Question of the Day: What Should We Do About Gas?

by Jonny Lieberman

March 25th, 2008 3:15 PM

question of the day what should we do about gas

Captain Farago opened up a can of angry worms earlier today when he reported that the New York Times hates Bush and wants to increase the gas tax. After lots of healthy debate, Robert interjected, "Can someone remind me again why we want to reduce gas consumption?" Excellent question. Well, aside from the obvious (life-threatening global warming, billions and billions of dollars– or is that trillions?– being pumped into questionable Middle Eastern regimes) there is the fact that the IRS thinks I owe them $3k. And since I've been paying $3.89 a gallon for the last few weeks, I don't have so many extra pennies to ship off to Washington. But hey, it's not all about me. Why are you concerned about gas consumption, gas prices, alternative propulsion and oil? Patriotism, environmentalism, cheap bastardism? How and when did the realization occur that something must be done?

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Phil Ressler on Mar 26, 2008
Mr. Ressler, you just used your brief allusion to the trade deficit as an excuse to provide lengthy advocacy for the purchase of Big 2.8 cars. Sorry, but the topic was gas consumption. No need to change the subject. Well, again no. The question posed by Lieberman regards what to do about gas? His comments focused the discussion on consumption and price. Early responses recommended taxation and various types of regulation, for both economic and environmental reasons. If you followed my posts in this thread, I began with a simple advocacy to leave gasoline policy alone, and explained why. I then responded to some other contributors and have followed a general line of discouraging regulation and taxation, encouraged behavioral consistency on the part of advocates for both, gave illustrations that included some examples of car-buying decisions, and concluded with a summary of inconsistencies that are undermining the credibility of advocates for regulation. I've been entirely on-topic. Phil

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Brownie on Mar 27, 2008

David Holzman: Oh boy, am I embarassed... I, the big fan of statistics and stickler for checking sources, really made a big boo-boo on that front. 100GW of US nuclear generation capacity is absolutely correct. The number I was thinking of (and thinking of wrongly) is ~700 GWh of actual annual generation in the US. So not only was I citing the wrong number, I was off by two orders of magnitude to boot.

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Carlos.negros on Mar 27, 2008
Landcrusher : March 26th, 2008 at 3:44 am Carlos, I call Bullshit. Please tell us about a huge tax cut, incentive, or subsidy for oil companies. Please? Just one. January 19, 2007 House Votes to Rescind Oil Drillers’ Tax Breaks By EDMUND L. ANDREWS WASHINGTON, Jan. 18 — House Democrats easily passed legislation on Thursday that would rescind $14 billion in tax breaks and subsidies for oil drillers and reserve the money to develop alternative energy projects and conservation technologies. The measure passed 264 to 163, with many Republicans joining a bloc of Democrats. Passage came despite opposition from the oil industry and the Bush administration, which said the bill singled out the companies for higher taxes and could increase the country’s dependence on foreign oil. The bill will rescind $7.6 billion in tax breaks for oil drillers that Congress passed in 2004 and 2005 and will add $6.3 billion in royalties from companies that pump oil and gas in publicly owned waters of the Gulf of Mexico and off Alaska. One provision is intended to correct errors in drilling leases signed by the Interior Department in the late 1990s that allowed oil companies to escape billions of dollars in royalties over the next decade. The provision, opposed by the White House and the industry, would require companies that refuse to change their leases to pay a “conservation fee” on each barrel they produce. Otherwise, under the bill, the companies would be barred from acquiring additional leases. Full article: http://www.nytimes.com/2007/01/19/business/19royalty.html

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Landcrusher on Mar 28, 2008

Carlos, Let me tell you the real story my press/government believing friend. Those were not errors, it is really a break on royalties, and the leases would never have been sold at the normal rates. The Clinton Administration (Yes, that is correct, the lefties) noted that no one was drilling deep wells. They wanted the revenues from the lease sales, so they changed the standard terms on the leases. Had they not done so, there would have been no way for anyone to make a profit because the price of oil was too cheap at the time, and these leases were all gong to be expensive to explore and produce. Basically, this is analagous to a mall owner giving tenants a cheaper price on less desirable locations in the mall. Fast forward to the Bush administration (Yes, that is correct, the right wing in the pocket of big oil guys) and the price of oil is now through the roof. The realize that the lease holders are making a huge profit, and in the spirit of communist governments everywhere, claimed the leases were a mistake and demanded back payment. Using the mall analogy, the mall owner now comes back after the retail shop located in the closet under the stairwell and demanding years of extra back rent because he finds out that the guy was making a lot of money back there by using expensive advertising. As I said, some companies came to a settlement, others are still fighting. However, in no way is this a subsidy or a tax break for the oil companies under any objective opinion. Sure, royalties may be technically taxes, but a reduced royalty on an undesirable lease is supposed to be a subsidy? What is really disgusting is the Clinton campaign blaming Bush for giving away the so called subsidies when it is actually the exact opposite. What is also disgusting is the NYT slanting this story when they know better. As written, it is more editorial than news, but that should surprise no one who has read that rag in the last decade. There are actually a few tax breaks and subsidies for the oil industry, but they are really insubstantial compared to the taxes paid by them. All major industries in this country get something, and I would be glad to see almost all of them cut off. Especially the airlines and big ag.

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