The End of Cheap Oil is Now

Never underestimate a politician’s ability to pander. With gasoline prices nearing $4 a gallon and the summer driving season approaching, presidential candidates John McCain and Hillary Clinton have responded by calling for a consumer holiday from the federal gasoline tax. But both McCain and Clinton must know that blaming taxes for soaring gasoline prices is absurd. The tax hasn’t changed. What has changed is the price of crude oil, which hit a record $119 a barrel in April.

Get used to it. Contrary to McCain and Clinton’s feel-good simplifications, there’s no easy answer to this problem. Gasoline prices are rising-and will continue to rise-because global demand is outstripping supply. Combine America’s gas-guzzling ways with millions of new middle class consumers in China and India, and global demand is bound to increase for years to come (absent a global economic depression). Meanwhile, global oil supplies are essentially flat. This mismatch pushes up prices.

People’s Weekly World