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A tax on the O&G industry is a tax on consumers. Demand for energy is largely inelastic, so costs are easy to pass on. Gas prices at only $3.50 are already sending Joe Biden's approval ratings through the floor. Sending gas prices past $5 or more means a reactionary panel of candidates get elected next cycle, which is counter-productive.



I always forget US gas prices are dollars per gallon. According to Google prices are currently less than a dollar a litre, in Europe the median seems to be about 1.8 dollars per litre (4.5 litres in a gallon). In the UK it is about 7.5 dollars per gallon.

The USA seems addicted to cheap fuel. That addiction needs to end sometime, and if you collectively cry about prices raising to less than the levels the rest of the world deals with just fine it doesn’t give much hope for the future.


> USA seems addicted to cheap fuel.

Cheap fuel means cheap transportation, which means cheaper goods and greater purchase power across the entire economy. This is especially the case in countries like the USA where population density is so low. In the EU we can accomplish corresponding purchase power with more expensive fuel prices because of population density (more than 3x more people per km than the US).

I don't think it is at all reasonable for the USA to just give up on cheap fuel because our situation can allow for more expensive fuel.


Consider the american built environment since WW2, gas at 7.50/gal would simply make many people’s daily lives unaffordable, and the most impacted people have the largest clout politically due to the rural bias at every level of our government. We would happily commit climate suicide first.


It would make people buy electric cars, or just trade 20 mpg SUVs for 40 mpg small cars.

If there is a rural bias, the solution would be to subsidize the rural areas to buy their votes. The solution to a problem of the commons, and the distribution of benefits, are separable (Coase Theorem).


> Demand for energy is largely inelastic, so costs are easy to pass on

Demand for energy is inelastic, but demand for O&G in the long term is less so because over time a higher price for O&G will push investment into alternatives.




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