Dam Demand

The Energy Answer offers a comprehensive solution to one of our most important and pervasive problems. One can quibble about details, like what to tax, how to tax it, how much to tax it, and what to do with the revenues. However, the underlying premise - that we must address demand for fossil fuels as opposed to increasing supply - is unassailable. Expanding domestic energy production at the expense of the environment or lavishing subsides for alternative energy at the expense of taxpayers only will increase supply for an ever expanding void of demand made worse by the very increase in supply that these policies promote.

There is really only one way to dampen demand for energy and that is to raise the price of energy. Raising energy prices will dampen demand as surely as water runs down hill. Whether one remembers the history of the 70’s or looks at the ups and downs of current energy prices this principle is demonstrated over and over again to all of us.

Taxing energy reliably and consistently raises the price of energy. This is a very good thing. It dampens demand, the most important thing we want it to do. The money goes back at least to our government (and in this proposal back to the people) as opposed to people and governments that hate us. By creating a consistent market, one that we control, not OPEC, we can develop our energy future. This simple example will illustrate how important consistent markets can be. It takes 3 to 5 years for a car company to tool up and market a new car. Should Ford be designing cars for a world of gas at $3.25/gallon or for gas at $2.25/gallon? Two months ago when gas was $3.25 that would appear to be a no brainer. Now what should Ford be betting what might be it’s last chance on?

This fall, when you hear candidates say we should open up ANWR or subsidize hybrids you can just shake your head and say, “You just don’t get it,” because the problem is that Damn Demand.