Separation of Oil and State

I paid $3.25 for 87 octane gas yesterday. It cost over $40 to fill the tank. Ouch. I am beginning to think about trying to work closer to home. I can’t afford to live closer to my work. I may have to start driving the Civic instead of the CRV. I already carpool with a co-worker, and that helps reduce the pain. If gas gets any higher, that hybrid vehicle will be a lot more attractive. I am hoping that competing fuels will come on the market as the price of oil makes them profitable.

No political solution is required, thank you very much. People will adapt to higher fuel prices both as consumers and as innovators. It won’t be painless, but the end result will beat anything the politicians can dream up. And nobody has to kill anyone in order to solve America’s “addiction” to oil. America is not an addict. America is an abstraction. Individuals have organized their lives to greater or lesser degrees around the availability of oil. Oil fuels our vehicles and heats some of our homes. If it becomes less available or affordable, we will make adjustments. I am not willing to hold a gun to anyone’s head to save a few bucks on gas or heating oil.

Let’s have separation of oil and state. Eliminate the crazy ethanol requirements. Abolish the taxes on gasoline. Stop military activities that benefit oil companies. Eliminate subsidies to oil companies. Eliminate regulatory barriers to entry into fuel production. In the short run, prices will rise, but we already pay more than the stated price because we are taxed to fund these subsidies and military activities. This leads us as consumers to make decisions based on incomplete information. We don’t know what our gas and heating oil are really costing us because we can’t calculate our share of the tax burden. We don’t know what innovations in fuel production have been squelched because oil prices are kept artificially low, and these lost opportunities are a huge cost to us.

Let consumers bear the costs of oil production directly, and they will organize their lives on the basis of the information that is transmitted through prices.