Sunday, June 08, 2008
Cost of energy is higher than you think
Dan Radmacher
Recent columns
- Virginia voted for gridlock on Tuesday
- Project Vote Smart tries to educate Virginia voters
- America should listen to this Cassandra
- Endorsements are just one part of the equation
From the RoundTable blog
Americans have never had cheap energy. We just thought we did because so much of the price wasn't reflected either at the pump or in utility bills.
But prices are going up, and the shock -- both to individual family budgets and to the economy as a whole -- will continue to be tremendous.
Back in the 1990s, a few brave and far-sighted politicians advocated boosting the federal gas tax by 50 cents a gallon -- Al Gore, Ross Perot, Charles Robb and John Kerry among them. Others have long advocated carbon taxes to bring the price of other fossil fuels more in line with their actual costs.
Such ideas were ridiculed and excoriated. In 2004 (when gas was averaging $1.77 a gallon), President Bush criticized Kerry's decade-old support for a 50-cent-a-gallon increase.
But think if those taxes had been adopted. They could have been phased in more gradually than the current price spikes. Americans would have had time to adjust to the pain.
The beneficial side effects of higher prices would have begun far earlier -- Americans choosing more efficient vehicles and relying more on mass transit, increased interest in renewable fuels, a push for wiser use of energy at all levels.
Less fuel would have been used, lowering emissions and making goals to cut greenhouse gases further both more manageable and more meaningful.
The revenue from the taxes would have been substantial and could have been devoted to a concerted effort to develop new, cleaner and renewable energy sources -- or to mitigate the widespread environmental and public health consequences of current fossil fuel extraction and use.
Instead, the high prices benefit only oil companies, which are enjoying record profits.
Realistically, I know it never would have worked. Congress could never have endured the heat for high energy prices.
Even now, as other commentaries on this page and elsewhere demonstrate, Congress is blamed for what it has -- and hasn't -- done to bring down energy costs, even though the current spike is mostly about global supply and demand and other factors that Congress has no control over.
That has stopped politicians from trying. Presidential candidates from both parties have pitched irresponsible ideas like a gas tax holiday -- a foolish gesture that would drain billions from the federal road fund without offering consumers any true relief at the pumps.
So, no. Human -- and political -- nature being what it is, a national policy that had the goal of making energy more expensive wasn't feasible in the 1990s. Even now, with the catastrophic threat of global climate change looming, many believe we should not make it more expensive to burn fuels that emit greenhouse gases.
But, even though energy is far less cheap than it used to be, the problem remains that much of the true costs aren't covered by what consumers pay at the pump or to the electric company.
Much of the cost of our energy use remains externalized. These costs are not borne by energy producers, or directly by consumers, but by society at large or certain communities in particular.
Those who live downwind of coal-burning power plants pay the cost in higher incidents of asthma and other respiratory illnesses. Communities in Appalachia where coal is mined pay the price in an environment destroyed by mountaintop removal, roads ruined by overweight coal trucks and a political system corrupted by industry money and influence.
We all pay the cost for our dependence on foreign oil by supporting an expensive military presence in the Middle East -- in addition to the other widespread impact of the geopolitical turmoil of that region.
Those who live in smog-choked cities pay a heavy price for our automobile-centric society.
For the past 20 or 30 years, America could have been paying for these external costs, driving demand for alternate forms of energy and encouraging more efficient lifestyles with higher energy taxes.
American car makers could have better planned the transition from fuel-hog SUVs to hybrids and ultra-efficient vehicles.
The political cost was too high.
Now cheap energy is gone for good, and the transition to a high-cost energy world will be all the more jarring because of the steps few were willing to take before.
Radmacher is the editorial page editor of The Roanoke Times.
