By DAN K. THOMASSON
Scripps Howard News Service
April 27, 2006
In this auto-dependent nation, few issues are more volatile than soaring gas prices, especially when those controlling them are making heretofore unimaginable profits. The recent bonus afforded the chief executive officer of Exxon amounted to hundreds of millions of dollars in the wake of his company's most successful year.
The reports of this largess caused reverberations from the packed car canyons of Los Angeles to the jammed roadways of Manhattan. Democratic Sen. Carl Levin of Michigan called for taxing oil company windfall profits and Republican Sen. Arlen Specter of Pennsylvania said it was worth considering as the average cost of a gallon of gas jumped 15.5 percent during last month.
Just saying the high prices are the result of a suddenly booming China or any of the other half dozen excuses used by politicians and industry executives isn't going to cut it when the cost of driving to work has tripled.
So what does the president do to offer relief? He talks about the need to push forward with hydrogen-powered fuel cell cars, a concept that is years away from practical application, and he warns Americans they are in for a tough summer of high prices. No kidding.
"I strongly believe hydrogen is the fuel of the future," Bush said in California, where only one model car is being tested, a vehicle priced at $1 million in case anyone was prompted to go out and buy one.
Well, he may be right. But what are you doing for us at the moment, Mr. President, or are you oblivious to the stress this is causing? The soaring prices impact everything we do in this country - our food, clothing, and, as the Chicago Tribune noted recently, even home furnishings. While the economy continues to grow, the reason for that is business has taken the hit rather than pass on the higher costs to consumers.
But how long can that go on with businesses of all sizes increasingly feeling the pinch? As the Tribune noted, $75-a-barrel oil is pushing up raw materials costs for petroleum-based products like polyester carpeting, Styrofoam and tires and adding to the price of new home construction, airline tickets and shipping. Although gasoline for autos is the most visible cost, it accounts for only 44 percent of the use of a barrel of oil. The rest is fuel oil, petrochemicals, petroleum gas and jet fuel.
It seems wholly justified to ask why, after more than five years in office, there is no overall energy policy other than drilling on the Alaska's Arctic National Wildlife Refuge? Both the White House and the Congress have been woefully negligent in giving a solution the priority it should have.
Well, before the Democrats start howling we told you so, they should look at their own failure to relieve the situation. They have been equally as dilatory in suggesting viable policy. Their unflinching support for ruinous, illogical and disastrous environmental policies has played a major role in the overall dependency on the Middle East supply and the inability to meet demand with new refining capacity.
As for the development of alternatives, the last time anyone looked, substitutes like ethanol have been little more than a boondoggle Congress designed to line the pockets of a handful of political allies. Ethanol, for instance, has been called the Dwayne Andreas relief bill, so named for the former CEO of Archer Daniels Midland, the one major producer. Its distribution has been so limited as to be practically non-existent despite federal subsidies to farmers growing the corn to distill for the alcohol.
Granted, that there is only so much the president can do to stop what clearly is gouging on the part of everyone from the Saudi capital to Houston. But using his bully pulpit to put as much pressure as possible on the industry both at home and abroad is certainly one of them. He has not done so. He must understand that Americans are tired of hearing the oil companies explain away their enormous windfalls as necessary to support exploration and production.
Meanwhile, an excess profits tax might not be a bad idea. Even the threat of it might force the producers to lower their expectations for another record year at our expense.
Distributed to subscribers for publication by Scripps Howard News Service.