Since my last discussion with "Liberty Dad" (love that handle, actually) seems to have been interesting -- just productive enough that we both gave some ground and admitted some points -- I thought I'd take a whack at another interesting idea he brought up:

Cicero at WoC notes that Bush has failed to ask Americans to sacrifice enough.

Yes, higher gas taxes. Bush, on 9/14 or so, should have said he was raising the gas tax by 1 penny, per month, until 10% of the federal tax collected came from gas, or until alternative transport came on-line.

Yes, higher gas prices will influence people in changing their behavior, which is what is needed. Also unpopular.

The US should offer gas/ energy tax collection as a percentage of gov't revenue to be the measure of a country's commitment to lower gas use -- instead of Kyoto's emissions.

Despite my otherwise often conservative values, or perhaps even because of them, I've always viewed myself as a bit of an environmentalist. (After all, isn't conservation inherantly, uh, conservative?)

But as part of my long period of "waking up" from many of my former culturally-absorbed assumptions, I'm starting to think about the standard arguments against oil and fossil fuel use. What are they? Are they true?

After if we're going to discourage fossil fuels, we are then, of course encouraging something else. And we'd better make sure that something else, whatever it is, isn't worse.

Well, what's so bad about fossil fuels?

The usual arguments are:

1. They're not renewable, and we're running out of them soon
2. They pollute the environment and are destroying the world
3. Oil tends to be located under countries with less than stellar issues on human rights and democracy

1. Are we running out of oil?

According to pages like this and this, we only have about 50 years before we run out of oil, at current rates of consumption. Of course, there are hints that untapped reserves may be three times known ones. That could make it 150 years, or something more like 90, if rates of consumption increase.

But there's another trend people don't mention: Over time, estimates of available oil reserves have repeatedly been revised upwards, and, according to some critics [PDF, see final paragraph] are increasing faster than consumption!

As this gentleman summarizes:

Not only does the argument rest on a flawed theory, it is empirically wrong. In his paper 'The New Pessimism about Petroleum Resources', Michael Lynch, president of the consulting firm Strategic Energy and Economic Research, illustrates how Colin Campbell's ongoing predictions of an imminent peak in production have consistently proven wrong while his estimates of total reserves have had to be revised upwards .

Also, in order to create a crisis, the pessimists have to discount so-called 'unconventional' sources of oil, such as tar sands, as too dirty or uneconomic; methane hydrates are apparently too speculative; coal liquefaction would take too long to come on line; and so on. Every alternative is shot down.

In fact, maybe tar sands would be more expensive to extract oil from or harder to clean up - but this wouldn't stop us using them if we needed the oil. Various problems that often occur with the development of new technologies are inflated into insuperable obstacles. Tar sands and coal liquefaction are both sufficiently advanced that they could absorb investment in production if it were needed.

So what is driving the wider popularity of the oil depletion argument? It is not, strictly speaking, all about the oil. Rather, a wider social pessimism, the idea that we are collectively messing up the world and are too short-sighted or greedy to do anything about it, is expressing itself in fears about oil.

There are some, like psychologist John Ray, who feel that these fears are raised by leftists politicians as a ploy to gain power. Indeed, fear is a powerful motivating factor. And what could be more threatening and worrysome than all of civilization coming to a screetching halt in just a generation?

Next, there's a question as to whether "fossil fuels" are indeed even "fossil fuels" -- a one-time energy supply which is non-renewable. There is a theory advanced by people like Dr. Thomas Gold that oil is not at all a "fossil" fuel, but is instead continually produced by deep, hot tectonic pressures.

I personally find the evidence he presents persuasive, and not because I have any vested interest in the matter.

So there's some question as to whether we will even "run out" of oil at all.

Next, even if we ignore all that, and accept the idea we will, indeed, be running out of oil at some point in the future, it's not clear why this idea, alone would lead us to need to raise taxes on oil in order to "artificially" shift away to other sources before that point.

After all, it's not like one day, poof, we'll suddenly be out of oil. Instead, the scenario is that scarcity would increase slowly, and prices increase slowly as well as one oil field after another dries up, or switches to more expensive extraction techniques to get the last remaining bits.

Assuming this happens at all, it would have roughly (see next paragraph) the same effect as artificially increasing prices now through taxation. But what's the point of doing that? If we need to adapt at some point, then how does pushing that up thirty years change anything?

But look what happens with a tax: It often goes to expand government which is one of the most wasteful uses of money ever discovered. This tax will not be coming from petroleum companies, but rather from consumers, who would have many better ways of spending it than by employing vast phalanxes of beaucrats who will produce meanless reports or (worse) spend their lives telling other, more competant people what to do.

In constrast, future hypothetical "natural" increases in oil prices would go towards paying for the more expensive extraction technologies being used to get that last drop out. Or towards finding other sources for it, such as deeper drilling or coal liquifaction.

Further, a delayed transition might actually be much cheaper or entirely unnecesary. By the time the hypothesized crisis arrives, we may have already solved many of the supply or demand problems through improved technology. Having this crisis "early" might be much more painful, and perhaps even, we may discover, pointlessly so.

The next detrimental effect of an "artificial" (taxation-caused) crisis is that, unlike genuine scarcity, it only affects some countries, not others. That means that as US oil demand decreases (if so), it means that world oil prices will be lowered slightly by this decrease in demand. In turn other "less-enlightened" nations, like Russia and China, will now see oil as being even more attractive than before, and will increase their consumption in a compensating manner.

And economic activity will tend to shift to those areas, without actually decreasing world oil consumption! Shortsighted! In essence -- as people argue Kyoto does -- this would just be a tax to shift money from "nice guy" countries who "care" (though perhaps through shortsighted policies) those who don't, without actually decreasing overall consumption. Talk about getting the incentives wrong!

Next, such an approach fragments technological efforts: Assume cleaner-burning vehicles, or vehicles using alternative fuels are more expensive. If there was a world demand for such, there would be world economies of scale to benefit from, as well as a tremendous demand and incentive to research.

But since there will not be, it means that technology which makes sense under the artificial scarcity created in the US will not necessarily be attractive outside the US, and vise-versa. That's bad because it means people will have lower quality and higher price, and waste money which might be better spent on recreation (which feeds people, too), healthcare, or charitable causes.

Look at the artificial crisis created by the Carter adminstration in the 70s. Did that help us today? Are we any better off, really, because of it?

So IF the issue were strictly one of projected future scarcity, I cannot see a tax as being beneficial in any way, and fear, indeed, it may be quite harmful.

As I'm tired of typing, I'll leave the other issues for future posts.