Thursday, March 22, 2012

Calling for tax increase on oil companies may be bad political strategy for Obama

When oil company revenues go up, it sounds good to ask, "why do they still get tax breaks?" Problem is, if they loose their tax breaks, they'll just pass that cost on to the consumer and add to the price of gasoline. Rising gasoline prices seems to be a thorn that Republicans are using in their campaigns against Obama.

Rising gas prices are a reality that's here to stay due to peak oil and not really Obama's fault. Still, it's being used as a thorn in Obama's side. Adding more tax to oil companies would just give the oil companies more reason to raise their prices as they pass the cost along to consumers.

Taxes are basically good especially since the government does need the money, but people who depend on cars are grumbling and the price of gasoline is becoming a campaign issue.

What we really need is to reform society so it's less dependent on fossil fuels. Central to that strategy is changing the way we plan cities. We need planning with more density. With density, commutes can be shorter and more errands can be done on foot, bicycle or public transit. Car commutes can be shorter also. There is too much sprawl in the way American's plan their living habitats.

Obama doesn't talk enough about city planning and how it plays such a big role in our energy future. Sure, it is more of a local issue, rather than a national issue, but Obama does have the "bully pulpit." Talk about city planning is a missing link in Obama's green energy strategy.

Green energy is not really that easy of a pill for Americans to swallow without changes in the way cities are planned. This doesn't have to mean whole scale rebuilding of our landscape. It can start by just encouraging a lot of simple changes in people's lives at the grassroots level. Moving closer to a job, for instance.

The reason why green energy is hard to swallow, without denser living environments, is a matter of cost. Green energy tends to still be more expensive than fossil fuels, even at today's higher gasoline prices. People are grumbling about high gas prices now, just imagine how bad it would be if folks had to pay the even higher cost of green energy!

Another form of tax on oil which is often suggested by folks fighting global warming is a carbon tax. Grumbling about things like high gasoline prices would really make it hard to impose a carbon tax since such a tax would just push gasoline prices higher.

All of these things, like taxes on oil companies and carbon taxes, are likely to be passed on to consumers and add to the grumbling. I hear that carbon taxes have been tried in Australia and a few other places, but the political fallout from higher fossil fuel costs makes these taxes improbable to sustain. Politicians can't survive the onslaught.

We really need to learn how to make society less dependent on inexpensive energy as a way help us afford the transition to greener technology which, at first, tends to be even more expensive.

Maybe, in the long run, green energy such as solar and wind can compete on a price level with fossil fuels, but that day is still in the future.

In the meantime, we need to adjust our society, lifestyles and city planning to accommodate higher priced energy.

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