How's this for a 'œdouble dose of irony?' asked the Pittsburgh Post-Gazette in an editorial. The very day last week that President Bush signed his much-hyped energy bill into law, the price of crude oil hit $64 a barrel, pushing gas prices ever further into record territory. For Bush's pals in the oil industry, anyway, it was win-win. We're now shelling out an eye-popping $50 to fill up our gas tanks, just as the pork-infested energy bill confers billions in tax breaks and other goodies on the industry. Bush, at least, was careful not to promise too much to sticker-shocked consumers. 'œThis bill is not going to solve our energy challenges overnight,' Bush said. 'œIt's going to take years of focused efforts.' But 'œfocused' hardly describes a 1,745-page law that barely mentions conservation and does virtually nothing to ease our addiction to foreign oil.
Here we go again, said Austan Goolsbee in Fortune. Every time gas prices spike, we're told that only concerted conservation can reduce our dependence on foreign oil. That sounds nice, but it 'œignores the way oil pricing really functions.' The fact is, the oil we import from overseas is much cheaper to produce than the oil we drill ourselves. So if Americans were to swap their gas-guzzling Hummers for bicycles and start wearing sweaters indoors, energy prices would go down some. But the drop in demand would hit U.S. oil producers hardest, since their profit margins are slimmer than their overseas competitors'. We'd end up consuming just as much foreign oil, while damaging our own economy. The long-term solution to high-priced oil is to develop alternatives such as solar and wind power. As for the short-term solution? The 'œsad reality' is that there isn't one.
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