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Raymond J. Learsy Headshot

Breaking Oil's Price, Curtailing Gas Consumption, Regaining Our Self-Respect

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Whenever I write about the manipulation of oil prices and the need to bring the oil industry and their allies to heel, my musings elicit the riposte that high prices are part of the solution. High prices for oil bring higher gasoline prices reducing consumption, spurring the search for alternative fuels and energy sources, refocusing attention on mass transportation, hybrid vehicles, and on.

And these arguments are correct. In the normal course of events this would be the markets' programmed yet time freighted reaction to higher prices for oil, gasoline, heating oil, diesel.

I would like to argue here these long range, time consuming and cost intensive solutions are no longer viable in the immediate given the time they would take to be realized and given the existential risks to our civilization.

Our present rate of consumption of crude oil and at the enormous prices we are paying is confronting us with two core dangers fraught with immediate risk.

First, we are skating at the edge of environmental disaster. Global warming is an incipient and fast gaining catastrophe confronting our ability continue life on this planet as we know it. The need to restrain fossil fuel consumption and greenhouse gas emissions is becoming more urgent with each passing day.

Second, given the events we are witnessing every day it becomes increasingly urgent to cut down the oxygen fueling these social and political pathologies and the avarice of the oil industry. By that I mean the flood of billions filling the coffers of nations, corporations, institutions and sects permitting them to finance and act with impunity. These billions are putting our national governance, our national security and much of the world at risk.

We are confronted with a compelling paradox. How do we bring about a significant reduction in the consumption of fossil fuels and at once bring down the price of oil and the massive transfer of wealth inherent in the current oil price structure?

We need a plan and an immediate response. In my book " Over a Barrel: Breaking The Middle East Oil Cartel" I put forward a proposal for a voucher based gasoline distribution plan that would permit the fair and equitable distribution of mandated available gasoline.

Here's the plan. The Department of Energy would establish a maximum quantity of gasoline that could be consumed in the nation during any given quarter. Every car owner would get a monthly or quarterly gas allocation based on that ceiling amount, equally divided. These, let's call them "Gas Purchase Permits" (GPP's)'s would come in the form magnetic debit cards giving each car owner the same allocation of gas. GPP units could then either be used or freely traded in whole or in part. Driver's whose allotted amount of gas didn't meet their needs or wanted more for whatever reason, could buy part or all of someone else's allotted amount of gas through on line bulletin boards, gas station markets, or personal transaction. The key is that the GPP plan employs market incentives to allow heavier gasoline consumers to get what they need without increasing overall consumption of gasoline.

Not very different than the administration's cap-and-trade Clear Skies initiative, which allows less polluting companies to sell emissions credits to heavier polluters. In this instance it would be national in scope and involve all Americans. The program would be fair to all and put all Americans on the same footing and level of responsibility.
It would contrast strikingly with an across the board tax on gasoline, espoused by some, which would pose an even greater burden on disadvantaged Americans already being devastated by the sudden and inexorable rise in the price of gasoline and heating oil ( see "Headline: Oils Steady March to $80 Fails to Shock" 7.18.06). Limited allowances could be embedded in the program for those required to drive long distances because of geographic location or employment where no mass transportation is available. These are issues that can be sorted out, but they cannot and must not prevent us from acting and taking the first important and urgent steps!

Such a plan would do much to help crush the price of oil and would probably make gasoline cheaper than it is today for holders of first distribution GPP permits. It would also drive down the sale of SUV's and less gas efficient cars almost overnight, keying our focus on hybrids.

It would refocus our priorities on mass transportation and redouble the search for renewable and alternative energy sources. It would have an immediate and forceful effect on reducing fossil fuel emissions and the consequent salutary impact on greenhouse gases.

Importantly, it would give us a very forceful policy tool when the nation is threatened by rogue states such as Venezuela to cut off oil supply. We, as a nation would then have a national policy in place giving us the capability to counter such threats by making it clear that we have the tools and ability to cut back oil consumption, and mean it.

A demand control measure such as this need not be draconian. Reducing national gasoline usage by a small percentage could readily be the equivalent to all the oil we now buy from the Middle East.

Given a clear understanding of the gravity of the issues at hand Americans would rally around this initiative as they did in World War II. Positive action now would go far to securing the nation's and our children's future. It could turn us from being simply a blessed generation to the defining act of becoming a great generation. But it needs a bully pulpit. And as I have written before, what a transforming opportunity for our former oilman president to seize the day and redefine his presidency and lead the nation out of the wilderness on this issue at very least.

Forceful action on this program would raise us overnight from being groveling supplicants before the oil industry and its adherents, with its ominous and metastasized players such asVenezuela, Iran, and OPEC. It would permit us to deal with them once again as a nation standing tall. And while we are all under terrorist threat and having lost thousands to that threat, with American servicemen and women giving their lives most every day, who wouldn't want to pitch in?

And just think of how our example would play out. By dimming the lights a bit, we would once again become a shining beacon among nations.