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We have “spawning season,” “breeding season” and “calving season,” which make our “summer driving season” sound almost like a naturally occurring phase of the American cycle of life. Americans might watch football in the fall and clean their houses in the spring, but between Memorial Day and Labor Day, we drive.
This year’s driving season is threatened by the highest gas prices we’ve ever seen, which may force some of us to drive less. This is inconvenient. And to many Americans it feels almost like the violation of a natural right.
John McCain is proposing relief in the form of a “Summer Gas Tax Holiday,” a temporary suspension of the 18.4-cent-per-gallon federal gas tax and the 24.4-cent tax on diesel.
Is this a good idea? No.
I don’t claim to understand economics any better than McCain does, but I’m skeptical about the beneficial impact that leaving an additional 18.4 cents per gallon in the pockets of consumers will have on the price of food or any other aspect of our teetering economy. In fact, I suspect that the proposal is directed more toward consumers’ psyches or emotions than their pocketbooks, arising, as it does, just before the “fall voting season.”
One problem with the tax holiday is that the revenue from the gas tax is used mostly to build and maintain highways. In other words, it’s a tax that no one who drives has a right to complain about. Our highways and bridges (probably) won’t crumble over the summer, but whatever maintenance or construction is deferred will have to be performed at some future point, out of a federal budget that already operates at a deficit.
But the worst element of the tax holiday is that it’s being dangled before us like a bauble before a child, something to temporarily distract us from the foreboding condition of the current world of petroleum.
The price of crude oil hovers at around $117 per barrel, with little indication that it will go back down. Some of this is a matter of supply. The Saudis aren’t forthcoming with information about their petroleum reserves, but there’s considerable evidence that their once-abundant oil fields are wearing out.
And the news from the world’s No. 2 supplier of petroleum isn’t good, either. On April 16, an Associated Press story by David Nowak reported that Russian oil production has dropped for the first time in a decade. Russian officials are admitting that “supply growth appears to have hit a ceiling.” Leonid Fedun, vice president of an independent oil producer, says, “The period of intense oil production is over.”
Both Saudi Arabia and Russia still have lots of oil, but the days when oil gushes out of the ground under its own pressure, as it did in 1901 at Spindletop, in Texas, are over. Much of what’s left has to be coaxed out by ingenious — and very expensive –engineering.
Maybe there’s hope from Brazil. The initial reports are unconfirmed, but Petrobras, the state-run oil company, may have discovered a new offshore oil field that could contain as many as 33 billion barrels of crude. That sounds like a lot. But assuming that the reserve is as big as is estimated and that all of that deepwater oil could be extracted — and these are very big assumptions — at current levels of consumption, ignoring increased consumption by China and India, all of that vast new reserve would last just about a year plus a couple of weeks.
If this picture isn’t dark enough, consider that we haven’t yet mentioned global warming, pollution, traffic congestion, a weakening highway infrastructure and increasing competition for the remaining petroleum, which portends more “oil wars” like our current disaster in Iraq.
In view of all this, the Summer Gas Tax Holiday feels like a sop tossed our way in hopes that we’ll be placated long enough not to notice the primary failure of American leaders for decades: the failure to develop and implement a long-term energy policy that gives us a chance of preventing the kinds of disasters that we can see coming. We should demand better of them and of ourselves.
(John M. Crisp teaches in the English Department at Del Mar College in Corpus Christi, Texas. E-mail him at jcrisp(at)delmar.edu)