Tag Archives: legacy costs

Legacy Gasoline

Along the lines of my thoughts on legacy costs in our transportation infrastructure, comes National Review on the pathway-dependency of our gasoline use:

Re Re Oil Prices – Cliff May – The Corner on National Review Online
Of course, right now ethanol from South America carries a whopping tariff of 54 cents per gallon. By contrast, oil from Venezuela carries a tariff of 0 cents per gallon. I think it’s time to level the playing field (by getting rid of the tariff, not by adding new ones).

And yes, it’s true that we get most of our oil from Canada and Mexico but oil is a fungible commodity. Oil from the Gulf – on which our European allies depend -funds al-Qaeda, the Taliban, Hezbollah and similar terrorist groups.

Oil is dominant in the market not as a result of competition but because once upon a time America was the world’s leading oil producer. That helped us win World War II (the Germans and the Japanese were both desperate for gasoline –a major cause for their defeat and a cautionary tale). But those days are long gone.

Global peak oil production may come in 2020, but American peak oil demand may be last year.

Of course, from our end, peak oil does not really matter. But from countries the perspective of countries like Russia, Venezuela, and Ecuador, their economies can grow normally once the oil beneath their feat stops propping up their governments.

I hope President-Elect Obama uses his administration to unveil a geogreen stimulus that creates green-collar jobs that help reduce our oil consumption even further.