Posted by: bmeverett | August 14, 2008

Energy in Wonderland


In Through the Looking Glass, the White Queen tells Alice, “Why, sometimes I’ve believed as many as six impossible things before breakfast.” Sens. Obama, Clinton and McCain all believe that our energy problems can be solved if we believe just one impossible thing: energy prices should go up and down at the same time.

Two principles govern this view. First, energy prices are too high. Four dollar gasoline is a severe hardship for working Americans struggling to get by. Fuel is a necessity, not a discretionary purchase, and consumers are powerless to combat a market out of control. High oil prices are driving the US into recession, perhaps a deep and prolonged one.

The pain will be more acute next winter when Northeasterners freeze to death, unable to pay for heating oil. Joe Kennedy has been publicizing this suffering for several years, as he begs for heating oil donations from #1 America hater Hugo Chavez.

Oil companies, of course, are the culprits. Congress has held several hearings to explain to us that oil companies have been surreptitiously returning company earnings to shareholders through dividends and share repurchases (known in Washington as “schemes”) rather than spending their shareholders’ money on public service projects, like renewable energy. Furthermore, the oil companies have manipulated the political system so that their obscene profits (which for ExxonMobil amount to 9¢ a gallon for their refining and marketing businesses) are taxed in exactly the same way as the earnings of every other American company (known in Washington as a “subsidy”).

All three Presidential candidates will fix this problem by beating the oil companies into submission. Government should force lower prices for essential goods by taking money away from the firms that provide them. We’ve seen this policy work effectively for food prices. (Oops, we give farmers more money when food prices skyrocket. I better get back to you on that one.)

And the second principle? Energy prices are too low. Americans are wastrels addicted to oil. We drive SUV’s to pick up our mail. We keep our houses overheated in the winter and frozen in the summer. We use criminally inefficient light bulbs, build our homes and office like sieves, fill our houses with frivolous electronics and wantonly throw away plastic containers. The results of this unconscionable behavior are devastating: global warming, petro-terrorism, depleting resources, polluted water and unbreathable air. No wonder the Europeans hate us.

Fortunately, fixing this problem is easy – raise energy prices. Of course, we don’t like to use the T-word during election years, but we can increase energy prices just as effectively through a back-door system called “cap and trade.” The “cap” limits our total emissions of carbon. Since all fossil fuels (oil, natural gas and coal) generate carbon, a strict cap will raise energy prices for everyone. The “trade” part allows companies that emit less than their quota to sell those rights to companies that emit more. Even better, rights to emit carbon can be auctioned, generating revenue not for evil oil companies but for the government, which knows how to spend your money wisely.

At first blush, you might think that raising energy costs across the board would be bad for the economy, but think again. The key is conservation – higher prices will simply eliminate all the waste. You’ll have everything you want, use less energy and save money in the process. In addition, we can develop new non-polluting sources of energy. Hey, we went to the Moon, so we can do anything. Even though the $125 billion in government energy research over the last 35 years has produced absolutely nothing of commercial significance, our luck is surely about to change. The Law of Averages tells us we’re due for a breakthrough after all these years. Just take some more money from oil companies (whose shares are held largely by the middle class), and we’ll roll the dice again. Even better, spending money on green technologies will make the economy grow, since jobs will be created to develop and manufacture all the new high-cost appliances, light bulbs, biofuels, automobiles and renewable electricity that you will be forced to buy.

Only in Wonderland and Washington can energy prices go up and down at the same time. Not quite up to the White Queen’s standard of six impossible things before breakfast, but it’s a start.

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Responses

  1. One effective way to address the issue of expensive gasoline is to not own nor operate a car. This eliminates the need to pay the high prices at the pump.

  2. Hey, cool tips. I’ll buy a bottle of beer to the person from that chat who told me to go to your site 🙂


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