Guest essay by Tom Scott
Do you recall the last presidential election season, when the New York Times, Washington Post, and other media giants ridiculed those who argued that the US could bring retail gasoline prices down to $2.50 per gallon by maximizing production? Many pundits and “experts” read the same memo and went straight for Alinsky’s rule #5: “Ridicule is man’s most potent weapon.” The mainstream media was flooded with similar messages, but here is a classic by Richard Thayler from March 31, 2012:
“Newt Gingrich, meanwhile, has promised us $2.50-a-gallon gasoline. But if we can suspend the law of supply and demand, why stop with gasoline? Why not $2.50 for one-carat diamonds, steak dinners and 18-year-old Scotch whiskey?”
Of course, the author knew the “proper” way to balance supply and demand and reduce gasoline prices:
“A better approach would be to gradually raise the gasoline tax to levels similar to those in Western Europe, where fuel-efficient cars are the norm. N. Gregory Mankiw — the Harvard economist who advises Mr. Romney and is a fellow contributor to the Economic View column — has long advocated such a policy. I agree with him, as do most other economists.”
Well, such ridicule helped to win an election later that year, but by the end of 2014 most US drivers could find gasoline for under $2.50 per gallon, and today EU energy consumers save about $50 per barrel of oil as compared to 2012 prices, almost a billion US dollars daily, due largely to the increase in US production and the ripple effects on the world market.
Source: https://blog.gasbuddy.com/Retail_Price_Chart.aspx
With that in mind, as discourse becomes heated this election season, remember that ridicule is a socio-political tactic, not a legitimate tool of the sciences.
People in the State of Washington voted to increase fuel taxes because such had not gone up along with the cost of road maintenance and construction. Further, current autos get about 30 mpg and PU trucks — big sellers in WA — get a bit less. Such numbers are double those of many earlier autos. As miles traveled on State roads increased wear, auto designs improved efficiencies and reduced revenue growth below what what might have been. State taxes are much higher than the Federal tax that, I think, Congress critters have to do. I did not check to see if the POTUS can just will these to go up. [This week, our regular gas is $2.55.]
With increased use of hybrids and EVs, a way will have to be implement to collect road-taxes from them. This too is likely to be State designed and State implemented. This is a discussion that is now underway. Tesla Model S ($60,000+) owners can afford the taxes but much lower priced EVs — many coming soon — will need to pay also. Likely there will not be a great amount of “free” charging coming either, nor continued use of HOV lanes and such things.
Don’t look for big changes in a hurry. There are near 17 M vehicles sold in the US every year and most still use gasoline. They also have a long life.
Beware of politicians argueing for increased road taxes to finance the upkeep of the infra-structure.
Here in the UK we pay an annual vehicle “excise” tax which depends on the size of your engine and is mostly between £35 and £200 per year. You haven’t driven a mile yet. Then there are fuel taxes to the tune of more than 80% of the pump price going to the exchequer, billions upon billions per year. Now comes the catch: the total money spent on upkeep of the infra structure is less than a quarter of what comes in as taxes. In other words: the fuel taxes are a milking cow to finance many other things. As the former PM Tony Blair once sheepishly replied to a question about this unbalance: but how would we otherwise pay for social security?
So, some advice from this fed-up taxpayer. If one of your politicians talks about taxes to finance the upkeep (which of course it should) make sure that the revenue is ringfenced by law and thus used for that purpose only.
Someone has to be the pedant. Richard Thayler couldn’t even get his spelling correct. Scottish “whisky” is spelt without the “e”. It is the Irish distillate that is spelt “whiskey”.
Newt got lucky. None of the major oil companies, with all their expertise and insider knowledge have ever been any good at price projections, long term or short term.
I was a steady contrarian in “peak oil” discussions back when they were the rage, and was confident that horizontal multi-stage fracking would provide a steady supply of gas, but I don’t know of anyone who had confidence it could unlock so much liquids production so fast.
Ridicule is the best tool for Liberal Media types trying to get on Clinton’s good side :A side note
An open letter to FBI Director James Comey, Attorney General Loretta Lynch and All American Citizens.
My fellow Americans, I live in America and I am an American citizen. Fox News has discovered it was Unanimous amongst the FBI & DOJ non-political investigative professionals that Hillary Clinton must lose her security clearance, and, a clear super-majority of the investigators determined that the evidence warranted a criminal indictment against Mrs. Clinton. If true, claims to the contrary by the politically appointed personnel from the President on down would constitute a clear deception designed to control the outcome of an American Election. This shows that many Democrats, at different levels in the government, have been working in concert to rig the outcome of the Presidential Election. There is no greater level of corruption possible for a nation! All Americans must stand united against corruption whomever is doing it.
The only way to allow Americans to HONESTLY obtain the information needed to make an unbiased, properly informed and equal selection for President, as guaranteed by American law, is to have a 3rd party accounting of the findings by the FBI agents, analysts and DOJ lawyers. This way all the information is available and the process not corrupted by the Email Server Scandal, at the very least. If Fox’s findings are then verified, Pres. Obama and many, many Democrats, especially Hillary Clinton, would need to explain their claims that she is the most qualified candidate in history yet cannot pass the minimum requirements for the position. After all, every single person involved has maintained (LOUDLY) that there was NO POLITICAL INFLUENCE IN THEIR DECISION. Give the Citizens what we need to properly vote! For me, a Donald octopus Trump Trumps a Hillary felon Clinton selection for President of the United States every time. No contest. But for others, this is not true! Give the Voters what was promised, an unbiased election.
DEMAND A 3rd PARTY ACCOUNTINGS OF THE FBI & DOJ PROFESSIONALS WHO INVESTIGATED THE EMAIL SERVER SCANDAL!
Actually Newt was right, unleash free market system, which developed new technology in the form of fracking and deep offshore drilling along with more sophisticated seismic exploration lowering the risk of dry holes and enjoy the fruits. Bill Clinton can be credited with opening up portions of the Gulf with incentives in the form of lower royalties (tax) for high cost deep water drilling.
I agree the peak oil discussions were recently a false rage and falsely justified massive incentives and mandates for ethanol which they clung to even in the light of significant production due to fracking and associated technology. Strange the media give no credit for the extensive application to the technology developments associated with increased new oil finds throughout the world applying this technology.
Also it is a fact that job growth was primarily associated with fracking and other oil/gas production.
Who predicted massive