WindBourne's Journal: Tackling the oil issue.

Throughout most of the world, oil/gas is expensive. Every so often, we go through these oil spikes that make a lot of money for OPEC and those that service them. But the question is, how is America (and western countries in general) going to stop being hit by these?

Well, the Republicans will tell you that the way out of all this, is to depend on capitalism. As a good Libertarian, I agree in principal. But the problem is that oil is not under free economic policies. Basically, the bulk of the worlds oil is controlled by just a few entities (OPEC and Russia). OPEC is made up of small countries, but they mostly act in unison. So between the 2 of them and the companies that service the industry (companies such as enron and halliburton being good examples), we literally have a monopoly. It is in their best interest to keep the rates just below what the world will tolerate and then slowly keep raising it. And that is what they currently do. IOW, free enterprise is not in play here.

OTH, the Democrats will now try to legislate the issue. That is, they will either insist on raising the fleet MPG average, or they will ask for subsidies for some pet project (which is not much different for republicans/neo-cons of today). This has already shown that if the republicans get control back, they will simply roll back the changes. Notice where Carter's energy changes and Clinton's electric car efforts are? All ditched. Interestingly, Carter's main work was on alternative esp. solar and wind which are finally paying dividends. In addition, while W. pushes subsidized oil and hydrogen, it is the hybrid car with increased battery size that is making an impact.

So, is there an alternative? Yes. We need to understand that we are in the situation we are because we are so heavily entrenched into oil. So we need to change that. One of the bigger issues is that autmobilies hang around for ages. So the cars that middle class bought when gas was relatively cheap, will filter down to the poor. Since automobiles are long-term issues, then oil needs to be a long term issue.

1. We need to roll back the oil production taxbreaks that has been given. Basically, we are subsidizing keeping our country reliant on oil. Big mistake from a debt and policy POV.
2. W. actually did major cuts into NREL. The money needs to be restored and focus changed slightly; Basically, we should be researching not energy generation, but energy storage. Alternative energy is awesome, but its generation is rarely consistant. Demand is so varied, that if we can store during the off times, and use it during the peak demands cheaply, then all come out ahead. In addition, a storage system would allow for localized distribution.
3. We need to kill off the fleet average mpg requirements. They serve no purpose and only allow the auto companies the opportunity to point to "doing enough". Yet, they are dragging their feet. It really causes them to shoot for the minimum, which is a mistake. If GM wants to create 5 mpg hummers, then let them. Look at where they are today vs. Toyota/Honda who build high MPG cars.
4. Finally, we need customers to buy cars KNOWING that gas will go up. Reagan and W. came in preaching cheap oil. That is a mistake. Since oil is a monopoly, it should be taxed. Basically, we should create a progressive tax on Gas that is known ahead of time. Say every 6 months for the next 2 years, gas tax will go up .25. After that for another 2 years, it will rise .50 / gal / 6 months. That means in 4 years, gas will go up by $4/gal. Now, that sounds harsh. And if you are driving a 5 mpg hummer, it is harsh. Of course, if you are driving a 60 mpg hummer, you really do not mind. This will enocurage those that tend to make long range decision (typically high/middle class) to buy more fuel efficient cars or switch. Why? Because they will not want to be tapped for the gas, and they know that the 5 mpg car WILL depreciate fast. Nobody will want to buy it.

The last item is a real hard thing. First it goes against my beliefs. Second, it will be next to impossible to get it passed. After all, JC and Poppa Bush paid with their jobs for doing what was in national interest. Finally, asking citizens to accept a tax that will grow is unheard of and will be judged Unamerican. Yet, we need a way to encourage LONG range choices to be made.