Is now a good time for the U.S. to kick its oil habit?

Posted Nov 17th 2008 1:28PM by Joseph Lazzaro
Filed under: Politics, Commodities, Oil

With oil prices cut in half and gasoline near (or below) $2 per gallon, is now a good time for the U.S. to end its century-long addiction to oil?

The topic was raised by none other than the 'liberal bastion' of The Wall Street Journal Monday (subscription required0 with energy analysts and policy makers weighing in.

BloggingStocks Monday asked Energy Trader Jim Dietz to evaluate some of the major recommendations discussed.

Four-day work week: "It's possible, but the best plan would be voluntary, allowing companies to opt in/out and adopt plans that meet their production needs," Dietz said.

Mandated higher MPG for vehicles: "This is almost certain to be proposed by President-elect Obama, and will likely pass the Congress. It will reduce gasoline and diesel consumption."

Mandated flex-fuel cars: "Another measure likely to become federal law and it would take pressure off oil consumption."

Tax credit for fuel-efficient vehicles: "Another oil saver, and it stands a better than 50% chance of being passed by the next Congress."

Federal funds for next-gen vehicle: "This will likely be included in any rescue package for General Motors, Ford, and Chrysler. A next-generation vehicle would be a game-changer, energy wise, but it's years away."

Business / residential conservation tax credits: "Another substantial saver of oil and natural gas that the Obama Administration is likely to push hard for. It most likely will pass."

'Super' income for solar / wind power: "This involves the federal government paying more than the market rate for kilowatts generated by solar and wind technologies. It would encourage solar and wind development, but I don't think it will become law."

Increased federal gasoline tax: "A higher gas tax would reduce gasoline and diesel consumption, but I don't think the Obama Administration will favor one in a recession. Perhaps after the economy recovers."

Federal price floor for oil: "This involves adding a federal tax to oil if its price drops below a certain level, for example below $60 per barrel, add a $5 tax. It would save oil, but it's not likely to be passed by Congress."

Oil / Energy Policy Analysis: Higher vehicle MPG requirements, federal investment in next-generation vehicle technology, and tax credits for insulation / conservation efforts by businesses and residences, appear to be the likely federal policy actions as the Obama Administration and new U.S. Congress begins work. Alternate energy and environmental groups make complain that the changes are not bold enough, but the above may be all that's possible given the many demands placed on lawmakers amid the slumping U.S. economy.

Tags: alternative energy sources, CAFE, Congress, Democrats, gas tax, gasoline prices, GasTax, hybrids, inthenews, Obama, oil prices, Republicans, solar power, trade, trade deficit, TradeDeficit, wind power

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Reader Comments (Page 1 of 1)

11-17-2008 @ 2:25PM

Mike O said...

If there is a solid tax credit for zero emission vehicles, I will be first in line for a Chevy Volt next year.

11-17-2008 @ 4:06PM

Inkling said...

ALL homes that are constructed from here on should be supplied with solar power. it should be mandatory.

11-18-2008 @ 11:31AM

EMIL J KOVACH JR said...

ALMOST Two Thirds Of Fuel Consumption, In The USA Is In Commercial Vehicles, I Would Suggest We Approach Fuel Consumption, Two Ways--Issue A TAX CREDIT For Any NEW, American Made Vehicle, Purchased, And More Importantly--Issue A GOOD Tax Credit, For ANY VEHICLE Scrapped, That Is 7 Years Old, Or Older, This Would Help Remove These Old Inefficent Vehicles From The Roads. And Encourage New Car/Vehicle Production.
EMIL J KOVACH JR

11-18-2008 @ 12:02PM

Christine said...

What about Natural Gas Vehicles? We're currently working to build the infrastructure in Florida and I am aware of the same effort in many other states. There's information on wisegasinc.com. Solid tax credits and significantly reduced emissions.