I’ve just returned from a business trip to Norway. One of the first things I noticed upon my arrival there, on the way into town from the airport, was the price of gasoline. Since Norway still uses its own currency rather than the Euro–lucky them–I had to look up the exchange rate before I could calculate that 15.40 Norwegian Kroner per liter equated to a penny or two under $10 per gallon. I’ll bet that Norwegians would be ecstatic if it were only $4 a gallon. Gasoline isn’t the only thing that’s expensive in Norway–a draft beer was $9–but the remarkable thing about its price there is that, unlike nearly all European countries, Norway is a net exporter of both oil and refined products, including to the US. Most major producing countries subsidize motor fuel for their populations; Norway taxes it exorbitantly and effectively puts the proceeds into its Government Pension Fund.
As a result, there’s at least one developed country that is well-positioned to manage its public pension liabilities. Although I wouldn’t advocate adopting exactly the same system here, since among other differences we’re still a significant net importer of crude oil–despite the weak economy having made us a net exporter of products–it does suggest some possibilities. Could Congress compromise on opening up more US oil and gas resources for development if the royalties were slated for infrastructure investment or a new Social Security trust fund that amounted to more than just an accounting exercise involving government paper? It’s an interesting model to contemplate.