Blame games

Liberal and conservative politicians alike are playing silly games over oil, and we are idiotically enabling them. They've got dueling web sites urging us to rant and rave about our "pain at the pump". True Majority is spearheading the liberal effort at http://www.stoppainatthepump.org/. Conservatives are led by Scott Garrett, who's sponsoring an email campaign at PainAtThePump@mail.house.gov. The bipartisan focus on pain is noteworthy - perhaps Republicans and Democrats are both into S&M?

Each side has their own favorite scapegoats. Conservatives blame Democrats and environmentalists, for opposing offshore drilling. Liberals blame Republicans and oil companies, for their "windfall profits". Of course, neither of them talk at all about the real issues.

I sent both groups a version of this email (which they promise to forward to my Congresspeople). If you are so inclined, feel free to cut & paste, modify, etc and do the same.
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I am a school teacher, and a liberal, living in New Hampshire. I tell you this so that you will understand that I am not well-off, I make a middle class living. And I am not an oil company shill, far from it.

The current price of gas is the best "energy policy" we've had in this country in 30 years. With gas at $4 a gallon, Americans are driving billions fewer miles. Americans have stopped buying SUVs. Americans are riding mass transit in record numbers. Americans are investing in alternative energy in record numbers. Americans have cut their production of greenhouse gases. And America is importing less oil.

Congress is focused on the wrong issues, when it comes to offshore drilling, "high" gas prices and "windfall profits". We know that gas & oil prices are driven primarily by worldwide demand and supply. We know that the American level of consumption of oil is unsustainable - Americans represent 5% of the world's population and consume 25% of the world's oil. And we know that the way we consume fossil fuels is a major factor in global warming.

Offshore drilling may result in a modest increase in domestic oil production, in about 10 years. The EIA and the DOE both caution that we will not see any near-term (or long-term) drop in gas prices by increasing offshore drilling now.

Europeans and Japanese pay about twice what we do for gas and oil. They have very high standards of living (equivalent to or better than ours in the US), and consume less than half the petroleum we do per capita. Their energy efficiency makes their economies much less vulnerable to upticks in the price of oil. Cheap gas and oil is not a requirement for a thriving economy, or a high standard of living.

Most Americans can afford to pay $4 or more per gallon for gasoline and heating oil. Americans will respond to higher prices by cutting their consumption, buying smaller cars, driving less, insulating their homes, changing thermostat settings, etc. The American economy, and our environment, will be far better off if we keep gas & oil prices high, and cut our oil consumption.

Instead of sending misleading messages to voters about "pain at the pump" Congress should focus on helping those who are truly struggling with energy prices - by offering low cost loans to the poor so that they can trade their gas guzzlers in for more efficient vehicles, insulate their houses, buy more efficient furnaces, etc. Congress should also establish a "gas stamp" program for those most in need, similar to our food stamp program. For the rest of us Congress should do nothing to cut gas prices, but instead should be passing a gas tax to ensure that prices remain at this level.

As for a "windfall profits" tax, how should we define "windfall"? Are we going to tax every company that makes more than a specified profit margin? If so, long before we start taxing oil companies, we'll have to tax companies like Google, companies that make much higher profits than Exxon.

Google's profit for the first 6 months of 2008 is a whopping 25% of revenues. Exxon's profit for the same 6 months of 2008 is 9% of revenues. If Exxon is making "windfall profits" at 9%, then Google's profits of 25% are absolutely obese. Oil company profits are modest, compared to many businesses. Congress must first define windfall profits, and then impose any windfall profit tax consistently and fairly, on all businesses.

Politicians are playing blame games here. They seem to think that their constituents are idiots. Many of us are not, and we expect that politicians will do the right things, not the expedient things. Keep gas prices high, provide aid to those who suffer real hardship, invest in mass transit, invest in solar and wind power, and make America the most "oil efficient" economy in the world. Doing these things will cut oil imports, cut emissions of greenhouse gases and leave our country a much better place for our children and grandchildren. They will thank us for it.

Stop pandering!!!

Sincerely,

John F. Ranta, etc...

Pick-up lines...

I was sitting at the bar at our local Bistro last night, enjoying some pizza and reading my book, when a guy came in, sat down next to his buddy one seat over from me, and started talking excitedly. He pointed to a shiny new, full-sized, extended-cab pick-up truck sitting in the parking lot just outside the window, and said "Look at that beauty. Can you believe it? They gave me $7200 for my old truck on a trade-in!!" His friend responded "How old was that piece of shit, '95? It wasn't worth 5 bucks." To which the first guy, grinning from ear to ear about his good fortune, replied, "Yup. I sure fooled them, I hit the lottery on that deal."

The most ironic part of the whole conversation was when the new truck owner turned to me, pointed to my book and asked "whatcha reading?". I handed him my copy of "Twilight in the Desert" and explained it was a book about how much oil might be left in oil fields in the Middle East, and the future of the oil market. He pretended to be interested, for about a second, then said "yeah, okay", and turned back to his buddy to brag more about his new truck. I didn't say a thing, just went back to my book...

The guy in the bar may not know it yet, but the pick-up truck is dead. Today Ford Motors is announcing that they are retooling most of their US plants. For years these plants have been producing pick-up trucks and SUVs. With gasoline prices hitting $4 a gallon, no one is buying a pick-up truck or an SUV. Six months ago Ford's F150 pick-up was the best selling passenger vehicle in the US. Today the number 1 selling vehicle in the US is the Honda Civic. Reading the writing on the wall, Ford has delayed its release of the 2009 F150, and is switching production in their US plants from SUVs and trucks to the compacts and sub-compacts that they currently build in Europe. Ford is telling customers and shareholders that they will be completely retooled and selling a line-up of fuel efficient cars by 2010.

How the Detroit story has changed. Only a few months ago, as Congress was pushing CAFE legislation to raise the average vehicle fuel economy in the US to 35 MPG by 2020 (the average today is about 22.5 MPG), Ford and GM executives were protesting that they couldn't possibly shift so quickly (12 years) to manufacturing fuel-efficient cars. GM's chairman Bob Lutz claimed that the 35 mpg CAFE standard would result in "a net average additional technology cost of $6,000 per vehicle which will have to be passed onto the consumer...(continuing)...it’s impossible to build small cars and sell them at a profit in the United States. " Turns out that such statements were just so much smoke (the auto company execs were talking through their exhaust pipes, so to speak).

As Ford is demonstrating, they can completely revamp their US product line in 18 months, with no additional technology costs. For many years Ford and GM have been making fuel efficient cars for the European market, which they chose not to sell here. That's too bad, because if they had been selling a more fuel efficient line-up of cars in the US, they likely would not be struggling as they are now. While Ford's US sales are down 15% this year , their sales in Europe are up 2%. The best selling car in England (where gas is $8.00 a gallon) is the Ford Focus. In Europe Ford has three cars in the best selling top 10. Their Euro line-up includes the Mondeo (a Civic rival), the Ka (an award winning design similar to the Smart 4 Two), the Focus (one model of which they also sell here) and the Fiesta. Although in Congress's CAFE hearings Ford wept and wailed that there was no way it could meet Congress's CAFE standard of 35 MPG by 2020, in fact their European car line-up would meet that standard today.

Ford and GM's misleading Congressional testimony grossly exaggerated the technology costs and re-tooling time that the new CAFE standard would impose on Detroit. Why would GM and Ford have lied about that? Geez, I don't know, maybe it had to do with money? The average profit margin on a full sized pick-up or SUV is $10,000, while the average profit on a compact car is about $2,000. Or, to put it another way, Americans have been over-paying for SUVs and pick-up trucks for years. That proud pick-up owner I met last night in the Bistro may have gotten $7200 for his old banger in a trade-in, but the dealer got to move a dinosaur off his lot and probably still made $3000 on the deal. Over the next 6-7 years, at $4 a gallon (if gas prices don't rise further), that shiny new pick-up will cost him about $10,000 more in gas than a Honda Civic would. Winning the lottery, indeed.

Peaking Tom?

This post is inspired by an online debate I had this week with a "peak oiler" on NHPR's web site. My worthy opponent claimed that oil production is about to fall off a cliff, resulting in mass starvation and WW III. His main justification for this is his belief that it will soon take a barrel of oil to produce a barrel of oil, and when it does, production will crash. This didn't make sense to me. I searched the web, and found very little credible support for his argument. I did find a few web sites that echoed his claim, most using very similar words and phrases. A little more searching led me to an article by Jay Hanson (http://www.dieoff.com/page175.htm) that all the other sites seemed to be quoting. Hanson, in this "ur-essay" from 1999, claims that he is the only one who understands the "physics" of oil production, and he knows that the thermodynamics of oil production are nearly at equilibrium. He pooh poohs "economics", while providing no supporting data for his physics claims. We're left with an "exothermic" opinion - his words provide more heat than light. I'm not convinced that the energy requirements of oil production will soon equal the energy produced, and no one besides Hanson deems the issue worth studying.

That said, my research did lead me to two related articles concerned with oil production. Each seems credible to me. The first (http://assets.opencrs.com/rpts/RL34437_20080404.pdf) is well supported by data, and is well cited. The financial charts show that oil companies are not making obscene profits (5-10% profit is hardly obscene). More surprising, the oil production of all of the major oil companies is declining. Oil historically has been a cyclical business, and it's not unusual for oil production to lag when prices are low (low prices provide no incentive to explore for and produce more oil). But prices have been relatively high since at least 2004, and production is still falling. This fits what "peak oil" folks have been saying about production.

The second article (http://www.grist.org/news/maindish/2005/11/03/simmons/index.html?source=daily) is even more provocative, but hard to dismiss. The author, Matthew Simmons, is very credible. He has a PhD from Harvard and works in the oil industry. In addition, this interview was published in 2005 and he made very accurate predictions about oil prices in 2008 (it looks like he will win his bet for 2010). His claims about a rapid falloff in oil production are a much better explanation (to me, anyways) for why Bush/Cheney invaded Iraq (note that Simmons was an energy adviser to Bush/Cheney in 2000). I'm guessing that Cheney believed Simmons' projections. It never made sense to me that someone as smart (albeit paranoid) as Cheney would manufacture all that flimsy evidence about Al Qaeda ties and yellow cake to justify a war with Iraq (home to the world's largest unexploited oil fields), unless he was afraid of something "big". Perhaps the purpose of Cheney's "oil company" meetings at the White House in 2001 weren't to help his oil company buddies make money, but to understand what the truth was about worldwide oil production.

The New York Times published a long article on Simmons's claims, which mostly corroborates Simmons' projections. Now I am left to wonder about the realities of oil supply. I assumed (before reading these articles) that projections by folks like Daniel Yergin were the most plausible. That is, we'll see a flattening of world wide production (which is about 85 million barrels a day) at perhaps 90-100 million barrels within the next 5-10 years, followed by a very gradual decline over the next 30-50 years. Given that worldwide demand will easily match that production, we might soon see prices rise to $200/ bbl, but we'll adjust. If instead there's a more rapid decline, with output dropping from 85 million barrels a day to say 50 million bbls a day in the next 10-15 years, the transition won't be so comfy.

I tend to be an optimist. If oil production remains close to today's volume, prices will continue to rise but living standards won't crumble. We'll bitch and moan, but we'll adapt (there's a lot of "slop" in the American energy system). The trends that we're beginning to see now - people shifting from SUVs to compacts, moving from the suburbs to the cities, using mass transit more, driving more slowly, etc - are all positive in the long run. Higher oil prices work - we're cutting our consumption and focusing on alternative energy production. If our weaning from cheap oil is gradual we'll end up with a healthy and economically vibrant future. If however, oil production falls precipitously, we're likely to see worldwide depression, and other, more drastic consequences. What's the slope of that oil production line? Am I too optimistic? What do you make of all of this? Is Simmons a Chicken Little? Or is it time to run out and get one of these - http://gas2.org/2008/05/13/run-your-car-on-wood-no-joke/?

Mooseketeers

This bull moose appeared outside my kitchen window last month, as I was brewing coffee. It was making its way along the shore of the Contoocook River, using the river as a travel corridor. I grabbed my camera and played wildlife paparazzi, snapping a bunch of close-up photos as it made its way toward downtown Peterborough.

I saw my first moose in New Hampshire about 20 years ago. I was driving home from a hiking trip in the White Mountains, and came upon a bunch of cars parked willy-nilly along the Kancamagus Highway. I slowed and looked over to see a mother moose and calf munching weeds in a roadside bog, doing their best to ignore the tourists snapping pictures and pointing "look, those are moose!" Yes they were. Two decades ago moose were just starting to make their reappearance in New Hampshire, and seeing one was a rarity. Since then I've seen many more, both on hikes in the White Mountains and increasingly, in and around Peterborough.

I saw this young moose a couple of years ago, over in Stoddard. There's a large forested area there, between Rte 9 and Rte 123, which is home to at least 10 to 12 moose. I've been tracking and photographing this particular herd for several years, and happened to get lucky with this photo. I've gotten in the habit of carrying the camera around my neck, powered up and zoomed in, because it's hard to get that deer or coyote to wait around while you get your camera out of your backpack. On this particular summer afternoon, in what must have been early August, I had stopped along a logging road to eat the raspberries that were ripening (I do love raspberries). There I was deep in the bushes, munching away, and not really paying attention as this young moose trotted up the trail. As I turned and caught sight of it, it stopped and tried to figure out what I was. I've read that moose have mediocre eyesight (how does one figure that out?). This one stood there for a couple of minutes, deciding if I was friend or foe. I was able to get a dozen photos before it finally turned and trotted off in the other direction.

Moose have been returning to New Hampshire for the past 20 years, making their way south from Canada and Maine, where they've bided their time for the past 150 years. They were abundant throughout most of the Northeast 200 years ago, but disappeared in the 19th century as a result of hunting and farming. The connection between hunting and moose disappearance is probably obvious. As for farming, as rocky and anemic as New England's soil is, most of New England was cleared for pasture 150 years ago. By the 1850s New England was only 20% forested. Moose are woodland animals, and the lack of forest led to a lack of moose. NH Fish & Game estimate that there were only a dozen or so moose left in the state by 1860. In the latter part of the 19th century the advent of railroads and good sense led New England's farmers to give up plowing rocks and move their farms to the Midwest. Since that time the forests and the moose have been coming back. Today New Hampshire is 85% forested, and there are thousands of moose living in the Granite State.

When hiking you may not see moose as often as you'll see moose sign, such as the browsed maple shown here. Moose use their lower incisors to scrape bark off young
maple trees. The name "moose" is adapted from the Algonquin word for "twig eater", and in addition to tasty bark moose also eat maple, willow and alder twigs and buds, leaving snapped and broken branches behind as evidence of their repast. There's not a lot of nourishment in bark and twigs (but you have to love that fiber), so moose eat a lot, up to 50 pounds of vegetation a day. Given the relationship between input and output, you're likely to see large piles of scat when in moose country, looking like this. It seems that early morning and later in the afternoon are the best times to see moose, although I've seen them in mid-day as well. I have yet to see one hanging out with a flying squirrel.

Honey they shrunk the dollar!

I can't bear to listen to the sound of our whining, hypocritical Congress. This week the Senate Judiciary Committee held "hearings" to investigate high oil prices (what do oil prices have to do with judicial issues?). The quotes from certain Senators posing as "concerned protectors of hard-working Americans" make me gag. Diane Feinstein, all innocence and outrage, accused oil company executives of "having no ethical compass about the price of gasoline.” Feinstein and her Congressional cohorts are the ones without compasses. They know the real reasons for high oil prices. And so do we:

1. Growth in world-wide demand for oil.
   
2. Stupid, stupid, stupid (did I mention stupid?) US energy policies, which have done nothing but encourage consumption.
3. Tightening oil supplies (there are fewer and smaller new oil fields coming online, and older fields in places like the North Sea and Mexico are running dry).
4. The weak dollar (if the dollar was as strong today as it was in 2001 the price of a gallon of gas today would be about $2.70)
   

I hesitate to give the impression that I think that high gas and oil prices are a problem, because I don't. Given Congress's lack of spine and Bush's belief that a legitimate energy policy consists of drilling in Alaska and begging the Saudis to pump more oil, we need high prices to force us to cut our consumption of petroleum. But one thing that we ignore when we complain that those OPEC meanies and oil company bullies are kicking sand in our faces, is how much of a role the diminished dollar has played in making oil prices appear higher.

Since 2001 the price that Europeans and Asians pay for oil has doubled, while for Americans the price has quadrupled. Similarly, since 2001 the price of gasoline in Europe has increased about 40%, while the price of gas here in the US has grown 110%. The reason for the difference has little to do with market dynamics, it's because the dollar has shrunk in value compared to other currencies. It's not just oil, the same thing is happening with other commodities, like gold (see chart below). In 2001 the Euro and the dollar were equal in value, whereas today the dollar will only buy you .6 Euros. If the dollar had remained as strong as the Euro, today we Americans would be paying $70-$80 for a barrel of oil, and (as mentioned above) about $2.70 for a gallon of gas.

The dollar's value is akin to our credit rating, and as far as the rest of the world is concerned, our credit's in the toilet. Since 2001 (remind me, who moved into the White House in 2001?) the dollar has lost half its buying power in world markets. This is because of the huge budget deficits we’ve run up to pay for Bush’s tax cuts and the wars in Iraq and Afghanistan. It's also a result of our ballooning trade imbalance which comes from importing far more than we export, and borrowing money to pay for all those overseas goodies (we are China’s biggest debtor). And the dollar has shriveled significantly from our mortgage and banking crisis, and the fact that the housing portion of the US economy has lost 25% of its value in the past two years.

Price of gallon of gasoline in Euros or Dollars	2001	2008	Change
Belgium	€ 3.75	€ 5.43	+45%
France	€ 3.75	€ 5.20	+39%
Germany	€ 3.77	€ 5.30	+41%
Italy	€ 3.72	€ 5.36	+44%
Netherlands	€ 4.17	€ 5.95	+43%
UK	€ 3.04	€ 4.33	+42%
US	$1.87	$3.94	+111%
Relative value of the Euro and Dollar	2001	2008	Change
Price of gold in Euros	€ 275.00	€ 550.00	+100%
Price of gold in dollars	$275.00	$900.00	+227%
Value of the Dollar in Euros	€ 1.05	€ 0.65	-38%
Price of bbl oil in dollars	$30.00	$130.00	+334%
Price of bbl oil in Euros	€ 30.00	€ 65.00	+115%

Congress wants us to believe that high gas prices are somebody else's fault, and so they hold hearings to pin the blame on greedy corporate execs and callous OPEC sheiks. They're hoping that we won't notice that because of our shriveling dollar, gas prices have risen twice as fast here as in Europe or Japan. So far we seem to be buying the ruse. The average citizen, and even the typical reporter, gives little thought to what it means to be living in a world economy. We assume that the dollar is rock-steady, and oil price increases will disappear in a flurry of committee hearings. Instead of applauding Congress for playing the blame game, we should be holding them (and the Bush Administration) accountable for their head-in-the-sand economic policies that have cut the purchasing power of the dollar in half, and for wishy-washy energy policies which have done nothing to cut US consumption of oil.

Blogger's choice awards

(A bit of a detour this week - into media favorites)

I like GoodReads, the web site that helps you (their blurb):

• see what your friends are reading.
• keep track of what you've read and what you'd like to read.
• get great book recommendations from people you know.

When Colleen (or maybe it was Marin) first sent the GoodReads link to me, I went crazy, entering in all of the books I've read over the past gazillion years. But once I had finished compiling my reading history, my contributions to GoodReads dwindled to a book every month or two. The problem is, GoodReads is only about books and books make up a small part of the media I (please give me another word, "consume" seems so banal - absorb? digest? ah well...) consume nowadays.

What I'd love to find is a GoodReads for all the other media - podcasts and movies, and radio shows and websites and magazines and (yes, even the boob tube) TV shows. So I thought I'd make a stab at it here. What follows (which I admit is an amateurish beginning without the database and Friends e-connections and fancy-shmancy user interface) is a list of a few of my favorite things. (Sing along..."Podcasts on roses and bright shiny movies, warm woolen web sites and books that are groovy, brown paper magazines wrapped up in string..." etc etc)

Some of my favorite podcasts:

• I love "Fresh Air", and I also hate it, depending on the day. When Terry Gross focuses her interviewing acumen on a topic of interest to me - politics, religion, science or economics - her show is terrific. She has a talent for crafting questions that draw people out, and that ask them things that I would ask if I were a clever interviewer. Her interviews with controversial characters like Tim Lahaye or Bill O'Reilly provide revealing insights into the way these folks think and act. On the other hand, when she plays the NPR version of Barbara Waters, dabbling in pop music or TV shows (topics in which I have zero interest), I feel that she's wasting her talent on trivial trash. Why is "Fresh Air" under the podcasts, you may ask? First off, I am seldom near a radio when it broadcasts, and secondly, in iTunes I can delete the crappy shows where Terry enthuses breathlessly about "Desperate Housewives" or "The Wire".
  

• The Cato Institute's podcasts are much more than just libertarian propaganda. Cato provides a forum for politicians, historians and economists of all stripes to present their views. They usually invite two or more renowned guests to present differing views of an issue. Listening to Cato podcasts gives me the feeling of being a fly on the wall of the halls of power.
  

• "On The Media" is a straight-forward and intelligent look at how the news is reported (not to mention that Brooke Gladstone, who I met when NHPR brought her to Concord, NH, is my secret crush). You might think that a weekly show that's all about making media would be insipid and navel-gazing, but I often learn more about the news from OTM than I do from the news.
  

In the interests of brevity, here's a quick list of some of my other favorites:

• Movies - "Brazil" (every minute is brilliant), "The Great Match" (I never thought I'd use the word "cinematography" when explaining why I loved a movie - Thanks, Murray!) and "A Clockwork Orange" (many of Kubrick's films, like "2001: A Space Odyssey", show their age, but this one is just as powerful as it was 25 years ago).
  

• Books (or rather authors) - John LeCarre (I wish the Cold War hadn't ended), William Gibson (sci-fi that's more than cowboys in space), John MacPhee, E. B. White and John Steinbeck
  

• Web sites - NYTIMES.COM (check out the Freakonomics and Dick Cavett blogs), forecast.weather.gov (mmmm, weather porn about northeasters "bombing out in the Gulf of Maine!"), thesaurus.com (when you need another word for "consume" and you need it now!)
  

• TV shows - "The Daily Show" (John Stewart doth protest too much when he says "we do humor, not news"), "The Colbert Report" (although Stephen can be too much to take, sometimes), Red Sox games, "Mystery" on PBS (Helen Mirren is my other secret crush, but why is so much of the rest of PBS programming nothing more than "self-help for yuppies"? Will someone please put Suze Orman out of my misery?)

• Radio Shows - "Wait Wait, Don't Tell Me" (but only when Paula Poundstone is on), "Morning Edition" (although I have to warn you that NPR will never keep you up to date on Amy Winehouse), "Lucky Dog Radio" (on iTunes Radio)
  

• Magazines - "Harpers" (if only Lewis Lapham didn't have to use the word "mammon" in every issue), "The Atlantic" (long articles that are actually worth the time it takes to read them), "Paste" (just for the CDs and DVDs)
  

Okay, your turn. What are some of your favorites, and why?

Pander bear

I got an email from Lisa yesterday, nudging me because I hadn't posted on Saturday morning (my usual schedule). It's true, I was a laggard, but I was working. Really.

This was the week of the gas pump pander, with Hillary Clinton staging her ridiculous idea of a gas-tax holiday from the back of a pickup at a North Carolina truck stop. Hillary's playing the slimiest of political ploys, and it appears to be working. She's proposing to suspend the paltry 18 cent a gallon federal gas tax from May Day to Labor Day, to "ease our pain at the pump". She wants us to believe she's doing us a favor, but she's really just helping us fall further and further behind the rest of the developed world. She's betting on Americans being myopic, and it appears from her recent gains in the polls in North Carolina and Indiana that she's making the right bet.

We Americans have gotten ourselves horribly addicted to gasoline, and the last thing we need is a politician to enable us. Over the past 25 years European and the Asian governments have deliberately raised oil & gas taxes about 20 times the measly 18 cents we pay, exacting this price to become nearly three times as energy efficient as we are. We did nothing but guzzle. Our faith-based energy policy rested on the belief that the world oil supply would grow forever. America played the grasshopper to Europe's ant. Three of the four best-selling vehicles in the United States last year were the Ford F-150, the Chevy Silverado and the Dodge Ram - all pickup trucks which get 15-17 MPG. Europe's economy is humming today, as is their currency. When Bush took office in 2001, the dollar was worth 1.15 Euros. Since then the dollar has steadily shriveled, it's now worth 0.65 Euros. What we have to show for 25 years of "head in the sand" energy policies are decrepit mass transit systems, suburban garages full of SUVs and pickup trucks, and trade deficits ballooning because of oil imports. Whose fault is this?

What Americans should be doing is accepting responsibility for our profligate ways, but we'd much rather look for scape goats. The oil companies are easy targets, after all they're making tanker loads of money from the worldwide demand for oil. Hillary's plan combines the suspension of the federal gas tax with a windfall profits tax on those big oil company meanies who forced us to buy all those SUVs and build all those suburbs (Exxon and Shell are probably behind the explosive economic growth in China, too). She knows her tax proposal is a gimmick that's unlikely to ever pass Congress, but what the hey, demagoguery sells. She accuses anyone who disagrees with her gas tax holiday plan of being on the side of the oil companies. Such b*llshit. She's the one proposing to pass our tax dollars over to the oil companies, using us as the middle men. Because the biggest benefactor of her gas tax holiday will be the oil companies.

If we're worried about the oil companies taking too much of our money, what do you think we should do - try to tax their profits or buy less gas? I did a quick calculation this week. A Ford Explorer (one of the most popular SUVs of the past 10 years) gets about 17 MPG, and has a 22.5 gallon gas tank. My 2002 Honda Civic gets 39 MPG and has an 11 gallon gas tank. It takes me $35 today to fill up my tank. It takes the Explorer driver about $80 to fill up her tank. We can both go about 400 miles on that tank of gas. Which one of us is inflating oil company profits?

This spring we're seeing headlines that show that high gas prices are starting to have a beneficial effect. Americans are buying smaller cars and driving less. As Americans buy less gas, oil companies take less of our money. If we cut our driving and gas consumption enough, gas prices might actually drop, but no matter, the important thing is that we'll cut our consumption of and expenditures for gasoline. On the other hand, if Hillary's tax holiday was to pass, this good behavior likely goes on holiday as well. The short-term, symbolic drop in gas prices would motivate Americans to hold off trading in the guzzler for a sipper, at least until the fall. Many of us would change our minds and decide to drive the family to Disneyland after all. Gas consumption would go up! Oil companies would smile, broadly. Even if they had dropped prices at the pump the full 18 cents when the tax was suspended (doubtful) they'd start to raise them again as demand soared over the summer. The oil companies (and their profit margins) will just LOVE Hillary's gas tax holiday. And where will we find ourselves (and gas prices) come Labor Day, when the gas tax will be reimposed? How happy will we be at that point?

The primary reasons that oil companies are making big profits in the US is because we've done nothing to cut our demand, and demand from the rest of the world is growing rapidly. America consumes half of all the world's gasoline supply. We're 1/20th of the world's population and we use 1/2 its gas! What did we think was going to happen, when the rest of the world started to catch up? Worldwide demand for automobiles and gasoline is growing exponentially as newly minted middle class consumers in China and India adopt a western lifestyle. Do any of us honestly believe that this is the oil companies' fault? We all know that we need to become more efficient, and conserve more. The thing is, we didn't mean we wanted to do it right now. Maybe next year, or next decade. We'll change our ways sometime in the not-too-distant future, as soon as we've paid off the Chevy Tahoe and taken that Las Vegas vacation. Hillary's doing us no favors, but you can't really blame her, she's just giving us what we want.