Clicking on banner ads enables JWR to constantly improve
Jewish World Review April 11, 2004 / 21 Nissan, 5764

Mort Zuckerman

Mort Zuckerman
JWR's Pundits
World Editorial
Cartoon Showcase

Mallard Fillmore

Michael Barone
Mona Charen
Linda Chavez
Ann Coulter
Greg Crosby
Larry Elder
Don Feder
Suzanne Fields
Paul Greenberg
Bob Greene
Betsy Hart
Nat Hentoff
David Horowitz
Marianne Jennings
Michael Kelly
Mort Kondracke
Ch. Krauthammer
Lawrence Kudlow
Dr. Laura
John Leo
David Limbaugh
Michelle Malkin
Chris Matthews
Michael Medved
MUGGER
Kathleen Parker
Wes Pruden
Sam Schulman
Amity Shlaes
Tony Snow
Thomas Sowell
Cal Thomas
Jonathan S. Tobin
Ben Wattenberg
George Will
Bruce Williams
Walter Williams
Mort Zuckerman

Consumer Reports

Getting real about gas prices

http://www.NewsAndOpinion.com | Woe! Woe to the politician who is perceived to be failing to do something about the soaring price of gasoline, which has jumped about 20 percent in the past six months. Every week, drivers feel the bite on their pocketbooks as they pull up to the pump. AAA estimates the average two-car household will consume more than 1,200 gallons of gasoline a year. That means the 50-cents-a-gallon increase over the past year has families spending an extra $600 of after-tax money each year, squeezing middle- and low-income families the most.


Americans can't stop driving, but this means they'll have to spend less on other items. For every penny that gas prices rise, about $1 billion comes out of the pockets of consumers, so the 20 percent increases at the pump will wipe out about half the expected $60 billion in tax cut benefits flowing to households this year.


The Democrats blame President Bush, saying he doesn't care because higher prices mean bigger profits for his oil-industry buddies. The Republicans attack John Kerry for his one-time support of a 50-cents-a-gallon tax hike and other votes in favor of gas-tax increases.


Chinese drivers. This time nobody is sure that the spike in oil prices will be short-lived. The money-grubbing OPEC countries, having regained their grip on the world market, have announced another reduction in output to drive prices even higher, exploiting a global market that is heating up primarily because of demand from Asia. Global oil demand grew by about 14 million barrels a day over the past 15 years. Worldwide oil consumption is estimated to jump another 45 million barrels a day by 2030--and demand for natural gas will also soar.


The big story, though, is Asia. Who could have imagined that India and China would become such big consumers? Chinese demand grew by 33 percent last year and by an additional 20 percent this year, pushing consumption to over 6 million barrels a day. China is on the verge of an exploding demand for automobiles. Gasoline consumption will have risen from about 10 percent of China's oil needs 10 years ago to an estimated 40 percent by the end of this decade, when private car ownership is expected to soar to almost 28 million. Those people with incomes high enough to afford autos in India and China are growing by about 12 percent a year. No longer will 80 percent of the world's energy be used by only 20 percent of the world's population.


And what about supply? No one is paying attention to the experts' warnings, any more than they did nearly 50 years ago. Back then, the United States was the world's biggest oil producer, pumping more than half as much again as the Soviet Union and twice as much as many Middle Eastern countries. But the Cassandras, as it turned out, were right. U.S. production peaked, in 1970, at about 10 million barrels a day and is now at least 30 percent below that. As for the OPEC countries, we know very little about their potential for new energy sources. Most of their oil comes from a handful of old oil fields, concentrated in a small area called the "golden triangle." It has been years since any significant new fields have been found. Whether Saudi Arabia could step up production from its current level, 8 million barrels a day, to 20 million barrels a day by 2020 is questionable. Political turmoil, meanwhile, besets producers like Venezuela and Nigeria.


So a crisis looms. Matthew Simmons of Strategic Economic Decisions has offered a brilliant if dire analysis. The crisis, he says, will be global because the $3 trillion-a-year energy industry underpins every aspect of society.


The absence of a coherent U.S. energy policy has become a stale cliche that invites bored yawns. Conservationism has become an orthodox religion, but unlike religion, almost nobody in America practices it. Americans for too long have felt they are entitled to enjoy the benefits of unlimited energy at low prices. There is no silver bullet.


What to do? We must provide an environment certain to attract the huge capital investment necessary to enhance and improve production of every energy resource--oil, gas, nuclear, hydro, coal, and renewables. The auto industry has shown how it can improve fuel efficiency, so we must work out a timely updating of such standards for cars, light trucks, and SUVs.


No progress will be possible, however, without sacrifice. We will pay more dearly if we procrastinate. Failure to develop an energy policy means we can look forward to a lifetime of enriching the obscene sheiks, of wasting treasure and blood to defend the Middle East while impoverishing ordinary Americans and hobbling our economy.

Every weekday JewishWorldReview.com publishes what many in Washington and in the media consider "must reading." Sign up for the daily JWR update. It's free. Just click here.


JWR contributor Mort Zuckerman is editor-in-chief and publisher of U.S. News and World Report. Send your comments to him by clicking here.

Up


03/16/04: Dems demagoguing protectionism adds up to economic nonsense
03/02/04: A truly cruel college squeeze
02/10/04: Fixing what's broken
01/13/04: Policing the corporate suites
11/25/03: Slowly but surely in Iraq
11/12/03: Holding their feet to the fire
10/29/03: Graffiti On History's Walls
09/04/03: All work and no play
08/29/03: Facing the other threat among us
07/23/03: Making odds on a recovery
07/15/03: A Kremlin conversation
06/10/03: Welcome to Sue City, U.S.A.
05/05/03: America's next critical test
04/22/03: The challenge of success
04/15/03: Shape up or step aside
04/08/03: The latest in reality TV is
04/02/03: Chirac and Saddam's thugs are two of a kind
03/26/03: War by new rules
03/05/03: The high price of waiting
02/14/03: Needed: fast fiscal action
02/03/03: Clear and compelling proof
01/24/03: Midnight for Baghdad
01/14/03: They should have said...
12/24/02: Who finances the fanatics?
12/19/02: Put-up or shut-up time
12/09/02: Sheep, wolves, and reality
11/21/02: Curing the uncommon cold
11/12/02: Everybody has the right to be wrong but the Dems have been abusing the privilege
11/05/02: Force vs. fanaticism
10/30/02: Land of the sinking sun
10/22/02: No more cat and mouse
10/15/02: And pigs will fly
10/07/02: A shameful contagion
09/26/02: Calling a madman's number
09/23/02: Our rainbow underclass
09/13/02: Why America must act
09/04/02: After bubbles, a double dip?
08/20/02: No time for equivocation
08/06/02: No time for politics
07/30/02: Getting off the dime
07/17/02: What scandal cannot dim
06/18/02: Time to crack down: Where is the outrage?
06/05/02: The next new thing
04/30/02: Roller-coaster nation
04/25/02: A critical tipping point
04/15/02: Israel's endgame will impact the free world
03/21/02: In the face of pure evil
03/14/02: A man on a mission
03/07/02: Land of the Sinking Sun
02/12/02: Speaking truth about energy
01/15/02: Putting our house in order
01/12/02: Talking points for 2002
12/24/01: The shape of things to come
12/11/01: Finally, a clarity of vision
12/04/01: Apocalypse now
11/26/01: The Big Apple's core
11/06/01: What it will take to win
10/22/01: Getting the mayor's message
10/08/01: A remedy for repair
10/01/01: A question of priorities
09/26/01: Our mission, our moment
09/11/01: Running the asylum
08/29/01: Hail, brave consumer
06/14/01: Blackouts --- or blackmail?
06/01/01: A time to reap --- and sow
05/25/01: A question of confidence
05/18/01: A question of confidence
05/04/01: Making the grade
04/26/01: The caribou conundrum
04/19/01: Chinese boomerang
03/27/01: The man of the moment
03/20/01: The Fed must be bold
03/15/01: Japan on the brink
03/01/01: Rethinking the next war
02/09/01: The education paradox
01/08/01: How the bottom fell out
01/03/01: Quipping in the new year
12/20/00: A time for healing
11/13/00: The need for legitimacy
10/30/00: Arafat's bloody cynicism
10/18/00: Arafat torches peace
10/03/00: A great step backward
09/08/00: The Perfect Storm
08/29/00: Don't blow the surplus
08/15/00: Voting for grown-ups
08/01/00: Arafat's lack of nerve
07/17/00: Can there be a new peace between old enemies? Or will new enemies regress to an old state of war?
07/11/00: A time to celebrate
06/19/00: A bit of straight talk
06/08/00: Using hate against Israel
05/26/00: Is the Federal Reserve trigger-happy?
04/18/00: Tensions on the 'Net
04/13/00: A paranoid power
03/10/00: Fuel prices in the red zone
02/25/00: Web wake-up call
02/18/00: Back to the future
01/21/00: Whistling while we work
01/11/00: Loose lips, fast quips
12/23/99: The times of our lives
12/14/99: Hey, big spender
11/18/99: Fountain of Youth
11/04/99: An impossible partner
10/14/99: A nation divided
10/05/99: India at center stage
09/21/99: Along with good cops, we need a better probation system
09/08/99: Though plundered and confused, Russia can solve its problems
08/31/99: The military should spend more on forces and less on facilities
08/05/99: Squandering the surplus
07/06/99: More than ever, America's unique promise is a reality
06/24/99: The time has come to hit the brakes on affirmative action
06/15/99: America should take pride in honoring its responsibilities
06/02/99: The Middle Kingdom shows its antagonistic side
05/11/99: Technology's transforming power is giving a lift to everything
05/04/99: The big game gets bigger
04/30/99: On Kosovo, Russia talked loudly and carried a small stick
04/21/99: No time to go wobbly
04/13/99: The Evil of two lessers

© 2001, Mortimer Zuckerman