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125 comments on People in Glass Houses

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SunnyvaleCA on November 4, 2006 - 5:52pm

Part of the beaut of taxing oil extraction is that California's neighbors have to foot part of the bill. If California just increases at-the-pump taxes, then only California suffers. Prop 87 at least has the California benefit of syphoning money from our neighbors to pump up our own economy.

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Engineer-Poet on November 4, 2006 - 9:12pm

California produces about 730,000 barrels of oil per day, while in 2002 it consumed 980,000 bbl/day of gasoline alone. As any restriction on California oil production is going to have some small upward influence on the world price of oil, California's net position as an importer means some cash is going to flow out of California as a result of Proposition 87. The only benefit is part of the zero-sum game of money being collected by the state instead of going to shareholders. (A motor fuel tax would depress demand and tend to lower world prices slightly, leading to less cash leaving California due to fewer and cheaper imports.)

I hadn't realized that until I looked at the production and consumption numbers. It looks like Khosla & Co. are wrong, and T. Boone Pickens and the other folks who favor stiff fuel taxes are right.

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