Conservation Takes Back Seat in Gas Price Debate

When President Clinton first proposed an increase in the gasoline tax as part of his 1993 budget package, he said that a new tax on energy would not only reduce the federal budget deficit but encourage conservation.

Three years later, as Congress and the White House debate repeal of the 4.3-cents-a-gallon tax that was enacted in 1993, hardly anyone--except for a few lonely environmental groups and a handful of obscure Department of Energy bureaucrats--has a word to say about saving gasoline.

Although U.S. reliance on imported oil is edging toward 50% after sinking as low as about 27% in 1985, no one is saying that the current spike in gasoline prices should be a warning that Americans’ petroleum consumption habits must be curbed.

Absent are the warnings, typical of past debates, that cutting the tax would only encourage profligate use of fossil fuels and increase the nation’s dependence on imported oil.

When Americans discovered that pump prices had shot up 20 cents a gallon or more in the past few weeks, Republicans in Congress raced to the microphones to proclaim their support for a gasoline tax rollback as a way to reduce middle-class taxes.

Clinton rushed to use his authority to sell 12 million barrels of oil from the nation’s strategic reserve as a way of goosing fuel supplies and lowering gas prices.

When gasoline prices shot up in the oil shocks of 1973 and 1979, the nation responded with conservation measures that had profound impacts on driving habits, automotive technology and the American psyche.

Government set fuel-efficiency standards for cars and light trucks, a nationwide 55-mile-an-hour speed limit was imposed and Americans became conscious of the nation’s potentially dangerous reliance on foreign sources of oil.

Imports dropped steeply as a percentage of domestic consumption, from 43.1% in 1979 to 27.3% only six years later. U.S. oil consumption fell between 15% and 20% in the same period while automotive fuel efficiency increased 50% between 1979 and 1991.

Since then, however, oil consumption has grown and dependence on foreign sources has hit historic highs. Gains in fuel-efficiency in vehicles have stalled as more Americans buy gas-guzzling vans and sport-utility vehicles to replace their more economical sedans and station wagons.

And today’s response across the political spectrum to the current gas price mini-shock is not that the United States must rethink its addiction to cheap gasoline.

Rather, both sides are proposing that the government should intervene to keep prices down--either by cutting the federal tax on gas or by manipulation of supplies.

The public appears to believe--and many experts agree--that the current supply crunch and price spike are merely temporary and that cheap gas will be back at the pumps by summer.

“This is a one-shot phenomenon caused by two nonrecurring events--the weather and anticipation of Iraqi oil returning to the market,” said oil industry analyst Benjamin Rice of Brown Bros. Harriman in New York.

He said American motorists are unlikely to change their driving habits or become conservation-conscious because “they haven’t been stung hard enough or long enough.”

But environmentalists warn that overconfidence about supplies is likely to lead to future shocks that will be harsher than they need to be. Public officials should be discussing ways to reduce oil consumption, rather than pandering to public cries for lower prices, said Dan Lashoff, an energy specialist at the Natural Resources Defense Council.

“The White House and Congress are not talking about it [conservation], that is true,” Lashoff said. “When you have a price shock, people look for quick fixes and it’s not a particularly good time for a rational debate on a long-term solution, unfortunately. Clearly that’s what we need to do.”

Senate Majority Leader Bob Dole (R-Kan.), the presumptive Republican nominee for president, said Friday that he intends to bring up the gas tax rollback for a vote in the Senate before the summer driving season begins on Memorial Day weekend.

He demanded that Clinton join him in the effort. “Americans are overtaxed and need relief that will allow them to keep more of what they earn to spend as they see fit,” Dole told the Senate Finance Committee, which was taking testimony from transportation interests on the effect of taxes and higher fuel prices on their costs of doing business.

Clinton, for his part, has told Dole that he is willing to discuss repeal of the 4.3-cent gasoline levy if a way can be found to replace the lost revenue. Removing the tax would cost the Treasury about $2.8 billion for the rest of the year and nearly $30 billion over five years.

And a senior administration aide suggested Friday that Clinton would be delighted to sign a bill linking repeal of the 4.3-cent gasoline tax to an increase in the minimum wage.

If the Republicans “were dumb enough to send us the minimum wage and a gas tax cut together, he would sign it in a second,” the official said.

While Clinton sees political mileage from cutting gasoline taxes, his enthusiasm is not shared by everyone in his administration.

Joseph J. Romm, the Department of Energy’s deputy assistant secretary for energy efficiency, said the Clinton administration has tried diligently to promote conservation, despite fierce opposition from free-market Republicans in Congress.

He said that cutting the gas tax now to deal with today’s price increases would only exacerbate the long-term crisis of excessive consumption and overreliance on imported oil.

“Some of the factors that have contributed to the short-term problem are only going to get worse,” Romm said. “U.S. and East Asian consumption are rising steadily. . . . The next oil shock will make those of the 1970s look trivial by comparison.”

Why, then, is the president talking about tax cuts and temporary supply increases instead of conservation?

“We’re working on that,” Romm said wryly.

* FUEL INEFFICIENT: Americans’ love affair with gas guzzling cars continues. D1

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Oil in America

Americans are relying more and more on foreign oil as the number of miles they drive is going up.

% of foreign oil consumed in the U.S.

Miles per gallon

Oil consumption (millions of barrels per day)

Miles Driven per car (in thousands of miles)

Source: Energy Information Institute