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Published: Saturday, 5/6/2006

Gas bag remedies

ALL of a sudden sticker shock at the gas pumps has become big political news. The combination of voter outrage and impending elections has sparked renewed interest in rising gasoline prices from the White House to Congress.

Suddenly Americans' struggle to fill up their tanks with gas that costs about 80 cents a gallon more that it did a year ago has prompted a political scramble for solutions.

The flurry of proposals, accompanied by proper indignation, make for good TV but that's about it. The real remedies for reining in high oil prices require long-term planning, commitment, and the political courage few are willing to invest.

That's why the problem of rising gas prices, propelled in part by spooked oil markets reacting to geopolitical crises in oil-producing states, is out of control.

Add emerging oil consumption in China and India to the balance of America's already bloated appetite and the demand for oil worldwide overwhelms supply.

Over the years there have been numerous suggestions to wean America from its "oil addiction" and dangerously high dependence on imported oil, but here we are, addicted and dependent.

Dire predictions are plentiful about what will happen if the United States does not substantially change course on its oil consumption, capacity, and lackluster conservation efforts.

And yet the country stumbles on with old habits until a new energy emergency occurs and there's a clamor do something quick. With approval ratings in the Dumpster, the President stepped forward immediately to address the problem of rising gas prices. But his recent price relief plan to suspend oil purchases for the Strategic Petroleum Reserve and authorize waivers of some clean-fuel rules has been likened to "treating cancer with aspirin."

The marginal moves to keep more oil on the open market and make it easier for refiners to deliver oil where it is most needed will have little impact if any on the big picture.

Gasoline prices will rise now and in the foreseeable future in the U.S. as long as there is a shortage of refineries, rampant speculation in the markets, unrelenting gasoline demand - and did we mention huge industry profits?

That same industry received billions in tax breaks under the energy legislation enacted last year and spearheaded by the former oilmen in the White House.

But all of a sudden there's talk of rolling back some of those tax breaks and encouraging energy companies to re-invest their "large cash flows" into alternative fuel sources and expanded capacity for oil refining.

All of a sudden politicians are calling for investigations into possible price gouging by oil companies and possible tax loopholes afforded them in the wake of windfall first-quarter profits and astronomical executive compensations.

All of a sudden the midterm elections make gasoline in excess of $3 a gallon a priority for Republicans and Democrats, because ignoring the problem could hurt their political prospects.

But the political backbone to give more than lip service to actual solutions like curbing gasoline consumption or demanding dramatically higher fuel efficiency standards from American auto-makers is missing.

So the country will stumble on with soaring gas prices and the resulting financial hardships until the next energy crisis hits and leaders jump to do something quickly.



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