Pioneer Editorial: Higher gas prices may be a given
As the nation nears paying $3 a gallon for gasoline, the panic button has been pushed and a call for action initiated.
But will it do any good? Probably not.
President Bush joined the fray on Tuesday in calling for a halt for the summer to filling the nation's emergency oil reserve. But analysts believe that the amount of crude oil going into the reserve is so small the suspension of shipments will have no impact. He also urged a waiver of clean air rules to ease local gas shortages, but that too is predicted to have little effect as most of the summer-blend gasoline is already in place and may actually draw more imported oil that doesn't meet U.S. clean air standards.
The Democrats' answer -- to declare a 60-day"holiday" from the 18.4-cent per gallon federal gas tax is foolhardy, as it takes away valuable monies for road and bridge infrastructure or would add $6 billion to the federal deficit. And taxing the oil companies for that will gain little traction in a GOP Congress.
The president also called for the repeal of $2 billion in tax breaks for oil companies which are making barrels of profit over the higher prices. While that, too, may not lower prices, it is an action that will make the American public feel better. The nation's three largest oil and gas companies are expected to report later this week combined first-quarter profits of more than $16 billion, a 19 percent jump from last, which was a record year for profits itself. The tax breaks were given to encourage the companies to explore for oil, but with profits flowing like oil, they certainly don't need the government subsidy.
Unfortunately, the administration has had five years to put in place an energy policy that moves the United States away from dependence on oil, and now it's clear that the nation needs to move there as quickly as possible. Requiring that vehicles sold in the United States get higher gas mileage would be a start.
Increased efforts to produce and market ethanol is also needed, along with accelerated research into hydrogen fuel cells and in making and marketing hybrid gas-electric cars.
Those measures, though, are plans for long-term relief, not short term.
That means that the American consumer must be prepared for the jolt -- and its ensuing impact to the economy through higher airfares, delivery surcharges and higher prices for products made of petroleum byproducts. We can only be thankful that the higher prices didn't come as predicted over the winter, and hope that prices stabilize before the next heating season.
Also important are efforts diplomatically and militarily to stabilize foreign oil markets -- ensuring that Iran doesn't become a nuclear threat to the Middle East and moving Iraq more quickly to self-governance and self-security.
Meanwhile, higher gasoline prices are here to stay.