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$75 oil...
| quote: | Pains at the Pump
April 29, 2006; Page A8
"If $75 a barrel oil and a $3 average for a gallon of gasoline isn't a wake-up call, then what is?"
-- Senator Charles Schumer (D., N.Y.), April 23, 2006.
Yes, that's a fine question Senator Schumer asks. But a wake-up call for what, exactly? A wake-up call to produce more domestic oil? Heaven forbid.
In fact, Mr. Schumer and most of his Democratic colleagues in the Senate -- the very crowd shouting the loudest about "obscene" gas prices -- have voted uniformly for nearly 20 years against allowing most domestic oil production. They have vetoed opening even a tiny portion of the Arctic National Wildlife Refuge in Alaska to oil and gas production. If there is as much oil as the U.S. Geological Survey estimates, this would increase America's proven domestic oil reserves by about 50%.
[Hot Topic] HOT TOPIC
Soaring Gas Prices Hit Washington1
They have also voted against producing oil from the Outer Continental Shelf, where there are more supplies by some estimates than in Saudi Arabia. Environmental objections seem baseless given that even the high winds and waves of Hurricane Katrina didn't cause oil spills in the Gulf of Mexico. In the 1970s the environmentalists and their followers in Congress even protested building the Alaska pipeline, which today supplies nearly one million barrels of oil a day. If they've discovered some new law of economics in which a fall in output with rising demand can cause a reduction in price, we'd love to hear it.
The dirty little secret about oil politics is that today's high gas price is precisely the policy result that Mr. Schumer and other liberals have long desired. High prices have been the prod that the left has favored to persuade Americans to abandon their SUVs and minivans, use mass transit, turn the thermostat down, produce less consumer goods and services, and stop emitting those satanic greenhouse gases. "Why isn't the left dancing in the streets over $3 a gallon gas?" asks Sam Kazman, an analyst at the Competitive Enterprise Institute who's followed the gasoline wars for years.
Scan the Web sites of the major environmental groups and you will find long tracts on the evils of fossil fuels and how wonderful it would be if only selfish Americans were more like the enlightened and eco-friendly Europeans. You will find plenty of articles with titles such as: "More Taxes Please: Why the Price of Gas Is too Low." Just last weekend Tia Nelson, the daughter of the founder of Earth Day, declared that even at $3 a gallon she wants gas prices to go higher.
[Tax on Mobility]
At least Ms. Nelson is honest about wanting European-level gas taxes. We doubt that many American voters would be as enthusiastic. If you think $3 a gallon is pinching your pocketbook, fill up in Paris or Amsterdam, where motorists have the high privilege of paying nearly $6 a gallon thanks to these nations' "progressive" energy policies. (See nearby chart.)
However, you can be sure you won't hear that from Democrats or Northeastern Republicans on Capitol Hill -- at least not in public. Far from it. They're suddenly all for cutting gasoline prices, just as long as that doesn't require producing a single additional barrel of oil. We haven't seen this much insincerity since the last Major League Baseball meeting on steroid abuse.
So how do the sages on Capitol Hill propose to reduce gas prices? They want to slap a profits tax on Big Oil because of alleged price gouging. Here we have another head scratcher that seems to defy even junior-high-school economics. Usually when you tax something, like tobacco, you get less of it. But somehow a tax on oil will magically lead to more oil.
As a Harvard study has shown, when the U.S. imposed a windfall profits tax in 1980, prices rose to an inflation-adjusted range even higher than today, and domestic production fell. As for claims of "gouging," the price of gasoline at the pump in the U.S. has risen 25% less than the rise in the global price of crude oil since 2003, according to Wall Street economist Michael Darda.
We've also heard proposals to force the oil companies to cut the pay of their CEOs to $500,000. That's about what Kobe Bryant makes for a handful of basketball games, but even if the salaries were chopped to this level -- and all of the savings passed on to consumers -- the gas price would fall by at most one-tenth of a penny. In any case, CEO pay is an issue to be resolved by shareholders, not Congress.
Which brings us to the Bush Administration, which is bludgeoned daily by the likes of Mr. Schumer, whose real concern is exploiting an issue that might elect a Democratic Senate in November. Meanwhile, the White House refuses to attack the left's anti-consumer energy policies and has even capitulated on requiring a rise in auto fuel-efficiency standards. Mr. Bush could instead be talking about the national and economic security need for a pro-domestic-production energy policy -- starting with drilling in Alaska. It's worth reminding the American public that in 1995 the Republican Congress passed an ANWR production bill, which Bill Clinton vetoed because he said it could be five to 10 years before the oil would be produced. We would have that oil today if Mr. Clinton had signed that bill.
Instead we have rising gas prices and record dependence on foreign oil. Is that enough to spur Congress to act on ANWR and deep-sea production? If not at $75 a barrel and $3 a gallon, Mr. Schumer, then when? |
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Anti-Purple Alliance.
