Saturday, August 2, 2008

A benefit of expensive gas

I'm as upset as most people about high gas prices. Of course, I don't drive an SUV or pickup truck.

One thing I think they should do is have the drivers of fuel-inefficient vehicles pay an additional tax (either at purchase time or annually), with funds used for two purposes: half of the money should be earmarked for development of renewable energy, the other half should be used to offset high gas prices. My rationale? The price of oil is determined in large part by the laws of supply and demand. Since the drivers of SUV use a lot more gas than I do with my subcompact, not only do they use more gas, but they create a larger demand, raising gas prices for everyone. I don't have the slightest idea how much money such a tax would raise and perhaps the total would be a subsidy of less than a penny per gallon. If that's the case then all of the money raised should be dedicated to research into or development of renewable energy sources.

Back to the "good news" about high gas prices. People are driving less, buying more fuel efficient cars, and thinking about renewable energy sources. Ethanol has been a mistake and hopefully that experiment (especially the corn-based one) will end soon; besides using more energy to produce than it gives us (and cost inefficient as well), the investment in ethanol has the collateral damage of high food prices (talk about shooting oneself in the foot). Some of this is periodical -- should gas prices go down, people will return to their gas guzzling vehicles and driving, investment in mass transit will decrease and users of mass transit will drop, placing a bigger burden on taxpayers. Tom Tomorrow has a nice cartoon here.

Some benefits are bound to stick around. Today there was an article on about the development of wind energy. The article also notes that China is gaining on the US in terms of harnessing the wind. The article is generally positive and notes that new lines being built in a Texan consortium "will accommodate about 18,500 megawatts of wind generation by 2012-- enough energy to power 4 million homes." Right now production is at just under a third of that, with T. Boone Pickens' project, that "When completed, his 2,700 turbines will be capable of producing enough electricity to power 1.3 million homes." That's apparenlty another third of the total potential capacity for the new lines to support. The more, the better, and I'm guessing that 4 million homes is potentially over a half of all Texans (about 21 million estimated population; I'm thinking 3 people per home; later I'll check the census bureau info and see how close that is). That 's a pretty strong statement for one of the largest states. Hopefully others follow suit.

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