Unfortunately we all know that if the price of oil falls people will continue driving until the planet is laid to waste. The low cost of oil is due mostly to the huge subsidies to oil companies including nearly free use of my public lands, the government bailouts when disasters occur including hurricanes, government aid to children and elderly who suffer the most from pollution and the support for wars. This has deluded us into thinking that the price is low. A higher price at the pump will better approximate the real cost of $12 to $15 per gallon. When prices at the pump fall people will ignore the other costs and just continue burning fossil fuels thinking that they don't have to pay the cost. Unfortunately these other costs are a huge drag on the long term economy. Short term drags on the economy due to higher pump prices mask the potential for longer terms gains as we are compelled to increase efficiency. In the 1980s, when energy prices rose the long term relationship between GDP and energy consumption changed. The short term impact was that energy expense as a percent of GDP rose as the prices rose. This was then followed by a period where the energy expense portion of GDP fell as we became more efficient. This was then followed by lower oil prices and we then became inefficient by driving more SUVs. Now we are experiencing a period where prices are rising and the per cent of GDP the comes from energy is rising. If we learned our lessons from the past we will become more efficient and this will then drive down energy expense as a portion of GDP. Overall we will end up spending less of our disposable incomes on energy since the progress in efficiency will spur new growth and higher incomes but we will be consuming energy more efficiently. In conjunction with the problems related to climate change it is clear the the short term gains that we receive from lower pump prices will be overshadowed by the damage. We will forgo all of the gains from efficiency. Historically, efficiency gains have been the real reason for economic growth. Gains from cheap resource extraction produce no long term benefits, in particular when we relay on archaic 18th, 19th and 20th century technology.
As we are amused by those who at the beginning of the 20th century derided the drivers of cars and yelled "get a horse", our grand children and great grand children will laugh at those of us who tried to hang out to the outdated internal combustion engine and coal fired energy plants. As we are amused by the notion the people used to wade through the streets and try to avoid the noxious output of the horse that lay strewn in the streets, 100 years from now people will laugh at the idea the our generation was willing to spew toxins into the air and to heat the planet in order to drive around in those silly things we called cars. It is high time that we moved into the 21st century and stop trying to mindlessly hang onto the fossil fuel economy with the myopic belief that without the ability to burn dinosaurs we are doomed. It is time to evolve or to move to the side of the road along with the horses.
Off shore oil drilling is foolish. Instead of engaging in behavior that increasees the risk of doing environmental damage we need to seriously reduce the consumption of oil. Those of you who think that we can bring down the price of oil and save the planet from the destruction of climate change are deluding yourselves. We need to increase efficiency in use by better technology and we need to reduce use by changes in how we commute and make land use decisions.
It is obvious that most people will not reduce the use of oil unless the price is high. We need to incorporate all costs of oil use into the price so that those who use oil pay for it directly instead of externalizing these costs at the expense of children with asthma, people who die and pay for wars designed to protect suppy and the ever increasing costs Climate Change which include hurricane and tornado damage. Ignoring these problems and simply working to increase supply in an attempt to bring down toe price at the pump is the most foolish and shortsighted thing we could do.
We need to resist all attempts to subsidize oil companies by granting the additional leases in public lands and off shore. Instead we need to develpe a cap and trade system that incorporates the cost of the destruction into the price that people pay when they buy oil. Only in this way will the incentives be correct for people to move away from destructive behavior. The economy will thrive as we increase the development of new technologies. The alternative in environmental and econmic destruction.
McCain has run out things to say.
No news is good news when it comes to McCain
http://www.huffingtonpost.com/2008/07/23/mccain-on-the-run-cancels_n_114539.html
