While I don’t like paying $50 to fill my gas tank, every time I do I remind myself that this surge in oil prices is helping along the search for an alternative energy source.  When oil prices are low, there is little incentive to do R&D, especially if the cost of the new source comes in much higher.  But as the price of oil climbs, the incentive to innovate becomes stronger, and leads us closer to a solution.

But there are some that, while they proclaim they want the latter, also complain about the former.  Unfortunately, all 3 of the major candidates for President are among that crowd.

This tiff over gas and oil taxes only highlights the intellectual policy confusion – or perhaps we should say cynicism – of our politicians. They want lower prices but don’t want more production to increase supply. They want oil "independence" but they’ve declared off limits most of the big sources of domestic oil that could replace foreign imports. They want Americans to use less oil to reduce greenhouse gases but they protest higher oil prices that reduce demand. They want more oil company investment but they want to confiscate the profits from that investment. And these folks want to be President?

Higher prices are doing what they’re supposed to do; encouraging conservation.  This is a good thing.  I know it’s hard to understand when you’re watching the numbers fly up on the pump, but in the bigger scheme of things, it can be an aid to discovering the next big, clean energy source.  I have in the past covered those who are antagonistic to clean, renewable energy (oh please, read those links; just dripping with irony), but these politicians — these allegedly smart people who supposedly see the big picture — should be the ones educating the public on this issue, not pandering and just rounding up the usual suspects.

Prices convey information.  They affect demand.  Artificially manipulating them doesn’t do any long-term good.

[tags]energy,oil,gas prices[/tags]

Filed under: DougEconomics & TaxesEnvironmentGovernmentPolitics

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