Windfall Profits Tax, Weekend Weather

Some exciting news for all you web surfers out there. WAOW.com will be undergoing a re-design. In a couple short weeks you will see a new design with new functionality. The blog will remain - so no worries there. I'll let you know as the date draws closer.

As mentioned earlier this week, reading the WAOW weather blog keeps you on the leading edge of science/weather/space/environmental news. How many times have I said high oil prices are here to stay? A couple times a month at least through the first part of this year. Here is an article from wired.com that confirms my point. Sure, there could be somewhat of a bubble in the price of oil, but even if the bubble burst, I doubt oil would drop below $90 per barrel. Which means we would still be paying $2.50 to 3.00 per gallon of gas. What is more likely is that hurricane activity will drive the price oil over $130 a barrel this Summer or Fall.

Something else on the horizon that could drive up the price of gas, oil, and electricity is climate change legislation. Earlier this week, even John McCain came out with a "cap and trade" AGW scheme. He would like to cut carbon dioxide emissions by a significant margin as early as 2012 and have the primary goal to cut emissions 60% below 1990 levels by 2050. Cutting that much by 2050 will be a piece of cake, so it is a good political move. The short term cap and trade scheme is not such a good political move (even though all the candidates are in favor) because it will cause a dramatic jump in prices. If climate change legislation goes into place early next year with the new administration, gas prices could easily reach $6.00 or $7.00 per gallon by the summer of 2009 (next year). Your electricity bill could double as well. Plane tickets could jump as well because new climate treaties might include the airline industry. Past treaties exempted the airline industry. Right now, flying out of CWA to Vegas, LA, or New York,  costs around $400 even a little more. New climate legislation could push that price up to $700 or $800 per ticket. I am all for cutting emissions of every type of pollution, but I would rather see investment into alternative energy and tax breaks for those who purchase solar panels or electric cars. Incentives rather than punishment.

What about taxing the 'evil' oil companies and have them pay for it? Aren't they making record profits? The state of California is active in promoting alternative energy so they keep tabs on the price of oil and each component. Here is the latest tabulation. Throughout 2008, in the category of "Distribution Costs, Marketing Costs, and Profits", we find that it is only averaging about 10 cents out of a total cost of $3.90 per gallon (in California). So the actual profit the 'evil' oil companies are making is probably 5 cents per gallon at best. So don't fall for this idiotic idea that taxing the 'windfall profits' will do anything to the price of gas. Even if the government took every last profit from the oil companies and used it to 'offset' the high price of gas, it would save you a nickel at the pump. Worse yet, the taxes would disproportionately penalize U.S. oil companies. If you want to start buying your gas from Lukoil, a Russian company that already has gas stations in parts of the U.S., then go ahead and support the windfall profits tax. If you want your 401K retirement plan to lose value, then go ahead and support a windfall profits tax. We are all in this together. Trying to penalize one person or company in order to benefit another will have un-intended consequences and come around to 'bite' us all. As I have mentioned many times in the past, every individual has a lot of power to minimize the impact from high energy prices. Make your house more energy efficient. Move closer to work. Drive a fuel efficient or electric car. The list is endless.

Enough punditry. How about the forecast? It now looks a little better for the weekend. Rain chances are slim and temps should be a little warmer than what was forecast a couple days ago. We will have plenty of sunshine today and high temps in the low 60s. The mercury should hit the upper 60s tomorrow and the mid 60s on Friday before dropping into the low 60s for the weekend. High temps should rebound at least into the mid 60s early next week. There is a slight chance of showers all the way from Thursday evening through Sunday but any showers that develop should be light and widely scattered. There should be plenty of opportunity to get outside over the weekend.

Meteorologist Justin Loew.