May 2006 Archives
You may not have noticed it, but gas prices are incredible these days. During a trip down to Texas last month, I saw prices higher than $3 in Dallas and around $2.79 outside of Dallas. And of course this is happening while ExxonMobil (headquarters in DFW) rakes in profits of $8 billion in the first 3 months of 2006. Possibly I have it wrong, and someone please correct me if so, but the price of gas seems higher than would seem appropriate given increased demand and higher crude prices if profits are rising so dramatically for oil companies.
Our friends in the Congress are hard at work trying to appear hard-at-work doing something about gas and energy prices and their solution, at least the Senate’s one is to rebate what they estimate each person would pay in federal gas taxes for 10 months. How they figured 10 months, I have no clue, but they did. This comes to $11 per month or $99, which they rounded to $100 because it sounds better I guess.
Lame, ladies and gentlemen. Lame.
One hundred dollars per person regardless of car ownership to about 100 million people, would cost the government $10 billion — or about $2 billion more than what ExxonMobil made in the last 3 months. And as a bonus, it will give about two or three tanks worth of relief to recipients. Wait wait, there’s more — it won’t do a damn thing to temper demand the demand for gas, which is the only way to force gas prices back down.
Now here’s a novel ideal that’s been circulating that would force down gas prices by decreasing demand — raise the federal gas tax to $2 per gallon. Normally, being a Republican, I would oppose an increased tax, especially one designed to manipulate the market the way this would. However, in this case increasing the tax is a pragmatic solution to a problem that isn’t going to fix itself. The best part about this tax would be in its encouragement to drivers to drive less and buy more fuel efficient automobiles, and increases interests in alternative fuels like ethanol by making them more cost-effective in the short-term. Beyond that it reduces our dependence on foreign sources of oil, which has been a big part of President Bush’s rhetoric in the last five years, and something I agree with, but it avoid having to open up places like the Arctic National Wildlife Refuge to do so.
I myself don’t want to pay $5 for a gallon of gas, but I recognize the overwhelming benefits to America if I am required to do so. Lucky for me I have public transportation in New York, but if I moved back to Texas and needed a car I would get myself a Honda Civic Hybrid, which is rated at 50 mpg combined city and highway. That’s probably more than twice what most cars get, effectively cutting my fuel bill in half. I get to drive twice as much as everyone else for the same capital and environmental costs.
