The pickle with oil

It has long been clear that a proper carbon tax would help Americans understand the actual costs of our behavior vis-a-vis gratuitous trucks used as fashion accessories for masculinity, excessive beef consumption, etc. But we've never had the political will to impose one.

A combination of things has changed the landscape. ESG investing, which disincents the chasing down of additional reserves by extractive firms, has dramatically reduced investment in oil-producing assets and taken away America's recent status as the world's swing producer of oil, i.e. the place that could spin up production quickly in response to price signals from the market. So, perforce ESG has functioned like a market-imposed carbon tax.

Of course, Russia's invasion of Ukraine has thrown the market into turmoil, and the current swing producers of OPEC+ have decided to decrease production. So Biden has continued to draw down reserves from the US's Strategic Petroleum Reserve (SPR), seemingly in a desperate attempt to keep the price of gas low through the midterms.

The problem, of course, is that the SPR is meant to be a strategic asset for the US, not the Democrats. If we actually needed the SPR for, say, war, it won't be there. Rather than having the price of gas suppressed by government action, in the long term it would be much better if people actually paid the price of gas when they were using it (as opposed to at some time in the future when the government has to replenish the SPR). 

Of course, for the sake of democracy we really don't want a man who was decisively defenestrated from office and then has forced his party to declare fealty to the idea that the election was stolen to return to power. If only the Republicans could implement some of their sensible critiques of policy without tipping over into populist nonsense, or if Democrats could be open enough to listen to reason on occasion instead of having to throw the kitchen sink at buying elections.

Rather than draining the SPR, it would be better to provide cash to lower income people at moments like this to help them buy gas and let wealthier people pay the actual cost of gas.