Andrew Clem presented some interesting ideas about President Bush’s “investment in research in alternative energy sources” in his letter to the NewsLeader editor. His idea is to raise the cost of oil products by taxation resulting in development of renewable energy resources and conservation which is somewhat low priority with our present “Low” cost of petroleum products. Also the extra tax money collected would be used to develop better forms of energy including renewable sources of energy…
Know as much as I am against more or additional taxes, Andrew makes a great point that this problem will best be solved by the free market system. In the majority of examples it is the free market, not the government, that creates solutions to many of our problems. My fear is where that additional tax money will really show up and in what form. Many times Profit\loss statements are the most efficient guides to getting the job done.
It is apparent that we are using more energy now then we ever used before. This is possible for the simple reason that energy produced by petroleum products are relatively cheap to us in the United States. That is not necessarily a bad thing, but little change will happen until the cost rises to a point where the “Market” dictates a change.
Look at the recent $3 a gallon effects of Hurricane Katrina. People started to think twice before taking that extra trip or how they could save and consolidate these trips. Around here the average gallon price is about $2.20 and people have forgotten already the pain of $3+ a gallon. Interestingly people are talking more about the obscene, (term used by mainstream media and politicians looking for airtime) profits made by the oil companies. I agree the profits are high as compared in the past but history shows oil companies average about 10% in profits when all is said and done. McDonalds averages 24.4% profits… Go figure… The thing is that the oil companies spend much of their “profit” money on exploration and development of more sources of petroleum to remain competitive. If we tax petroleum products to raise the cost and promote conservation and development of other forms of energy, how can we be sure this money will be used wisely?