Lake Martin Topics: GAS TAX PROPOSAL

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	Name:	MartiniMan -
	Subject:	GAS TAX PROPOSAL
	Date:	5/2/2008 2:03:10 PM

I think its a great idea to eliminate the federal gas taxes. Would drop the price per gallon by around $0.18. Not great but a step in the right direction. I have some comments about the current gas prices that cover a lot of territory.

First, most of the rise in gas prices in the U.S is being caused by the weak dollar. Yes, gas in Europe is $12/gallon but remember, not that long ago the dollar and euro were about equal. Today it costs $1.5 for every euro. Take it back to currency parity and gas is $8/gallon which is not that big a rise for Europeans. So, a stronger dollar (which is starting to happen) will ease gas prices.

Second, we have for the last 20+ years made misguided political decisions regarding drilling for oil in certain areas and making it nearly impossible to build new refining capacity. Those misguided policies are bearing the fruit in terms of higher energy prices. As an example, Bill Clinton vetoed drilling in ANWR in 1995 which had been proposed in the federal budget. Since then any attempts to open ANWR has been met with filibusters and other motions that have not been overcome. Even if we opened up ANWR today it would be 10 years before that oil can be delivered to the markets. Making reasonable decisions about opening drilling in many of these areas will be a long-term solution but won't help in the short term.

Conservation is likewise a longer term solution. Reducing our demand in the U.S. will help but only a little. There is still strong world-wide demand for oil, particularly in developing countries that are driving toward first world status (i.e., India, China, etc.). We can't control that and will definitely see the effects. As for replacement sources, with the current cost structure a lot of technologies and more importantly, brain power and ingenuity, will be applied to finding solutions. Again, this is a longer term solution.

Finally, government is not the solution to this problem, government created this problem.