If the run-up in the price of gasoline has [...]]]> Sorry, but this news story just set me off this morning. Rep. John Dingell of Michigan is proposing a 50 cent tax on every gallon of gas sold to discourage consumption with the idea that it will help cut greenhouse gas emissions. What a friggin’ moron!

If the run-up in the price of gasoline has taught us anything it is that the demand for gasoline is pretty static. As prices increase motorist may be more conscious of their driving habits and work harder to consolidate errands into a single trip to slightly reduce consumption, but the bulk of our driving is not discretionary. We must go to work. We must make at least the occasional trip out for groceries, household items, etc. We have to bring the kids to day care. Except for those few who live in a dense urban environment, the automobile is a fact of life. Yes, there is public transit in many areas, but in many areas this just isn’t practical (or safe). Imagine trying to lug an entire cart full of groceries onto the bus for the ride home! We have seen in the last year that although gas prices have skyrocketed consumption has largely stayed the same. Another 50 cent hike per gallon isn’t going to keep Americans off the road and from living their daily lives.

Of course this is from a member of the same party that always cries the loudest when gas prices do go up and likes to threaten the big oil companies with new taxes. If this new tax were enacted the heat would likely be on the oil companies for the increase and not the politicians since most Americans are too politically disinterested to know of all the taxes on gasoline that are already collected, which is typically around 40 cents a gallon.

As a former employee of the refining company of a large oil company, I can tell you that refining company profits aren’t really that impressive. Refining and marketing is considered a necessary evil. Although refining companies are doing reasonably well now, it wasn’t that long ago that many were losing money. Where was the outcry for the refining companies when gas was under $1 a gallon? In the company I worked for, the message was always that our exploration and production arm made a great profit and the expectation for us in refining and marketing was not to lose too much of those profits.

Even to say that the large western oil companies are to blame for the increase in crude oil prices and thus the increase in gas prices is ridiculous. Reserves controlled by the likes of BP, ExxonMobil, and Shell are dwarfed by the vast reserves controlled by companies controlled by governments in Venezuela, Russia, Saudi Arabia, and elsewhere. Everyone else, including the major western oil companies, are largely at the mercy of these state-owned companies when it comes to the market prices of crude oil.

I’m not going to argue the oil companies are without sin, but they aren’t the source of all evil either.  I just get angry when these stupid politicians start spouting off about the economics of crude oil and gas prices without even an elementary understanding of what they are talking about.