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Talk of Raising Gas Tax Is Just That
Steven Mufson, Washington Post
Analysts Cite Advantages but Concede Its Political Improbability
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There might be a simple way to trim U.S. oil imports, reduce greenhouse-gas emissions, encourage alternatives to petroleum and ease world energy shortages.
The method: raising taxes on gasoline or crude oil. Economists and policy experts across the political spectrum think it’s a good idea. And with gasoline prices falling, now might be the perfect time to do it without eliciting cries of pain from U.S. drivers who have become somewhat accustomed to high fuel prices.
But on the long road to a new energy policy, the idea of a higher gasoline or crude-oil tax is just another bit of roadkill.
Because of the thorny politics of raising taxes, the 18.4-cent-per-gallon federal gas levy hasn’t changed since Oct. 1, 1993. And few policy experts expect a higher tax soon.
“We know the broad contours of some things that have to happen,” said Douglas Holtz-Eakin, former director of the Congressional Budget Office who is now at the Council on Foreign Relations. “You have to price oil on a permanent basis to provide incentives to shift away from it. It’s the key issue — and the hardest one to make progress on.”
(18 Oct 2006)
Curing the World’s Oil Addiction
Editorial, LA Times
Developing alternative energy sources now is crucial as more budding economies secure oil supplies from unsavory regimes.
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…The rise of Asian powers – and their pursuit of policies designed to secure a steady supply of oil – is a geopolitical watershed, albeit a predictable one. Even if the U.S. were to reduce its oil dependency, its ability to act multilaterally could be constrained by the energy arrangements of other nations.
For these and other reasons, the development of alternative energy technologies that can reduce demand at home and be exported abroad is both an economic necessity and a national security priority. It’s far too important to be left to the environmentalists – or the states, the lobbyists (for nuclear power or ethanol) or even to philanthropists such as Richard Branson. In our globalized economies, lasting peace is unlikely without energy security.
(18 Oct 2006)
The LA Times is onboard for energy security. Great! Unfortunately they don’t mention any of a myriad of related issues: global warming, peak oil, conservation/efficiency, etc. I don’t think there’s ever been a time when the gap between U.S. opinion leaders and reality has been as wide as it seems to be now. -BA
Decent US energy policy on its way – via Europe
Jerome a Paris, Daily Kos
EU plans tough laws on energy efficiency [Financial Times]
Wasteful television standby settings and the energy efficiency of computers and water heaters are to be targeted in a new legislative drive aimed at slicing EUR100bn a year from the European Union’s energy bill, in a move that could impose Europe’s green agenda on the world.
Stringent new European Commission energy efficiency targets for items such as electrical appliances and cars could set new global standards, since all imports into the European market would have to comply.
…The final result is not clear, but one thing is certain – worldwide standards for safety in the chemical industry will be set via that directive decided in Brussels (seat of the European Commisison) and Strasbourg, France (seat of the European Parliament).
The same thing could now happen for a whole series of goods: if Brussels sets energy efficiency standards for computers sold in Europe, then these standards will apply worldwide, because they will be tougher than those in the US or anywhere else and manufacturers (large ones, anyway) are unlikely to split production between EU-compatible products and less regulated products.
Multiply this over the range of products now under consideration, and you could see a massive imapct on the energy efficiency of many goods sold in the USA.
This may sound good, but the risk of course, is that regulations set in Brussels are shaped in ways that European manufacturers are more familiar with, thus giving them an edge against manufacturers from other countries, including in these manufacturers’ home markets.
This is what has happened on carbon trading. The EU countries, having signed the Kyoto treaty, have also set up new markets to trade emissions rights (effectively, carbon trading) based on obligations imposed on European (and other participating Kyoto-countries) industry. That means that the high-paying jobs that come with these markets (bankers, lawyers, consultants, etc…), and the technological know-how necessary to comply with the new rules are based in Europe, not in New York or Chicago.
Regulation drives new industries within the regulated markets, but once the manufacturers are able to meet such higher standards, they are competitive everywhere else, and in particular in countries that did not prod their industry that way.
(17 Oct 2006)
The article cited by Jerome is online: EU plans tough laws on energy efficiency.
Oil major CEO calls for demand reduction
Jerome a Paris, European Tribune
To extend the age of oil, we must save fuel now
By Paolo Scaroni, CEO of ENIOne of the most common explanations advanced in the west for the current squeeze on energy supplies – and for why prices are still so high even after the recent decline – is that China is using up our oil.
…It is the west’s consumption, along with sustained under-investment in energy infrastructure during the 1990s, that has really pushed prices up.
The paradox is that, while on the one hand we complain about high oil prices, on the other we pursue energy policies that are wholly irrational.
This introduction (from which I just cut out a few statistics about Chinese oil consumption compared to ours) makes several excellent points:
* it notes the sense of entitlement we feel about access to oil (get the Chinese hands off of “our oil”)
* it is our consumption which is the problem
* and sadly, public policy makes things worse
These will not come as a surprise to the readers of this series (although the impact of China on demand increase in recent years is a lot bigger than its share of global demand, and is thus probably underestimated in this article), but it is quite something else to see a major player of the industry say these things loudly.
(And just in case you’re not familiar with it, ENI is not a small player. With a production of 1.8 mb/d, it is half the size of ExxonMobil or BP and is in the top ten of non-State-owned oil companies worldwide)
(16 Oct 2006)
Also at Daily Kos.
The original of Paolo Scaroni’s essay is at Financial Times, unfortunately behind a paywall. -BA
