'Tax' Revolt

Posted: Jun 30, 2008 12:12 PM
'Tax' Revolt

On the eve of the 4th of July, 2008, Americans are arguably as angry about being taxed without representation as at any time since they declared their independence from Great Britain. At the moment, they are furious about having no say over what amounts to a “tax” levied in the form of extortionate fuel prices driven by the supply-manipulating OPEC oil cartel.

As was true 232 years ago, we must channel that anger into action. This will require not just declaring independence from the Saudi-led oil monopoly, but taking the steps necessary to secure our freedom.

OPEC is able to effect an oil levy worth hundreds of billions of dollars each year for basically one reason: Currently, our transportation sector is almost entirely dependent on oil-derived gasoline and diesel fuels. As a result, our citizenry, economy and society today have no choice but to pay the tax and hope that the Saudis and their friends will recycle the national wealth thus expropriated by buying up our financial sector and other strategic assets for pennies on the dollar.

As Robert Zubrin, author of the best-selling Energy Victory: Winning the War on Terror by Breaking Free of Oil, puts it: “OPEC will clear $1.5 trillion in net export profits this year. The entire worth of the US Fortune 500 is $18 trillion. So at their current rate of looting, OPEC will accumulate enough cash to buy majority control of the entire Fortune 500 within 6 years.”

As outrageous as the present pass may seem with the price of oil at over $140 per barrel, U.S. and foreign capital markets are being rocked by the prospect that there is – under present circumstances – no end in sight. Panicked selling on Wall Street followed a recent warning that gasoline could soon sell for $7.00 a gallon. Why stop there?

The truth of the matter is that OPEC won’t – unless, that is, we declare that our cars will henceforth be made capable of operating independent of gasoline.

Fortunately, this is not wishful thinking. We have the option right now to require that new automobiles sold in this country be capable of using alcohol-based fuels like ethanol, methanol or butanol instead of or together with gasoline.

This is a well-known technology. There are already 6 million such “Flexible Fuel Vehicles” (FFVs) on America’s highways. Seventy percent of Brazil’s cars are FFVs, many of them made by U.S. auto manufacturers. It costs less than $100 per car to allow a new car to be gasoline-independent – less than it costs to fill up many of our vehicles at today’s gas prices.

The really good news is that both Senators John McCain and Barak Obama have declared their support for the Open Fuel Standard that must be adopted to ensure that each of the roughly 17 million cars we buy in this country every year are Flexible Fuel Vehicles. In a speech last week, Sen. McCain declared:

“Our government must also level the playing field for all alcohol fuels that break the monopoly of gasoline, to lower both gasoline prices and carbon emissions. This can be done with a simple federal standard to hasten the conversion of all new vehicles in America to flex-fuel technology – allowing drivers to use alcohol fuels instead of gas in their cars. Whether it takes a meeting with automakers during my first month in office, or my signature on an act of Congress, we will meet the goal of a swift conversion of American vehicles away from oil.”

For its part, the Obama campaign website features the following commitment:

“Mandate All New Vehicles are Flexible Fuel Vehicles: Barack Obama believes that all new vehicles sold in the U.S. should be flexible fuel vehicles (FFVs), which means they can run on biofuel blends like E85. Obama will work with Congress and auto companies to ensure that all new vehicles have FFV capability by the end of his first term in office.”

Both of these would-be presidents and leaders of their respective parties understand a central reality: It is not just a sensible policy approach to begin making our automotive fleet independent from gasoline. It would be utterly irresponsible to do otherwise, particularly given that those cars will on average be on our roads for approximately 17 years. If they are not FFVs, we will be locking ourselves into the present form of taxation without representation for decades to come.

It stands to reason that replacing OPEC’s monopoly with fuel competition will force the cartel and commodities speculators to drop the price of oil. At the very least, the predictable emergence of tens of millions of cars here and abroad that don’t require gasoline will create a free market in various alcohol-based “Freedom Fuels” that are considerably less expensive to produce than gasoline at prices well below today’s.

Congress is said to be incapable of acting before the November elections due to the partisan gridlock that has set in with a vengeance – even on so pressing a matter as gas prices and energy security. Given the stakes for our people and country, however, getting an Open Fuel Standard adopted this year should be a test of the avowed desire of both Messrs. McCain and Obama to work across the aisle to get things done. And every member of Congress should be challenged during this week’s recess: Will you declare our independence from OPEC’s oil stranglehold by adopting the Open Fuel Standard now?