By By Tray Smith
As the summer driving season nears, gas prices are again starting to rise. And as gas prices rise, politicians are filling the airwaves with talk of "renewable energy" and "energy independence." Unfortunately, the looming Presidential caucus in Iowa and the political clout of U.S. automakers and farmers is having more of an impact on our current energy debate than economic reality and scientific fact.
No one likes paying higher prices at the pump. Yet, the reason we do not depend on corn-based ethanol or hydrogen to fuel our transportation is because as expensive as gasoline is, it is still cheaper than any other type of energy. Forms of renewable energy that can be manufactured domestically have already been discovered, but the prohibitive cost of those options make them less of an "alternative" source of energy and more of a "potential" fuel source. Substances such as ethanol cannot be transported through the pipelines currently used to mobilize much of our gasoline supply, and much of our energy infrastructure (gas stations, refineries, etc.) is set up for the sole purpose of distributing gasoline. Much research remains to be done on finding an economically viable petroleum replacement, if that is even possible.
That is why the single most effective step we can take towards minimizing the economic and environmental impact of higher fuel prices and increased fuel consumption, respectively, is making a gallon of gasoline more expensive and more efficient. The combined effect of that policy will be a lower demand for gasoline, which requires a two-part solution: raising the gasoline tax so that people will conserve more resources and raising fuel economy standards so that vehicles will operate more efficiently.
Economics dictates that if you raise the price of something, the demand for it will fall. As oil prices fluctuate over the year, so does the pressure on consumers to conserve gas, automakers to build more efficient cars and oil companies to sell cheaper energy. By increasing the gas tax dramatically, the federal government can place pressure on those parties all year around. In other words, the Pirus will be just as attractive in the winter as it currently is in the summer.
It makes little sense that with our current fiscal problems, infrastructure needs and the coming financial imbalance in the Highway Trust Fund, the government spends billions of dollars each year on energy independence programs without raising the gas tax. The increased funds from a higher gas tax could go to repair infrastructure needs (which would reduce traffic and thus oil consumption), preserve the solvency of the highway trust fund and fund research into economical sources of renewable energy while actively reducing the demand for gasoline.
With a high gas tax in place, the demand for fuel efficient vehicles will rise and the car companies will have to respond. Yet, over the past several years, our car manufactures have failed to respond to higher gas prices and our average fuel efficiency has actually decreased. In order to ensure that American consumers have the opportunity to buy fuel efficient cars, the government should increase the CAF