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Strategic Petroleum Reserve: Bad gas

Gas prices President Obama can't seem to get a break. The unemployment rate is down (from 9.8% in November to 8.9% in February), which is great news for the economic recovery. But now the cost of oil has skyrocketed, resulting in astronomical gas prices in the neighborhood of $4 per gallon in Los Angeles.

Just because gasoline prices are up, says our editorial board, doesn't mean we ought to dip into our Strategic Petroleum Reserve. In Tuesday's Opinion pages, they argue:

The reserve was created in response to the 1973 Arab oil embargo, as a hedge against serious disruptions in the oil market. In recent years, it has been tapped in the wake of hurricanes that damaged U.S. production, such as Gustav and Ike in 2008 and Katrina in 2005. What's affecting the market now is a sort of man-made hurricane: a rebellion in Libya that has cut off a key source of European oil. Yet it's a mistake to think that this is the only reason prices are rising. […]That's why it's critical for Americans to focus on efficiency and alternative energy sources.

Michael J. Graetz, a professor of law at Columbia Law School and the author of the forthcoming "The End of Energy: The Unmaking of America's Environment, Security, and Independence" would agree. In Monday’s pages, he tapped into the U.S.' costly oil addiction.

Our domestic energy policies have failed us. Although we have succeeded in eliminating oil from electricity production (reducing oil-based electricity generation from 17% in 1973 to less than 1% today), this has come at the cost of substantially increasing our reliance on dirty coal-fired electricity, boosting our carbon emissions considerably.

Likewise, automobile fuel efficiency standards have reduced somewhat U.S. oil consumption, but in an unnecessarily costly manner, and they do nothing to reduce the miles we drive. Economists have estimated that a gasoline tax of just 25 cents a gallon would have saved as much oil as these fuel efficiency standards at one-third the cost to the economy. […]

Decades after the Arab oil embargo, we accept instability and even war in the Middle East as inevitable. We take it for granted that we will pay the costs in lives and treasure. […]

The president recently described Libya's oppression of popular unrest as unacceptable. It is. But so is our longstanding failure to address our inadequate domestic policies concerning oil.

RELATED:

Energy: Jimmy Carter, a president for our time

Gasoline prices: Round up the usual suspects!

Sen. Dianne Feinstein: Robbing California of energy

California's renewable energy push: It's time for a state law

Dirtying the Clean Air Act

-- Alexandra Le Tellier

Photo: A gas station attendant raises gas prices on a sign at a station in the Hollywood. Credit: Nick Ut / Associated Press

 

Comments () | Archives (3)

The comments to this entry are closed.

budgetanalyst

The government should sell off some of the SPR and take advantage of the current prices to make a profit for the taxpayers. This also would drive prices for consumers down slightly. Then refill the reserve by purchasing biodiesel. This would help domestic production of alternative fuels. This would help the U.S. become less dependent on imports of foreign petroleum. This is directly related to the purpose of the SPR.

xexon

The bright side of this is it's going to make more people buy electric cars.

Can you imagine waking up in LA someday and seeing the sun rise without a brown haze?

We wouldn't be in this predictament if we had listened to ourselves years ago when electric vehicles first started coming out. We wouldn't have that mess in the Gulf of Mexico either. Or wars in distant lands that contain oil.

Time to leave fossil fuels in the ground where they BELONG.


x

Steven Verona

Wake up America! What we should be asking about gas prices.

If you have been watching the news, especially financial news, you have no doubt been hearing some experts argue that oil should not be this high and the current prices are all driven by speculation. A few minutes later you will hear a different expert claiming supply and demand issues have driven the price increase. The real question that nobody seems to be asking is: “Who cares why oil and gas prices are moving up, what can be done about it?!”

At the end of the day, who cares WHY we will be paying $5 per gallon for gas? Will it make you feel better when you lay out your hard earned cash to know that the price is artificially high due to speculation or politics? Or would you feel relieved to know that it’s true supply and demand that sucks your wallet dry?

Its time to start asking what can be done to control the high prices! Here is one suggestion: The government can regulate the price of gas in a similar fashion to utilities such as electricity and water. For instance, the price can be fixed at $5 per gallon when “real prices” would have been $3 per gallon. The government will effectively collect a $2 tax that can be used to fund development of alternative energy and be held as a reserve to offset expenses when the “real price” rises above the $5 level. Those of you who know that I am the CEO of MyGallons.com (providers of the fixed price fuel savings program for consumers wanting to lock-in current prices) are probably surprised to read this suggestion since it would effectively end the need for our service. I developed MyGallons to help people protect themselves from rising gas prices, but nothing would make me happier than to see the day when there is no longer a need for our service. Ideally, MyGallons would fade away as we end our dependency on fossil fuels. I am perfectly happy to close the doors if effective price controls were put in place by our government.

It’s time for a real change, not just talk. Ask your Senators, Congressmen or President Obama to contact me at [email protected] so I can show them how to lead our nation with an effective energy policy to insure our national security and economic prosperity.

Steven Verona
CEO
MyGallons.com


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The Opinion L.A. blog is the work of Los Angeles Times Editorial Board membersNicholas Goldberg, Robert Greene, Carla Hall, Jon Healey, Sandra Hernandez, Karin Klein, Michael McGough, Jim Newton and Dan Turner. Columnists Patt Morrison and Doyle McManus also write for the blog, as do Letters editor Paul Thornton, copy chief Paul Whitefield and senior web producer Alexandra Le Tellier.



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