A Modest Proposal for Gas Prices
Many people don’t know why gas prices are so high, so today I’ll share what I know of it: crude oil is selling right now for about $1.40 a gallon, of which 20¢ is rumored to be terrorism insurance. Add transportation costs, refining costs, federal and state taxes (Florida: 14¢), and mark it up a few cents for the gas stations themselves, and suddenly you’re paying $2 a gallon to go to school.
Obviously, the biggest part of the price is for the raw crude, but why? Two reasons: supply and demand. Supply has been edging off, as OPEC has been trying to raise oil prices to bring in more revenue to their dilapidated economies. As strange as it may seem, oil-producing nations right now tend to be the most financially insecure, mostly because elites have mismanaged their wealth instead of investing it at home. Secondly, the world is consuming more oil –because we Americans are becoming less fuel-efficient and because nations like China are now consuming as much oil as Japan. Less oil on the market and higher demand equals less Corona and more Bud Lite for you, the college consumer. It’s also early summer, when energy demand is greatest and prices peak.
“So what do we do to lower the costs?” the budget-minded undergrad asks. The way I see it is if we really want to put a dent in oil prices, we need to ask if we want to do it long term or short term. See, oil prices aren’t even that high right now compared to the 70’s OPEC oil embargo or even to what they will be when we pass peak production. Within our lifetimes, oil-nations will be unable to pump more oil than previous years but demand will be even higher than it is now. Gas prices will be astronomical compared to today, even when adjusted to inflation.
If we want to counter the big oil crunch of tomorrow, we’re going to have to take a bigger bite today. Like Europe, we’d need to jack up gas prices through taxation to provide demand-side incentives for fuel efficiency. People are going to need a good reason to buy a station wagon instead of a Hummer.
Who wants to pay more for gas right now? Therefore, I propose that we fix the problem in the short term, in the new American fashion: from the supply-side. We need to withdraw our Marines from Iraq and place them back on the ships that brought them there. We then need to sail them to three places: a few hundred miles south to the Saudi oil fields, out to the Nigerian oil fields, and then out to the Venezuelan oil fields south of Aruba. We’ll let the 82nd Airborne take over the Caspian. We need to secure these oil fields, free the people living and working inside of them, and open the pumps and let the oil flow, flow, flow. After taking out a small fee to pay for the Marines, bullets, and whatnot we’ll give the rest of the revenue to the governments that host the liberated fields. This modest proposal gets to the heart of what we should be doing in Iraq: we don’t come to steal the oil, we’re more than happy to pay for it; we just want to make sure it flows at peak capacity so it’s cheap.
Tags: Treyopia Current Events Spinnaker Gas Prices Modest Proposal military 82nd Jonathon Swift satire China Japan markets
