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Pittsburgh Post-Gazette Steve Massey Column

Posted on: Sunday, 30 April 2006, 15:00 CDT

By Steve Massey, Pittsburgh Post-Gazette

Apr. 30--WE'VE MET THE ENEMY, AND IT IS US: It's almost too easy. Gas prices jump above $3, oil companies post record profits and industry executives reap huge payouts -- in the case of ex-Exxon Mobile chairman and chief executive officer Lee Raymond, $686 million in the past 13 years, including a whopping $400 million retirement package.

It seems obscene. It is obscene.

No wonder so many of us are demanding that something, anything, be done to make those oil barons pay like they're making us pay.

But if you want to know who is most responsible for gas prices topping $3, look in the mirror.

For the better part of two decades, Americans have gone on their merry way, buying increasingly bigger cars and trucks and sport-utility vehicles, neither demanding or at the least worrying much that gas mileage standards haven't changed a lot over the years. The result is that only recently have automakers, particularly foreign makers, begun to introduce a wide range of higher-mileage vehicles.

Moreover, we increasingly have shunned public transportation, complaining for the most part that it's inconvenient -- that the hours and frequency of service are bad, the routes too far away or the service doesn't reach where it is needed -- and that the fares aren't all that much of a break. And some of that is undoubtedly true.

I plead guilty. I used to take the bus, but when I too often found myself stranded for as long as an hour if the clock ticked past 7 p.m. and I missed my last peak-time bus because of work, I went back to driving. Clearly, I'm not alone in making this change -- the Federal Highway Administration says the Pittsburgh region suffered the fourth-biggest drop-off in the use of mass transit in the 1990s among major metro areas.

More than 77 percent of the region's workers drove alone to work in 2000, the agency said, up from 72 percent in 1990 and 61.4 percent in 1980. The good news (or the discouraging news, depending on your perspective): The region's use of mass transit in 2000 still ranked eighth-highest among the nation's top 25 metro areas, according to report prepared for Allegheny County by the University of Pittsburgh Center for Social and Urban Research. And local weekday transit ridership rose in March for the 19th straight month.

This isn't to say that we all can solve the immediate problem simply by changing our behavior, i.e., buying more fuel- efficient cars, taking the bus or the T to work or -- like a few folks here at the Post-Gazette do -- riding your bike or even walking to work.

But all of these steps, taken over time, will do a lot more good for your pocketbook, and possibly your health, than the quick call to action that seems to be reverberating around Capitol Hill and Harrisburg these days.

The truth is, supposedly quick fixes are not only misguided, but they're also bad public policy. A gas tax holiday, temporary suspension of the state gas tax -- 31.2 cents a gallon in Pennsylvania, on top of the federal 18.4 cents -- or a windfall profits tax on oil profits wouldn't get at the root of the issue.

In some cases, such steps may make the situation even worse. Take the windfall profits tax (windfall being a relative term, of course. Profits earned per dollar of revenue are far higher at such companies as Microsoft and Yahoo! and even at General Electric, yet no one seems to be calling for an added tax on software sales, search engines or conglomerates).

Taxing excess profits (is that a non sequitur in an economy driven by the profit-motive?) sounds fair given that Big Oil companies are racking up mind-numbing amounts amid our misery -- Exxon Mobil alone earned a record $36.1 billion last year. But the last time we tried this in the early 1980s, domestic oil production fell and oil imports rose.

The end result sucked potential investment dollars out of the pockets of oil companies that otherwise might have gone not just to increased production, but also to increased refinery capacity and potentially even increased exploration of alternative sources of energy -- changes that could have eased the current sting.

A federal tax holiday or a state sales tax break undoubtedly would ease the pain being felt by lower-income workers who have few options other than driving to work.

But this short-term fix only undermines the reality that oil and gasoline prices are driven by supply and demand, and only when one or both parts of that equation are addressed, will we move toward long-term solutions.

Even President Bush seems to understand this.

On Thursday, he called for legislation to boost mileage standards for cars for the first time in 16 years. This came a month after his administration also moved to raise fuel standards for some of the biggest gas guzzlers, sport-utility vehicles, minivans and trucks.

Better fuel economy, the combination of new technologies and energy sources, and changes in our consumption patterns are steps that can fix what ails us at the pump -- and the pocketbook.

It may be medicine that won't do much to relieve our immediate pain and frustration, but if we have the patience and fortitude to stick with it, it may cure our illness.

Steve Massey can be reached at smassey@post-gazette.com or 412-263-1174.

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Source: Pittsburgh Post-Gazette

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