Pissed off at the gas pump? “Deny, Baby, Deny”

Perhaps we’ll get serious when gas reaches five dollars a gallon, and demand change when gasoline reaches ten dollars a gallon

Note: The Trickle Down theory of economics seems to be working overtime in reverse. These days, it's "Trickle Up," by the barrel.

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By Rocky Boschert
Financial Editor

As gas prices soar, Republicans and oil company executives are starting to revive the same old tired and ignorant rallying cry that echoed around the country in 2008, the last time gas prices spiked and took us into recession.

The totally asinine “Drill, baby, drill!” chant – spewed by Republicans in Congress and around the Gulf even after Deep Water Horizon are addicted to big oil money. They do everything they can to keep Americans addicted to oil by pushing more dangerous drilling in environmentally-sensitive areas and continue our reliance on climate-changing fossil fuels.

Yet, as usual, the big corporate oil Republicans continue to posit a seductive and simple idea: The U.S. has untapped resources that ought to be put to good use. If only big bad federal policy allowed more drilling, gas prices would drop, following standard rules of supply and demand.

But like so many simple ideas, this one is political fodder based on political opportunism and shortsightedness. The U.S. cannot drill its way into free-flowing, low-cost oil and then gasoline. The clear truth is the supply of U.S. oil isn’t anywhere big enough to make a dent in our current oil demands. It is scientifically proven that we have only about two percent of the world’s known reserves.

The larger supply problem is one of worldwide demand (though speculators and Middle East turmoil are too often blamed for current price spikes). As nations such as China and India grow more prosperous, they want their share of the world’s limited energy resources. Like Americans, members of the Chinese and Indian middle-class now view cars as symbols of prosperity and independence.

Anyone with a normal sense of business knows that if you have a limited product that lots of people want, you can charge a lot for it as we see with the Apple iPhone and iPad. That common sense business rule suggests that prices at the pump will likely continue to spike and then ease slightly, as they have for the past few years. But they’re unlikely to drop significantly.

A few far-sighted politicians and our most thoughtful prognosticators have known this reality for years — and said so. Indeed, analysts for a large British bank, HSBC, warned last month that the world may have no more than 50 years worth of oil left, at current rates of consumption, and such demand could lead to “very significant price rises.” (For those of you who don’t want to live in a right wing, American oil company propaganda information closet, read the British magazines the “Economist” or the “Financial Times” for your political and economic news.)

Despite multiple warnings, the American political system has become so dysfunctional that very little has changed since a president named Jimmy Carter tried to get us to get serious about reducing our dependence on oil based gasoline. Sure, cars and trucks get better gas mileage than they did back then. But the nation still lacks, after 40 years, a coherent policy for radically reducing fossil fuel consumption.

Families struggling in the post-recession economic landscape (some still jobless, many earning less than they used to just two years ago) are hard-pressed to fork over more and more money at the gas pump. And for many of those families, driving has become a necessity. They’re not taking leisurely spring-break road trips. They’re trying to get to work, to the doctor’s office, to the grocery store.

Over the last 30 years, suburban and ex-urban development, especially in fast-growing Sunbelt and Bible Belt cities have produced sprawling mega-suburbs, wherein workers may live an hour’s drive (or more) from the workplace. Those suburbs aren’t exclusive enclaves of the affluent, either. Many suburbs, like Plum Creek in Kyle, are economically middle class and racially diverse, so more families of modest means must drive up to an hour to work. A dime a gallon increase can hurt the budget, and twenty cents a gallon can break the budget.

It’s easy to look back and see what might have been: If Congress and state legislatures had adopted sensible energy policies back in the 1970s that promoted renewable energy development, discouraged never-ending sprawl and encouraged public transit, we would have slowed our dependency on polluting fossil fuel consumption and minimized the current pain at the pump.

But even those progressive energy policies of the 70s could still be adopted — pouring serious money into research and development of alternative fuels and boosting public transit, for example. But they continue to be stalled by ignorant and lobby money corrupted Congressional bickering and inertia.

Perhaps we’ll get serious when gas reaches five dollars a gallon – and demand change when gasoline reaches ten dollars a gallon. But don’t forget who you voted into office last November and who their major campaign contributors are.