An American scholar has suggested
the reduction of taxes and end of fractionation of the gasoline
market as short term ways to lower gas prices in the United States.
Kenneth P. Green, resident scholar at the American Enterprise
Institute, told Xinhua in a recent interview that most options for
bringing down gas prices are long-term propositions, whether it's
increasing domestic production, or finding some decent replacement
for gasoline.
These propositions won't have all that much influence on price,
but would keep more of the petro-dollars circulating here, and
creating jobs here, rather than flowing elsewhere, he said.
Vehicle electrification is problematic and again, a long-term
proposition, he said.
"One thing that could be done relatively quickly that might ease
prices would be to axe the many regulations that have divided the
U.S. market into a bunch of smaller markets that must use custom
boutique fuels," said the scholar.
He added that producing so many blends raises the costs of
refining, and makes it hard to smooth prices out should a refinery
in any given area has a problem.
According to Green, there are two short term ways that the United
States could lower gasoline prices at the pump.
"The first would be, to lower gasoline taxes. Motorists pay high
taxes to both the federal government and the state governments for
the use of gasoline. A temporary reduction would help motorists,"
said Green.
"Another way to lower costs would be to end the fractionation of
the U.S. gasoline market, which produced many unique fuels to meet
many unique air pollution laws across the country," said Green.
That means that if one refiner, say in Texas, has trouble, Texans
can not simply import gasoline in from a neighboring state, because
the blend of the gasoline is set by law. This fractioned market
drives up regional and overall prices, he added.
On ways to solve the oil problems in the U.S., Green said that
policy makers may take an action without bothering to consider that
people might respond to a given policy in a way that isn't exactly
what the policy makers had in mind.
Green mentioned that U.S. Energy Secretary Steven Chu once wished
that America shared such prices, when gasoline in Europe was the
U.S. equivalent of 8 dollars per gallon. The expectation was that
such prices would also lead to reduced greenhouse gas emissions.
"But what works in Europe won't necessarily work here: Americans
are highly averse to seeing gas prices go north of 4 dollars per
gallon, let alone 8 dollars, and U.S. markets, despite the
increasing regulatory burdens they face, generally try to respond to
what Americans want," said Green.
On clean energy, Green said he does not think that "greenhouse
gases" should be lumped in with the rest of the pollutants to
determine whether energy is "clean" or not.
"We should, definitely pursue coal power with excellent pollutant
control, and the same for natural gas power, and gasoline and
diesel," said Green.
He said that nuclear power is probably not economical, nor are
wind power and solar power. The best policy for energy "is to make
sure that there is a level and competitive market, and to
internalize external impacts with highly targeted eco-taxes. The
government has no role in picking and choosing winning or losing
technologies."
Green said that expectations of the U.S. government on green
technology for green energy are not realistic.
Contrary to the expectations, he said, "I find that it has
resulted in job loss, higher energy prices, and corruption --
results that do not bode well for green job investments in the
United States."
For example, in Spain, each "green" megawatt installed destroys
5.28 jobs elsewhere in the economy on average. Green programs in
Spain destroyed 2.2 jobs for every green job created, while the
capital needed for one green job in Italy could create almost five
jobs in the general economy, according to Green.
He said that since 2000, Spain spent $771,000 approximately on each "green job," including subsidies of more than
$1.35 million per job in the wind industry.
According to Green, wind and solar power have raised household
energy prices by 7.5 percent in Germany, and have resulted in
Denmark having the highest electricity prices in the European Union.
On the concept of "next-generation biorefineries," Green said,
"At this point, I think they are mostly a fantasy. Nobody has come
close to producing cost-effective ethanol from cellulose, nor
biodiesel from algae."
"Those technologies, I think are at least 20 years away from even
showing that they can be done cost-competitively, and then scaling
them up to displace conventional fuels will take many decades. And
any crop-based biofuel will compete with land for food, or for
animal habitat, parkland, wilderness areas, and other important
uses. These next-generation biofuels are no miracle," said Green.
On the recent increase in tornadoes through the U.S. South, Green
said that it is impossible to blame any short term series of weather
events, even those spanning several years to decades on climate
change.
However, he stressed that the pattern of the climate is measured
in 30-year blocks of average temperatures. Similarly, trends in
storms often span decades, and are related to decadal cycles of
climate activity such as the Pacific Decadal Oscillation and others.
"While I believe that the climate is changing and that human
greenhouse-gas emissions cause some part of that change, the shrill
attribution of things like Japan's earthquake and tsunami to climate
change, and tying the recent tornadoes to climate change," he said.
On the lessons of the Japan earthquake and tsunami, Green said
what people have learned is how amazingly resilient high technology,
advanced democratic market economies have become over time.
"In the past, before Japan's industrialization and experience
with former disasters, the outcome of the recent 9.1 earthquake and
tsunami would have been horribly worse. What we learned from this
disaster is that humans do learn over time, they learn, and they
adapt," he stressed.
"While we can never live in a perfectly safe world, we can learn
as we encounter hardship, build resilience to surprise events, and
overcome even horrific natural disasters," said Green.
