Politico has a nice piece up about the Republican party's plan to beat the Democrats about the head and neck on the price of gas. This doesn't have to happen. Progressives can win this fight if we take the initiative now. Here's how:
First shift the debate. The problem isn't the price of gas. The problem is that we have become a country of energy shut ins. In the 1990s you could drive to the beach, to the campground or even take a trip across several states in your car. Today gas prices have confined many Americans to their homes, only driving to work and other needed errands. The country can't drill fast enough to bring down the price of gas. We can build fuel efficient cars fast enough to have an impact. If your car gets twice the MPG it use to then, for you, the price of gas is halved.
How to we get America into more fuel efficient cars? Bring back cash for clunkers and expand it. Anyone with a car more than four years old can participate if the new vehicle gets at least 20% better gas mileage than the old. Increase the trade in value under cash for clunkers to $10,000 per car. That would put 100,000 new cars on the road per billion dollars in the program. Going big, putting one million new fuel efficient cars on the road over the next year would cost ten billion dollars. This will both aid those taking advantage of the program and bring about a marked decrease in U.S. fuel consumption. It will also create jobs in domestic manufacturing.
The ten billion could come, in part, through a windfall profits tax on oil companies. Oil companies are pumping the same amount of oil they have been, but are now getting more for it. We will also end a number of tax breaks for oil production. Now is not the time to give companies tax breaks to engage in the most profitable business on earth.
Further, attack the oil industry head on. The United States has massive oil reserves. Prior to the 1970s most oil leases assumed that only one strata of rock held oil. These leases said that they would remain in effect as long as oil was being produced from the land. You may have heard that the East Texas oil field became exhausted in the 1970s. The truth is only the layer of rock that was being pumped from began to run dry. Underneath that layer are numerous other oil bearing strata. A cheap well going down to the, exhausted, strata and pumping a little bit more oil out holds the lease all the way to the center of the earth. This means the oil companies get to treat the layers that they are not pumping from as reserves on their balance sheets.
After about 1970 “Pugh” clauses became a standard feature of most oil leases. A Pugh clause says that after a number of years, a oil lease only applies to rock stratas from which oil actually is being produced. Enacting a Pugh clause into federal law, releasing all strata not being produced from after five years, would free up massive domestic oil reserves. To put this into PR terms American energy companies are hoarding oil in the ground. We need need to change the law to stop this. The problem isn't one of “drill, baby, drill” it's of companies going “hoard, baby, hoard.” Once we start arguing for a national pugh clause we have some leverage in negotiating with big oil.