Editorial: No quick solutions will change effects of supply and demand

The San Diego Union-TribuneFive years ago, a barrel of oil cost $26. Today, it is nearing $120. Five years ago, a gallon of gas cost $1.55. Today in San Diego, $4-per-gallon gasoline is common.And it is beginning to hurt. It is hurting consumers because they are paying more for a fill-up. It is hurting businesses because their expenses are going up. Consumers are further hurt because they have to pay more for products that use petroleum, which means just about everything we buy.There is plenty of blame to go around. Until recently, consumers in this country were driving bigger and bigger vehicles. We have failed to adapt to a situation that nearly everyone saw coming. That may be changing, but not fast enough. On the presidential campaign trial, Republican John McCain and Democrat Hillary Clinton are calling for a summertime moratorium on federal gasoline taxes. But, in the end, the 18.4 cents consumers would save on a gallon of gasoline or the 24.4 cents on diesel would be enough to buy a half tank of gasoline. But it would deprive the federal highway trust fund of millions of dollars and do nothing to address supply or demand.Some longer-term proposals likely would prove just as ineffective. Taxing “excess” oil company profits would only reduce exploration. Prodding the Organization of Petroleum Exporting Countries, and other exporters such as Canada, Mexico or Venezuela, appears to have done little good. The drop in the value of the dollar also hurts as investors withdraw from the dollar to petroleum futures and other investments.The reality is, there are no short-term fixes. Only permanent changes in supply and demand eventually will work. That means less consumption, more production, including alternative fuels beyond corn-based ethanol, and more nuclear energy. In the meantime, Americans will get poorer and oil-producing nations wealthier.