An Uncomfortable Fact About Gas

Eric Massa and Randy Kuhl are both addressing the issue of higher gas prices. 

The Kuhl take is the same as the rest of the Republican caucus: it's Nancy Pelosi's fault.  If you're interested in the tortured logic by which Kuhl arrives at this view, here's his floor speech.   The sum total of Kuhl's "argument", which is cribbed from his caucus, is that Pelosi said that Democrats would lower gas prices and they haven't.  Ergo, it's all Pelosi's fault.  I don't think anyone's buying:  unless the use of botox somehow depletes the world's oil supply, Nancy is in the clear.

Massa's view is as follows:

The source of this problem is clear - Randy Kuhl and far too many Washington insiders have allowed Big Oil to gouge us at the pump. To solve this problem, we must stop the George W. Bush Big Oil handouts and start investing in real energy independence for America, not real obnoxious profits for Exxon Mobil.
I agree with Massa that the subsidies and tax breaks for big oil make no sense, especially when oil is over $100/barrel, and they should be ended at once.

But here's the unpleasant fact:  the only thing that causes us to stop using so much gasoline, and to invest in energy independence, is high gas prices.  For the first time since 1991, and the eighth time since 1951, gas consumption is down in the United States.

"Sustained higher gasoline prices are beginning to show up in lower gasoline consumption,” said Tancred Lidderdale, an analyst for the Energy Information Administration.
While I agree with Massa that, in theory, the government could implement an energy independence program, it's too late for that.  We're like the fat smoker who just had a heart attack.  We've known for decades what we're supposed to do, but we will only do it under influence of tremendous pain and fear.

Comments

The way I understand it, the oil companies only received three cents in profits for every dollar they took in. Granted they sell hundreds of billions of dollars each year, but a three cents on the dollar if they dropped their price 6 cents a gallon they would break even.

I think that congress should kill any tax breaks the oil companies have and make them invest some of the profits in R&D, but I don't think they could save each individual gas buyer much money.

I didn't want to make this post super long but I agree that cutting oil company subsidies won't affect the price of gas.

Oil is a commodity sold on a worldwide market. Assuming enough refining and transport capacity, the price of gas is pegged to the price of oil, and there's very little our government can do about it.

But it's hard to get a politician to admit that unpleasant fact, or even the more unpleasant one I mentioned above, namely, that high gas prices are the best way to ensure that we'll get energy independence.