Gas Prices: We're to Blame

As the price of gas hovers in the mid-$3 range across the country, and the price of gas rising on the poll charts as an issue of concern for American citizens, out come a series of dueling calls for federal investigations, tax cuts and trust-busting from the political leadership in Washington.

Leading the Democrats' charge has been New York senator and serial grandstander Chuck Schumer who called for a study to consider the break up of the oil industry and a federal investigation into price gouging on the part of oil companies. "The bottom line is that [oil companies and refiners] are producing at 85 percent capacity when they should be producing over 90 percent," Schumer told CNN. Congressional Republicans echoed Schumer, and then Bush waded in with an order to probe oil companies.

Bush's other big moves, announced this Tuesday, have been to relax clean fuel standards so that states with a high environmental bar for fuel emissions can burn dirtier fuel, and to divert shipments from the U.S. strategic oil reserve into the American market to increase supply -- good for 70,000 more barrels a day. And now Democratic Sen. Bob Menendez has proposed eliminating federal gas taxes for 60 days, taking the weight off of the cost of gas for the consumer by about 18 cents per gallon.

Meanwhile the media have recently begun pointing a pseudo-populist finger at retiring Exxon exec Lee Raymond's $400 million retirement package, marking him as sacrificial gouger-in-chief. Lee Raymond may well go down as one of the biggest corporate vampires in American history, but we aren't going to get any closer to dealing with gas prices on a long-term basis if this is just about Lee Raymond.

The problem with media and political responses like the ones we've heard so far is that they don't even begin to address the central reason why gas prices are going through the roof -- the global supply of oil is having a hard time meeting demand, and the United States is built to consume a quarter of all of it -- on a daily basis.

Not only this, Schumer's complaint about an unexplained 5 percent production margin and Bush's move to divert oil from the strategic reserve to gas stations displays how narrow the gap has become between full supply and fuel shortages. Seventy thousand barrels pumped into the American oil supply isn't going to do much for gas prices when you take into account that the United States consumes more than 20 million each day. Those are tinkering solutions at best, and they are a massive distraction from any kind of serious approach to the scale of what we're facing.

It may well be a fine thing for our politicians to break up the big oil companies, establish a windfall profits tax on them, open federal investigations into price gouging, and fund incentives for alternative fuels and lithium batteries, but none of them address the principal cause of all this demand for oil: the average car-driving American citizen.

And so, as with the Iraq war, where there has been no increase in taxes or military draft to pull in soldiers from a wider range of economic backgrounds, the American people aren't asked by their politicians to make any kind of sacrifice. The underlying message from Washington is: "We'll just work around your extreme gas consumption; you just keep doing what you're doing."

Moreover, what "solutions" like these reveal is an astounding lack of creativity and political will in Washington to envision a society that doesn't have automobiles as the fundamental unit of American life, as though our car dependency is the best outcome possible. Democratic House Minority Leader Nancy Pelosi tried to shame Bush by painting his ties to the oil industry as evidence of his collusion on the recent hike in gas prices: "… [Y]ou are too wedded to the oil companies. We have two oilmen in the White House. The logical followup from that is $3 a gallon gasoline. There is no accident. It is a cause and effect."