Saturday, May 19, 2007

Benton County John Boozman's Energy Policy?

The Democrat-Gazette reports that gasoline prices in Arkansas set a record high Friday, averaging $3.02 for a gallon of pump-it-yourself regular. Nationwide, prices also broke the record, averaging $3.13. In Northwest Arkansas, we beat that with the average price yesterday at $3.224 a gallon, almost 23 cents more than in Little Rock. The newspaper did not report that Exxon Mobil Corp. also set a new record last month--net income rose to $9.3 billion for January-March, up from only $8.4 billion the first quarter last year. In 2006, Exxon Mobil posted the largest annual profit by a U.S. company — $39.5 billion. That result topped the previous record, also by Exxon Mobil, of $36.13 billion set in 2005.

“Chris Bartholomew put $100 worth of gas into his Chevrolet Suburban 1500 on Friday afternoon at the Kum & Go gas station in Lowell. His children play competitive softball, which can mean long road trips on the weekends for tournaments. ‘It’s affecting our kids,’ he said. ‘Basically, we have to rethink where we are going to travel to for softball tournaments.’” Right, Chris, and you might also rethink what kind of car you buy next time.

Consumers will either change their driving habits or find themselves with less discretionary income, said Kathy Deck, professor of the obvious at the University of Arkansas. Citizens will also demand that the politicians change our energy policies, or they will find themselves continually bent over and grabbing their ankles.

Congress should raise the Corporate Average Fuel Economy for cars and light trucks to 35 miles per gallon, which would save 1.3 million barrels of oil, or roughly $65 million each day. A more aggressive but very achievable increase to 40 miles per gallon would save 3.4 million barrels per day. The Feds should also give tax credits to those who buy hybrid or electric vehicles, reversing the Bush-Cheney energy policy that gave tax credits to people who bought SUVs.

In Arkansas, there is a move toward tax incentives for bio-fuels, but it remains to be seen whether this is a practical approach or merely a boondoggle to subsidize rich planters and corporate scam artists. Our state levies a 21.5 cent gas tax plus the federal tax of about 18.4 cents a gallon, meaning we pay a combined tax of 40 cents per gallon, and most of that is spent on bonds to build more highways. In Great Britain, the fuel tax is about $4.40 per gallon, not only a disincentive to drive and an incentive to buy fuel-efficient cars but also revenue to help subsidize mass transit and other sustainable energy investments that actively provide citizens with alternatives to driving.

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