Thread: CFR report: U.S. should hike gasoline taxes:

U.S. should hike gasoline taxes: foreign policy grp

WASHINGTON (Reuters) - The United States should hike taxes on gasoline and improve energy efficiency to curb oil demand in a bid to formulate better foreign policy, a report from the Council on Foreign Relations said on Thursday.

The nonpartisan group's report "The National Security Consequences of U.S. Oil Dependency", prepared by industry and government experts, urged Washington to introduce a "substantial federal excise tax" on gasoline, tighten the Corporate Average Fuel Economy (CAFE) standards and use tradable gasoline permits to cap fuel consumption and improve efficiency.

"You can't simultaneously enjoy abundant energy, low-cost energy, and energy that comes from other parts of the world," task force chair John Deutch, former director of Central Intelligence and undersecretary of energy, told reporters.

CAFE standards were enacted in 1975 in the wake of the first oil crisis, setting minimum average fuel economies on vehicles. Two thirds of oil used in the United States is for transportation, of which 60 percent is used in personal vehicles.

The report did not spell out how high the gasoline tax should be, but estimated a gasoline tax of $1.00 per gallon would reduce demand by 3 to 6 percent over the first several years and would encourage use of more fuel-efficient vehicles over a course of 10 years.

World Bank Energy Director Jamal Saghir said on Wednesday governments around the world have not done enough to improve energy efficiency since the first oil shock in 1973.

The United States, which consumes and imports more oil than any other country, has 4.6 percent of the world's population, but uses 25 percent of the world's oil. Its dependence on imported oil, currently at 60 percent, puts the country in increasing competition with other importers, like the rapidly growing economies of China and India.

The International Energy Agency, energy watchdog for developed countries, expects an increase in global oil consumption of 43 million barrels per day between 2002 and 2003, with China accounting for 9 million barrels per day.

The United States, concerned about energy security, scuttled an $18.5 billion bid by China's top offshore producer CNOOC Ltd. for America's Unocal Corp.

"At best, these trends will challenge U.S. foreign policy; at worst, they will seriously strain relations between the United States and these countries," the report said.

The task force urged the United States to help China and India to join the International Energy Agency system.

China and India are not part of the 26-member IEA, which was formed by Organization for Economic Cooperation and Development countries in 1974 in the course of that oil crisis, mainly for failing to meet the 90-day oil reserve requirement.

© Reuters 2006. All Rights Reserved.

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Yeah this will go over like a led balloon to the taxpayers.

Hey CFR!!! The only thing we're going to hike is our collective leg!

You get my drift, PISSANT?!?!?!