Wednesday, March 31, 2004

Gas Pain: Nick Schulz has a good essay on gas prices at NRO, backed up with some humorous research:
Gas is also cheaper than orange juice ($6.64 a gallon), Snapple ($10.32 a gallon); olive oil ($51.04 a gallon), eye drops ($995.84 a gallon) and nasal spray ($2,615.28 a gallon) according to figures from the Department of Labor, Consumer Price Index.
Talk about "record" gas prices should serve as a reminder of how little pressure it takes for a politician, of either party, to propose monkeying with the market. Now, obviously OPEC isn't a free-market organization, but domestic action will only compound the problem. Kerry, for example, talks about "streamlining" environmental regulations to iron out the disparity between gas prices in, say, Georgia and California. (Never mind that the upshot will likely raise Georgia's gas prices as much as it lowers California's.) But there are reasons for the disparity. Californians have opted for more of that luxury good we nebulously call "the environment"; in other words, they (through their state legislature) have agreed to fork out more in gas costs, to cover additives and refinery issues, in exchange for some perceived (arguably nonexistent) benefit.

Also, Kerry wants to put topping up the strategic petroleum reserve on hold for a while. (Note that some conservatives have said he wants to "tap" the reserve: well, yes, in the sense that reducing the rate of growth of an entitlement can be called a "funding cut.") As Schulz notes, this would have a negligible effect on prices since, as both parties pointed out a few years ago, our "reserves" consist of really laughable amounts.

As Schulz's price comparisons indicate, gas is pretty goddamn cheap, considering we have to explore, haul it out of the ground, ship, refine, ship again -- things not necessarily true about Visene -- with everyone getting a profit along the way. The stuff comes pretty cheap, particularly when you consider that -- after all that labor getting dead dinosaur from the shale layer to your tank -- a quarter to a third of the cost is straight tax.

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