Gas Panic!
Why high gas prices are good for America and the world
Matt Harrison

High gas prices are annoying, certainly topping many people's collection of the most frustrating aspects of modern life. In this natural frustration, many people are seduced by populist rhetoric about the need for price controls and other such interventionist nonsense. Before you also fall for this unfortunate trap, do yourself (and your country) a favor by recognizing the true effect and significance of high gas prices.

Point 1: High gas prices will repel us from oil development itself. Such a repulsion will dissolve the ties that now bind America to the affairs of the Middle East.

In your daily routine, you might be able to afford driving around with the same frequency when the price of gas is $3, $4, even $5/gal. But for every person, there is a point at which he/she would have to conserve by driving less. Some people would buy a Prius, some would walk places, some would take the bus places, and some would just drive less often. All of this, it is necessary to point out, has the effect of reducing the demand for gasoline.

Which is exactly what we want.

John Kerry thought so, when he frowned effeminately and stodgily derided our "dependence on oil." So did Mr. Bush, during his recent State of the Union headline fodder when he noticed that the nation was "addicted to oil."

Every kid who has taken D.A.R.E. knows that kicking an addition isn't easy. Neither is dealing with high gas prices. But everyone knows that addictions are kicked by wanting less of the product.

Believe it or not, during the Middle Eastern disputes of the 1950s, the Arabs and Israelies sought American mediation. They did so because they appreciated our neutral stance and lack of interests in the region. How things have changed. The 1970s, thanks significantly of the good intentions yet remarkably bad ideas of Jimmy Carter, we forged an uneasy but everlasting alliance between America and various Middle Eastern states. We did so for the benefit of securing the American economy against future oil market shocks. Our ties formed then, for our business interests, now complicate terribly our political interests.

In the case of high gas prices, the market can solve the problem for the politicians. Our resources are removed from the region and so with them the economic complications.

Point 2: High gas prices will encourage development of alternative fuels, making them more affordable (and more appealing) relative to traditional fuel.

Ethanol, the Great Green Hope for alternative energy zealots, isn't catching on because it's too expensive relative to gas. An easy solution? Make gas more expensive.

Despite the search for new oil fields, high prices are already getting oil companies to change course. Peter Robertson, vice chairman of Chevron, said, "[High] price is our friend here, because it has encouraged investment in new hydrocarbons and also the alternatives." The Economist, referring to the price increases, added, "Unless the world sees another open-engineered price collapse as it did in 1985 and 1998, GTL, tar sands, ethanol and other alternatives will be become more economic by the day."

In other words, either prices will fall or alternative fuels will become more appealing.

A great way to slow global warming is to make causing it (i.e. driving a car) cost more. The earth is protected best when pollutants are expensive, not when they are cheap.

It's also worth noting that the new converts to alternative fuel will create a market for more alternative fuel production and supply - which will, in turn, further drive down the prices of alternative fuels. (If you don't understand that, click here) In effect, the advantages of alternative spurred by high gas prices are actually self-perpetuating.

It's normal to dislike high gas prices. But we all must realize we'll never be putting anything else into our cars until we can afford to do so - or we can't afford not to.

Furthermore, despite what the government - or its paternalistic supporters - tells you, it doesn't know which alternative fuel is the best. Only the people do, and they will have to decide with their wallets and vehicles, not with their representatives and senators.

And until we figure out which alternative fuel is going to be the next big thing, it's absolutely futile to throw money at technologies that might be the automotive DIVX, Betamax, MiniDisc, or Waterworld.

Let the market do what it does best - figure out what people actually want to buy. And let high gas prices make those experiments a lot more appealing.

Point 3: High gas prices make the United States safer.

My first point was that high gas prices reducing demand for oil (read: Middle Eastern oil) will remove many of our obligations to the region, benefiting the US.

A conservative's objection to this point would be that terrorism is an intractable religious conflict that would always translate into violence, no matter the economic situation.

Perhaps. But even so, a release of the main economic interest in the region would make fighting the war appreciably easier.

The terrorists, in a world disinterested in gasoline, can't castrate the world economy by blowing up a refinery.

Think about it. Which does the American corporate executive fear more, a Muslim boycott of his goods, where a poverty-stricken, backward market declines to buy products they certainly weren't sweeping up anyway, or the destruction of 30% of the world's oil supply?

We want to reduce the risk that the terrorists pose to us. A fine idea would start by robbing them of the ability to freeze our entire economy, achieved through a lack of demand for the expensive petrol with which they hold the power switch to our economy.

High gas prices help to end our politically-crippling dependence on oil, encourage the development of alternative fuels that will improve the environment, and remove a de facto bargaining tool for terrorists around the world.

So next time you curse Allah after you pay to fill up your tank, remember this. You don't really want what Osama wants to give you, do you?

TrackBack URI for this entry

Comments (1)

Subscribe to this comment's feed

...
written by andrew, January 19, 2008

Just did some quick poking around on the web. Did you know that we only get 10-20% of our oil from the Middle East? That doesn't seem like an economy crippling number to me, but what do I know.

report abuse

vote down

vote up

Votes: +0