Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: Richard Saunders who wrote (7662)	10/3/2000 11:48:17 PM
From: CIMA	Read Replies (1) \| Respond to of 24899

Oil shock could jar Canada into action on vital issues Bill Tieleman National Post Big oil has just given Canadian consumers a good kick in the gas, and while soaring prices are offensive, they just might be the ticket to encourage an overdue review of our environmental priorities. And if the soaring price of gas isn't already enough, wait till the first heating bills of fall arrive and people realize the highway robbery they suffer at the pumps has become a home invasion of jacked-up fuel oil and natural gas costs. But while truckers have blockaded oil refineries and service stations throughout Europe in recent months and their Canadian counterparts threaten the same, it's worth considering what caused the problem, and looking for real solutions. Canadian Alliance party leader Stockwell Day, following happily in the footsteps of American oilmen George W. Bush and Dick Cheney, simplistically blames government taxes. The election-sensitive Liberals are considering a gas tax cut. And Conservative leader Joe Clark has never got over how oil price policies ended his short career as Prime Minister. So, should we go back to the good old days of 1998, when regular unleaded gas sold for 52¢ a litre, instead of today's 80¢, by reducing taxes on fuel? Gasoline tax cuts may seem politically appealing, but gas taxes are neither the cause of nor the solution to high prices. First of all, taxes have not changed at all in the past two years. The federal excise tax of 10¢ a litre is the same, as are provincial taxes such as Ontario's 14.7¢ a litre or B.C.'s 11¢. The 7% GST hasn't changed, although the GST per litre obviously increases when the base price of oil goes up. So where does the gas price increase come from? Big oil companies and oil-producing countries. Crude oil cost 12.5¢ a litre in 1998, but more than doubled to 30.6¢ last month. Refining and marketing costs were 11.9¢ a litre in 1998 and 16.6¢ in 2000, a jump of nearly 40%. Given that key oil producers are dictatorships such as Iraq and that big oil companies are more powerful than many democratic governments, can anything be done to stop Canadian consumers from being hosed? Actually, quite a lot. First of all, it's time to increase the fuel efficiency of automobiles, expand public transit, promote alternative energy sources such as solar and wind power and find ways to improve home heating effectiveness. During the oil crisis of 1973, these things were deemed essential, but as gasoline became more plentiful again, energy efficiency gave way to gas-guzzling sport utility vehicles. The results are clear -- or rather, a dirty cloud of toxic automobile emissions that hangs over every major Canadian city. The David Suzuki Foundation points out that up to 16,000 premature deaths per year can be attributed to air pollutants, while tens of thousands more people suffer from respiratory ailments. And as we daily poison the air we breathe, our planet is being artificially and dangerously warmed with greenhouse gases. Ensuring that gasoline consumption increases by cutting fuel taxes -- and diverting revenue from improving much-needed social programs -- is truly absurd. Another critical government failure -- to force automobile manufacturers to build more fuel-efficient cars -- should be corrected. In 1981, the federal government passed but never implemented the Motor Vehicle Fuel Consumption Act, which would have allowed Canada to demand improved fuel efficiency of all vehicles sold in the country. Without the hammer of legislation, government has let automakers put their foot to the floor. Natural Resources Canada estimates that the average fuel economy of new cars will improve by only 7% between 1995 and 2010. The Suzuki Foundation says that simply by reducing average car fuel consumption from today's 11.8 litres per 100 kilometers to five litres, the CO2 produced each year by a single vehicle would drop from 5.57 tonnes to 2.36 tonnes, significantly reducing greenhouse gas emissions. Another key government action that would fight high gas prices is to ensure that independent retailers are not squeezed out of business by big oil. Quebec has established a "below cost selling law" that prohibits companies from selling a product for a lower price at retail than it costs to produce at wholesale if the intent is to eliminate competitors. High gas prices are hurting consumers. But the solution is to reduce consumption and increase fuel efficiency, not to cut gas taxes. It's the only way we will ever be able to breathe easier. Bill Tieleman is president of West Star Communications, a Vancouver communications and strategy consulting firmregards, Bill Tieleman West Star Communications 3rd Floor 1260 Hamilton St Vancouver BC V6B 2S8 Tel. 604-844-7827 Fax 604-608-6301 Website: www.weststarcommunications.com