Oil, Gas, and Renewable Energy

Thought: With crude oil selling at an all-time high of $75.19 per barrel yesterday, what is going wrong?

First, to those who claim free market, I would agree, except the profits are funding the worst regimes in the world, the least democratic, and the only reason these countries don't change is because they are backed by obscene oil prices. At $20 per barrel, Iran has no funding for its nuclear program. At $30 per barrel, Saudi Arabia can't afford to support the families of terrorists in the West Bank and Gaza after they blow themselves up in public places. At $40 per barrel, Hugo Chavez wouldn't be as outspoken.

The problem in the United States is primarily one of demand. To curb demand in the United States, the most oil-hungry nation in the world, by far, prices must go up even higher. "But wait," you say, "you just said that high prices are bad!" The high price of oil is only bad if the profits are going to fund the oil nations. Therefore, the federal legislature must set a large gas tax, per gallon, in the vicinity of 1-3 dollars. This will cut down on demand, and will help eat up the deficit at the same time. Give people who make under 25k per year a new tax break on their income tax equal to a half of their gasoline expenses, and give people who make under 50k per year a break on the income tax equal to a quarter of their gasoline expenses, to curb hardship. To those who complain about the effects of high consumer gas prices on the economy, I respond that this will only put the United States' prices more in line with those that the rest of the Western world will pay. Furthermore, the tax will make the citizens of the United States more aware of the coming energy crisis. Needless to say, the billions of dollars in aid for the poor, impoverished oil companies must stop immediately.

A second method to curb demand is through manipulation of the auto industry. Legislation should be passed in favor of high gas mileage. One example would be to require all car companies to have an average of 30 mpg or higher on all cars sold, or face severe fines. The 30 mpg average would be increased by 2 mpg each year. This would force companies to try to sell more of their higher mileage cars, and research new ways to improve mileage. To help the auto industry out, this would be counteracted by federal subsidies of $1000 to both the seller and buyer of any car with mileage of over 40 mpg (this, too, would increase by 2 mpg each year). Thus, the sales drop in the truck and SUV categories would be accompanied by higher profits in the gas-sipping categories.

The solution is not drilling more in the Gulf, or in Alaska. These are temporary solutions, and will be much more valuable in a few years or decades when the rest of the world's oil begins to run out (or to "peak"). On the supply side, instead of producing more oil, the United States should try to produce more clean energy. Clean solutions need to be funded lavishly, and wind and solar energy need to be made cheaper, as these are the most renewable resources of them all. Perhaps solar panels could be subsidized, and homeowner property taxes could be reduced if the roof is paneled.

With lower demand, brought about in part through more efficient cars, and a greater supply of energy through the use of renewable sources, the world can be made a better place.