Should You Pay $6 Per Gallon?

So what would it take to curb our oil enthusiasm? Gas at $6 a gallon, says Jackson. And to get to that daunting price, Jackson says Washington needs to jack up gas taxes the way the Europeans have. In Western Europe, where gas tops $7.50 a gallon, more than half that price ($4.67) is taxes, according to AutoNation's research. Here in the United States we're paying about 40 cents in federal, state and local taxes on a gallon of gas. This helps explain why new vehicles sold in America average 25 mpg, while European cars average 36 mpg. "The dirty little secret is that it's all about the price of the fuel," says Jackson. "It's not that Europeans are better people than us. That society decided to tax gasoline to encourage consumers to make trade-offs to favor fuel economy."

That's all fine. But even Jackson admits his gas tax idea is DOA, since raising taxes is a suicide mission for any politician. President Bush is trying to break our oil addiction with tougher new fuel economy rules that his transportation secretary, Mary Peters, announced this week on Earth Day. By 2015 every auto company's passenger cars sold in America have to average 35.7 mpg, up from 27.5 mpg today, while minivans, SUVs and pickup trucks must average 28.6 mpg, up from about 22 mpg today. That adds up to an overall average of 31.8 mpg for all new vehicles sold in America by 2015, a big step up from 25 mpg today. This is all on the way to achieving an overall 35 mpg average by 2020, but it is coming much faster than Detroit or its detractors expected. "I can't believe I'm saying this," says environmental activist Dan Becker, "but the Bush administration actually got one right."

However, others wonder if Americans will actually buy these more fuel-efficient models, which the government predicts will cost as much as $979 more than today's cars. After all, fuel economy in America has actually gone in reverse over the last 20 years, from an average of 22 mpg in 1987 to 20.2 mpg last year, according to the EPA. That's due, in part, to the fact that the rise of the SUV was never contemplated when Congress first passed fuel rules back in 1978. Now, though, we're used to riding high in a comfortable, commodious cabin and don't want to turn back. "Even if you jack gas prices up to where they are in Europe, people here still won't drive those little cars," says Global Insight auto analyst John Wolkonowicz. "We've been conditioned to believe those are cheap cars."

Another aspect of the European model that hasn't translated to America is the love of diesel engines. More than half the cars sold in Europe are equipped with diesels, which get 20 to 40 percent better fuel economy than gasoline engines. But they also pollute more. So American regulators have outlawed them in several states, including California and New York. Auto companies are engineering cleaner diesels aimed at meeting America's tougher regs, but now the price of diesel fuel is accelerating faster than that of gas. Diesel now averages $4.23 a gallon, up from $2.92 a year ago. Suddenly the diesel deal isn't sounding so good. "At almost a dollar a gallon more," says Wolkonowicz, "it's becoming very hard to justify paying the $1,500 to $2,000 extra for the diesel engine option."

But it might not take pricey technologies or outlandish gas prices to change our guzzling ways. Social stigma and inconvenience could do it, says Tom Kloza, energy analyst with the Oil Price Information Service in Wall, N.J. Kloza suggests that shopping malls and municipal parking lots start requiring the drivers of big rigs to park in the spaces farthest away. Or the popular electronic EZ Pass that commuters use to pay tolls without slowing down could be restricted to lighter cars while the heavyweights have to line up at the toll booth. All rental cars could be outfitted with GPS navigation so we don't waste gas getting lost. His most controversial idea: stop giving driver's licenses to 16-year-olds and we'll decrease the ever growing population of gasoline gulpers. "The laws allowing 16-year-olds to drive are based on an old agrarian economy where you needed to be licensed to drive a tractor or to drive to the grain elevator," says Kloza. "Why isn't there any dialogue on creating a national driving age of 17?"

That's a dialogue any of the presidential candidates could open if they really wanted to do something about America's oil addiction. Because as any economist will tell you, nothing cuts prices faster than a sharp dropoff in demand. If we consume less gas, we're likely to pay less for it. That's a bit of straight talk, though, that has been absent from McCain's rhetoric about the gas-tax holiday. In the past McCain has called for tough fuel rules that would help combat global warming and reduce our dependence on foreign oil. In spite of that he is the presidential choice of 70 percent of auto executives, according to a recent survey by Detroit's Dykema law firm. But Dykema attorney and former GM exec Frank Dunne finds the climate-change hawk's call for a gas-tax holiday "intellectually dishonest."