacy" and dictate to others, at the point of a gun, what our currency is worth, currently it's at an ebb. Being worth less in the world, people will want more dollars to buy a certain amount of stuff--like, say, a barrel of oil--than they used to demand. Ergo, higher oil and gas prices.

If you've read this far, though, you're in for a treat. Here's where I really let our friends on the left have it. See, they always want "the government" to "give" them something "for free"--for example, government-run health care. They want someone else to pick up the tab, usually "the rich" or "big corporations" or some similar group besides themselves. If they're really stupid they don't even consider that "the government" doesn't have any money that it doesn't take from someone else, and our friends just expect "the government" to pay for it. Geniuses, these friends of ours on the left.

NOTE TO LEFTIES: all these things you want, you will pay for. You believe in the Church of Global Warming and want to impose even more stringent requirements on our industries? Don't whine when they ship jobs overseas (probably to India and China, which are exempt from Kyoto). You want cigarette taxes to pay for health care for children? Don't whine when higher taxes cause some people to quit smoking and the tax well runs dry for children's health care. You think ethanol is the way to go? Don't whine when corn prices rise. You think Detroit should be compelled to raise mileage standards for vehicles? Don't complain when the price of those cars rises. You don't want oil wells spoiling your views off Santa Barbara or Miami? Don't whine about higher gas prices.

Here's a good one. You know who advocated higher gas prices in the early 1990s, believing that would force people to economize? Why, Saint Al Gore, in his book Earth In The Balance. "Higher taxes on fossil fuels. . . is one of the logical first steps in changing our policies in a manner consistent with a more responsible approach to the environment." Of course, higher gas prices aren't going to hurt someone with all of Saint Al's money--but are they bothering you at all? See, Al doesn't like what you are doing and how you live your life, so he wants to tax you so that you'll change your behavior. He's not going to change his; change is just for the little people. You don't believe Gore really believes this? Slate, not known to be very right-leaning (at all), even says so, while taking the obligatory swipes at President Bush.

Do you think you should have to pay higher gas prices so that Al Gore's vision of the world becomes a reality? I don't think I should have to.

You know which political party is the only one that ever mentions a military draft? The Democrats. They usually mention one around election time in order to scare younger voters into the Democratic sphere of influence. Republicans never mention a draft--it's not something we believe in except in the direst of emergencies, which we're nowhere near.

You know which party mentions higher gas taxes? The Democrats. They love higher taxes. And with a per-gallon tax on gas in addition to a sales tax, states are rolling in gas tax revenues. So of course, we need to raise gas taxes even higher!

A Michigan congressman wants to put a 50-cent tax on every gallon of gasoline to try to cut back on Americans' consumption.

That would be John Dingell, D-MI. Just like Saint Al, John doesn't like your wasteful, polluting ways, Mr. and Mrs. America. He'll compel you to change by taxing your ability to afford your current lifestyle. It's so typical of the left, yet people still vote for this man and his ilk. We certainly do here in California, which has some of the highest gas prices in the country.

"But, but, we use so much gas! We've got to cut back!" say the tree-huggers and lefties.

The automobile is the nation's biggest polluter; Americans use more gas than the next 20 countries combined...
But others say it wouldn't change much. Even if Americans abandoned their cars, global emissions would fall by less than one percent.

I like my standard of living. I like the affluence of our nation. I'm not willing to give it up, not even for 1% of global greenhouse gas emissions. Did you get that? We could give up every car in the country and that would reduce the "problem", as they see it, by less than 1%. It's not worth it, not to me.

And let's not forget--John McCain, too, is a serial regulator.

While Dingell's idea will likely lie dormant until after the 2008 election, the idea of carbon taxes is not. Hillary Clinton, Barack Obama and John McCain all support some type of system that either directly or indirectly will raise prices to penalize polluters.

By polluters, they mean you.

Our friends on the left should be happy with today's high gas prices. It's what they've been pushing all along, in reality. Those of us on the right, though, don't like them, and see a solution in the market--not in the halls of Washington.

And when that change occurs, we'll see the effect on Virginia Street, right across from the University of Nevada, Reno.

Update, 3/22/08: We won't drill for oil off the coasts of California or Florida or in ANWR, but they'll drill for oil off the Falklands.


Anonymous said...

Very well written, Darren.


Unknown said...

I love how everyone brings up the tax on cigarettes for children's health care. It either a) helps fund children's health care, b) stops people from smoking, or c) does both. A lot of people believe in children having health care and some even believe in forcing people to stopping smoking, and amazingly the tax would probably do some of both. I don't see anyone really complaining when people stop smoking, I just see them finding a new thing to tax or increasing the tax on cigarette further. It's not an efficient tax, in an economic sense, but everyone seems to miss the point that I don't think the people who designed it ever believed it was. I think it was designed to kill two birds with one stone and would successfully do so.

Darren said...

It only does so "successfully" until there are no smokers left--and then those who wanted something for "free" (read: someone else pays for it) will have to pay for it themselves through general taxation.


Ellen K said...

You could say the same things about gambling as a source of school revenue.

As for the gas problem, it's one of those situations where the left latches onto what seems like a good idea without really researching it. And by "it" I mean corn based ethanol. Corn based ethanol has been said to lower fuel efficiency by 15%. This makes is almost ridiculous when you consider the power and water needed to create the stuff and the steps that have to be taken at the refinery level to add the stuff. What happened is that the dogooders and environmental types read reports out of Brazil on ethanol use. One thing they overlooked was that was sugar cane based ethanol-a much more efficient fuel source. So rather than using sugar cane-a domestic crop that has been sorely diminished and undercut by imports, we use food grains that are human and stock feeds to create an inefficient fuel source. And we spend billions of dollars doing it. All it has done is make the farmers happy for subsidies because the price of corn has risen. For the average consumer, we are hit with the double whammy of higher fuel AND higher food prices. But the farm lobby is strong and the Democrats need those votes. So don't look for anything good soon. And by the way, I have been ranting about this on my blog for awhile. Did you know we haven't built a refinery in TWENTY NINE YEARS? Just the tip of the iceberg. My solution? Rather than throwing good money after bad, let's give those corn subsidies to recreate the numerous domestic sugar cane fields in the Southern U.S. Maybe then we could stop using fattening corn syrup which is cheaper and possibly connected to our fat problem. We could then use surplus cane to produce the more efficient type of ethanol. Maybe that will hold us over until we finally wise up and start drilling domestically and using oil shales for fuel. End of rant.

Darren said...

As far as I'm concerned, you can rant like that as often as you like.

Well done!

Unknown said...

TANSTASFL only works when looking at the big picture, you can always get a free lunch if you make someone else pay for it. The Democrats believe that those unable to pay for necessary things in life should have those things paid for by those who have enough money. We already tax cigarettes and gas and you've already stated people still use both, so I really don't ever see people stopping either with taxes that weren't extremely high. In reality there's always something else people don't like that they could tax until people stop buying them, such as alcohol or guns. I'm not saying it's right, but to think it doesn't/couldn't work is just wrong.

Darren said...

Then, in accordance with your own first sentence, look at the big picture.

Ellen K said...

What I find amusing is that the same folks who claim to want "freedom" also want to watch how you spend money by punishing you for bad things. I anticipate that along with higher taxes on our bad habits like driving, being warm and smoking, soon we will have fat taxes added to our fastfood and rations on how much junk food we can buy without penalties. So when is "freedom" not really "free?"

David Foster said...

Sugar-cane ethanol vs corn-ethanol...the political popularity of the former probably has something to do with the fact that corn grows in more congrssional districts than does sugarcane.

Liberals and "progressives" often tend to view government as an idealized parent-figure, devotedly pursuing the good of its children, without really understanding that it is made up of humans who have their own objectives in mind.

Anonymous said...

Yeah, the clout of the farm states is important but if they could have foisted anything as misbegotten as an ethanol subsidy on the American public it would have happened long since. It required the additional support lent by the enviro-wacko community to get it through Congress.

Hopefully the swift rise of food prices will work to undo the ethanol subsidy but I won't hold my breath.

Anonymous said...

"Tangential tidbit: do you know the four top countries from which the US gets oil? Here goes, and the list might surprise you. The US itself, Canada, Mexico, and Venezuela.

What? No Iraq? No Saudi Arabia?"


Looks like whoever you got that lie from casually forgot to include Saudi Arabia, in second place right behind Canada. Whoops!

And yes, I completely agree with you that corn based ethanol is bad. Corn generally is relied upon way too much. It's not a good alternative. Solar panels, on the other hand, have now dropped below a dollar a watt, and that's the retail price, not the manufacturing price. Solar power is no longer prohibitively expensive, like some people may have you believe. The more we are able to research alternative methods of power, the cheaper they will become! Renewable power is cheaper in the long run.

Darren said...

Cameron, good call on the oil imports. I doubt the caveat at the bottom of the page would move Saudi Arabia off the list.

I seem to recall that we, at least here in California, used to get lots of oil from Indonesia. They're not on the list at all anymore. The amount we import from Iraq is small indeed.

While my swipe about getting a significant amount of oil from Islamic countries was wrong, the "big picture" statement remains correct.