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One big sigh... (Sarkozy on lowering gas taxes)
Posted by Jerome a Paris on May 27, 2008 - 9:00pm in The Oil Drum: Europe
Topic: Policy/Politics
Tags: gas tax, sarkozy [list all tags]
Sarkozy: "Demand for oil is stronger and stronger and supply is increasing very little, if at all"
When I heard him say this on the radio this morning, and continue by adding that we had to be aware that prices would continue to remain high, I was pleasantly surprised. But that did not last.
[UPDATE, Chris Vernon] Here's Gordon Brown's contribution to the debate.
The European Union should consider capping sales taxes on fuel products if oil prices rise further, French President Nicolas Sarkozy said on Tuesday, seeking to allay consumer fears about spiralling costs.
Ah, lower taxes on oil are sure going to help solve that "growing demand, stagnant supply" situation, right?
"We can't perpetually have a market where prices rise permanently, to the benefit of producing countries."
Yes. We. Can! (if we continue with our idiotic energy non-policies). I must admit that I am even more amazed at our politicians now that they are making the right descriptions of the energy market (saying, quite correctly, that oil is no longer cheap nor plentiful) - their lack of action when that diagnosis was absent was at least consistent, if irresponsible. Now, the contradictions are just stunning.
Given that voters seem to only care about how much their next gas tank will cost, and can't or won't grasp the consequences of short term fixes, it may be rational for politicians to pander to such denial.
One way or another, it's not going to last. But we're choosing the maximum pain route.
In related news British hauliers are today protesting fuel cost:
And continental fisherman have called an unlimited strike starting later this week, again in protest at fuel cost:
Jerome is right, it seems the voters only (understandably) care about their short term costs. This will translate into tremendous pressure on our politicians to “do something” however it’s hard to see what they can to simultaneously pacify the protestors without exacerbating the long term problem.
I for one canonly welcome th relief to the fishing holocaust. The EU controls nothing it seems. They should fish with sail boats and get what they can that way. Mayb a small portion of the natural fish stock can return after some years. PO can only be good in this sense but probably too late. Humanity has done a horrible crime.
Right on Galactic,
... and I for one quite enjoy my protein as beans on toast, as long as I have a jar of chili garlic sauce to go with it. As far as fishing with sail goes it really can be a gas. As a younger guy I spent much time in a small 10 foot sailed skiff trolling and jigging but wouldn't like to think about doing that for a living under sail most particularly now. There just isn't the stock and the last time I was out in small sail boat, after a twenty year absence, it was so disappointing I don't bother to fish any more, still go out for a sail though. And anyway there is also tortillas and beans which is IMO even better than beans on toast:)
Ummmm.... Tortillas are also rising 18%.
I was saddened to se all those truck drivers out there whinging, There industry has no future and they will be out of a job sooner than later, Its like Sarkozy the clown saying, We will continue using steam engines for the SNCF because it would put boiler makers out of work
They are not simply whinging. their livelihood is being destroyed.
Their complaint is not so much about the overall level of fuel costs, as the lack of a level playing field.
Whilst diesel prices vary so much within Europe truckers from other countries can come in using fuel bought at much lower cost.
We need co-ordination in fuel prices, but not as Sarkozny suggested to lower them, but to have a consistently high level.
This is due to poor political decisions, not just an inevitable rise in fuel prices, and the truckers are right to protest the incompetence.
EuroTunnel offers (last time I checked) a special service for British lorries.
Come down to Dover with just your cab (tractor) and we will transport it to France.
Drive less than 1 km on French soil, fill up with cheap French diesel, come back and we will rail you back to England.
It does not sound like France needs cheaper diesel !
Alan
Consistently high prices are what is needed, instead of inefficiently crossing the channel for no purpose other than those created by varying tax regimes.
The Channel tunnel should be transporting more goods by rail, not lorries to fill up their tanks.
The point is that (eg. in France) the pain is shunted right down to the little man, the fisher, the small independent truck co., the individual poor commuter, farmer, etc. Greek tanker owners pass the cost right down to their customers (though I have heard they are feeling pain as well) and they limp along. At the end of the chain, as the payees or customers are strapped, the goods and services (fish to the incredulous housewife, trucking charges to the on-the-ropes small manufacturer..) billed can no longer be sold / paid for. So they prefer to demonstrate, or give up and shut down.
Besides that, Sarkozy is a grinning bling-bling buffoon.
"...it’s hard to see what they can to simultaneously pacify the protestors without exacerbating the long term problem..."
Unfortunately most governments see the long term problem as not their problem but the problem of a future government:-(
A report on the bbc today says "Gordon Brown and Alistair Darling are set to meet oil industry leaders...He says an increase in the supply of oil would lower the price of fuel and ease pressure on the government over the planned tax increases..."
http://news.bbc.co.uk/1/hi/uk_politics/7422802.stm
So there you have it, he is interested in easing the pressure on the government and this is just a delaying tactic to show he is listening or "feeling our pain". Of course a large enough increase in supply would lower the cost but as we know this is not possible.
Even those who should know beter are not helping, Vince Cable the economic spokesman for the Liberals (the third party) and a former economist at Shell says "...It may be that the world oil price will fall very substantially in the intervening months..."
Chris,
"it seems the voters only (understandably) care about their short term costs" the problem is that the voters are not being given a clear and unambiguous message.
They hear the media talking about prices coming down in the future, untapped sources and politicians saying they are going to do something such as Gordon Brown saying "top of the economic agenda for the forthcoming G8 summit in Japan should be a global strategy for addressing the impact of higher oil prices" or free insulation...
IMHO what needs to be said is we are facing a problem such as we have never seen before and we need to take every step possible. These steps should start by making it clear everyone is subject to the same problems, e.g. by completely banning the sale of gas guzzlers within three months thus showing that even rich people are affected.
The politicains best placed to do this are those who will not be reelected such as Bush and almost certainly Brown.
Best hopes for brave and honest politicians.
Well, if the same fishermen had not overfished their fishinggrounds in de last decades, they might still be able to operate economically.
Well, they could be upfront and honest and say fishing is not sustainable, the stock needs to recover anyway and it is an inefficient use of fuel. Then they could provide funding to retrain the fishermen to do something else.
Here in Oz we have the truckies staging a rolling protest (Irony++). This in a country where almost all of the freight is in a narrow north-south route (Mebourne-Brisbane-Cairns) or east-west (Melbourne-Adelaide-Perth), with next to no freight heading anywhere else (Adelaide-Darwin line only carries a few freights a week). There is no logical rationale for the massive long-distance trucking industry to even exist!
(My step-father has raised his prices twice this year already (earthmoving), and is now looking to get out altogether. I've advised him that if he's looking to get out (and he should, it'll wipe away all of his and Mums debts and leave money left over), he should do it soon!)
But in Oz, it seems trucks rule the roost, via the very loud Transport Workers Union. "Without trucks, Australia stops" etc. So we still build huge highway expansions, tunnels, bridges etc for vehicles, but don't bother thinking that maybe, just maybe, the whole paradign is broken and we should be focusing on Public Transport, primarily rail, instead.
Nah, no votes in that.
To some extent, I think that the delusional thinking we are seeing is blowback from ExxonMobil, Saudi Aramco and CERA, et al, asserting that--worst case--we don't have to worry about Peak Oil for decades. These parties are basically giving some degree of credence to the conspiracy theorists.
And dont' forget President Ronald Reagan envisioning "a future without limits," and the public and media lapped it up, and they laughed at President Jimmy Carter who warned all of us about the "catastrophe" of the energy crisis ahead. And then there are those who preached don't worry, there's lots of solar energy, we just need to make a switch... but they forgot to consider that we need liquid fuels.
I think history will not treat kindly that generation of politicians, Reagan, Thatcher et al that pandered to the grossest elements of human nature to get elected and allowed people to believe that there is no limit to how rich we can all get, and no limit to what the planet can supply us with, a mindset that is still very much with us.
Well, I saw a "documentary" called "In the Face of Evil" about Reagan which seemed to me to be the most shameless propaganda I've ever seen though it is much much less skillfully done than "Potemkin". Yet, it was on TV without any comment about its many false claims. You could see though that Jeane Kirkpatrick knew she was lying in her bits. It seems to me that history is going to have a lot of work to do to get past those who worship Reagan as an idol.
Chris
cj- the energy crisis ended while reagan was in office. oil dropped like a rock.
there is lots of solar and we can use it. we do need liquid fuels but they aren't going away tomorrow. we still have half our oil left. we can use solar to power our cars...
Of course the energy crisis did not end, it just became a non-issue, that is an important issue that is not on the public agenda.
"""We can use solar to power our cars.""" Hey John, what have you been smoking??????.
Who is going to buy a solar powered car he/she is out of work, the $35,000 SUV is worthless for a trade-in, inflation is rampant, and they can't make the house payments.
Daniel Yergin has an articale in the FT today headlined as Oil has reached a turning point. It's behind a paywall but you can register for free and view
http://www.ft.com/cms/s/0/57b6ff18-2bf2-11dd-9861-000077b07658.html
"...
What is now unfolding is an oil shock...
Oil supply, one might think, should be responding. Yet there are three obstacles. The first is time. These high prices have not been around all that long and development of new supplies takes many years. The second is access to new resources. And the third factor is what is happening to costs...
Everything is in short supply – people, equipment, engineering skills...
Demand is already responding to the new prices except in those parts of the world where retail fuel prices are controlled or subsidised. What can be done to improve the supply picture? The International Energy Agency’s work on future supply is getting attention. But the IEA’s message is not that the resources are not there. Rather it is the likely risk that the required investment will be “deferred” – will not take place in a timely way – because of these rising costs and because governments restrict access or postpone decisions...
The break point is already here. Oil is in the process of losing its almost total domination in ground transport...
..."
So no acknowledgement of Peak Oil but a push for more investment and less government restrictions. I detect a bit of passing the buck since he mentions the IEA message rather than CERA whe he says resources are there.
I wonder what exactly he thinks is going to replace oil? Pedal power? Flintstone feet?
electricity will replace oil.
Can apples replace oranges? Electricity (excluding a little hydro, wind, solar) isn't usually considered a primary source of energy. Electricity is just a vector, from which primary energy do you think this oil replacing electricity will be generated from.
I don't think the common man has ever heard of CERA and doesn't know the position of the oil companies. And if they did they have a distrust and dislike of the oil companies. The only authority figure that could possibly convince them that there is an oil problem is the leader of their country. Since most leaders are not talking Peak Oil the common man has no idea what is coming down the pike.
Even people with college degrees are mostly ignorant of the situation. I mentioned Peak Oil to a colleague the other day and gave some details and he asked me if this was some conspiracy theory I was reading about from some fringe group on a website.
Does this imply that French politico's are as stupid as American politico's. On this one issue it appears so.
The price of oil and gasoline has doubled in a very short period of time. Here in the USA gasoline consumption has dropped about 1 percent in the same time period. As long as people keep buying this stuff, the people that have the oil are going to keep raising the prices.
If you really want to stop rising oil prices you just have to build an electric vehicle and fuel it with solar power.
I rode this to work today.
http://www.evalbum.com/1414
This EV gets its fuel here.
http://www.zevutah.com/page/solar.htm
Now it is time for me to get off this computer and back to work on my Electric car.
Cheers,
Kyle
LOL! Great job though can't wait to see your electric car.
Siwmae (Hiya) Kyle,
Very nice suite of machinery, Kyle. It must make you really happy to have achieved something like this so far ahead of the pack. The techie-optimist side of me just loves this.
Bur -- erm -- the hard-faced-realist side of me asks: "Don't all the technologies that make and maintain all that machinery, and the roads you ride on, depend absolutely on petro-energy -- particularly oil -- to be set up and to be kept running?"
I won't tell you what the ultra-deep-green wilderness-mystic part of me says.
But still, can't help feeling: nice achievement, Kyle!
Cofion gorau (Best remembrances), RhG
Does this imply that French politico's are as stupid as American politico's. On this one issue it appears so.
No ... they just expect America to do all the work for them, and they're complaining America hasn't done so yet.
After all ... America's done all the work in WWII, in the reconstruction, fighting the soviets, securing the mediterranean, ...
"Hop to it, Yankees !" is what the French politico's are saying. Given that they'll be totally unelectable before the year ends, it's probably not a bad strategy ...
America did all the work in WW2? Pardon me? I think the Russians and Brits might have something to say about that.
During WWII, the Eastern Front (facing the Russians/Soviets) required 5 times as many German soldiers as the Western Front (American, Canadians, British etc). Despite this, the Eastern Front moved to Berlin a lot faster than the Western Front.
Oh, by the way, the Americans only started fighting when the Russians and British had been fighting for years.
The Red Army was supported almost entirely by US trucks (the Russians developed a preference for Ford over Chevy), American rations were a large part of the food (the Russians had many obscene jokes about Spam) and a good % of the aircraft were Made in the USA.
The T-34 tank was an American design.
The Americans also supported the British Army, airlifted enough goods over the Himalayas to keep the Chinese Army in the field, developed two different types of nuclear weapons and essentially defeated the Japanese single handedly.
As the old sayings goes "Amateurs debate tactics and strategy, professionals discuss logistics".
American logistics won WW II, on all fronts.
Alan
The chassis for the T34 was developed from the Christie suspension system.
All else was all-Russian.
The sloped glassis and side plates, the overhanging gun, the wide diameter turret mounting (for later upgrades), the wide tracks for snow and mud, the strange little gap between the 2nd and 3rd road wheels to allow for track running after a damaged track was shortened etc
- All Russian.
Much to the Chagrin of the Germans who answered with the Panther.
The T3 is the father of all tank design since.
Part of me would like to build a bike just like this, but my fiancee seems to have a really negative ideas about motorcycles. I don't know if the electric thing would overcome the objections or not.
She doesn't mind my riding a bicycle that much though, and I need the exercise.
Hello,
Yes, French politicians can be a pain.
Your motorcycle looks great. One question, why use a chain for transmission? (I am not very mechanically oriented, so there is probably a good reason.)
Are you aware of smaller versions?
Thanks,
FB
To be fair, if European countries lowered their fuel taxes, the effect would be to allow greater consumption by Europeans at the expense of other countries.
The funny thing is that German (and Austrian) oil consumption is booming along with the economy. German consumption increased by 7 % year on year for the first four months of 2008.
http://www.mwv.de/cms/upload/pdf/statistiken/aktuell/Abs.zip
I hope you all enjoy that little example of price elasticity. Diesel is up by 7,3%, jet fuel by 4,3% heating oil by 34% (the winter 06/07 was abnormally mild)
I have found this more than a bit bizarre also.
About the only explanations I have are that currently, the German economy looks to be doing really well (including exports which require transport) and there may be a bit of stockpiling going on, especially of fuel oil, as people realize that fuel prices are unlikely to decline in the next few months.
Nonetheless, the trend is quite disturbing in general, though it may have a bit of fin de siecle feel to it - why not drive while the driving is good?
Equally strange, people seem to have accepted 1.50 euro a liter fuel without any of the problems that 1.30 a liter resulted in.
I watch a lot of BahnTV. The rail infrastructure in Germany is fantastic. Yet I am shocked at how few people are using it at least from what I see on BahnTV.
True ridership is up, but one would think that with fuel prices about double what they are here in the U.S. cars would hardly be used at all. I get the impression that cars still rule, even in Germany.
The Bahn, cars, and Germany - where even to start?
Karlsruhe has a fantastic transit system, and is partially replacing DB and expanding formerly used or disused rail routes. Karlsruhe is also the only city of any size in this region (excluding Freiburg in a broader definition of region) which doesn't have a major Mercedes production facility.
But leaving aside the strong political position of companies like VW, BMW, or Mercedes, the Bahn seems remarkably capable of shooting itself in the foot, over and over again. This is a general German consensus - DB is considered to be the sort of organization that can always be counted on to pick the dumbest of any alternatives offered, at least in terms of actually considering DB an attractive way to travel. For example, raising rates is one thing - raising rates while making people pay for reservations for the first time AND telling the riders this saves them money is just insulting. (Yes, they did this a few years ago.) As for the engineer strike(s) last years - hard to imagine that any management could actually look like greedy incompetents when a locomotive engineer union was asking for a third more in wages, but yep, DB managed to do that. Even at a time when most Germans' wage increases have been flat for several years. (The engineers were seriously underpaid by European standards, it must be noted.)
However, I think the point about cars is that a car is a public display of worth, something which just can't be duplicated by taking the train.
Remember that, outside the US perhaps, fuel taxation is a key component of government revenue. If the tax is set as a percentage of say the wholesale price, then the government take goes up in lockstep. Even if that was uncoupled the price will most likely still rise. Illustrative fictitious figures may be; wholesale price 75c/litre, tax 70c, retail margin 10c giving a pump price $1.55/L. If the tax is capped at 70c/L and the wholesale price jumped to $1.00 then with the same retail margin the price goes to $1.00 + 0.70 + 0.10 = $1.80. Is this what Sarkozy is talking about?
In my opinion fuel must come under a carbon cap so that CTL is double penalised and there should be a large set-aside of fuel revenue for green investment.