Energy Independence..

[Lyion]

Really good George Will read on Energy Independence


Energy independence
By George Will
Thursday, May 17, 2007

WASHINGTON -- Democrats, seething at the injustice of gasoline prices, have sprung to the aid of embattled motorists. So resolute are Democrats about defending the downtrodden, they are undeterred by the fact that motorists, not acting like people trodden upon, are driving more than ever. Gasoline consumption has increased 2.14 percent during the last year.

That probably is explained by the inconvenient (to the Democrats' narrative) truth that Speaker Nancy Pelosi was characteristically overwrought when she said that Democrats intend to do this and that because the price of gasoline recently ``set a record'' at $3.07 a gallon. In real (inflation-adjusted) rather than nominal dollars, $3.07 is less than gasoline cost in 1981.

Pelosi vowed, as politicians have been doing since President Nixon set the fashion, to achieve ``energy independence.'' Such vows are, as Soviet grain production quotas used to be, irrational reflexes that no serious person takes seriously. Pelosi baldly asserts that ``energy independence is essential to reducing the price at the pump,'' but does not say how.

As Steven Hayward of the American Enterprise Institute notes, there is no yearning for national self-sufficiency concerning other essential goods, such as food, automobiles, airplanes or medicines. Are Democrats worried about security of oil supplies? In some ways, Hayward says, America's energy supply is more secure than it was in the 1970s, partly because ``since 1975, energy consumption per unit of gross domestic product has fallen 48 percent.'' Furthermore, ``oil represents a shrinking share of total U.S. energy consumption -- from 44 percent in 1970 to 40 percent in 2005.'' The oil America consumes -- only one-eighth of which comes from the Middle East -- is used almost entirely in transportation, and accounts for about 40 percent of energy uses. Half of America's electricity is generated by coal, of which America has a huge abundance.

America has about 22 billion barrels of ``proven'' oil reserves, defined as ``reasonably certain to be recoverable in future years under existing economic and operating conditions.'' In addition, there are an estimated 112 billion barrels that could be recovered with existing drilling and production technology. Make that, with existing drilling and production technology -- and fewer Democrats like Pelosi who, while promising energy independence, are opposed to any drilling in the Arctic National Wildlife Refuge and much drilling offshore, where 87 billion of the 112 billion barrels are located, as is much of the estimated 656 trillion cubic feet of recoverable natural gas.

Pelosi announced herself ``particularly concerned'' that the highest price of gasoline recently was in her San Francisco district -- $3.49. So she endorses H.R. 1252 to protect consumers from ``price gouging,'' defined, not altogether helpfully, by a blizzard of adjectives and adverbs. Gouging occurs when gasoline prices are ``unconscionably'' excessive, or sellers raise prices ``unreasonably'' by taking ``unfair'' advantage of ``unusual'' market conditions, or when the price charged represents a ``gross'' disparity from the price of crude oil, or when the amount charged ``grossly'' exceeds the price at which gasoline was obtainable in the same area. The bill does not explain how a gouger can gouge when his product is obtainable cheaper nearby. Actually, Pelosi's constituents are being gouged by people like Pelosi -- by government. While oil companies make about 13 cents on a gallon of gasoline, the federal government makes 18.4 cents (the federal tax) and California's various governments make 40.2 cents (the nation's third-highest gasoline tax). Pelosi's San Francisco collects a local sales tax of 8.5 percent -- higher than the state's average for local sales taxes.

Pelosi and others who just know, evidently intuitively, the ``fair'' price of gasoline must relish what has happened in Merrill, Wis., where Raj Bhandari owns a BP gas station. He became an outlaw when he had what seemed, to everyone but the state's government, a good idea. He gave a discount of 2 cents per gallon to senior citizens and 3 cents for people who support local youth sports programs.

But Wisconsin's Unfair Sales Act requires retailers to sell gasoline for 9.18 percent above the wholesale price. The state's marvelously misnamed Department of Agriculture, Trade and Consumer Protection has protected consumers from Bhandari's discounts by forcing him to raise his prices. Some customers now think he is price gouging.

Some Wisconsin legislators are considering changing the Unfair Sales Act to allow retailers to discount gasoline to benefit things those legislators think should be benefited. In Madison, Wis., as in Washington, D.C., it is considered eccentric to think that government should butt out, let people buy and sell as they please, and let markets equilibrate.

[Yamori]

While oil companies make about 13 cents on a gallon of gasoline, the federal government makes 18.4 cents (the federal tax) and California's various governments make 40.2 cents (the nation's third-highest gasoline tax). Pelosi's San Francisco collects a local sales tax of 8.5 percent -- higher than the state's average for local sales taxes.

Why does no one ever talk about this in the media. :/

[Arlos]

Because those taxes haven't changed, and thus are completely unrelated to the recent price increases, which is what the real complaining is about. It's not likey they didn't exist last summer and were suddenly slapped on there. You likely paid the same in taxes when gas was 1.25 a gallon as you do now.

-Arlos

[Evermore]

While oil companies make about 13 cents on a gallon of gasoline, the federal government makes 18.4 cents (the federal tax) and California's various governments make 40.2 cents (the nation's third-highest gasoline tax). Pelosi's San Francisco collects a local sales tax of 8.5 percent -- higher than the state's average for local sales taxes.

Why does no one ever talk about this in the media. :/

they do talk about the record profits big oil is making thou.

[Snero]

paid the same %, not the same number. If prices triple, you are paying the same % in tax but the actual amount has tripled too

[Lueyen]

paid the same %, not the same number. If prices triple, you are paying the same % in tax but the actual amount has tripled too

Unless your state levies a percentage tax on the total this isn't the case. Federal tax and most state are a set dollar amount per gallon.

[Eziekial]

are you sure? a flat rate tax on a consumable doesn't sound like our government MO at all.

[Lueyen]

Federal tax on Diesel is .244 per gallon, Gas is .184 that doesn't fluctuate with the retail price at the pump. State to state it varies, but most if not all do the same thing (I know quite a few that have a set per gallon tax, can't think of any that do a retail based percentage rate).

[Eziekial]

learn something new everyday

[kaharthemad]

While oil companies make about 13 cents on a gallon of gasoline, the federal government makes 18.4 cents (the federal tax) and California's various governments make 40.2 cents (the nation's third-highest gasoline tax). Pelosi's San Francisco collects a local sales tax of 8.5 percent -- higher than the state's average for local sales taxes.

Why does no one ever talk about this in the media. :/

they do talk about the record profits big oil is making thou.

correct me if I am wrong. but gumint tax (total state and fed for cali) is 58.4 and 13 cents to the oil companies. Hmm I think im more pissed at the government then at some 13 percent profit.