What To Do About Gas Prices
What To Do About Gas Prices
A crisis and an opportunity
Gas prices have shot up in the US because of the Russian invasion of Ukraine, a reduction in US refinery capacity, and higher seasonal demand. Whenever this happens, it has an outsized role in US political discourse for reasons that I think are both understandable and hyperbolic. The media certainly loves to talk about gas prices when they are high. I also saw one theory that people notice gas prices more than other things because they are plastered on giant billboards all over the place. But from a material perspective, this country is spatially designed around the personal automobile, and other forms of transit are consequently onerous if not deadly. Even though they have skyrocketed recently, our gas prices are among the lowest in the world as a percentage of income. For these reasons, and perhaps some cultural ones, our vehicle miles traveled per capita are the highest in the world. And, driven by lax regulation and skyrocketing sales of huge gas-guzzling SUVs and trucks, our average CO2 emissions per kilometer driven are second only to Canada.
Unsurprisingly, Republicans are hammering Democrats in campaign ads over the current spike, and Democrats understandably feel compelled to at least appear to be doing something to reduce the pain people are feeling from sustained increases in their fuel expenses. In our car-centric society, this directly hits many working class people hard, and also drives up the cost of other goods due to higher transportation costs. Proposals have included a windfall tax on oil companies’ profits, some form of cash or tax credit, temporarily suspending the gas tax (currently $0.183 per gallon), asking oil companies to be less greedy, and increasing domestic oil and gas production. I am all for taxing oil companies and giving people cash universally, although I am not sure how much the former would actually help alleviate this particular situation in the near future. Increasing domestic oil and gas production takes time and would have a negligible effect on gas prices in the short and medium term, and is of course terrible for the health of people and the planet. The gas tax holiday is a bad idea that would provide miniscule relief for consumers at best, increase oil company profits, and possibly induce more demand for the highly polluting activity of burning gasoline—which we desperately need to be reducing rather than incentivizing.
There is good reason to believe that slashing gas demand will have a higher impact on reducing gas prices than trying to increase supply. In both the immediate and long term, demand reduction is absolutely crucial to not only ease the burden of high prices but reduce pollution and greenhouse gas emissions. To that end, the Center for Public Enterprise recently released a report with some useful recommendations for policymakers:
Fare holiday to get people on buses, trains and micro-mobility as quickly as possible
Compress timelines for transit infrastructure investments to grow ridership base
Incentives for firms to allow and encourage employees to work from home
Encourage carpooling with incentives and a bully pulpit campaign
Consider a national speed limit reduction
These are all great ideas to both alleviate the pain of gas prices and work towards a just and sustainable transportation system. It is also vital to massively increase investment in our woefully inadequate public transit systems. Even the best ones in the US, like New York City and Chicago, have been allowed to deteriorate rapidly as of late, and our largest transit systems are facing down fiscal cliffs. It would be disastrous for governments to let this backsliding continue.
As far as the oil industry goes, asking them to voluntarily reduce their profits is ridiculous. Maximizing profits is capitalism; if you do not like it, you should start nationalizing the industry. This situation where the US government massively subsidizes the fossil fuel industry in myriad ways then begs them to do certain things is the worst of all worlds: private profits, socialized costs, and little control. It is certainly not a good setup for an energy transition in myriad ways. Nationalization, while largely absent from the neoliberal mainstream US political discussion right now, has been used many times in the past here and is fairly normal in many countries.
More broadly, I think there is a good chance that inflation and relative shortages across the economy may be here to stay in the US (to some extent), particularly in the context of increasing ecological breakdown and climate destruction. The disruption of the COVID-19 pandemic revealed the fragility of our present globally interconnected, profit-driven, just-in-time supply chains. Despite the fact that health-related production reductions have been largely gone for some time now, many goods and services that US residents have grown accustomed to having access to whenever we want can still be hard to get and/or are significantly more expensive. So the decades-long trend of cheap and ubiquitous US consumption, a key part of global capital circulation and accumulation, should probably be seen as an unsustainable aberration rather than the norm.
While this disruption is harmful to the US working class in the present structure of our society, it does not have to be. Inflation and supply chain shocks could be an opportunity to change production and consumption to be oriented around the global health of humans and the planet. While the result of this will necessarily be reduced aggregate consumption in the US, this can be abstract, so I think it is better conceptualized as qualitatively different consumption. For example, reducing gas demand by reducing the need for and centrality of cars in policy and planning will inherently reduce individual and aggregate resource consumption, but this will largely be felt as an increase in quality of life with less air and noise pollution, more exercise, more free time, less transportation spending, and less danger and harm. It will also reduce exploitation and pollution on the extraction and production side, which often occurs outside of the US for goods we consume here. This can help form the basis of solidarity among the global working class across supply chains, an ecosocialist necessity as both a means and an end.
Profit-seeking entities always try to exploit crises like inflation to further entrench their power. Even people with good intentions are incentivized to respond to higher gas prices by trying to alleviate the pain in ways that reinforce the status quo political economy, which is causing not only higher costs but myriad social, environmental, and economic ills. Instead, we can see this for what it is: the result of a system based on profit accumulation that produces fragility and inequality as a feature rather than a bug. The present state of things is not inevitable or immutable; it is produced, over and over again. It is time for us to change course and build something better.