Re: Oil prices
Your Excellencies, Eminences, Graces and Greeds,
As far as I can tell, there isn't one of you who hasn't been visited in the past few weeks by Bill Richardson, our secretary of energy, demanding, no, imploring, no, begging on bended knee for a return to cheap gas.
But this American citizen hopes you jack the price up as high as the market will bear. In the long run, that's going to be better for everyone. And I do mean everyone -- not just me in my 1999 Toyota Camry and other compact-car drivers like me, but those SUV cowboys crowding the highway, the retirees in their yacht-sized RVs and the long-distance truckers fighting them for rights to the fast lane.
Americans, as you know, believe devoutly in the free market -- for other people. Whether it's wheat in Bangladesh or prescription drugs for the poor at home, we have no time for people who complain just because the necessities of life are priced beyond their reach. We believe the forces of supply and demand are the only efficient way to value a product or service. Intervention to keep prices artificially high or low just mucks things up, leading to shortages, inflation and misallocation of resources.
Well, no one's repealed those laws of supply and demand when it comes to petroleum products. They've been cheap since the end of the Gulf War. Now we have a relatively small run-up. In Oregon, the average cost of a gallon of gas is inching toward $2. Nationwide, the price is up about 25 percent, adjusted for inflation, from last year. Until then, the real cost of gas was nearly a third less than it was in the 1950s, when a gallon cost nearly $2 in today's terms, and lower than prices were before the oil shock of 1974.
The Energy Department predicts the price will fall again by 2001. That's the way markets work. If we have the fortitude to insist that Third World peasants pay more for U.S. food, why should we have the right to insist on getting gasoline at below-market prices?
Even if the price stays high, that's not necessarily a bad thing. Cheap gas has made us far too reliant on oil and the automobile. The energy crisis of the 1970s forced America to research solar and other renewable technologies, move forward with industrial energy conservation, and make rapid strides in mass transit and energy-efficient vehicles. Then in 1981, the price tumbled and the progress stopped.
Remember when every auto commercial on TV gave the EPA mileage rating? Now the roads are full of Ford Expeditions that engulf their solitary, sedentary commuters.
Ministers, I don't need to tell you why the price of gasoline has been lower than the price of Evian for so long. It's not economics; it's politics. Poor Jimmy Carter, with his cardigan and his conservation program, stands today as an object lesson of what happens to politicians who don't keep cheap gas flowing. We even fought a war in 1991 to make sure we didn't lose control of the Middle East's oil reserves. I, for one, don't want to see any more killing over the price of crude.
And, don't forget, oil use and production are environmentally treacherous. Every barrel we pump, every gallon we burn, has lasting impacts on the level of greenhouse gases, the quality of our air, the purity of our ground water and the livability of our planet. Do you really think cheap gas encourages careful environmental planning?
There's only so much oil on the planet. One day -- perhaps within my lifetime and yours -- it will all be gone. That day will come sooner, and will be more of a shock to our society and our economy, if we keep the price of oil too low.
That's true even though there will be genuine suffering in the short term if the price stays high. I'm not rich, but I'll make some changes. Paying more for gas will mean I use the bus more and think twice before taking vacations east of the Cascades. I may walk or take mass transit to work, or even carpool now and then. Some poor people may find themselves priced out of car trips to the store or their job.
But we can find substitutes for our energy-wasting ways. Carpools, buses and walking; fewer superstores and shopping malls; energy-efficient homes and careful city planning. We can count on the market to produce solutions that will enable even people of modest means to live without artificially low fuel prices. That will come after a period of dislocation, anger and even fear. We simply cannot imagine life without cheap energy.
That short-term suffering is only a pale shadow of the pain to come if we continue to burn energy at a rate we can't sustain.
Perhaps by coincidence, news of the upcoming oil meeting ran last week alongside articles about a report by the office of White House drug czar Barry McCaffrey. Street-drug prices are at their lowest level since 1981, the report says. Drug-related deaths are at an all-time high.
Our economy is resilient and productive, but it needs a little tough love from OPEC, before our oil jonesing cripples us.
As oil prices rise, the screaming begins. I may even start whimpering myself as spring turns to summer. But do me a favor, ministers. No matter how I beg you, don't shoot me up again.
Garrett Epps used to drive a Corolla, which got even better mileage but had no air bag. He is associate professor of law at the University of Oregon. This year, he's visiting at Boston College Law School. He can be reached at 885 Centre St., Newton, MA 02149.
Copyright 2000 Oregon Live
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