Tuesday, January 25, 2005

Gas Subsidies for the World vs. Alternative Energy Subsidies

I don't think we need new taxes on energy to provide a financial incentive for alternative sources. I think we merely need to stop subsidizing the entire world's energy supply of oil. I think it is clear that only through the power and projection of US military force into the Middle East has oil been a continuous and reasonably reliable source of energy. Half of our military budget is spent on projection platforms to maintain sea lanes there. This allows oil to be a reliable and reasonably priced energy not just for us but for every country that imports energy. Why are we giving away the security for oil that our military provides to the rest of the world?

It is entirely foolish. Let the true price of oil bear the market conditions that would be if we did not spend 200 billion dollars per year on the flow. With oil at twice or three times the historic levels, alternative energy would not need subsidies to be cost effective, and over time with wide production would presumably be more efficient and therefore cheaper. The military savings from not having to screw around with the Middle East would be significant, and would offset somewhat the impact on the US economy giving us a competitive edge over other oil consumers who would bear the higher cost without any commensurate military savings to offset the new burden.

Not to mention the political and security benefit that we would get from not having to mess around with such a backward place like the Middle East.


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