re:  Climate bills test Senate's commitment

In her article advocating the imposition of a tax on carbon — ostensibly to wean American consumers off their alleged "addiction to oil" — Ms. Carolyn Lochhead makes some rather curious assertions and ignores some economic tradeoffs (see:  Climate bills test Senate's commitment, June 27, 2010).

First of all, she asserts that somehow our purchase of oil from overseas results in a "hidden cost" in "wealth and jobs".  Petroleum is purchased from foreign countries because we are unable to produce enough of it ourselves here in the US.  Some of that is because the government restricts the ability to produce oil from known reserves; whatever the reason, buying oil from overseas increases the market supply of this commodity, which reduces the price of energy here in the US.  We use petroleum precisely because it is the most economical source of energy; if we were to spend more on energy, we'd have less money to spend on other goods and services.

Secondly, petroleum processing doesn't just result in energy-based products.  Petrochemicals are used to make a variety of products, from drugs to medical devices to construction materials.  Government action to artificially raise the price of petroleum would also increase the cost of health care, homes, and appliances, and would negatively impact our standard of living.  How's that for a "hidden cost"?

Thirdly, Ms. Lochhead ignores the hidden costs of alternative energies.  For example, material for use in producing batteries or solar panels must be mined, which has its own environmental and safety impacts.  Windmills can result in bird deaths.  Batteries can produce hazardous and toxic wastes that must be disposed of.  Windmills, solar panels, and other products also employ the use of plastics and other petroleum-derived materials; raising the cost of petroleum would increase the cost of alternative fuels as well.

Contrary to the assertions by Ms. Lochhead and former President Bush, we are not "addicted" to oil and its derivatives.  If a more efficient, effective, and economical source of energy and other products were to come available, we would shift towards it — we moved towards carbon-based energy sources precisely because they provided a more economically efficient outcome.

Ultimately, we should trust private enterprise and free market innovation to help provide us with the best technologies — not government-imposed taxes, more bureaucrats, and giveaways to special interests.

Sincerely,
Dave Smith
Houston, TX