Only Half-Joking Department

It seems fairly clear at this point that the world’s, and particularly the West’s (guess to whom ‘particularly’ applies in that sub-category) reliance on massive oil consumption for energy and economic growth is politically dangerous and environmentally unsustainable. This is especially true of the enormous market share in oil supply controlled by Middle Eastern tyrants both friendly (House of Saud in the house) and otherwise (that fellow my brother brilliantly refers to as “Mahmoud I’m-A-Dinner-Jacket”).

With the enormous wealth that flows from their oil reserves, these despotic scum are free to buy lots of nasty weapons and to repress and neglect their people. Certainly some oil states use their revenues to provide a relatively cushy lifestyle for their citizens, but this itself is part of the problem. Oil-rich regimes do not feel the need to invest in people, or their people’s future, stunting political, cultural and economic development. Talent, intellectual capital, dignity and respect – these are of no interest when light sweet crude will buy you shiny cars and warheads.

With their black gold providing them serious geopolitical leverage, psychopaths and tyrants literally have America and the West over a barrel. Saudi oil money funds terrorism through Islamic “charities” and propagates vile anti-Western Wahabbist fundamentalism throughout the Middle East, indoctrinating Muslims with bigotry and jihad. Carbon emissions from petrochemical energy are contributing to climate change and the tiniest pinch in the oil supply can bring us to our knees. And all the while the global demand for energy becomes ever more ravenous.

Faced with this epic political and economic challenge, the Bush administration’s policy is, apparently, to shift America’s oil supply away from politically ‘unreliable’ regions such as the Middle East to new oil supplying markets such as Africa. For one example of how well that’s going, follow the locusts. This, one supposes, is what happens when you let your energy company buddies devise your energy policy. A better idea has been articulated by honey-tongued rogue and sometime cigar moistener Bill Clinton: what we need more than anything is a source of clean, renewable energy.

So, what to do? First, as far as reducing consumption of carbon-fueled energy, I’m partial to a straightforward tax. Pissing and moaning about high gas prices seems to be something of a national past time but what Americans pay is laughable compared to their more rigorously petroleum-taxed counterparts in Europe.

Nevertheless, it’s true that a consumption tax on gas is highly regressive – people need to drive to work and such a tax hurts those most who are least able to pay. Better to invest more in public transportation (yes, yes, shock-horror, Americans love their cars, blah blah – indulge me), introduce tax breaks for fuel-efficient vehicles and tax penalties for gas-guzzling SUV’s and other suburban monsters, and increase mandatory fuel-efficiency standards for most vehicles. Gregg Easterbrook does an excellent job in the current edition of The Atlantic of dismantling the argument from economic burden against the latter – as with the catalytic converter, if you regulate it the suits will find a way to make it cost-effective. (Sorry – trapped behind subscriber wall. But if you’re not an Atlantic subscriber you should be ashamed of yourself).

But here’s an even crazier idea: impose a 100 percent tax on a designated proportion of oil companies’ profits UNLESS the companies invest those profits in the development of clean, renewable sources of energy. Any profits from the development of such fuel sources would be entirely tax free. As Easterbrook points out, given the choice between making nothing and something, the suits will make it work. This formula would create a regulatory financial bonanza for the successful development of alternative fuels, harnessing greed for the public good. Oil could then, at least in part, fuel its own eradication as an energy source.

Now, obviously this is all something of a pipe dream (pardon the pun). It’s certainly politically unfeasible under the current administration and I’m sure there’s some elementary principle of economics I’m overlooking. But it does seem a rather elegant solution.

An esteemed colleague of mine thinks I’m smoking the crack on this one, primarily because he believes the multinational oil conglomerates will just take the hit on the taxes and jack up oil prices on consumers to compensate. Possibly, but a significant increase in the price of oil (particularly one you can calibrate through regulation rather than leaving it entirely to the vicissitudes of a volatile market) wouldn’t necessarily be a bad thing – consumption would fall and so would profits for the oil companies, again creating market pressures for other sources of energy (not to mention political pressure on those companies rather than on government, which wouldn’t be taxing the consumer directly). In addition, the government would be flush with cash that could be spent on alternative fuel research – creating another situation in which the oil companies can either choose to get in on the game or ultimately be cut out completely.

That or we could keep riding our handbasket to hell.

Explore posts in the same categories: Middle East Democracy, Politics of Oil

6 Comments on “Only Half-Joking Department”

  1. Opinionated Wench Says:

    Handbasket? You’re still driving that old thing?

  2. Mike Harrison Says:

    I agree Africa may be even worse, and agree the answer is, in part, to reduce consumption. I just don’t know how to best do that… I’ll tell you one thing: Bush doesn’t want consumption to go down. And this administration definitely won’t tax oil companies.

    So what’s the answer? $10 a gallon gas? A Carter-esque 45-mph federal speed limit? Are we going to grind commerce in this country to a halt?

    The big problem with “clean/renewable” energy (hydrogen is described as such all the time) is that it’s still either sourced from oil and natural gas, or the energy needed to convert water to hydrogen still comes from fossil fuels. It’s just shifting the consumption and pollutive impact from one point (the roads) to another (the refinery).

    I don’t claim to have the answer for the whole world, or even for the whole country. But I do my part. I walk my fat ass to the store. I sit my fat ass on a subway (we call it the “El” in Chicago) to get to and from work. So if you’re really tired of depending on oil, or supporting despotic leaders through that dependence, do yourself (and the country, and the world) a favor: Sell your car.

  3. « small-d Says:

    […] The UN Security Council’s deadline for Iran to halt its uranium enrichment program came and went yesterday. I’m-A-Dinner-Jacket has essentially told the world to suck on his centrifuge. Explore posts in the same categories: Uncategorized […]

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