Monday, April 10, 2006

The Mystery of the Mysterious Public Utility

Here in our beautiful burgeoning Los Angeles of 1910, our happy and growing Population has escaped the blight which makes many large Cities a miasma of cacophony, filth, disease and misery. We have achieved this near-miracle by building into what we called "Suburbs" - actually, the countryside many miles away from the FETID heart of the City. We are able to do this because of the modern wonder of Electric Railroads and Streetcars. While it is true that many Do-gooders complain that the Traction Companies have gathered Great Wealth to themselves through Land Speculation - purchasing cheap land and then building to it, which greatly increases its Value - this is simply an example of the Enterprising Spirit that has made our Country the envy of the world.

Some jackdaws complain that Traction Companies run an inadequate number of cars and too few trains, in order to increase their Profits. But the vast majority of Patrons would gladly trade the wait of a few moments, against the TURMOIL of City life. And if the cars are over-crowded, how much more, the horse-filled streets of Central and Olive? And with the affordability of Mr. Ford & Co.'s automobiles, available to even the humblest of menials, Downtown has become like unto the anteroom to the First Circle of Hades.

Again, scare-mongers cry like Cassandra that should the Traction Companies fail, our countless Suburbanites will be marooned on their Islands in the Grass. Muck-rakers proclaim that the Public Trust is easily betrayed by Capitalists, and that the good-faith Expectation to Commute will be SLAUGHTERED on the Altar of Mammon. These weak sisters suppose that such economic Hardship will befall not only our Suburbanites, but that all Employers and Merchants and Tradesmen would be calamitously AFFLICTED. Others go so far as to imagine that a cabal of anarchists and Unionists might Strike, to rein the mighty Engines to a halt! Woe! - the entire Polity will suffer, they prophesy, and beyond any measure of reason. Depression and blight would follow, and we would be transported by immobility back to the Age of powdered wigs. Stuff and nonsense, of course. As much to suppose that the Electrical Companies might fail! Imagine, the fires of Prometheus, going out!

[The scene shifts. We find ourselves nearly one hundred years in the future.]

Once upon a time a giant storm swept over the mouth of the Mississippi. New Orleans is a major port, through which untold barrels of oil find their way into the American heartland. With the closing of the port, gasoline was a scarce commodity, and prices rose. Supply and demand. No mystery, no scandal. Reality. Price gouging? I suppose there was some. But that's what money is for - to buy necessities.

However, in the Golden State of California, a particularly, um, progressive body of legislators has mandated that the gasoline sold in the state have a unique and particular formulation. California gas is refined in California, and only in California. No tankers from Nevada or Oregon make their way across the stateline. Their gas is not special enough. And the petroleum that feeds California's shrinking number of refineries comes into the state through the Pacific ports. Not from inland. Not over the Rockies. Not from, oh, say, New Orleans. Why then did Californian gas prices rise, during the Katrina crisis? Why? The gas came from an unconnected, from an independent source. The supply was not affected by the storm. The demand did not increase because of it. So why did prices go up? Why did the oil companies raise the price in California?

Because they could.

High gas prices take money out of the general economy and pump it into the corporations. Every aspect of the economy suffers. More money is spent on gas, less money is available for buying clothes, books, appliances, food. Hmm. Oil companies have the power to raise prices as high as the market will bear. The market will bear quite a bit. In Europe, petrol is at least twice the price it is here, and often much more. Oh yeah, we certainly can pay more for gas. At the sacrifice of our way of life. And what are you going to do about it? Walk? Ride your bike? Take the bus? Hail a cab? Streetcar, anyone?

We are hostage to foreign and often hostile oil-producing countries. We are hostage to American oil corporations. The demand for this strategeraniositous product must fall. SUVs. God, what a waste. Stupid beyond words. Save the planet? Well, that's not my religion, but I am of an age to remember frequent smog alerts, so yes, save my lungs. (But any male who's over 15% body fat had better worry more about that, than smog. Priorities.) And job one is rationalizing the energy supply. Oil harvests the fields. Oil moves the crops. Oil makes the clothes. Oh yeah, it is a public utility.

And what do we do with Public Utilities? We regulate them. For the public good. In the public interest. For national security.

If there is justification for any regulation at all, it must apply to gas prices. For some time during WW II, the national speed limit was 35 miles an hour. Yes, you read it right. It wasn't to conserve oil. Rubber. The Philippines had been taken, you see. My point? Rubber is easy now. The problem today is oil. Our economy is our way of life. Our way of life is what makes us unique in the world. No, scratch "unique" - "best." Government, for purposes of national security, has certainly stepped in most powerfully to preserve our way of life. Against, say, Tojo and Hitler. Well, can you think of other ethnic-sounding names today, that want to destroy our way of life?

The incredible oil reserves in Alberta assure us that petroleum will always be available. At a high cost, and after some years of development. Do we have years? With Venezuela going insane and Iran already there? With China and India multiplying their petroleum use year by year? The problem exists right now, and a solution is needed, now. Of course the way to drive down prices is do reduce demand, but the morons aren't going to move out of their idiotic SUVs quite yet, into vehicles that reflect intelligence and responsibility. So. Gas prices need to be regulated.

Right now, it cannot be market forces that are driving up the price of a gallon of gas, say, ten cents every week. Up one month, down the next - not connected to any rational pattern. Supply and demand is not the driving force, so much as the greed and irresponsibility of profiteers.

Charles Krauthammer has advocated artificially raising gas prices to a set minimum price, by imposing a self-adjusting tax. Amusingly - haha - he posits the outrageously high floor of $3 ... oh, wait ... that's what it is now, where I am. Oh-oh, guess he means $5. But in any case, if the market price of gas goes down, the tax would instantly rise, eliminating the flux. Artificially elevated prices - that is, artificially elevated by the tax, rather than by the oil companies - which would spur research. Well, it might work. If the tax revenue isn't just flushed down the bottomless toilet of government waste. Which it most likely would be. After all, European petrol prices are high because of taxes, yet they haven't gone alternative.

The real benefit, in theory, would be to encourage the development of alternative energy sources. High gas prices would make alternative energies more profitable, more competitive, more worthwhile to develop. It taps into and exploits the wonderful urge for profit, that right now is only taking, and not giving. If, of course, Americans got the message, about actually going for alternative sources. Lower demand for oil would lower the cost of a barrel, and suddenly our oil-rich friend-enemies wouldn't be so rich. They couldn't hold us over the, um, barrel.

This is what government is for. We are taxed, not to subsidize illegitimacy and to fund social engineering. We are taxed to promote the general welfare. I can think of nothing more general than oil. It is the nation's blood. Well, time to evolve. Wood, coal, oil - next, whatever it is. But really, it's time.



Anonymous said...

We need a movement to establish a national public utility to regulate the distribution of all oil and its byproducts.

Jack H said...

View it as an issue of national security. We are hostage to hostile alien powers - the third world controls us, for cripes sake - and this is simply dangerous. During WW II, the precedent was set, as I pointed out. It's just a matter of whether it's important. If we can send a man to the moon (so the cliche goes (even though it was 37 years ago)) what would it take to start a national drive toward energy independence within five years? The Manhattan Project took less time than that, and gave us, in effect, nuclear energy. Gas will be five bucks a gallon next year. Times up.