In a recent editorial titled "What to do about rising gas prices," Alex Epstein made one good point - gas prices are set by supply and demand. I agree that government action is very unlikely to lower gas prices. However, Epstein goes on to make a number of very misleading statements, which, if we accept them at face value, will lead us to disaster.
For instance, Epstein said, "Thanks to price increases, we can insure our continued access to gasoline to the extent we are willing to pay for it," implying that market forces will allow business to continue as usual. This is a dangerous and false assumption. Most of us only think about the petroleum that goes into our gas tanks. This is half of our oil use. The other half goes into manufacturing and transporting things that we rely on. So when the price of gasoline goes up, not only do our driving habits become more expensive, but the cost of everything we rely on - from building materials to clothing to food - also goes up.
Have you noticed that grocery prices have increased drastically in the last two years since Katrina drove gas prices up? If the price of gasoline keeps rising, what will happen to the cost of everything else that depends on petroleum?
It's hard to think of anything that we use that doesn't depend in some way on cheap petroleum. Most clothing contains artificial fibers made from petroleum. Clothing is transported from China to the U.S. in diesel-powered ships. What will happen to the price of shirts and socks as oil prices rise? Then there is food. Researchers have calculated that the average American meal travels over 1,000 miles before it reaches our dinner table. How much of the food we eat is produced nearby in South Dakota, and how much of it travels great distances to get here? I personally enjoy eating produce from Mexico and California in the winter and spring. But as fuel gets more expensive, I'm not sure I'll be able to afford fruits and vegetables that are grown with petroleum-based chemicals, harvested with diesel powered equipment in a far-off land, and trucked thousands of miles to my local grocery store. Locally grown produce won't be much cheaper, because production costs will be high everywhere. Western South Dakota produces a lot of beef, but where is the nearest meat packing plant?
Our economy is dependent not just on oil but on cheap oil. When petroleum gets more expensive, businesses will fail because fewer people will be able to afford their products. And when businesses start failing, still fewer people will be out there shopping and supporting the economy. It won't be pretty.
This is what Epstein left out of his optimistic and misleading editorial. The price of oil doesn't just affect our driving - it affects everything. And because of close profit margins, most businesses are likely to suffer serious pain from higher prices before we drivers finally get the message at the gas pump.
Epstein almost says that the way to get gas prices down is to relax government regulations on oil refining and open up more areas (such as ANWR) to drilling. But he doesn't quite say it, since it's not true. There's not that much petroleum in ANWR and other areas. Epstein is hiding the fact that the price of petroleum is rising in the long term because oil producers are collectively no longer able to keep up with demand. The world's super giant oil fields - Cantarell in Mexico, Ghawar in Saudi Arabia and others - are now in decline. Recently discovered oil fields are smaller and harder to get to. It's not possible to keep producing oil indefinitely at the current rate, let alone increase production.
Don't expect that the deepwater oil found under the Gulf of Mexico is going to save us. The amount of oil is probably not as much as optimists claim, and it's going to be very difficult and expensive to get the oil out and transport it to refineries. Oil companies don't lay pipes that far from shore.
Don't expect that ethanol is going to save us. It's simply not possible to produce nearly enough ethanol to power our economy, and without government subsidies ethanol is still more expensive than gasoline.
Epstein recommends that we do nothing, and allow the magic of the market to take care of high oil prices. The unfortunate truth is that we have built an industrial economy that relies on fossil fuels, but the fossil fuels are not going to last forever. Doing nothing is a bad choice right now. We're going to have to make drastic changes in our economy and in our personal lives. This will take time and commitment, both of which are in short supply these days. While Epstein's feel-good message might help us stay happy a little longer, it distracts us from beginning the very important work of figuring out how to live in a post-petroleum world. We desperately need to stop doing nothing and start planning how to live differently.

Andy Johnson,
Spearfish