New York Times Editorial demands higher fuel standards

This is an editorial from the New York Times demanding stricter fuel standards

Pain at the Pump and Beyond

The surge in the price of energy couldn’t come at a worse time. The average price nationally of regular gasoline has shot up to a record $3.28 a gallon. Combine that with the collapse of the housing market and the seizing financial sector, and it is putting a boot to the gut of an economy that is either already in a recession or close to one.

The Bush administration can’t be entirely blamed for the pain at the gas pump. But its shortsighted energy policies — zealously focused on increasing the energy supply, with little attention paid to conservation and greater fuel-efficiency — means the country is far too dependent on oil that is both ruinously expensive and ruinous for the environment.

There are several reasons for oil’s dizzying price spiral. Soaring demand in fast-growing developing countries like China and India means there is little oil to spare. The turmoil in financial markets — the White House can take a good chunk of the blame for that — has driven prices even higher, as investors have bought oil and other commodities as stocks and the dollar plunge.

Meanwhile, President Bush’s strategy for ensuring that the nation’s energy security is focused on one thing: getting more oil by drilling in the Arctic and sending Vice President Dick Cheney to ask his Saudi friends to pump more. Neither could ever produce enough.

Not everyone is unhappy with oil at $100-plus a barrel. Authoritarian governments in Iran, Venezuela, Sudan and Russia are pocketing the profits and enjoying the political impunity that comes with such riches.

At home, the news is bad and getting worse. Consumer prices rose more than 4 percent in the past year, largely because of rising energy costs. Americans have started to reduce spending on other consumer goods, which is weakening the economy. The risk of inflation leaves the Federal Reserve with less room to maneuver.

If any good can come out of this mess, it would be an understanding — by corporations, consumers and government — that the era of cheap oil is truly over. With that, the country could finally focus on developing clean alternative energy sources and reducing oil consumption, a strategy that has served other countries well.

Take cars. Until last December, Republican and Democratic administrations had refused to raise fuel-efficiency standards for 30 years. And raising the puny gasoline tax remains a political nonstarter. By contrast, in Britain, gas at the pump costs around $7.70 a gallon, of which about $4.90 are taxes. In France, taxes account for about $4.60 of the retail price of $7.50 a gallon. Unsurprisingly, their cars get much better gas mileage than the guzzlers still popular in the United States.

Higher taxes on energy mean other rich countries are more energy-efficient across the board. The average German or Japanese uses little more than half the energy consumed by an average American. In Germany and Japan, per-capita emissions of carbon dioxide spewed by cars, power plants and other sources of energy are half those in the United States. In France, they are a third.

Americans are beginning to curb consumption. Gasoline demand declined in the first 11 weeks of the year for the first time since 1997. But it is far too little, and government policy is lagging far behind the problem.

The landmark energy bill passed in December tightened fuel standards for the first time since 1975 — demanding a 40 percent increase in cars’ and light trucks’ average fuel-efficiency by 2020. Still, the Department of Energy estimates that by 2022, the new standards would have reduced gasoline consumption by about only two million barrels a day, which amounts to a 17 percent cut in projected gasoline consumption.

A lot more needs to be done to prepare the American economy for a world of scarcer, more expensive energy. To start, the nation has to replace the oilmen in the White House with leaders who have a better grasp of the economics of energy and the interests of all Americans.