Gas Price Fixes that Won't

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Clinton (May 2): We have a choice. We can choose to have you continue to pay the federal gas tax this summer or we can choose to try to make the oil companies pay it out of their record profits...We ought to say: Wait a minute, we'd rather have the oil companies pay the gas tax than the drivers of North Carolina, especially the truck drivers, or the farmers, or other people who have to commute long distances."

Problem: If, as we outlined above, the price of a gallon of gas stays roughly the same despite the "holiday," then what used to be 18.4 cents that would go to the federal government for every gallon sold instead goes into the coffers of the oil companies as profit. That would be the profit that Clinton is proposing to tax to recover the cost of the gas tax holiday. (Clinton planned to introduce a bill today with New JerseyDemocratic Sen. Robert Menendez to implement her proposals; Sens. Charles Schumer and Sherrod Brown introduced legislation in March to tax "excess profits" of oil companies.)

Paul Krugman, a Princeton economist, calls Clinton's plan "pointless." We think it sounds a bit like a Rube Goldberg machine.

The ANWR Answer
Meanwhile, President Bush tried to reheat some energy proposals that he's championed for years, to little effect. There are reasons for that.

Back during the 2004 presidential election and even before, Bush called for Congress to allow drilling in the Arctic National Wildlife Refuge, arguing that it would help the U.S. achieve energy independence, a goal we dismissed as unrealistic at the time. In 2003, 2005 and 2006, ANWR provisions were attached to several bills, but never made it to final passage. Not one to give up, Bush trotted the idea out again at a press conference this week:

Bush (4/19): The Department of Energy estimates that ANWR could allow America to produce about a million additional barrels of oil every day, which translates to about 27 millions of gallons of gasoline and diesel every day. That would be about a 20 percent increase of oil -- crude oil production over U.S. levels, and it would likely mean lower gas prices.

ANWR could create nearly a million barrels of oil a day (though the mean estimated "peak" number is 876,000 and would not hold steady "every day" as Bush claims). Current U.S. crude oil production is 5.1 million barrels a day. With rather generous rounding, one could calculate that oil from ANWR would bring a 20 percent increase in current U.S. crude oil production.

But supply is only one part of the equation. Bush didn't mention that with U.S. consumption at 20.6 million barrels of oil a day, the ANWR bounty, if all went well, could only satisfy five percent of the U.S. thirst. That wouldn't have much impact on eventual gas prices.

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Posted By: weraloc @ 05/12/2008 9:49:23 AM

Do you know the difference between a moral and an economic argument? For Clinton and McClain it is a moral issue not an economic one. Economists do not recognize morality, so leave their arguments out of it.
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Posted By: $2Gas @ 05/08/2008 10:05:54 AM

Demand $2 a Gallon Gas

Oil hit a new high of $120 a barrel on May 5, 2008.

The cost of making a barrel of synthetic fuel from coal is estimated to be around $55, including the sizeable infrastructure investments and the labor force necessary to operate the plant.

Petroleum poor Germany fueled WWII with synfuel from coal. It is proven technology.

America is the Saudi Arabia of coal with 1/3rd of the deposits on planet. We can eliminate dependence on foreign oil.
Reducing America???s trade imbalance, keeps money, technology and jobs here in America.

It is estimated that every billion in trade deficit equals 13,000 American jobs lost. $400 billion for oil last year: do the math.

And we can quit sending those billions to countrys that sponsor terrorism.

Synfuels are cleaner burning than gasoline and carbon sequestration can remove the CO2 hot house gases.

Visit http://governor.mt.gov/hottopics/faqsynthetic.asp

Ethanol from corn is a windfall for farmers but is it good for motorists.

After 4 months Congress is already rethinking. Unintended consequences include higher food costs for wheat, chicken, beef, pork, less grain for export, reduced gas mileage and incompatibility with older cars.

Harness your anger at the pump. Call or write your US Senators and demand a Manhattan Project to create an American synfuel industry within the decade.

If you don???t raise your voice the international companies, lobbyist and politicians will assume you are fat dumb and happy and ready to pay even more.

In Kentucky call

Senator Jim Bunning @

202-224-4343

and

Senator Mitch McConnnell @

202-224-2541
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Posted By: Driver of wagons @ 05/07/2008 1:51:05 PM

It was only a matter of time!

In this one move, the White House ended McCain's accountability for his use or abuse of the primary public financing system while putting him in position to take money for the general.

For this maneuver to have been arranged for the benefit of Senator McCain, of all people--the John McCain who has regularly, severely criticized the FEC as a "corrupt" agency--is a remarkable turn in his career as a reformer. A Commissioner who acted to enforce the law, to just raise an important question of enforcement, has been stripped of his post. This was clearly in Senator McCain's interest, this raw power play. It is also in his interest to have the FEC, back in business minus Mason, arrange for his money for the fall campaign.

He goes on to make a case that's going to be central to Obama's logic for forgoing public financing, despite his pledge to join the system: That McCain is a hypocrite on this reform issue.

For all the time that McCain has savaged the performance of the FEC, he has LED the sizeable crowd of critics who believed that the agency is too beholden, on the whole, to the narrow interests of parties and their candidates. Yesterday, Republicans could not have acted more narrowly in just this vein: effectively firing a Commissioner to immunize their Presidential nominee from enforcement action in a pending case but making sure that there is enough of an agency left to get him the money needed to finance his campaign.