Gasoline Prices Too High?
answer seems obvious. Of course prices are too high. Isn't
$4.00 a gallon just price gouging by the oil companies in order
to increase their profits at the expense of drivers? Shouldn't
they be required to reduce gasoline prices to “responsible”
levels? After all, driving is such a necessary part of our
lifestyle. And, of course, there isn't another option.
the risk of being labeled crazy, a heretic or even ignorant, I
would argue that the price of gasoline is too low! Driving
should be discouraged and exposed for its contribution to
greenhouse gas pollution, its wasting of valuable land and fuel
resources and its impact on congestion, accidents and noise
to the common assumption, there are frequently alternatives to
the private automobile. Most cities in North America maintain
extensive public transportation systems and non-urban and rural
areas are increasingly offering service of various types,
especially in areas popular with travelers.
gas price history
paths and lanes are being constructed at increasing rates,
providing a convenient and healthy car-free option. Tours
are often an option when visiting destinations not directly served
by public transportation or when you prefer the expertise of an
experienced guide. Where these options are not available or
feasible, it is still possible to use an automobile less
frequently. Combining errands, car pools, ride sharing and
walking are all options that reduce gasoline use and same money at
significant portion of the cost of gasoline, in the form of taxes
paid each time the tank is filled, is allocated to the Highway
Trust Fund and to various state and local taxes. These taxes were
originally designed to cover the full costs of highway
construction and maintenance, but today cover only about half of
According to US
Department of Transportation
statistics, the Highway Trust Fund collected almost $31 billion in
user fees in 2008. In addition, $63 billion was collected by
state and local governments for a total of $94 billion.
Expenditures that year for highway construction and maintenance
were $182 billion, leaving a deficit of $88 billion made up from
other sources such as general fund appropriations, property taxes,
investment income, bond proceeds and other miscellaneous taxes and
fees. In effect, highways were subsidized $88 billion by federal,
state and local governments.
April 2011, the Congressional
Budget Office released a report outlining an option under
consideration which would tax drivers on the number of miles they
drive (VMT) rather than, or in addition to, the current method of
taxing by number of gallons purchased. The
argument for VMT taxes starts with the fact
that, especially for passenger vehicles, most costs of highway
use are related to miles driven. In January 2011, combined
federal and state fuel taxes were about 2 cents per mile for
average passenger vehicles which just cover fuel-related costs.
There are approximately 10 cents per mile in additional mileage
related costs that under the current system must be covered by
other revenue sources.
efficient cars, such as hybrid or electric, while a great
improvement over the internal combustion engine, still require
infrastructure such as highways and parking lots. They do a
wonderful job in reducing greenhouse gas emissions and conserving
scarce fuel resources, but under the current tax system contribute
little towards the costs of highway construction and maintenance.
VMT taxes would address this discrepancy.
VMT system can be designed to be flexible depending on individual
situations. For example, trucks and other heavy vehicles that
take heavier tolls on highways would be taxed at a higher rate
than passenger cars. Off peak driving would generate a lower tax
than during rush hour improving efficiency by reducing congestion
and fuel waste in addition to reducing demand for additional
capacity. Areas without adequate public transportation or
bicycle infrastructure would receive a tax credit until such
services become available.
the first commercial oil wells were drilled in the mid 19th
century one could only imagine the many new uses that would be
discovered for this product, such as plastics and most importantly
the automobile, at that point only a remote idea in some
inventor's mind. When oil was first discovered, it was used in
lamps to provide light, as pitch to make boats waterproof and even
as medicine. The invention of the automobile provided a new use
for the vast new reserves being found throughout the world. As
more oil was discovered, the amounts were so vast that it seemed
almost unlimited. When they first came on the market, only the
most well-to-do could afford to buy an automobile, so demand for
gasoline was relatively low. It was unimaginable that these
resources would ever be exhausted, at least not anytime in the
after barely one century, we are close to exhausting that
“unlimited” fuel resource. In the industrial world today,
especially the United States, almost every adult owns at least one
car. It has become a “necessity” that most can't imagine
living without. Car ownership in other parts of the world,
traditionally much less common, has increased dramatically in
recent years making scarcity even more imminent.
has taken less than 200 years to almost exhaust the worlds oil
reserves that required millions of years to create. It is
gradually becoming evident that we have already passed the peak of
oil discovery and that it will become harder to find new reserves,
and those that are discovered will be more difficult to extract.
Much of the recent discoveries are in inaccessible areas, such as
deep underwater, in remote areas or embedded in tar sands.
only has to look at the explosion and sinking of the “Deepwater
Horizon” oil rig in the Gulf of Mexico and the resulting
devastation of the nearby coastline as an example of the costs of
deep water drilling.
oil located in remote areas requires new road construction, often
through pristine natural areas. The Arctic National Wildlife
Reserve in Alaska is being promoted as a rich new source of oil,
but experts estimate that the available oil would only last about
6 months. Can 6 months of oil really justify destroying this
from tar sands can be upgraded to synthetic crude oil and refined
to make asphalt, gasoline and jet fuel. Its extraction costs,
however are much higher than conventional drilling, less fuel is
recovered, the environmental costs are higher and large amounts of
water, also a scarce resource, are required.
recent years, it has become obvious that we cannot continue to
count on the private automobile as our primary method of
transportation. The America public, however is so enamored by
their love affair with cars that many see driving as a necessity
with no alternative possible. Dramatic measures are necessary to
emphasize the toll driving takes on society and to promote the
of the best ways to discourage or reduce private automobile use is
with higher gasoline costs. When gasoline prices increase,
driving mileage drops. When it hits their pocketbook, Americans
use public transportation, bike, walk or combine trips to save on
gas costs. In Europe where “petrol” prices average twice that
in North America, driving is much less popular. Of course they
have the advantage of an extensive and reliable public
transportation network and a bicycling and walking infrastructure
that dwarfs that in North America.
would argue that since our infrastructure isn't as extensive or as
efficient as in Europe, gasoline prices here need to be lower
because automobile transportation is necessary for our mobility.
A better argument would be to raise rates to provide the revenue
needed to bring our transportation systems to the standards of
that in Europe.
argue that oil company profits are at record levels so gasoline
prices should be lower. The same people often say that subsidies
and tax breaks for oil companies should be eliminated as record
profits make them unnecessary. Subsidies and tax breaks for oil
companies should be eliminated, but not to bring about lower
gasoline prices. They should be eliminated because they are
unnecessary and these funds could be better used elsewhere where
the need is greater.
of us may live to see oil so scarce that only the most well-to-do
people will be able to afford gasoline. With increases in oil
scarcity, prices will increase to the point that current prices in
Europe will look like a bargain. How many of us could afford to
pay $20.00 for a gallon of gas? Some of the youngest of us may
live to see oil completely exhausted.
I'm not so crazy after all. Greenhouse gas pollution, scarce fuel
resources, congestion and highway costs are all topics that must
be addressed and addressed now before they become catastrophic
problems. They are almost at that point now so we don't have time
to waste. Since the private automobile is the primary cause of
these problems, the logical solution is to raise gas taxes to a
point where they cover the full costs of highway construction and
maintenance, traffic enforcement, pollution control and other
will free resources to promote public transportation, bike lanes
and clean energy. It would have the added bonus of providing an
incentive for drivers to consider alternative transportation