Back to the 1970s at the fuel pump!

In a previous post I stated that history was repeating itself in the form of a debt driven economic crisis; the 1986 S&L debacle becomes the subprime mortgage fiasco of today.

We return to the past once again, 1972 this time, to relive that well-marketed, short-term supply problem that drove prices at the gas/diesel pump sky high, this time in the form of developing world economic demand straining the producers ability to supply enough fuel.

The oil and gas industry once again states that the solution is to let them drill for crude oil wherever and whenever they want.

That answer is as wrong this time as it was the last time. What brought the price of hydrocarbon based fuels down, by 1985, was conservation. The problem rears its ugly head again, because after the price of a gallon of gas/diesel went way down, due to sub $10 per barrel crude oil, all the conservation measures were quickly thrown away; replaced by pseudo-conservation methodologies.

Enter the Corporate Average Fuel Economy (CAFE) standards that would hold the line on fuel consumption without price controls (that had failed earlier in the crisis).

The first problem that arose was the cheap price of fuel; concerned citizens subdued themselves when they paid less at the pump. Those still concerned about overt consumption were labeled tree-huggers, whiners, nut-cases, etc…

The second problem with CAFE was the light truck exemption, deemed necessary for the folks who needed a truck on the job. Except that CAFE was met by eliminating large family sedans and station wagons, that were replaced by Sport Utility Vehicles (SUVs) and mini vans; family vehicles covered by the light truck exemption (allows these new types of vehicles to remain beyond the reach of CAFE).

Those of us who thought the price of gas/diesel should remain higher, by means of increased state and federal taxes on consumption thereof, were scoffed at generally. The tax revenue generated could have been used to operate, update and maintain state and federal road and ground transport infrastructure that was being worn out, by heavy usage, at a much faster rate than it was being serviced.

Well, we’re at it again! Supplies seem to be meeting demand; no station closures or waiting lines yet. Still, the price per gallon of fuel is exceeding $4 at the pump; excuses roll out as profits roll in to oil and gas industry coffers.

Once again the hydrocarbon providing companies are demanding that they be able to go wherever they want and to do as they please, without pesky taxes or regulatory oversight.

Of course, there are those of us saying (after, “I told you!”) that conservation and alternatives need be applied first. Then, maybe open some access to previously protected places to the hydrocarbon producers: taxes and regulatory environment fully operational at every site and company involved in petrochemical associated industries.