Don’t worry, Steve Hargreaves knows how to save you at the pump

In this overly simplistic article on CNN.com, he offers 6 ways to lower gas prices based on his assumption that all you have to do is increase supply and cut demand. Easy enough, as long as you like to make a lot of assumptions based in ignorance. He may stumble upon a few good ideas along the way.

His first method may be widely supported by environmental economists supporting sustainable growth, although technically, this doesn’t lower the price, does it, Steve?

Pass a Carbon Tax

Great idea! Lower demand for a finite resource, allowing for more sustainable growth and less dependence on an energy source that is mostly imported. But wait, that is not what Steve Hargreaves has to say.

Now this might not bring prices down at the pump. But it would most likely reduce demand, thus lowering wholesale prices and the profits currently reaped by oil companies and their shareholders.

Now I get it. Steve Hargreaves does not really want to lower gas prices, he just hates the fact that his scapegoat oil companies are reaping profits. And not only are the companies making money, but their greedy shareholders, too! Does Steve not realize that the shareholders are the owners of the companies, and that oil companies are publicly traded? If all you really want to do is take a cut of their profits, you could maybe….buy some stock? If the profit is not distributed to shareholders, it is reinvested in the operations of the corporation which would help his other suggestions come to fruition, Require Oil Companies to Make More Gas and Drill More Oil which are terribly simplistic as well. Also, can you really blame the companies for the price set by a global commodity exchange? Apparently this CNNMoney.com staff writer can.

Moving on, though, to suggestion number 2.

Increase Efficiency

Good suggestion. Making the US auto fleet more efficient over the long-term is a good way to decrease demand. Naturally, we must then go on to something like “Promote Conservation,” right? Surprisingly, no. Conservation is only mentioned at the end in a sentence that doesn’t address conservation directly. One could say an easy way to decrease demand for a good would be to simply use less of it. That is not just for gasoline, but for all petroleum and energy. Walking instead of driving, trying to work closer to home, using public transportation and turning the thermostat down are all things that could be promoted in order to help reduce demand. Unfortunately, nothing like that is addressed in this article, as if any lifestyle change is unacceptable, as unacceptable as those evil oil companies making their dirty profits.

And on to the 3rd suggestion.

Push Alternatives

Two good suggestions in a row. He still doesn’t address how we should probably be trying to use less energy in general, but ethanol either reduces demand for gasoline by acting as a substitute or increases energy supply, depending on the market, gasoline or energy, we look at.

Require oil companies to make more gas

I’m not exactly sure what Steve Hargreaves is suggesting here.

With record profits at Exxon Mobil, Chevron, ConocoPhillips, BP and other oil companies, it’s no wonder a lot of Americans think they are getting fleeced by Big Oil.

Ah, yes. We should just tell the oil companies to pump more petroleum out of the ground and refine more, despite the fact that we may be at peak oil according to some people like Matthew Simmons, chairman of a private investment bank, and many believe we are very close, with a rapid decline in Mexico’s Cantarell Field. Also, he completely ignores that the refinery capacity isn’t there to simply “produce more gasoline,” since a new one hasn’t been built in 25 years and many are in poor condition. Ignoring the feasibility of his suggestion, is increasing gasoline consumption a smart idea? Anthropogenic climate change is a worrisome topic as is our dependence on energy from abroad. I liked it more when his suggestions included decreased consumption, but I guess we can’t change our way of life in any way or let those big bad oil companies get away with what they are doing.

Build a Gasoline Reserve

In addition, Dugan said establishing a strategic gasoline reserve, similar to the government’s 700-million-barrel Strategic Petroleum Reserve, would go a a long way in alleviating the big jumps in gas prices whenever a refinery goes down in California or a hurricane hits the Gulf Coast.

Another good idea that Steve Hargreaves stumbled upon. But, I thought the name of the article was “6 ways to lower gas prices”, not “1 way to raise gas prices, 4 ways to lower gas prices, 1 way to end gas price fluctuations, and OIL COMPANIES ARE BIG TIME CONSPIRACY JERKS.” While stabilizing the price of gasoline will help prevent short-term shocks, it will not help alleviate the current burden on consumers, unless you perceive the current price increase as a random fluctuation.

Drill More Oil

Great idea! Except for that whole peak oil thing that is going to prevent that much growth in oil production. You could open up ANWR, the tar sands, the oil shale, deep sea drilling, but that will not be able to offset the decline in production for most countries in the world, the rest of the US fields and a possible decline in production from oil giant Saudi Arabia. This article explains in detail a good amount of evidence suggesting Saudi oil production has peaked. So, as for drilling for more oil, it’s a good sounding, ignorant, simplistic suggestion by Steve Hargreaves.

The fact that conservation wasn’t one of the six ways to lower gas prices is a joke. All the blame on oil companies and asking to just “produce more” will not end our dependence on oil, a finite resource that is running out quickly, which is the true problem. Hopefully readers of this blog realize that they can actually do something proactive in order to decrease the burden of higher gas prices, instead of making ignorant suggestions as to how to lower them and resorting to scapegoating. If you don’t want to pay so much for fuel, the easiest way not to is to not buy so much.

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7 Responses

  1. I had a brief dialogue with him via email earlier, bringing up electric only transportation. I’m waiting for Tesla’s White Star, honestly, and already have a true muscle car that I can’t legally convert to E-85 due to EPA regs – but I digress. He said electric cars weren’t out there yet. I showed him he was wrong, then he backpedalled saying he hasn’t DRIVEN one yet. SOOO, our media creates the news rather than reports it – and if you want to be reported rather than discovered, you have to roll out the red carpet for individual reporters to personally get their tracks greased by sampling your idea before they allow it in their pages.
    On a larger note, large establishments like the media, the political big 2, and the auto big, uh, three or almost three are all suffering from the same thing: they are foundering. Something new will come and make them all go away.

  2. You seem very conflicted. Stick to efficient ways. Drastic life changes (other than market driven ones, such as buying a fuel efficient car if it is cost effective) are usually seudo religious copouts. Be realistic your suggestions would only fare well at a Sierra Club meeting, grow a tree at all costs!!! But then you are somewhat reasonable about the oil company scapegoat contradiction.

  3. It’s too bad geology and biology stand in the way of modest efficiency gains from being a solution.

    In fact, if you are to just preach an increase in efficiency without behavioral or structural changes, you could very well end up wtih even more consumption, and set yourself up for a bigger crash.

    http://en.wikipedia.org/wiki/Jevons_paradox

    According to Jevon’s Paradox, when you increase the efficiency of a resource being used, the total consumption of the resource increases.

    For example, as we got more efficient at getting oil out of the ground and delivered, fuel prices dropped as a result, spurring development that was more and more energy dependent, greatly increasing our consumption to levels we see today.

    If were to just increase fuel efficiency, people would be just as enabled to be petroleum-dependent. When the geologic reality of declining resource supply sets in, we will be stuck with an unsustainable infrastructure and lifestyle. IMO, it is best to start making the transition before we have this crash. Simply enabling the same behavior to continue only buys a little bit of time.

  4. Does anyone know Steve’s email address? I would like to send him a note on a real solution. Not a pie in the sky solution, but one that can be put into action today and it might be interesting for him to write an article about it.

  5. Why not send it to us, instead? ;-)

  6. Who are “these people ” that want a gas tax . are they in the real world? we the american people are broke.
    If ‘these people” have money to give away just let them give it to the government . I have been in the car business all my life the gas prices is what caused the problem that we have now . when gas was 1 to 1.50 a gallon the economy was rocking when it got to 4 dollars it folded .. so please tell me who in there right mind wants a gas tax. I lost everything i have ever had the past few months and these people want to increase the gas tax.
    Get a life and leave the working american families alone. billy knight

  7. Thanks for the comment. Certainly, we realize that high energy prices are a burden, however it is also fair to say that the economic collapse was more a product of bad loans than of gas prices.

    Something that I think most people overlook is that a tax by its very nature is paid both by gas consumers and by the gas producers–oil extractors and refiners. Plus if we just enjoy cheap gas prices without consideration for the future, it will be a lot harder on us in the future. Whereas if we see this as a one time gift, and start making preparations for cheap wind, solar and nuclear energy, it will reduce the chances of seeing a similar crunch like we did in the Persian Gulf Crisis and during the recent $4+ gasoline crisis.

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