$5 Gas
By Justin Gardner | Related entries in Economy, MoneySome say it’s good for America.
Ehh…
Yes, a few billion newly motorized citizens of BRIC - that’s economist-speak for Brazil, Russia, India, and China - have turned up unexpectedly at the filling station, pushing prices sharply north. And yes, the oil world has lately endured more than its usual share of ugly headlines: insurgency in Iraq, unrest in Venezuela, mayhem in the Gulf of Mexico. And, OK, all those air-conditioned Cadillac Escalades are thirsty beasts. A million extra barrels a day burned here, a million fewer pumped there, a little geopolitical instability, and suddenly the price of the stuff that makes the wheels go around is flirting with historic peaks.All of which would be seriously alarming but for one happy fact: We’ve never had more options for keeping those wheels turning. Aramco’s fuzzy logic is just one of a multitude of new tools and fuels - some proven, some in the works, and some wildly speculative. The main thing standing between those possibilities and your gas tank is cheap crude oil that costs Aramco barely $3 a barrel to bring to the surface.
So rising oil prices are more than just an irritant or even an ominous nick out of the GDP. They’re an invitation to corn and coal and hydrogen. For anyone with a fresh idea, expensive oil is as good as a subsidy - with no political strings attached. Indeed, every extra penny you pay at the pump is an incentive for some aspiring energy mogul to find another fuel.
The story contains some very compelling points, and they shouldn’t be overlooked. But let’s be realistic, shall we. 5 dollar gas would cripple us and lead to a wider inequality between the haves, the have somes and the have nots.
Personally, I’m in that middle group and I certainly don’t look forward to a day where I have to pay these crazy prices at the gas pump. Simply put, our purchasing power bides us some time, and that’s what you get when you’re the most powerful nation in the world. I don’t disagree that gas prices should be higher, but not to the detriment of the American people.
But would I conserve more if forced? You’re damn right I would.
A relevant point and a scary future.
This entry was posted on Wednesday, November 23rd, 2005 and is filed under Economy, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
November 23rd, 2005 at 10:38 am
The problem with the idea of high gas prices leading to new technology, is that the industrial process for research and development of new technology relies on such fuel. Its like cutting off the oxygen in the scuba-gear factory to motivate the engineers to invent something more efficient.
France has huge energy taxes and price controls for environmental and conservation purposes (to the point of economic stagnation)…where is the solar-powered Pugeot?
Research grants and tax breaks for consumers who use alternative energy is a better method. You provide incentives for investment while keeping the economy humming along.
November 23rd, 2005 at 10:47 am
Good analogy. Innovation won’t happen just because it’s forced. I like the idea of tax breaks. If people understand that this can effect their bottom line, they’ll be more inclined to conserve.