There have been endless exchanges in this forum on the need to "let the free market work". There have also been criticisms of the current and prior administrations over never having studied and agreed upon a cogent, long-term energy policy.
But I got to thinking--how could we permit the free market influence our lawmakers to begin to address this problem, particularly our growing importation of foreign oil and the implications that has on our economy? How could we get them to think more seriously about the blood and treasure they authorize with so little thought, and their failure to even think about addressing important issues facing the country?
It seems to me that if we included
all the real costs of the oil we buy from the Middle East in the price we pay for gasoline, that might begin to get the attention of the public and the people they elect to Congress. What I'm saying is that the price we pay at the pump for gas doesn't come close to the real cost of the oil used to produce it.
Follow me here...
- I would posit that were it not for oil, there is no way we would have started eight wars in the Middle East in the last 20 years. (That's right, go back and count 'em up--we've started eight wars there; three are going on as this is written.)
- Our government spends something close to $475 billion per year for the military to fight those wars in he Middle East. (I arrived at that number by taking half the $653 billion budget for the Defense Department and adding the supplemental appropriation approved by Congress to fund the wars in Iraq and Afghanistan this year.)
- We will import approximately 4.92 billion barrels of oil this year. The cost of that oil at an average of $90 per barrel--a conservative guess for entire year, I think--will be almost $450 billion dollars! (I might point out that amount is about 12% of the entire federal budget.)
- The 4.92 billion barrels of oil will produce about 960 billion barrels of gasoline (at a conversion rate of 19.5 gallons of refined gas from each barrel of oil).
- So...if we do some simple arithmetic, it's pretty easy to see that the federal government is spending a little more than $2 for every gallon of gas we use to fund the wars in the Middle East whose principal objective is to protect the sources of oil there--for the U.S. as well as the rest iof the world!
So now the question...if we were to permit the free market to influence our energy policy, how long do you think it might be before major changes in the policies of our government were enacted? Things like getting our military the heck out of Iraq, Afghanistan and Libya; things like laws to require much, much more fuel efficient cars; more all electric cars and trucks; the replacement of oil-fired domestic heating; an alernative for asphalt for roads; and on and on.
How would we go about reflecting the
real cost of gasoline? What if we simply enacted a federal gas tax to pay for the costs of he wars we start in the Middle East to protect the flow of oil? That would be pretty close to a free market determination of the real price of gas in this country. Another benefit would be that it would provide almost a trillion dollars towards balancing the federal budget!
So, if gasoline suddenly cost around $5.50 a gallon instead of the $3.50 we pay at the pump now, how quickly would you be writing your elected representative to get off the dime and get something done about military spending and the creation of an energy policy so desperately needed in this country? How long would it take before we were demanding that we stop spending military dollars and killing American kids to protect the oil industry and subsidize the real cost of gas that we consume?
My guess is that it wouldn't take too long.
By the way, this approach doesn't add one dime to federal spending. All it does is move the expenditures from the federal budget, where our representatives just go borrow the money and run up the national debt, to our individual household budgets where we'd demand that something be done--and in a hurry!