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We need white-market gas rationing

By MARTIN DYCKMAN
Published September 18, 2005

" . . . We could have been preparing for this all the years we knew it was going to happen." - New Orleans poet ANDREI CODRESCU on National Public Radio, Sept. 13

The fate of New Orleans was unthinkable only to those who refused to think about it. So were the gasoline shortages and price surges that also came in Hurricane Katrina's wake.

It wasn't as though we hadn't been warned. Twice in the 1970s, sudden supply interruptions - the Arab oil embargo of 1973-74 and the Iran hostage crisis of 1979 - exposed the vulnerabilities of our energy-dependent economy. Remember the panic buying? The long lines? The empty pumps?

Memories were almost as short as the emergencies. We rid ourselves of the 55 mph speed limit, traded in our small, efficient cars for SUVs, and kept none of the lessons learned except for the Strategic Petroleum Reserve as a hedge against yet another crisis originating in the Persian Gulf.

Didn't anybody worry about what might happen in the Gulf of Mexico?

And by then we were already paying near-record prices in response to the markets' perception that world demand was closely crowding production capacity. Demand will grow. Relative capacity will fall, no matter how many Arctic caribou or Florida beaches are deemed expendable. That means high prices are here to stay.

Let's please hear no more about cutting or suspending gasoline taxes. That would be literally pouring gasoline on the fire, the exact opposite of market discipline. The more gasoline costs, the more we have to think about driving less, driving slower, and "downgrading" to a smarter car.

What we need most of all is gasoline rationing.

But of course it won't happen. There's nobody in current politics who would dare to put it on the table, least of all in an administration whose footprints are as oil-soaked as those of George W. Bush and Dick Cheney.

I do not propose the kind of rationing we had in World War II, the last time the United States understood the necessity and meaning of shared sacrifice. The right system, rather, would set a total consumption target and give every lawful resident an equal share of it. However many gallons that turned out to be, those who could do with less, such as city dwellers, motorists with efficient cars, and children too young to drive, could sell their unused coupons to those who need more. The overall limit would suppress the market price.

This white-market rationing concept is nothing at all like World War II, when the average family car was allowed only three gallons a week, pleasure driving was banned altogether for a time in Florida and other Eastern Seaboard states, and stamps could not be traded legally.

White-market rationing means that those who could do with less would make the money that those who need more would be willing to pay. Those profits would go into American pockets rather than into Swiss banks, or wherever the market speculators stash their loot.

There is nothing radical or even exceptionally liberal about this. It differs only in detail and scale from the fungible pollution credits in the administration's pending mercury emission rules.

Another benefit: We wouldn't be so defenseless against the next foreseeable disaster, whether it's a hurricane in the Gulf of Mexico, a war in the Persian Gulf, terrorist sabotage of one or more oil refineries, or an al-Qaida takeover of Saudi Arabia.

In 1977, before the Iran crisis, President Jimmy Carter began to prepare a standby emergency rationing plan. He sent it to Congress two years later after the turmoil in Iran cut U.S. imports by 500,000 barrels a day.

The House killed it on a bipartisan vote of 246 to 159 despite Speaker Thomas O. O'Neill Jr.'s passionate personal plea that it would be like voting against the World War II draft. Soon after, a New York Times/CBS News poll found that the public preferred rationing to higher prices or shortages. But it showed also that the public didn't believe Carter's warnings about permanent shortages.

Congress finally approved his standby plan in July 1980, but nothing more was heard of it after his re-election defeat four months later.

That will be not the last word on it. There will be another supply crisis; the question is not whether but when. And once again it will be observed that we could have been preparing for it all the years we knew that it was going to happen.

Martin Dyckman's e-mail address is madyckman@verizon.net

[Last modified September 17, 2005, 02:15:31]