I am going to shift gears a bit on this whole gas price issue. It’s not that BigOil isn’t a problem, but there are bigger fish to fry on this issue.

Let’s start with the usual “Public Enemy #1” – The Gov’Ment

The Gov’Ment is really an enemy of progress and freedom in many areas. In the problem of rising gas prices they are to blame for many evils, starting with the gas tax. For every penny of profit for BigOil, the Gov’Ment nets about 3 or 4 cents. Let that sink in a second: 4 cents per penny of profit. Gas could be $0.40/gallon cheaper if the Federals would wish it to be. Then there is State and Local taxes on top of that. Cross the border into Chicago and gas price jumps. This is your Local Gov’Ment getting in on the windfall action. Now, I understand that gas taxes are needed to maintain the roads and such and that a high tax would reduce use. These are good things. If Congress wants to defend the taxes on these grounds, let’s hear it.

Sooper Sekrit Message to Progressives: The Gas Tax is REGRESSIVE, just like Social Security, Medicare and Sales taxes. [poke]

BigOil would like us all to believe that these high prices are caused by Gov’Ment regulation (true) and by a shortage of Ethanol (not true). There is room for debate on the environmental regulation, but there is a ready source of Ethanol just waiting to relieve any shortages BigOil is experiencing. Brazil would be happy to sell BigOil all the Ethanol they could use. The problem? The Federals have a $0.54/gallon tariff on imported Ethanol. Ethanol opponents like to say that the Ethanol program is a sop to the corn farmers, I disagree, but this tariff certainly looks to be guilty of that as well as stupid, unhelpful and unnecessary.

Lifting the Ethanol Tariff would also provide a source of Ethanol/E85 to much of the country. Of course, most people would not be able to use it due to the lack of Flex-Fuel vehicles. Which brings up another proposal that makes sense: Mandate all cars sold in the US to be Flex-Fuel capable. Set a date like Jan/2008 and make it stick. This would give choices to the consumer at the pump and will create a demand for E85, especially when gas prices are so high. I know the “M” word is scary, but think about it. It enables the MARKET, effectively canceling the current fuel monopoly.

Here is a simple 3-step program for retaining control of Congress and the White House:

• Drop the Gas Tax, at least the General Fund portion
• Drop the Ethanol Tariff
• Mandate Flex-Fuel by 2008

The other evil player in this is the “Greens”.

Environmental regulations have shut down the development of new capacity in supply as well as processing. No new drilling anywhere and no new refineries for 30 years. No nukes and boutique gas formulas are at least partially to blame for our precarious energy situation. The President temporarily ended the regs on boutique gas, but I suspect that it is really too late in the game for that to have much of an effect. Even if the rules were changed to allow new refineries, any new refinery would take a long time to build. Ditto for new drilling. BTW: my views on not selling ANWR oil still stand.

This is not to say that BigOil is off the hook. Blaming Ethanol and Gov’Ment regs for price spikes while sending off one of your own on a platinum parachute is complete BS. Though since they are literally not allowed to spend their profits on new refineries or development of domestic sources, I guess giving it to a departing CEO doesn’t really hurt much.

Linked to: basil's blog, Mental Rhinorrhea, Quietly Making Noise and Liberal Common Sense(?!)