Thursday, May 31, 2007

Got gas?

I read an interesting article forwarded to me by my blog-happy sister. You can read it here, which I would suggest or the following will make no sense. I find a few things interesting about this article. First of all, Americans should not complain. They are paying $4 a US gallon, which works out to $1.05/L, less than I am currently paying ($1.18/L). In fact, one of the reasons American energy & environmental policy has lagged so far behind the rest of the world is the absurdly cheap cost of energy in America. There is literally no financial incentive to be green in the United States. The subsidies handed out to the oil and gas industry keep the prices artificially low. Furthermore, they pay almost no tax. 18% of the price of gas?! HA! We’ve got you beat Uncle Sam. Taxes make up roughly 35% of the cost of Canadian petroleum. Second, Americans have only themselves to blame for the increasing cost of fuel. As supply diminishes in any commodity, the price will always rise. The production peak of oil occurred in the US in the 1970s and so ever since, demand has steadily overtaken supply. The remainder of the worlds oil is in the confines of shaky nations run by autocratic or theocratic governments. They are also conjoined through OPEC, so at the flick of a switch they could cut off supply to the rest of the world. However, they usually play nice, except when the US develops bogus foreign policy like the war on terrorism, trade embargoes against Cuba (a supplier of highly-trained physicians to Venezuela in exchange for oil; see below), and hate-filled slandering of Venezuelan president Hugo Chavez (Venezuela has one of the world’s largest oil reserves). Third, numerous independently funded studies have failed to prove that oil companies collude to keep prices high. In fact, quite the opposite is true. Governments have kept prices artificially low, and have only compounded the problem, as people then use energy recklessly, thereby further diminishing supply, and therefore, further raising the price of oil. The average gasoline price in Western Europe is currently over $6 per gallon, or roughly $1.60 a litre. Why do you think they all drive around in tiny little cars and mopeds? Why do you think they have walkable cities and mass public transit? Make sense? Americans can bitch all they want about the high price of gasoline, but little do they know they have it pretty damn sweet. (Qualifier: When I say “Americans” I refer not to the American people as a whole, but to those running the country.)

No comments: