I know, I know.  You are pissed as hell that gasoline prices are over $ 5 a gallon.  And, that means freight prices are zooming up, so our food and sundry items are also manifesting inflationary increases.

Let me start by saying, I feel the same way.  But, we should recognize that to a large degree, our situation is related to Russia’s invasion of Ukraine and the claimed approach to impose sanctions on Russia.  (I am not impressed with how Europe is really avoiding Russian petroleum products.)

And, keep in mind that gas costs more than $7.60 in Germany, $ 8.25 in France, and $ 7.85 in Canada.   Obviously, our gas prices in America are lower than almost anywhere in the world (except for Saudi Arabia, where it’s under $ 2.50 a gallon).

Now let’s get real.  Despite the BS that many Trumpites proclaim (Senators Joni Ernst and Josh Hawley and mendicant Congressman Kevin McCarthy easily come to mind), the fact is that the US is energy independent.  We don’t need to import any fuel for our needs.  (We do- but it’s less than what we export- and that is more related to the ease of delivery to various parts of our nation.)  And, we have been a net exporter of fuel products for a while- although the pandemic did set us back a bit for three or four months (not to mention some hurricanes and plant explosions).

The issue is that oil prices are set internationally.  So, if Russian oil is taken offline, prices increase.  As China releases Shanghai from lockdown, its demand increases.  Both events cause petroleum prices to rise.

There are only two ways to keep our energy prices in control.   The first way is what President Biden has been advocating for a while.  Invest in renewables, improve our electric grid to easily handle solar/wind sources (not to mention to harden it from foreign hackers), better battery technology, etc.   (Before you bitch and moan, how about another fact- it is cheaper to erect and operate a new wind or solar facility that it is to operate an existing coal plant.)

The second way it to impose a windfall profits tax on the American Oil Giants.  Yes, I know that only 7% or so of our petroleum is derived from (ridiculously low) federal land leases.   But, our domestic producers have not increased their capital investment or their production targets [they’ve actually produced LESS this year than last], despite their record profits.

What record profits?  How about that the big four firms have doubled their profits this year compared to last year. (That’s more than $ 75 billion in profits!)  All the while, while producing less fuel.   OK. let’s make it more revolting.   Since it’s still June, we don’t have full Q2 figures yet.  But, Q1 2022 the profits were 300% higher than they were in Q1 2021- or more than $ 35 billion.

While we think we imposed a ‘windfall profits tax” back in the 1980s on the petro-industry, it was closer to an excise tax.   (This tax was computed before profits were determined by taxing the difference in the price of crude per barrel compared to a reference value.)  And, we should also ensure this tax covers both public companies and private entities (think Koch Industries, which uses tar sands, not just oil pumped from the ground).  And, we could give credit to those firms that increase their production of fuel.

The tax dollars collected could then be used for infrastructure projects- like electric grid upgrades, wind and solar plants- all things related to our energy needs.  But, I know that Congress will also be tempted to distribute those funds directly to taxpayers- without regards to means or need bases.   We should resist that temptation.

It’s time to do something concrete.  (Eliminating the gas tax for 90 days is not a solution; moreover, there is no guarantee that the oil giants will even pass along that savings to Americans at the pump.  In other words- it will be a bigger giveaway to the oil giants.)

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