Monday, June 30, 2008

How Can Government Lower Our Fuel Bills?

Any politician who claims that they can actually lower the cost of gasoline in the next 5 years is a liar.

Increases in supply, pretty much all of which are really terrible for the environment, will take at least 5 years to get started:

1. Offshore drilling is sadly probably the best of these.
2. Should the so-called Green Freedom process be able to use solar or wind energy and yet remain cost-competitive, it would be the best option.
Frankly, it still might be the best option even with nuclear, though the cost is $4.60/gallon. I would think that since an industrial process doesn't require a baseload (assuming the manpower required for actual operation of the oil from CO2 and water plant is low, I would guess that production could be halted whenever the sun isn't sufficient for high-temperature solar thermal collectors like linear Fresnel reflectors; it's not like electricity where lack of a baseload means no use of lights, TV, computers, dishwashers, electric stoves, ovens, refrigerators, air conditioning, washing machines, dryers, toasters, etc. whenever the sun isn't out or the wind isn't blowing), solar and wind would be especially suited for this process (especially if the carbon dioxide can be stored effectively or, better yet, is coming from a coal power plant)
3. Liquid coal and shale oil are, when ignoring their sky-high environmental costs, likely economical these days, but that requires moving backwards on the environment, and we're screwed aside from energy if we don't move forward on slowing global warming.

So the government (whether federal, state, county, municipal, and it goes without saying school board) cannot actually lower gas prices.

But can government do anything to lower our fuel bills?

The St. Petersburg Times asked people who theoretically know something about the issue from all ideologies and areas:

Italicized and parentheses are my pre-article reading thoughts

Glenn Robertson, budget director for both Republican Governor Bob Martinez and moderate to liberal Democratic Governor Bob Graham (So he's probably got some elements of sanity to him, at least):

Donna Arduin, budget director for Republican Governors Jeb Bush and Arnold Schwarzenegger; also president of Arduin, Laffer & Moore Econometrics (Yes, that Laffer is Arthur Laffer, the guy who pushed the idea that there is a single local maximum in a graph plotting tax rates with tax revenue [clearly it will be 0 at a 0% tax rate, and low (not zero, but quite low) at 100%, but his idiot idea inspired Reaganomics and today is probably costing America as much as $100 billion each year of extra interest on the national debt), not to mention the trillions of dollars of debt. As such, she's almost certainly an idiot)

Democratic Chief Financial Officer Alex Sink (One hope's she'd be good)

Sean M. Snaith, director of the Institute for Economic Competitiveness in the College of Business Administration at the University of Central Florida (business school types are all over the map; who knows?)

Dominic M. Calabro, president and chief executive officer of Florida TaxWatch (TaxWatch? He's almost certainly as much of an idiot as Donna Arduin, possibly more so, as she at least might possibly [though I doubt it] learned something from being a budget director)

Raymond Arsenault, the John Hope Franklin Professor of History at the University of South Florida, St. Petersburg (Likely has some idea of what's been tried [and failed or succeeded] in the past, but that may or may not be useful to apply to today; history professors tend to be liberal, but can range across the board ideologically)

Mike Jackson, chairman and chief executive officer of AutoNation, America's largest auto retailer (Let me guess; it doesn't involve doing anything that would reduce the number of single occupancy vehicles on the road [and therefore probably doesn't involve doing anything unless he claims drilling is going to happen soon])

Susan Story, chairwoman of the Florida Chamber of Commerce and president and chief executive officer of Gulf Power (Chambers of Commerce are often surprisingly good on public transportation, at least in theory; but damn they hate regulation; Gulf Power is a subsidiary of Southern Company, which skews more heavily both coal and nuclear than U.S. power as a whole; expect emphasis on that

Mark Wilson, president and chief executive officer of the Florida Chamber of Commerce (Same as with Susan Story, surprisingly decent on transit, but hate regulation)

After reading

Obviously, there were the ideological themes, at least on the right:

  • the 2 Chamber of Commerce types, Tax Watch guy, and Laffer woman predictably pushed "tax & spending cuts are our Savior, because the government doing nothing about energy has worked out so well so far"

Anyway, there were a bunch of common themes:

No We Can't (pessimistic but probably sadly realistic as well): Everyone but the Chamber o Commerce; AutoNation CEO Mike Jackson "there is no quick fix." Same by the history professor, and to a lesser extent by the others. I forgot that Chambers of Commerce are the anti-Chicken Littles; Story and Wilson both say, in essence "We're in a 'transition' period, but the outlook is great!"

Public Transit-Pushed by everyone except TaxWatchman, no-solution Autonation CEO man, and Laffer lady.

Carpooling-Most, even the TaxWatchman.

The bipartisan budget director had the most ideas, most of which sound good,

• City and county governments could provide an accessible and user-friendly "Jump in the Pool!" Web site to help people carpool. The site could connect people who live and/or work in similar areas of town. The site could suggest a reasonable amount that each passenger pays to offset the driver's gas bills and inconvenience, and is less than the passengers would pay if they drove their own car.

• A government-sponsored "Save Me Some Money" Web site (message board) could allow citizens to contribute and access ideas that can help cut costs or save money in many different areas (e.g. food costs, energy usage, home maintenance, and car maintenance and operation).

• A government "Help-A-Neighbor-In-Need" Web site could be established where people needing help can request it from others in the community.

• Local governments could sponsor "Community Gardens" in various areas of cities and counties where especially lower-income families could access fresh vegetables that may be getting sacrificed to pay for gas and other higher-cost necessities.

• Local governments could more actively promote visiting homes in their area to evaluate energy-saving possibilities and maybe offer assistance to lower-income families if energy use and expense can be cut.

• In a special session, the Legislature could authorize grants to local governments to do any or all of these things from nonrecurring funds.

• State and local governments could actively introduce many different initiatives to save gas and energy as a model to citizens. Show some political leadership.

I don't know how much they would do, but they sound decent and are among the most that could be done, probably.

Some are stupid:

  • All the "cut taxes/end regulation" proposals

  • Toll holiday, proposed by Alex Sink and Sean Snaith; tolls help push people to public transit and are crucial to fund transit projects and keep roads from falling apart

However, both Democratic official Alex Sink and far-right crazy Laffer woman Donna Arduin agree on one thing-a gas tax holiday is extremely stupid.


Do Not:
Legislate temporary gas tax cuts, or any similar gimmick. Gas tax cuts would subsidize the oil industry and not help bring about any of the needed "substitution effects" that high gas prices cause, like buying more fuel-efficient vehicles and using mass transit more.
(so even she realize that mass transit use is a good thing)

Don't try reducing gasoline taxes. "Every time that's been tried, the gas companies just take it for themselves. That leaves us without the revenue we need for our infrastructure. So some people are losing their jobs."

I guess only a solution-lacking pandering crazy old man would propose such a thing.


Tom said...

Transit, car pooling, a four day work week, a revenue neutral gas tax increase with the revenue raised used to cut payroll taxes, and other simple and quick to implement solutions can cut US consumption by 25%, world consumption by 2 1/2%. Countries that followed our lead to consume more would start to conserve.

A 2% increase brought this massive price hike so why wouldn't a similar decrease bring oil prices to 2006 levels?

DemocraticLuntz said...

Because China and India aren't going to decrease their consumption. The only reason this didn't happen 25 or more years ago is that the extremely vast majority of the world was (still is) dirt-poor and had no cars and didn't use oil (or other fossil fuels) for much of anything.

By contrast, if China had stayed the way it was under Mao and India was, say, like Bangladesh, gas would still probably be $2.00 a gallon.