Lindsey Graham, R-S.C.
A long time ago in my teenage years I first heard about a 'fresh face' in Congress named Lindsey Graham. They said he was young - but much to my surprise this 'young face' had nary a pimple. Obviously Washington DC considers 'youth' in a different way.
Now that I'm a bit older I know that every politician has a few blemishes - and are a bit prone to 'oily' remarks. Unfortunately, politicians don't bear pockmarks for their juvenile language, otherwise 'face value' would have entirely new meaning on 'Meet the Press'.
Blemishes aside, it seems that Sen. Graham still has potential to live up to the 'fresh' image - even amidst the rot of the DC political swamp.
I have been encouraged by Sen. Graham's remarks of the last year or so. Calling 'birthers' "crazy", Glenn Beck a "cynic", and criticizing the 'Al Qaeda 7' ad are hallmarks of intellectual and moral honesty.
Recently, Sen. Graham has addressed climate change in putting forward a proposal for a 'carbon tax' in gasoline prices. However, is Sen. Graham still bringing the same candor and intellectual and moral honesty?
The current proposal put forward calls for a 'carbon tax' of $0.10/gallon; in turn, oil refiners will be exempted from the cap and trade plan already approved by the US House of Representatives. Sen. Graham has said that this move would put the onus on consumers to reduce consumption.
But would it really reduce consumption and carbon emissions, or simply retain petroleum's historically advantaged status?
The support of the refiners is based on obvious logic:
- The $0.10 per gallon tax has a much lower cost impact at the pump vs. the price increase caused by reducing carbon emissions through improving processes or converting to non fossil fuel sources.
- Politicians are loathe to increase fuel taxes so the price of the 'carbon tax' in the future will remain significantly lower than cap and trade economic pressures. By pressuring politicians to keep the tax low (so politically popular), oil refiners can remove carbon emission pricing pressure that would be caused by being part of 'cap and trade'.
- By creating the 'fuel carbon tax' as an 'alternative energy' funding source, oil refiners and their political champions can wrap themselves in a fuzzy green blanket while assuring that competing technologies will not well financed (again, by keeping the tax low).
- By keeping fuel prices low, the real economic advantage of battery powered cars is reduced.
The net effect of this bill and a too-low carbon tax will be to present minimal change to the refiners while also having net effect on consumer demand. Clearly, a minimal tax is no substitute for 'doing one's part', but oil refiners see this as a prime opportunity to shirk their responsibility.
Refiners might redirect criticism by saying that they are only responding to market demand. However, are they really so powerless to change how they supply that demand? More so, can consumers bring any real pressure to bear on refiners? Do consumers have the ability to dictate to gas stations where they source that fuel - especially when refiners largely own the gas stations of America?
Refiners are happy to continue the 'catch 22' presented by alternative fuels. Factory certified alternative fuel cars (such as 100% biodiesel vs the approved 5% today) will not be widely available until refiners put forward a clear plan showing when alternative fuels will be available at the pump.
As the story with Ultra Low Sulfur Diesel shows, refiners will not put forward anything new until Congress mandates change. The 2010 US standard for ULSD with 15 part per million (ppm) sulfur content was widespread in Sweden since 1992. In 2006, much of the EU had averages of only 3-5 ppm. How can America be great in a new energy economy if we're content to be nearly 20 years behind and only 33% as good as others? Please don't say it's enough if our refiners bottom line is better.
Sen Graham has stated that he believes climate change is real, but the impact of this legislation clearly shows that he does not see refiners as being 'part of the solution'. Is Sen Graham proposing this miniscule 'carbon tax' because in some way he still sees 'no real problem'?
Will Sen. Graham please address the logic of how a minimal tax will cause any change? More so, will he address why such a low carbon tax was selected as it clearly places oil refiners in a far more advantageous position than a fair, market-based, across the board solution would?
For what it's worth, I do believe that a carbon tax could be workable but only if the carbon tax per gallon was $2-3 immediately, with future increases indexed to an accelerated schedule of 5-10% per year. If refiners truly wish to only 'market providers' that favor straight pass-through tax increases that place the onus on consumers to reduce consumption, then they should readily accept the types of figures that I propose.
P.S. Those who wish to lash out at someone, please note that Sen. Mary Landrieu (D-La.) has yet to see a climate bill that she likes. In fact, she's still 'reserving judgment' on Graham's $0.10/gallon tax! Think she has a few refiners on her speed dial?
If you want Mary on your speed dial..(202) 224-5824 (DC) or (225) 389-0395