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Zer Netmouse
May 14th, 2008
01:02 pm


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Better than a gas tax holiday

(25 comments | Leave a comment)

Date:May 14th, 2008 10:06 pm (UTC)
It's worth noting that nothing in Levin's bill (or any other bill that might be passed) is going to make a significant difference in the price of gas in the next several years. Even if we could eliminate all of the corruption, speculation, and inefficiency that goes into the oil price, it would be unlikely to change by more than 20% or so.

The root cause of the high prices is that there are a billion or so people in Asia who are starting to buy cars and use petroleum-derived products. Meanwhile, there's not a lot of oil left in the ground that can be retrieved cheaply, so the cost of getting at what's left is going up.

Whether we feel entitled to cheap gas is irrelevant; the laws of economics say that when supply is tight and demand is growing, prices will rise. In the long run, improved energy efficiency and alternative power generation can make a difference, but in the short run, we really don't have any choice but to accept the high prices and find ways to deal with them.
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