Pump it Up

It took a good while for the pump to
reach $20 for a good reason. The price was down to $1.89 a gallon.
That’s half of what gas cost just a few months ago, when a barrel of
oil was selling for $140 and we were shelling out nearly $4 per gallon.
In fact it’s less than half. Gas at half the price takes twice as long
to pump, so it gives you a little time to look at the scenery and think
about things.

In those warmer days of escalating gas
prices, we watched as the SUV suddenly became a dinosaur. I noticed
that people began to carpool more. Other people were taking the bus.
People with hybrids were viewed with envy, and the classified ads
bulged with Yukons and Caravans and Explorers. Detroit watched its
sales freeze up and started figuring out how to lay off workers and
learn to live off the taxpayers. 

It was a genuine season of change. While
Barack Obama was leading the country in a chant of “Yes we can,” people
all over the country were saying, “No, we can’t” keep up our wasteful
driving habits. It wasn’t just the auto industry—all of us changed. The
miles driven per American declined for the first time ever this past
summer.

We’ve seen this movie before. It was
called the 1970s. Not the show, but real life, when Arab nations
decided not to sell oil to the United States. Prices went up, scarcity
set in, and people actually waited in line to buy gas. The government’s
response was to lower the speed limit and give incentives to those who
might produce or purchase efficient cars.

For a few years. Then prices went back
down, we all started living like there was no tomorrow, and for some
reason Americans started driving like the earth was just one giant
Pompey Mall, always there to pump gas when you needed it. 

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The current drop in gas prices comes at
an interesting moment. In Washington a new president committed to a
huge investment in infrastructure, including cleaner and more efficient
transportation, is about to take office. In Albany we have a governor
who appears to be willing to risk his political future by insisting on
fiscal discipline through a combination of spending cuts and tax and
fee increases.

The tax on soda got the most attention
when Gov. David Paterson revealed his budget proposal on Dec. 16. A
so-called obesity tax would add a surcharge to non-diet sodas which are
doing to young people, says the Guv, what cigarettes did to older
people a generation ago. Interesting analogy, but what I found more
interesting was the tax on gasoline. Paterson’s plan would remove the
temporary cap on the sales tax that was put in place when prices were
soaring. Essentially, Paterson is telling us that gas is too cheap—and
he’s right. A politician who says, in effect, that gas is too cheap may
not be around for long, so we’d better pay attention to him. 

It may not be the medicine we want, but
a stable and higher gasoline price is the medicine we need to change
our wasteful energy habits. When gas was near $4 it wasn’t easy, but
people found ways to adapt. But now that the price is down and future
prices uncertain, people don’t know what to think. No one can make
sound decisions on a roller coaster.

I say we stabilize the price of gas and
help with the state budget deficit by setting the gas tax based on the
price at the pump. Pick a price—let’s say $3.50. The tax will be the
difference between the retail price and $3.50. Then you will know what
your gas will cost and you can plan accordingly. Higher gas prices will
force us into making the investments we need in cleaner, more efficient
cars, and mass transit that really works. 

Or we can compromise: maybe the governor will let us drink our root beer tax-free if we ride the bus.

Fuel for thought: As gasoline prices approach 1990 levels, consumers don’t know what to think. MIKE GREENSTEIN PHOTO