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Oil's challenge

The Baltimore Sun

It's hard to say who is to blame for soaring oil prices. There are lots of villains in sight - those enriched oil executives grilled by Congress, OPEC conspirators, futures market speculators, inept regulators, indifferent politicians, environmentalists, Latin American dictators - the list goes on and on. To a greater or lesser extent, they are all to blame. The oil companies for feeding our addiction, OPEC for keeping us hooked by stabilizing prices and supply, speculators for manipulating the world oil market, commodities' regulators for failing to stop them, politicians for pandering to the oil companies and others for putting their special interests first. Then, there is us: millions of Americans who have guzzled a growing volume of oil despite repeated warnings about the consequences of our actions.

Now, with the global price of oil at record levels and experts uncertain about where it will go from here, it is time to stop talking about ensuring our future energy independence and get serious about doing it. And we should demand that our political leaders do the same. The goal should be to reduce our dependence on oil while developing alternative energy sources. Some consumers are already taking steps, driving less, deciding not to purchase gas-guzzling SUVs and pickup trucks and conserving in other ways. The short-term economic pain of higher prices is likely to be significant. Families, businesses and farmers in Maryland are expected to spend nearly $500 million more on gasoline this month than they did in January 2001. That's money that won't be spent on food, health care and other priorities.

Government can hasten our adjustment by quickly setting tougher fuel-efficiency standards for cars and trucks, eliminating unnecessary tax breaks for oil and gas companies, imposing a tax on oil products that would be used to fund development of alternative energy resources and requiring significant conservation steps in heating, air conditioning and lighting. Regardless of the conservation steps taken, the United States will be forced to rely on imported oil to some extent for decades to come. It's possible that the current price run-up is a bubble that will burst if hoarded oil supplies are released and producers increase their output. But any drop in oil prices is likely to be followed by more record highs as global demand continues to grow. If we lack the courage to significantly reduce our oil dependence, the social and economic costs will be formidable.

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