Congress To America: Gas Prices Are Too High. No, Wait. Gas Prices Are Too Low.

Ronald Bailey | May 9, 2007

The House Select Committee on Energy Independence and Global Warming is holding a hearing on soaring gasoline prices this afternoon to

...listen to the personal impact of gas prices on a single mom and small business owner from Virginia Beach, VA; an air conditioning service businessman from Metairie, LA; the head of a school bus service company in Youngstown, OH; and a farmer from McPherson, KS. The four will tell the committee how rising gas prices have affected their bottom line and their industry.

Gas prices hit a record $3.07/gallon nationwide average last week, the 13th straight week in which prices have risen. Prices have climbed 20 cents in the past two weeks and by nearly a dollar since the first of the year. The previous record was $3.03 per gallon on August 11, 2006.

But wait a minute--aren't higher gasoline prices part of the solution to man-made global warming? As the Denver Post notes :

Ending 20 years of indecision on global warming, Congress is speeding toward sweeping energy legislation that targets everything from utility plants to light bulbs...

House Speaker Nancy Pelosi, D-Calif., told lawmakers she wanted a global-warming bill by July...

Key House bills are likely to come in July and in the fall.... The first will be easier to pass, focusing on incentives for conservation, energy efficiency and renewable fuels.

The second will be more controversial. It's more likely to include limits on new coal plants, increases in fuel- efficiency standards and caps on carbon dioxide production...

"There is at the end of it all a price to be paid," [Rep. Rick] Boucher [D-Va.] said. "The price translates into a higher cost of energy."

Most of these Congressional proposals will increase the price of energy including the price of gasoline. Somehow I doubt that at today's hearing that Select Committee members are going to tell the single mom, the air conditioning guy, the bus driver and the farmer, that higher gas prices are exactly what Congress has in mind for the future. 

Comments

|5.9.07 @ 12:17PM|#

ah ha!
Politicians doing nothing but lip service to an issue? Get out of town!

|5.9.07 @ 12:20PM|#

Old standby (relevant version):

Wisconsin tells gas station owner to raise prices

|5.9.07 @ 12:23PM|#

So, there's no difference between gas prices that rise because we're using more than we have readily available and gas prices that rise artificially because of regulation and taxes? I see a world of difference.

|5.9.07 @ 12:26PM|#

Is anyone on the committee proposing to do anything to lower gas prices? No? I didn't think so.

You people (YOU PEOPLE!) point out the poor return on Social Security all the time, and yet you're not proposing that the government increase Social Security payouts. Rather, you bring it up as evidence that the existing system is broken, and needs to be replaced.

There is nothing remotely contradictory about pointing out that the petroleum economy leaves us in a vulnerable position by subjecting us to price spikes AND arguing in favor of solutions to move us off the petroleum economy.

|5.9.07 @ 12:38PM|#

Aren't high prices the first step to moving us away from the petroleum teat?

|5.9.07 @ 12:38PM|#

joe: High gas prices no matter the reason they are higher will tend to reduce consumption and reduce whatever "vulnerabilities" people are worried about. So decrying high prices now while planning to increase them later does seem just a bit contradictory and maybe just a bit hypocritical.

Guy Montag|5.9.07 @ 12:40PM|#

Wasn't lowering gas prices supposed to be in that first 100 hours business? I guess it is in some hour after legalizing some drugs. How many hours are left from the original 100 anyway?

Now, Ronald, you are missing a step in the title.

Congress To America: Gas Prices Are Too High. No, Wait. Gas Prices Are Too Low.

Should read: Congress To America: Gas Prices Are Too High. No, Wait. Gas Prices Are Too Low. So we must leave Iraq.

It is a similar chain to: OKC building was blown up so we need more gun control. But with more steps.

|5.9.07 @ 12:40PM|#

I agree with joe. Nancy Pelosi is a joke. How the elimination or reduction of new coal plants is going to get us off oil is a mystery. Increasing the price of electricity will reduce petroleum usage??? And she wants a global warming bill. That's stupid - the planet's warming up enough on its own. Duh.

|5.9.07 @ 12:41PM|#

No one said they were doing anything to lower gas prices. That's the whole point. They're acting like high gas prices are a problem, and then saying, "Oh, by the way, we're about to do some things that will make prices even higher. Deal with it, bitches."

The only thing they could do to lower prices would be that good old Nixonian stand by: price controls. I've always wanted to stand in line for gas.

Guy Montag|5.9.07 @ 12:43PM|#

The only thing they could do to lower prices would be that good old Nixonian stand by: price controls.

Could drill more holes and build more refineries. Just a suggestion.

|5.9.07 @ 12:43PM|#

Ron,

It can certainly be spun that way.

I know you're a supporter of higher gas taxes. Do you propose the increases be imposed as dramatically and quickly as a gas price spike?

There are many problems associated with our addiction to oil. Price spikes is one of them that is receiving a great deal of attention right now.

|5.9.07 @ 12:45PM|#

There is nothing remotely contradictory about pointing out that the petroleum economy leaves us in a vulnerable position by subjecting us to price spikes AND arguing in favor of solutions to move us off the petroleum economy.

It's often hard to tell which governments enjoy more: making omelets or breaking eggs.

Seamus|5.9.07 @ 12:58PM|#

Folks, it's really very simple: When the price of gas rises because of taxes, it's good because it reduces demand. But when the price of gas rises because of market forces, which create incentives for industry to provide more supply at the same time that they dampen demand, it's bad because it makes oil company stockholders rich.

Russ 2000|5.9.07 @ 1:08PM|#

There are many problems associated with our addiction to oil. Price spikes is one of them that is receiving a great deal of attention right now.

The current price spikes are due to our legislative addiction to ethanol.

it's bad because it makes oil company stockholders rich.

I'd rather people have their retirement investment plans increase because of oil company profits, otherwise they'll have to rely on social security.

|5.9.07 @ 1:19PM|#

It's often hard to tell which governments enjoy more: making omelets or breaking eggs.

Cracking that fragile white (or tan) enammel is the most staisfying part of making an omelet short of eating one. The real tricky part is making the eggs break themselves under the weight of their own (unjustified) guilt.

thoreau|5.9.07 @ 1:27PM|#

joe, are you talking about the difference between higher average prices and large price fluctuations? Mean vs. standard deviation, in statistical jargon?

|5.9.07 @ 1:28PM|#

No one said they were doing anything to lower gas prices.

They can't lower actually lower gas prices, but they (the Senate, not Congress, in this case) can pretend to feel your pain:

"Senate bill targets gas price gouging"
http://money.cnn.com/2007/05/03/news/economy/bc.usa.congress.gasoline.reut/index.htm

ed|5.9.07 @ 1:30PM|#

The House Select Committee on Energy Independence and Global Warming is holding a hearing

Damn, I should have started my vacation today so I could watch. I love those sob stories: "I used to be able to drive my daughter to ballet lessons twice a week. Now that gas prices are so high, little Kimberly will have to forego her dreams of becoming a ballerina. Thanks for nothing, Big Oil." Cry me a river.

Guy Montag|5.9.07 @ 2:13PM|#

Damn, I should have started my vacation today so I could watch. I love those sob stories: "I used to be able to drive my daughter to ballet lessons twice a week. Now that gas prices are so high, little Kimberly will have to forego her dreams of becoming a ballerina. Thanks for nothing, Big Oil." Cry me a river.

And the poor woman probably had to drive her large motor home all the way to DC to testify because gas is so expensive she could not afford a cable connection to the intertubes and an IP videophone.*

*Harking back to a staged Al Gore debate stunt where a woman in the crowd was used as a prop for his drug company bashing.

|5.9.07 @ 2:17PM|#

There are many problems associated with our addiction to oil.

Golly joe, I didn't know you were writing speeches for 'ol Dubya these days.

Next, you'll be telling us it's an epidemic and that we must act quickly to avert this national crisis.

|5.9.07 @ 3:21PM|#

There are many problems associated with our addiction to oil.

Also many, many benefits. When a fuel source comes along that has a cost-benefit ratio exceeding that of oil, I'm sure we'll switch over.

|5.9.07 @ 3:22PM|#

So, we're concerned that the poor are getting screwed by the current system, therefore, we should screw them even further by spiking the prices of energy (that the poor need to drive to work and heat their domiciles) as a solution that may or may not work to a problem that may or may not exist?

Okay...

|5.9.07 @ 5:06PM|#

Too tangential?

Editorial

Nature 447, 115 (10 May 2007) | doi:10.1038/447115a; Published online 9 May 2007

The process established by the Intergovernmental Panel on Climate Change has generated a sound foundation of knowledge on which policy-makers must now build.

And so, for another six years at least, it is over. Thousands of authors referring to vast numbers of papers have, in sometimes-contested consultation with the governments that lend their name to the process, provided the world with their best assessment to date of humanity's prospects and options in the matter of climate change.

The Intergovernmental Panel on Climate Change (IPCC) is far from a perfect institution, but it is a necessary and a heartening one. To see the governments of the world almost unanimously acknowledge that they share a problem, and set up a process for identifying its scope that is rooted in the impartial norms of science, is in itself a reason for hope about the century ahead.

The final contribution to the IPCC's fourth assessment report is, as we report on page 120, a rather upbeat one. Shifts in the way the world generates and uses energy can, the panel says, reduce the risks of climate change in exchange for only a fairly small slowing in the rate of growth of GDP. Various ways of bringing about such shifts are discussed. But perhaps because the IPCC is devoted to consensus, the relative merits of those schemes are not explored.

This is because two economists, or for that matter two nations, can agree on their analysis of the subject but still differ on what needs to be done. That decision rests in the political sphere.

The G8 summit in Heiligendamm, Germany, next month will offer powerful nations the chance to discuss the merits of opting en masse for the European Union's policy of halving carbon dioxide emissions by 2050. Six months later, in Bali, Indonesia, the countries that have signed up to the United Nations Framework Convention on Climate Change and the Kyoto Protocol will be able to begin the process of thrashing out what to do next - specifically, whether to extend and expand the Kyoto Protocol when its first commitment period comes to an end in 2012, or replace it with something else. However it develops, this stage must reaffirm the Kyoto goal of broad and coordinated reductions but must apply it more widely than the current protocol. Just as Kyoto was deeply flawed by the decision of the world's largest emitter of carbon dioxide to remain outside it, so the next agreement will be flawed if the same is true after 2012 - even though, by then, the potential holdout would be by China, not the United States.

There are no concrete plans for a fifth IPCC assessment before 2012. But some sort of continuity in the assessment of where the science of climate change is headed, its foreseeable impacts and the tools at policy-makers' disposal is a high priority.

It is unavoidable that many climate scientists care deeply about their work's implications, and quite proper, as this process unfolds, that they should make their concerns heard. But scientists and their managers also have a duty to explore all the options - and to put aside their personal preferences in offering advice to governments. In this, the community has not always been beyond reproach.

One research area that has been ignored, in part because of prior ideological commitments, is geoengineering, which explores in what circumstances aspects of the climate system might be deliberately modified to limit the worst eventualities of climate change (see page 132). It is true that some bizarre projects fall under that name - notably, various ill-conceived schemes for fertilizing the oceans. But the idea that more active management of soil carbon could offset future emissions is sound (see page 143).

It would be far better for such ideas to be examined scientifically - and their failings thus held up to scrutiny - than not. Those scientists who have started to raise this debate deserve thanks, support and, of course, rigorous criticism from their colleagues. In climate research and beyond, it is important to remember that the value of scientists' work comes not just from the research and expertise that allows them to inform debates, but also from the object lesson they provide in the ways in which a community rich in specialities and diverse interests can come to a comprehensive and objective overview.

|5.9.07 @ 5:49PM|#

How will changing light bulbs, mandating higher CAFE standards, and limits on coal plants affect gasoline prices? Last time I checked, gasoline had its own global market, and most of the price spike this spring has been related to inadequate refining capacity and all those fortuitously timed refinery shutdowns for maintenance.

Over the long run, reducing demand for gasoline and other fossil fuels should drop prices, if anything -- but that's a long way off.

|5.13.07 @ 1:04PM|#

Yes, fuel prices are high. In previous years, oil companies blamed hurricanes, the Iraqi war, federal/state taxes, etc.

When in reality, it comes down to simple economics. When you have a commodity that people need and use, and there isn't an alternative - guess what simply is in your hands while demand stays constant. Basically, if I want to get higher returns, then I limit my supply (we are all Americans and we want the same thing - to be richer than you).

It's too bad for those of us who do not have oil stocks because we would be excited to see fuel prices rise.

There comes a time in our lives when we start thinking ethically rather than financially, but again this is America and ethics are just words, however dollar bills makes us somebody.

|5.13.07 @ 9:05PM|#

Sure does amaze me for the longest time truck fuel was more then reglure gas now its cheaper its made from the same oil wants going on the oil companys are screwing us the same with the goverment

John Flintonberalston|5.17.07 @ 10:40PM|#

That the hiher the gas prices get the harder it is for teenagers to drive!!!!!! AND THATS NOT RIGHT!!!!!!!!

Semour Butts|5.17.07 @ 10:43PM|#

That I've had trouble maintaining my lawm mowing and yard care work because gas for the machines i use are way to high and I'm very very angery I'm almost poor because of gas prices no joke its really true.!!!!!!!!!!!!!!!!!!!!!!