The Earth travels its appointed course through the heavens without effort, but not much moves across its surface without oil. That fact is now painfully apparent in France, where the result of confiscatory environmental taxes has sparked a riotous citizen fury.
Tear gas greeted tourists making their way through the streets of Paris over the weekend. Police battled thousands of yellow-vested marchers protesting the result of economic policies meant to shift the nation’s predominant energy source from black to green. This means heavier taxes on gasoline and diesel fuel and tax breaks for buyers of electric cars.
President Emmanuel Macron, who was elected in 2017 as a refreshing young leader with a new approach to governing, now hears his good name shouted in vain with chants of “Macron, resignation!” and “Macron, thief!” The president tells The New York Times that “It’s a little bit unfair. They see my face when they fill up at the gas pump.” The protests, he says, are evidence that France is undergoing a “moral crisis.” The working stiffs of France might argue, “au contraire, France is facing a money crisis.” Thanks to the steadily rising tax bite, taxes on both gasoline and diesel fuel are sending the price of gasoline past $7 a gallon.
Mr. Macron’s popularity has plummeted into the 20 percent range, demonstrating that even in France there’s a limit to the magic in good looks and debonair demeanor. Dressing up taxes in trendy green may win the hearts of hardcore environmentalists, convinced that oil combustion is cooking the planet, but it doesn’t fool the families that bear most of the costs of staying cool or warm.
Numbers tell the story of a failure to understand how the real world works. Hundreds of thousands of rioters and demonstrators shatter the dream vacations of hundreds of thousands of excited visitors, and tourist-dependent Paris suffers a decline in revenue that consumer groups place at 35 percent. With the Christmas shopping season now beginning, the economic pain caused by the war on fossil fuels inevitably triggers anger, which translates to pain.
Here on this side of the Atlantic, the anti-regulatory energy policy of the Trump administration is having the opposite effect. Oil production has climbed to 11.7 million barrels per day, according to the Energy Information Administration, and U.S. crude inventories have reached 447 million barrels, the highest level in almost a year.
Consequently, oil prices have fallen to around $50 a barrel, reducing the cost of gasoline. The average price of a gallon of unleaded regular stands at $2.56 — a decline of 28 percent over the past month. Some gasoline stations in South Carolina, for example, where gasoline is less expensive than in states like California, were selling gasoline below $2 a gallon over the Thanksgiving weekend when prices customarily climb. It’s a bonanza that leaves more money in the pockets of American consumers in time for holiday shopping.
On the other hand, if prices decline too steeply and too fast, that could signal a global economic slowdown that would have far-reaching consequences. Motorists must be careful what they wish for, lest they hobble the free market’s finding the natural balance point between supply and demand. Mr. Macron wants to use fuel levies to wean French consumers from fossil fuels. The great energy regulatory pact, after all, is called the Paris Climate Agreement.
Mr. Macron could have his cake and eat it, too, by following Mr. Trump’s example and enabling the ingenuity of an economically free people to deal with the challenges of global warming or even global cooling. Earth has a knack for taking care of itself.
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