Inflation be Damned

[Res Ipsa]

One of the bedrock assumptions on which market theory is based is that the production of a good or service affects no one except the buyer and the seller. If it does, the good or service is said to produce externalities which amount to a subsidy to the production. The good or service is underpriced and too much of it will be produced.

The price of gasoline has always been subsidized in this manner. Dumping waste into the air, water, and land harms third parties, who involuntarily sacrifice their health and well being to keep the price of gasoline artificially low. Many of the environmental regulations that the GOP regularly sneers at simply require the harm to third parties to be priced into the gasoline. If the GOP truly believed in market theory, it would support any regulation that reduced or eliminated third-party harm because that removes the involuntary subsidies from the price of gasoline.

Gasoline is still being heavily subsidized by the emission of greenhouse gases in the process of producing it and then using it as a fuel source for vehicles. Ideally, the costs of adaptation to climate change should be paid for by the sectors of the economy that use fossil fuels. That would have two effects: first, higher prices of those fuels would result in using less of them. Second, it would make alternatives relatively cheaper, thus speeding the transition to low carbon energy sources.

To say that gas prices are too high because of environmental regulation reflects a complete misunderstanding of how market theory works. The regulations are there to make sure that the cost of gasoline includes the cost of health and environmental effects. The cost should be even higher, as the costs of adapting to climate change aren't included in the cost of the products that produce greenhouse gases.

Increasesing fossil fuel production is exactly the wrong thing to do in response to the current price shocks for petroleum. The US's percentage share of petroleum reserves is so small that it cannot significantly affect prices of petroleum by increasing supply. The only way to insulate the U.S. from petroleum price shocks is to decouple from the global petroleum market entirely by shifting to non-petroleum sources of energy.

[ajax18]

Why do you start digressing like this?

It isn't digression by simply pointing out you don't understand what drives gasoline prices up and down. Saying higher gas prices makes Green Energy more appealing to energy producers/consumers shouldn't be an earth shattering revelation. But you're constantly trying to engage in correlation = causation by blaming Democrats every time the price goes up and then giving them zero credit when the prices plummet under their watch. You keep asserting this nonsense that gas prices are driven up and down based on "policies" but you cannot name a single policy despite being asked four times now, and even if you could you cannot draw any direct causation from it.

If Democrats were opening up public lands for drilling, opening up pipelines, not punishing people for watering their lawns, or running their AC, I would credit them when the price of gasoline goes down. Until they're doing that, yes I will assume the price of gas lowering has nothing to do with their policies and that the price of gasoline rising does have something to do with their policies.

[Gadianton]

What if Democrats know that OPEC exists?

[K Graham]

If Democrats were opening up public lands for drilling

You mean like Biden's been doing at a record pace?

BILLINGS, Mont. — Approvals for companies to drill for oil and gas on U.S. public lands are on pace this year to reach their highest level since George W. Bush was president, underscoring President Joe Biden's reluctance to more forcefully curb petroleum production in the face of industry and Republican resistance.

The Interior Department approved about 2,500 permits to drill on public and tribal lands in the first six months of the year, according to an Associated Press analysis of government data. That includes more than 2,100 drilling approvals since Biden took office January 20.

Now don't you feel foolish?

Until they're doing that, yes I will assume the price of gas lowering has nothing to do with their policies and that the price of gasoline rising does have something to do with their policies.

So basically you're going to double down on stupid and claim things that aren't true, and then run away when I refute your claims with hard facts. You know, facts like the one above. Or this one:

US oil production was only 5 million barrels per day between 2006-2008 right before Obama took office. Output had dropped in every year since 2000 while Bush was President. Between 2009-2016 US oil production increased accordingly:

2009: 5.36 MBPD (million barrels per day)
2010: 5.48 MBPD
2011: 5.67 MBPD
2012: 6.52 MBPD
2013: 7.49 MBPD
2014: 8.79 MBPD
2015: 9.44 MBPD
2016: 9.35 MBPD

ETA: anyone remember when trump backed out of the Iran Nuclear deal which caused Oil and gas prices to spike?

US crude surges 3% to 3½-year high, settling at $71.14, after US quits Iran nuclear deal

[canpakes]

… not punishing people for watering their lawns, …

How is lawn watering affecting the cost of gasoline in ajax world?

ETA: I didn’t know that Texas was run by liberals, but they have scads of cities where lawn watering is restricted, too.
https://www.tceq.texas.gov/drinkingwate ... ughtw.html

[K Graham]

Now that we've established leasing of public lands is skyrocketing under Biden, what will ajax say? Nothing. He'll vanish, and then repeat the same falsehood at a later time.

[Chap]

Now that we've established leasing of public lands is skyrocketing under Biden, what will ajax say? Nothing. He'll vanish, and then repeat the same falsehood at a later time.

(Nods wearily ...)

[Atlanticmike]

Now that we've established leasing of public lands is skyrocketing under Biden, what will ajax say? Nothing. He'll vanish, and then repeat the same falsehood at a later time.

Biden is going to make Jimmy Carter look like a genius!!

[K Graham]

Now that we've established leasing of public lands is skyrocketing under Biden, what will ajax say? Nothing. He'll vanish, and then repeat the same falsehood at a later time.

Biden is going to make Jimmy Carter look like a genius!!

He's already made a lot of you look like fools.

[canpakes]

Biden is going to make Jimmy Carter look like a genius!!

Funny that you should mention him. This article is from a few years back:

Is it Safe Now to Admit Jimmy Carter Was Right?

By Joseph Wheelan
Mr. Wheelan is the author of four books on American presidents and American history, the most recent published in January, Mr. Adams's Last Crusade: John Quincy Adams's Extraordinary Post-Presidential Life in Congress.


Americans, who hate to be told they must change, roundly condemned Jimmy Carter’s memorable “Crisis of Confidence” speech of July 15, 1979. In it, Carter outlined a program for achieving energy independence: “On the battlefield of energy we can win for our nation a new confidence, and we can seize control again of our common destiny.”

We admirers have long endured ridicule whenever we dared to defend Carter’s prescient plan for reducing U.S. dependence on oil.

But today, after all the abuse and scorn heaped on Jimmy Carter and his supporters, we find ourselves paying more than $4 a gallon at the pump to fill our hulking gas guzzlers.

It turns out that Carter was right after all.

He was right in seeking to raise the fleet auto mileage standard to 48 miles per gallon by 1995. (Even U.S. automakers admitted at the time that they could easily achieve 30 mph by 1985.)

Jimmy Carter was right in exhorting Americans to turn down their thermostats, even if he did look nerdy in a cardigan while urging us to do so.

In his July 1979 speech, he was right when he said, “I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did in 1977 — never.” That worthy goal quickly went by the board.

He was right to encourage fuel conservation by proposing a 50-cents-per-gallon tax on gasoline and a fee on imported oil — in effect, a floor for fuel prices.

Invoking the pioneering spirit of the 1960s’ moon mission, he was right to recommend a tax on windfall oil profits to finance a crash program to develop affordable synthetic fuels.

Jimmy Carter was correct, too, in setting a goal of obtaining 20 percent of our energy from solar power by the year 2000.

We balked, and his energy program, which was new and demanding, shriveled up and died. When oil prices began declining in the 1980s, the justification for change vanished altogether. The Reagan administration junked the proposed 1995 mileage standard and the rest of the Carter agenda.

Amazingly, amid today’s record gasoline prices, Congress even now doesn’t quite get it.

It was only last December that Congress approved new mileage standards, the first in 32 years. If they stand, the present fleet standard of 27.5 mpg will rise to 35 mpg — but not until 2020.

Our leaders’ idea of promoting alternative energy is touting future, non-existent technologies, and that false savior, ethanol. Ethanol consumes nearly as much fuel to make as it produces, while collaterally raising food prices and damaging the environment.

The latest panacea is drilling in the Arctic and offshore, a short-term solution of dubious value that is wildly popular among oilmen and congressmen up for re-election, and in the Bush administration — which evidently hopes to use high gasoline prices as a wedge for opening off-limits areas to exploration for its Big Oil constituency.

Meanwhile, Congress has failed to take the simple step of renewing federal tax credits for wind and solar power that will expire at year’s end. Every week of congressional foot-dragging on renewing the tax credits further dries up venture capital for critical solar and projects.

Why is Congress deadlocked over this critical issue? How have our perceived options become so narrow and skewed?

It is because without any public debate, a de facto U.S. energy policy has evolved and is now in place: to cling ever tighter to our oil-based economy and its lucrative profits for the scions of the status quo, and to marginalize all who are not on board with this.

And now we are in the exact bind that Jimmy Carter tried to prevent three decades ago, when we were reeling from the concussive effects of oil supply disruptions in 1973 and 1979. Acting with promptness difficult to fathom today, our elected leaders then enacted year-around Daylight Savings Time, dropped the speed limit to 55, and established government price controls. And, oh so fleetingly, we downsized what we drove. All gone.

Consequently, the United States last year imported 3.6 billion barrels of oil, three times the 1.2 million barrels imported in 1973. We not only are consuming record amounts of oil, we import nearly 60 percent of it, about 13 million barrels per day. In 1977, U.S. oil imports totaled 8.5 million barrels a day, or 46 percent of consumption.

Remember, under Carter’s energy plan we were to hold the line at the 1977 oil import figure, in barrels. Had we done this, the percentage of U.S. oil imported today would be around 40 percent. Additional savings from Carter’s conservation and his alternative energy and synthetic fuel programs would surely have cut oil imports even further.

But it happened so fast, we say.

One hundred years ago, historian Henry Adams, in explaining his “Law of Acceleration,” observed that technological change occurs at an ever-quickening pace throughout history. “A law of acceleration, definite and constant as any law of mechanics, cannot be supposed to relax its energy to suit the convenience of man.”

Today, change occurs at such blinding speeds that the rise and fall of technologies and nations happen in a single lifetime.

An energy crisis is again upon us. Soaring gasoline prices and oil imports are daggers aimed at the heart of our stumbling economy.

It is time to give Jimmy Carter’s proposals a second hearing.

This is what he said in July 1979: “You know we can do it. We have the natural resources. We have more oil in our shale alone than several Saudi Arabias. We have more coal than any nation on Earth. We have the world's highest level of technology. We have the most skilled work force, with innovative genius, and I firmly believe that we have the national will to win this war.”

https://historynewsnetwork.org/article/52030