The Oil Addiction
Well, it's finally happened. Again.
Oil prices have caught up with us. Gone are the heady days during the 1980s and 1990s when we could hop in our convertibles - or work trucks - and wince slightly at the price of gas only to take off on a 300-mile road trip.
No, today gas prices in Massachusetts are nearing $4 a gallon, and everyone it seems has noticed. Some gas stations are reporting double digit percent drops in sales, and roadways during the Memorial Day weekend were oddly - and thankfully for those brave enough to shell out for a full tank - free of traffic.
And of course, high oil prices have also meant sharp increases in heating bills for homeowners and landlords. And the way the trend is going, it's only going to get worse as we approach the winter.
But there is a silver lining in all of this: we are finally being broken of our addiction to oil.
Good Times
Life has been pretty easy for us Americans since the oil embargo during Jimmy Carter's stay in the White House in the 1970s. The lessons we learned during that scare, including the importance of investing in alternative energy, were forgotten as quickly as the price of oil dropped.
And now we're being forced to relearn those lessons. It's uncomfortable, and a little scary for some business owners that are directly impacted by fuel prices, but it's a good thing - for our economy and our planet.
In addition to coming to grips with our oil addiction - the first step is, after all, admitting you have a problem - it seems that we as a nation have also come to grips with our impact on the environment. Global warming is a fact. And we have to be smarter about what we put into the earth's atmosphere. That means producing less carbon, either by driving more fuel-efficient vehicles or finding innovative ways within industry to produce goods without pumping toxins into the atmosphere.
Some might contend that a current bill in the U.S. Congress that would establish a federal cap-and-trade system for carbon emissions will pave the way to a cleaner atmosphere, but we have serious doubts. A cap-and-trade system would force industrial and utility producers to reduce carbon emissions over time, and would also require permitting based on carbon production. Those permits could then be traded on the open market, allowing companies with fewer emissions to sell their credits to companies that need them.
Massachusetts, thanks to Gov. Deval Patick, already signed onto the Regional Greenhouse Gas Initiative in 2007. That compact, among seven Mid-Atlantic states, calls for a similar cap-and-trade program.
While in theory the cap-and-trade idea may work, we worry about the plan in practice. The permits would cost industry a lot, and would add that money to government coffers. The idea, of course, is that the government would then take the money from the permits and help invest in clean energy technology, thereby saving the planet, and hopefully, saving the consumer some money. But it isn't necessary for the government to be involved. The government should stay out of the matter and let the market actually drive the technology advancements necessary to decrease pollution and its industry's impact on the environment.
In truth, the market is already responding to the increase in oil prices. As mentioned above, demand for gasoline is dropping. And General Motors has responded to a drop in demand for large gas-guzzlers by cutting production of SUVs and beefing up investment in fuel efficient and electric cars.
High oil prices sure aren't fun, but they may save us all in the long run. The government should stay out of the matter and let the market drive technology to cleaner solutions.
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