George W. Bush, the presidential candidate, can be forgiven for making oil
prices a political issue. But George W. Bush, the onetime oil man, should be ashamed for
trying to mislead Americans about "energy policy."
Bush is promoting the notion that the man in the Oval Office can snap his
fingers or write a law that tidily creates national "energy policy."
He knows better. The price of oil for transportation, heating and electric
generation is controlled by consumer demand. The surging sales of gas-guzzling cars,
record numbers of airline flights and this year’s heavy demand for electricity has
put a crunch on oil supplies.
Today’s consumers obviously have only vague memories of 1973-74 gas
lines as they pursue wasteful energy habits. Oil and gas guzzling have kept U.S.
refineries operating at 96 percent capacity, according to the American Petroleum
Institute, and overseas oil producers once again providing more than 50 percent of
America’s gluttonous needs, at prices reaching 10-year highs.
The Bush solution—increasing domestic production—is no solution.
Domestic oil producers don’t increase output by government fiat—only when prices
are high enough to boost profits.
Conservation measures that reduce profligate consumption are what control
prices. Although politicians are reluctant to impose controls on how consumers use energy,
there is one tough option—increasing the federal gas tax.
A higher tax and higher fuel prices create a strong incentive for
conservation, plus providing a war chest to accelerate development of proven alternative
energy sources not dependent on crude oil.
If tobacco taxes can be raised in the national interest, why not taxes on
oil and its derivatives?
