Getting off the oil bottle
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| Fri, 08-13-2004 - 3:13pm |
"Gasoline is still relatively less expensive than in decades past - once you factor out inflation. But that fact hasn't prevented price shock at the pump. Nor a global gasp as crude oil prices hit record highs this month, topping $45 a barrel.
That's a 39 percent hike from a year ago, and analysts say it might go higher.
Don't blame OPEC, however, for this latest markup. The oil cartel has little excess capacity.
Rather, one cause is a record and rising consumer demand for oil, especially in China. Another is uncertainty over the oil exports of three major producing countries that currently have domestic problems ranging from war (Iraq) to political powerplays (Russia and Venezuela).
While the higher oil prices have dampened economic growth, they do serve two useful purposes.
They're another wake-up call that available crude-oil reserves are expected to decline by mid-21st century. And they're a reminder that the best incentive for switching to alternative energy sources or better conservation is to keep oil prices high - and, most of all, steadily high.
That idea of maintaining high prices brings the topic around to a proposal John Kerry endorsed a decade ago but which he dare not utter as a presidential nominee: raise the federal gasoline tax by 50 cents.
More than one politician has been singed by proposing such a consumer tax. Republicans are now trying to tar Mr. Kerry with his past endorsement of the idea. But both parties need to move away from such irrational populism and instead take a stand for weaning Americans off oil.
Both Kerry and President Bush have plans with the goal of "energy independence." While they differ on ways to get there, they both can endorse one idea: Investors in energy alternatives, such as wind, solar, "clean" coal, and hydrogen-run cars, as well as in conservation, need the certainty of high oil prices to advance those expensive technologies toward economies of scale and market sustainability - and toward the day when oil runs out.
Imagine if the US had had a decade of a 50-cent or higher add-on to the gas tax. Fewer people would have bought SUVs. Roads would be less crowded. Suburban sprawl would be slower. Air pollution would be less.
In all, the US would be further along in moving away from an oil-based economy, which it needs to do quickly.
So go ahead and wince once at the high oil prices. But then think twice about how the collective sacrifice of a higher gas tax could bring about a shift from oil by choice and foresight, rather than by last-minute necessity."

"Investors in energy alternatives, such as wind, solar, "clean" coal, and hydrogen-run cars, as well as in conservation, need the certainty of high oil prices to advance those expensive technologies toward economies of scale and market sustainability - and toward the day when oil runs out."
Americans who think their oil is expencive should look at the prices in petrol stations in Europe.
This country has a gluttonous oil appetite.
Then when windmills are suggested in certain areas people whine 'cause it'd spoil their view.
Any new source of power is going to be expencive at first but in the long run it has to be done. IMO.
"political powerplays (Russia"
"...But then think twice about how the collective sacrifice of a higher gas tax could bring about a shift from oil by choice and foresight, rather than by last-minute necessity."
YES, YES, YES!
Oil price falls from record highs
http://www.abc.net.au/news/newsitems/200408/s1177928.htm
Oil prices fell from fresh record highs on Monday as early reports of victory for Venezuelan President Hugo Chavez in a referendum on his rule eased fears that unrest could upset the country's oil exports.
United States light crude oil for September fell 25 cents to $US46.33 a barrel, down from an early peak of $US46.91 a barrel, which was the highest since the New York Mercantile Exchange launched oil futures 21 years ago.
London Brent was down 43 cents at $US43.45 a barrel.
Prices fell after results released by Venezuelan electoral authorities with 94 per cent of the vote counted showed Mr Chavez survived a referendum to recall him.
Energy markets have been worried about disruptions to the country's 2.6 million barrels per day (bpd) oil production if a disputed result sparked social unrest in the world's fifth-largest crude exporter.
Disruption to Iraqi oil flow also hounded the market, with exports remained cut by about half to about 900,000 bpd since the southern pipeline was attacked by saboteurs, and as a US offensive against followers of cleric Moqtada al-Sadr spread to several cities.
Oil is up more than $US10 a barrel since the start of the year.
The Organisation of the Petroleum Exporting Countries (OPEC), due to meet next on September 15, is already pumping at a 25-year high of 30 million bpd, casting aside the restraint of official quotas.
Concerns linger that supplies from Russia's biggest producer YUKOS will suffer as the authorities pursue payment of multi-billion dollar tax arrears.