What to do about high gas prices?

High gas prices result in higher heating bills for everyone and are especially hard on the poor and the elderly on fixed incomes. But what hurts the most is shelling out more money at the gas pump. It threatens our love affair with the automobile. The ability to come and go as we please in our vehicles has been an American right for years. Now we think twice before taking a leisurely trip somewhere. I figure that it costs me almost $10 in gas just to go to Bloomington and back from Minonk. Add that to your grocery bill before you decide to go to Bloomington to do your shopping.

We have been down this road before. Gas prices spiked up in the 1970's and again in the 1980's. In fact, adjusting for inflation, gas prices now are not as high as they were back in the middle 1970's.

While the public and the politicians are screaming for the oil companies hide, most experts agree that the price of gas is beyond the control of our government and the oil companies. The price is due to the law of supply and demand. Oil is going for $74 a barrel now, more than twice the price of just 3 years ago.

The reason that oil is so expensive is due to several factors. First, the economies of China and India are booming and they want oil now too but still consume far less than we do. The United States is still the energy hog of the world. Secondly, there have been disruptions in supply due to the destruction of some oil rigs by Hurrican Katrina and also because of distribution problems in South America. And lastly, the standoff with Iran over their nuclear program has created an unstable forecast for the future. All of these factors cannot be resolved anytime soon by President Bush or anyone else. In a capitalistic economy we cannot demand that an oil company lower their profits unless it can be proven that they are engaging in monopolistic practices.

So we can complain about high gas prices but there is really nothing we can do about it now. We all are going to have to adjust our life style as the result of higher energy costs. Blaming Exxon for excessive profits is fruitless. Their profit margins are 10% which is not excessive for an American company. What is excessive and bothersome is the ridiculous salaries of their executives. Exxon's outgoing chairman Lee Raymond is getting a golden parachute of over $400 million dollars. No one is worth that kind of money while working for someone else. If anything needs to be controlled, it is excessive executive salaries, not corporate profits. According to the AFL-CIO, the average salary of corporate CEOs is 450 times greater than the average salary of hourly workers. This ratio is 10 times greater than what it was in 1980.

Our electric utility companies are controlled to some degree by government regulations because the delivery of reliable electric service is vital to our economy and our life style. Should not the providing of energy sources also be considered vital? If so, then perhaps oil companies should come under similar government regulations so that the American people can be assured of a reliable and affordable source of energy which may require the oil companies to invest some of their profits in energy research. Then the government could encourage the oil companies to divert their enormous executive salaries into research for sources of renewal energy such as wind or solar instead of enabling people like Lee Raymond to light their cigars with $100 bills.

Hopefully high gas prices now will lead to a more reliable and renewable source of energy in the future. High transportation costs may result in more people shopping in their local communities. Railroads may make a comeback. With the high cost of oil, other energy sources are become economically viable such as the extraction of oil from shale deposits in Canada and Colorado. Perhaps we will no longer be dependent on the Middle East for oil.

We can't really lay the blame on our government for oil prices being high but we can blame them for not encouraging the development of alternative energy sources. Just as a high fever indicates something is wrong with our body, high gas prices indicate something is wrong with our energy policy. To me high gas prices signify a new and exciting future if our government finally starts getting serious about developing alternative and renewal energy sources.