The Cruelest Tax

It used to be said of socialists they loved humanity but hated the people. Something like that could be said of the modern environmental lobby. In their conspiracy to restrict fuel supplies and price transportation out of reach for all but the wealthiest they would bankrupt millions of Americans and condemn much of the world to perpetual poverty. The great socialist experiment failed, producing unimaginable misery in the process. We have the opportunity to avoid that fate for our next several generations but we had better get our act together. The zealots are out there and they are singing a siren song. What could be a greater calling than to save the planet? Of course as with socialism, the devil is in the details. Sky high prices cascade through the economy. Inflation erodes the value of savings. Marginal workers are laid off. Some have to quit because they can’t afford gas to get to work. Many who can barely afford the gasoline continue to drive their old clunkers, put off tune ups, and produce even more pollution. As people begin to catch on the twenty first century commissars spread more and more propaganda. No disinformation is beyond them.

They say off shore drilling puts our beaches at risk. The truth is we haven’t had a major spill from a drilling rig in almost forty years, not since 1969 off Santa Barbara. Thousands of platforms have weathered numerous hurricanes without incident. The tankers bringing in imported oil represent a far greater hazard. They tell us drilling in ANWAR will destroy a pristine wilderness. Baloney, drilling just down the coast along Alaska’s North Slope hasn’t done any appreciable damage. They claim oil is fungible so replacing imports with domestic production won’t have an effect on global prices. The fact is basic laws of economics hold that any increase in supply or decrease in demand will put downward pressure on prices. There are common sense measures to be taken on both sides of that equation to hold prices to manageable levels. We don’t need to repeal the industrial revolution.

Peak oil theorists maintain that the world has reached the upper limit on potential production. Future supplies will inevitably decline, so get used to permanently high prices: also demonstrably false. The United States alone has enough untapped reserves to satisfy the world’s appetite for decades if we choose to develop them. They’re just off limits. Add clean coal-to-liquid technology and we are talking many decades. New alga culture methods coming on stream will make the supply of carbon based fuels virtually limitless. That’s what this is really all about, carbon dioxide emissions. The rest is just smoke screen. But reducing CO2 in the air is another technical problem we could solve if we put our minds and money into it. The $700 billion or so we expect to spend annually for the next few years on oil imports would pay for a lot of R&D, all of it going into our domestic economy instead of being drained away.

Restrictive policies on development aren’t the only explanation for the dramatic rise in fuel prices over the last several years. Speculation in commodities markets plays a role. So does the declining value of the dollar and there is no question that increased demand from China and India is having its effect. But the increase in demand can be met. The expectation that it will be met would go a long way toward bursting any speculative bubble. The resulting decrease in US trade deficits should also reverse the dollar’s decline. This is in large part a manufactured crisis. I understand most members of congress got an earful while they were home for the 4^th of July. Good. It’s time they did.