Gasoline ignites political firestorm

COMMENTARY Environment

Gasoline ignites political firestorm

May 2nd, 2008 5 min read

Former Distinguished Fellow

Ernest served as a Distinguished Fellow at the Heritage Foundation.

Gasoline prices have hit Washington like a Molotov cocktail.

It may be the biggest factor in this fall's elections, so Washington, D.C., politicians are trying to dodge the flames and make someone else the villain and the target.

The attitude is typified by Sen. Charles Schumer, D-N.Y., whose all-purpose answer is "Big Oil should pay." Although Schumer represents Wall Street, he flunks economics: Whatever extra amounts "Big Oil" is made to pay will only be added onto the price of gas, making us the ones who pay even more at the pump.

There is an answer: We have ways to lower gasoline prices (to be outlined in a moment), but only if we recognize that America is held hostage more by radical environmental policy than it is by OPEC. And Congress has been their puppet.

Congress should be nervous, because no other issue touches so many pocketbooks as directly as gasoline prices do. Not subprime mortgages. Not college loans. Not even jobs and not even income taxes (since 41 million working Americans have already been exempted from federal income taxes).

Nine of 10 Americans still drive to work, the Census Bureau reported last year even after a gallon of gasoline climbed to over $3. That means 90 percent of working Americans see reminders along every street every day as they drive, as prices are prominently displayed at over 100,000 gas stations. The "soccer moms" also get reminded as they drive and tote around their youngsters.

The still-climbing prices are stoking anger - and anger needs a target. Politicians are rushing to dodge that blame and to channel that blame toward their rivals.

Republicans jumped at the chance to blame Democrats because prices are up almost $1.50 a gallon since Democrats took over Congress. Democrats say we're victims - not just victims of an OPEC conspiracy (which is obviously true), but also victims of corporate greed:

  • House Speaker Nancy Pelosi, D, Calif., wrote the president to complain that he wasn't supporting her "plan," which includes investigations of the oil companies and more laws and lawsuits against "price gouging" - although similar probes during other price run-ups were fruitless, and we already have anti-price-fixing laws. Pelosi's team wants to add more taxes on the oil companies (guaranteed to raise prices, not lower them), and more subsidies for alternative energy.

  • Senate Democrats blamed "speculators" and the oil companies - even though "Big Oil's" profit margin is only half that of Coke and Pepsi. The lawmakers promise to punish the guilty with higher taxes. But that won't bring prices down.

  • President Bush proclaimed, "Members of Congress have been vocal about foreign governments increasing their oil production; yet Congress has been just as vocal in opposition to efforts to expand our production here at home." He cited decades of congressional actions that have placed vast areas of oil-rich fields off-limits for domestic drilling and blocked construction of domestic refineries and nuclear power plants.

  • House Republicans have set up a special website tracking daily how much the average price per gallon climbs each day, compared to $2.33 the day Democrats took over Congress and pledged to reduce prices at the pump.

But political wrangling does nothing to reduce prices or increase domestic energy supplies. It's just scapegoating.

How do we lower our gasoline prices? Here are five ways, but beware that they require patience:

  1. Understand the causes, and don't fall for false claims. Our government has caused high prices by stifling domestic oil and gas production and suppressing new refineries and nuclear power plants. Our own government has forced us to rely increasingly on foreign oil, making us bid against the growing energy appetites of China and India.

    A plentiful supply of alternative energy remains far in the future, but much of it will be more expensive than $4-a-gallon gasoline.

  2. Open-up America's oil reserves that are now off-limits. Drilling in now-closed federal lands alone can provide enough oil to power 60 million cars for 60 years That includes areas in Alaska, on other public lands, the Gulf of Mexico and offshore areas. Our modern technology can do this without harming the environment. (Critics who scoff that this won't add supplies overnight should be required to explain why they didn't drop their opposition years ago.)

  3. Quit blocking the construction of refineries and nuclear power plants. We subsidize foreign despots and lose control of our own destiny when our gasoline must be refined in places like Venezuela. And nuclear power is safe enough to be France's dominant energy source, so it's obviously safe enough for us!

  4. Waive the requirement for different and special blends of gasoline in each part of the country. That adds expense and creates regional shortages and higher prices. Fixing this should include a repeal of the $18 billion ethanol subsidy and mandate, which is a major cause of our record-high food prices.

  5. Encourage alternative energy through the free market system, not by subsidies for special interests. Any fuel that needs a subsidy to compete with $120-a-barrel oil is never going to be affordable for consumers. Every day of high prices makes alternative energy more affordable by comparison, but still a stretch for most family budgets. Alternatives that need subsidies would obviously be even more expensive for consumers than $4-a-gallon gasoline.

Thankfully, at least one politician is acting rather than just talking. Texas Gov. Rick Perry just wrote the EPA, asking the agency to exempt Texas from at least half the mandate to blend ethanol in with its gasoline - which he notes is driving food prices through the roof as well as costing us billions in subsidies.

How many more will get the message? Based on recent comments, not enough so far. But that might change before Election Day. America is discovering how much radical environmentalism has cost us already - even without the new proposals being promoted by Al Gore and Company.

Gasoline packs a wallop in politics just as in autos. Now the tiger is out of the tank, and politicians find they must try to ride the tiger. Or it may eat them come November.

Ernest Istook is recovering from serving 14 years in Congress and is now a distinguished fellow at The Heritage Foundation.

First appeared in World Net Daily