The world's ever-rising consumption of ever dwindling petroleum is unsustainable. Except for the Rush Limbaughs and associated ignoramuses, we all know we need to make the transition to alternative, renewable fuels. Even Mister Bush gives lip service to the idea.
But how do we pay for the transition? And who pays?
I'm all for probing allegations of market manipulation on the part of the energy giants. However, whatever the amount that such manipulation may be doing to boost oil prices pales in comparison with what inevitably will happen as we continue to add tens of millions of barrels of oil to the 86 million we already consume each day on planet earth. While there will be some ups and downs, even barring war with Iran, the price of oil tomorrow is going to make those who are financially pinched today nostalgic for $3 gasoline. Greed comprises but a small portion of the price. Peak oil is not imaginary.
We didn't have to be in this bind.
Unfortunately, the federal government squandered a quarter century. One of Ronald Reagan's first acts was to order the removal of the solar panels his predecessor had had installed on the White House roof. Parroting anti-conservationists, Reagan set the national mood with his line that those of us who sought to use energy more wisely and efficiently wanted Americans to "freeze to death in the dark."
Instead of continuing to make alternatives and renewables a national priority of the highest order with the potential for creating millions of new jobs and maintaining the U.S. as an innovative world leader, the Administration chose to ignore, deny, reject and sneer at every warning sign indicating that dependence on oil and other fossil fuels was reckless and stupid.
In 1978, I joined the Department of Energy's Solar Energy Research Institute (now the National Renewable Energy Lab) as an editor. In 1981, which was the last fiscal year Jimmy Carter's budget applied, the Feds spent FOUR TIMES as much on renewables R&D as was spent in fiscal 2004, when adjusted for inflation. Reagan began gutting alternative/renewable energy programs as soon as he entered the Oval Office. Since then, relentlessly underfunded, those programs have never really recovered. As a consequence, a Danish company makes the world's best wind turbines. Japanese companies make the greenest, most fuel-efficient cars.
What's most frustrating about the energy conversation we've been having in dozens of Diaries for the past five days is that we had these same discussions 25-30 years ago when the artificial shortage created by the oil embargo gave us a taste of what a real shortage might be like.
Academics, architects, engineers, entrepreneurs, eco-activists and a small circle of others discussed and debated the energy implications of sprawl and population densities, decentralizing energy, revitalizing mass transit, reducing pollution and the health effects of fossil fuel burning, waste, technological prowess, environmental blindness and what would happen as the world's oil reservoirs emptied. Not much was said about global climate change because in those days the argument with the there-is-no-atmospheric-problem people centered on whether the ozone was being eaten by chlorofluorocarbons.
Most of all, we discussed what to do to reverse the attitude of those in power who had steered us off the alternatives/renewable path. Obviously, that conversation didn't get very far.
While there have certainly been some energy advances made since those days - in photovoltaics, in car technology, in wind turbines, in natural gas turbines, in making non-oil fuels, in appliance efficiency and other conservation techniques - we've more or less wasted 25 years that could have been spent in an intensive makeover of how much and what kind of energy we consume. Who knows how far we might by now have traveled down the alternatives/renewables path?
Instead, oil prices plummeted in the'80s and, with a spike here and there, remained low, assisting our misleaders in their determination not to prepare for the long haul. During that quarter century of energy pollyannaism, American gasoline consumption rose 50% from 91 billion to 137 billion gallons a year. Global consumption soared as well.
So here we are. Talking about energy again.
The finite resource of black gold didn't become infinite in those 25 years. The atmosphere didn't become more able to absorb the debris of our fossil fuel mania. There was a lull but no reprieve. We still must develop tomorrow what we should and could have been developing during all those yesterdays.
But, again, how do we pay for making the changes happen - the consumer incentives to go green, the R&D, the infrastructural construction and reconstruction that will be required? Windfall profits taxes - whether they're a good idea or not - will not cover the freight.
Three months after coming into office, Reagan gutted the Solar Energy Research Institute and with it my job. A month later, in a new position, I wrote my first editorial arguing for a 5-cent per year annual increase in the gasoline tax, the idea being to gradually encourage Americans to buy higher mpg automobiles and to fund alternatives/renewables R&D. I suggested a rebate to ease the pain for financially strapped Americans.
Five cents a gallon per year, every year for 25 years. By now, the tax would be $1.25 a gallon and generate somewhere in the neighborhood of $172 billion a year. By now, the collective take would have been $2.1 trillion.
Assuming, of course, that the increasing tax hadn't vastly reduced the amount of gasoline Americans consume and put them in plug-in hybrids or other modes of more efficient transportation long ago.
As most Kossacks interested in energy know by now, the Energize America 2020 team has included an incremental gasoline tax to help cover the governmental costs of its proposed package of proposals designed to fast-track the use of alternatives to non-renewables. Many people think we're nuts. Increasing the gas tax, we've been told, both gently and ferociously, is political suicide for the Democrats, an idiotic move in an election year that appears to hold some considerable promise for a turnaround in Congress. Others have wondered aloud how we could have been so stupidly elitist to ignore the effects that a higher gasoline tax would have on those Americans already hurting from higher prices.
I assure you we're not blind to these concerns.
While many affluent Americans have made the choice to live in a 4500 square-foot, energy-sucking house 50 miles from their job and drive Behemoths or Leviathans they don't need, many others live in double-wides or crackerboxes or whatever arrangement they can afford far away from jobs, they and drive inefficient cars because they're cheap. They didn't MAKE that choice. It was made for them by a system suckled on oil. There are Americans for whom living in a small town or on a farm is a "lifestyle" decision, but for most it's just their life. They shouldn't be punished for it.
The transition to an energy system built on alternatives/renewables will inevitably require some sacrifices, some adjustments, some difficult moments. But it's inexcusable to insist that the financial burden of those changes fall upon those least able to cope. We can't avoid making the changes, but we can cushion the effects.
I still think an incremental gasoline tax makes sense. But it's a regressive tax for a product that for most people is not a luxury item, and it needs to be offset by some kind of rebate or credit for lower-income people. The question is how.
Income tax rebate? The difficulty: people must pay for gas up-front.
Payroll tax reduction? The trouble: the affluent benefit as well, which cancels out any incentive for them to consume less gasoline. (Moreover, we should be raising the cap on Social Security tax to encompass far higher incomes than is now the case. The rich don't need a rebate.)
Fuel stamps based on income? The problem: Many of the poorest people eligible for these don't even own cars. Would the stamps wind up in some kind of black market?
All these ideas suffer from one additional problem, none relates directly to how much individuals actually drive.
And, finally, unintended consequences can always be counted on to enter the equation.
Then there's the second question. Even if a gasoline tax to fund renewables is a good idea and its regressiveness can be ameliorated or eliminated, can we present it in such a way as to avoid the GOP spinnery that would undoubtedly accompany it? Can we pre-empt their inevitable "The Democrats want to tax your mobility" campaign? Can wordy explanations of rebates and the future benefits of renewables funded by a gas tax trump an untruthful sound-bite? Is the gas tax a good idea but a bad tactic because trying to sell it will mean political disaster for the sales team?
Third question: if no incremental gas tax, how DO we fund renewables? As noted, windfall profits will only take us so far. Should the federal government simply borrow more Chinese money? Do we redirect large portions of the defense budget, much of which now pays for protecting America's overseas oil "interests"? Do we replace, say, the inheritance tax with a soak-the-rich alternative energy transition levy? And, if we pick any of these, how do we sell them?
Comment. And take the poll.
