don’t blame the oil companies

Rising gas prices, global warming, the War in Iraq … it’s a popular sport these days blaming oil companies for all our ills. While the energy industry is by no means squeaky clean (see: Enron), it is both unfair and fruitless to blame corporations for doing what they were designed to do: make money. Gas prices aren’t controlled directly by Shell and ConocoPhillips, but when they do rise, those companies are naturally going to make record profits because, well, we keep buying more gas.

A recent Reuters article states:

Big oil companies did not conspire to raise U.S. gasoline prices last summer, as it was high crude oil costs and supply problems that caused the spike in pump prices, government investigators said on Thursday.

The Federal Trade Commission said that about 75 percent of the rise in gasoline prices was due to a seasonal increase in summer driving, higher oil costs and more expensive ethanol that was blended into gasoline.

The other 25 percent of the price increase stemmed from lower gasoline production as refiners moved to using ethanol as the main clean-burning fuel additive and lingering damage from hurricanes Katrina and Rita that reduced refining capacity.

The truth is, gas prices are going to keep going up in both the near and far future. The long-term trends require it. It’s not simply that supply in the easiest to develop oil fields is reaching its limits. Demand is increasing everywhere too, spurred by the rapidly rising economies of China and India.

Even if there was a way to ensure a future of cheap gas, it would also ensure disaster for all life on this planet if we keep pumping carbon in the atmosphere at the rate we are today.

But again, I don’t blame the oil companies for doing what they were designed to do. That’s capitalism.

The real problem is a failure of regulation. While capitalism is a marvelous engine for moving societies to ever greater prosperity and growth, it is the job of our elected leaders and government agencies to step in where the market fails. They must take responsibility for the long-term quality of life issues and environmental consequences that are not considered in quarterly profit reports.

They are not doing their jobs.

According to the Washington Post, “The FTA has proposed spending about $1.4 billion on new transit projects next fiscal year, compared with $42 billion that states will receive for highway maintenance and construction”.

Sure, more people drive than ride mass transit, but how much of that is out of necessity instead of desire? If we spent more on transit, building new infrastructure and improving what we have, then more people would use it, especially with gas becoming ever more expensive. But if we underfund transit, people will be forced to drive, so the FTA can say no one is using transit, so they can … underfund it even more!

For a local example, the light rail tracks around the historic Union Station in Oklahoma City are being threatened by construction of a $360 million, ten lane expansion of I-40.

What about those places where population density is not high enough to support transit? Well, Congress hasn’t increased the CAFE standards that mandate auto fuel efficiency for 17 years.

Different energy bills passed in the Senate and House include some improvements, but it’s yet to be seen what will make it out of committee for the final bill. We need to put pressure on our government, both in Washington and locally, to do much more. If we don’t plan and advocate for a better future, then it is our fault too.

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