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Are Gas Prices Too Damn High?

| Wednesday May 18th, 2011 | 1 Comment

Poor Jimmy MacMillan. The well meaning eccentric hilariously rose to fame during the New York Governor’s Debate last year by declaring that “the rent is too damn high.”

Now, it seems gas prices are the target of his scorn – and surely millions of Americans agree – but Jimmy’s either just cashing in on his fame or doesn’t really understand the message he’s getting into. MacMillan has been hired by conservative think-tank “Let Freedom Ring” to drum up popular outrage about the price of gasoline in an amusing new video you can enjoy after the jump….

Seems harmless enough. Gas prices are pinching pockets far and wide, especially in rural and suburban areas where Americans have no choice but to drive long distances, often using inefficient cars. Relief from high gas prices would allow money to be spent in other areas of the economy, improve people’s wellbeing, and if we could lower demand for crude, it would divert money from hostile middle eastern regimes around the world. And let’s face it, the current state of the nation’s economy depends utterly on affordable gasoline.

The video campaign, however, has nothing to do with changing our economic dependence on crude. It does not demand better vehicles from Detroit. Nor does it demand better, walkable neighborhoods or transit. The message does not suggest driving less, or carpooling, or thinking about how alternative fuels might help. Heaven forbid Americans adjust their behavior or land use in any way. The message is a lot more simple: “More Drilling = More Gasoline = Lower Gasoline Prices“.

Right. Well, I can’t argue with the logic, but let’s do a little math here and figure out just how much “more drilling” would save:

Let’s start with ANWR. According to a McClatchy report in 2008, the DOE says opening ANWR to drilling would save a massive 2 cents per gallon – in 10 years time.

Opening the entire continental shelf might buy a few years of status quo economic activity, but wouldn’t shave more than a few pennies at the pump either – never mind the cost of the inevitable repeat oil spill. Finally, although huge amounts of oil does indeed exist in shales in the western US and Canada, it is not economically recoverable unless pump prices remain where they are – or higher still.  In other words, more drilling means more nothing.

The only thing that could (temporarily) lower prices at the pump would be to lower taxes – something the “Let Freedom Ring” video campaign also seeks.  However such a move would raise big questions about how roads and infrastructure would be funded (a real issue regardless of your opinion on the size of government).

The real problem is pretty simple. We’re addicts:

World oil consumption by country

The US consumes upwards of 25% of the world’s oil while holding something like 3% of oil reserves. At the end of the day, with global demand skyrocketing, the idea that gas prices will ever go down again is profoundly irresponsible.  The good news today is that high gas prices can spur innovation and necessary infrastructural change that will be sorely needed when gas gets *really* expensive. High prices now are much better than *huge* prices later – which, inflicted on an unprepared populace would make today’s trouble seem like a walk in the park. No amount of local drilling today can do anything significant to slow down this process. Structural and technological change, however, can.

Any campaign that seeks to relieve the impact of high gas prices needs to acknowledge the real problem long before simplistically calling for more drilling.

Is Jimmy clueless? Or does he just not give a damn?


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  • Kev

    As long as you have some people saying $6-$8 would cause a problem for them – we will still have a way to go for middle and lower income folks.

    See blog for money saving tips around the home http://tiny.cc/mvzgg and at the gas pump http://tiny.cc/fgck2