True costs of gasoline

Well, it's kind of ugly to watch just about everyone on TV is basically shouting and acting like: My way or the highway.

 

Mr. bush said after 911 you are either with us or again us. Translation My way or the highway. So correct peoples look around political or corporate world no more compromise or negoations. Black or white nothing in between. I don't like it but it is what it is.

 

Including Michelle Bachman in the same sentence as "middle ground" is like "Jumbo Shrimp"!

Icarus

 

...my bad

 

A person can consume no oil and still have to pay in taxes for the oil company subsidy. Yes, we would be paying at the pump and that would be better since the the amount paid for oil would be directly related to the amount consumed.

The money saved from oil subsidies should not go back to the taxpayer b/c there is a federal budget deficit. But getting rid of it would reduce the deficit. You state yourself that the government should cut spending and stopping the oil subsidy is one of the ways spending should be cut.

First, $4 billion is a lot of money. Yes, it is a small percentage of the national debt, but the conclusion to draw is the national debt is huge, not that the oil subsidy is small.

Also, comparing it to the national debt is an apples to oranges comparison. $4 billion is an annual amount of oil subsidy, while $14 trillion the the accumulated debt from at least 1860. It would be more accurate to compare against the federal deficit of ~$1.1 trillion, or ~0.36%. Again, this shows how large the federal deficit is, not how small the oil subsidy is.

Yes, we would be paying the $4 billion out of pocket. That's how it should be. The point is that oil subsidies make the price of oil artificially low, which increases how much oil people consume. If there were no subsidy, then it would be priced higher and closer to its actual cost and oil consumers would buy less oil. The oil subsidies are introducing a market distortion, which confuses the price signal, which makes is inefficient.

 

I think in this case, 'foxymoron' might be the more appropriate term.

 

The direct oil subsidies are around $30B per year, or $300B/decade. This number is of significance compared to the deficit reduction in the debt ceiling bill, and should have been one of those no brainer type of decisions. Let's take one part, the ethanol mixining subsidy which amounts to more than $5B per year. Removing this and the sugar tarrif would have amounted to no increase in the cost of gasoline (brazillian sugar cane ethanol would have been substituted) but might have reduced the cost of food and reduced polution causing a dead zone in the gulf. These market distortions, or corporate welfare, cause most americans to lose as a few corporations gain. The additional health costs of auto polution, and highway infrastructure could be added to national and state gas taxes. Idealy the share coming from property and income taxes would be reduced, but again the politicians seem to hate a free market. Most of that $14 subsidy is bogus though.

Increasing the price and properly applying the taxes would aid the invisible hand. The price out of pocket would actually decrease if done right, but this number is on the order of $200B. Because states vary a great deal, these taxes would be uneven, but at least the federal portion should remove corporate welfare and be taxed correctly. A gradually increasing tax, would allow people to make future decisions correctly.

 

It is not just the subsidy to factor in the true cost, but the long term, un paid environmental cost(s). So I ask again, what is the value of sea life in the Gulf, or Prince William, or the Yellowstone, (or god forbid the Congo?

What is the value of losing permafrost with the increase release of methane due to CO2 emissions. Get real folks, $3.50 gas is just the tip of the cost iceberg! ( to coin a phrase)

 

so viscious.....

there is no disagreeing with people here. it's like going against the gospel.

 

Excuse me? But you consider it vicious to suggest that some cost exists beyond the pump for fuel? It is vicious to place a value on environmental issues?

 

that's not what you do though, icarus. you don't just place value on environmental issues. you degrade people who disagree with you. i'm not going to argue with you on this. you're one of the biggest reasons i left the political chat. I was hoping that out here in the regular forums things would be a little more civil, but they really aren't. i'm going to block your posts from this point forward.

 

...and the gas tax at the pump does not cover all the cost of the roads and bridges.

Sorry about that.

 

It is scary when you look at countries with the most oil reserves.
World Reserves of Oil, Coal, and Natural Gas!

Oil, Coal, and Gas Reserves, Peak Oil, Global Energy Use Statistics - Earth Web Site

 

PC,

I'm sorry you have such a thin skin, but to that I can do nothing.

Feel free to ignore me, as you seem to ignore so many other things.

People who have independent thought capability would engage in the conversation,, and perhaps attempt to answer the question posed, perhaps given and receiving some insight.

 

I actually was just quoting priuscritter's number, but the discrepancy between your number and his is significant, so I pulled a couple of sources. Note that I'm discussing direct oil subsidy, which is an easily quantifiable number. Indirect subsidies vary depending on what is included. Anyhow, these sources both state $4 billion for this year:
http://www.nytimes.com/2011/02/01/science/earth/01subsidy.html
Can someone explain the subsidy that US oil producing firms get?

 

Good NYTimes quote- what I am trying to say, why are we focussing on subsidies and true costs for just one energy technology on this list? It does not make sense except as political picking and choosing debate tactic. I heard a Democrat senator say the other day "why is everyone opposed to picking and choosing (winners and losers) we've been doing that for years." True but what I think in USA we too often ignor science or right answer and pick what we think the political winner. Eg; ethanol was bad science because it was mandated due to cleaner burning argument, when the R&D results were coming in that saying it was not cleaner.

 

when talking about what is essentially a life or death question; strong opinions and emotions will frequently put one on edge. but we also have to take a step back and look.

we actually have people here who think that a 4 BILLION DOLLAR handout is not significant enough to discuss and the ONLY reason provided is because its size as compared to the National Deficit. well, NOTHING is significant compared to something like that.

its like comparing a trip to Cleveland against a trip to Alpha Centauri.

that is the ideology we are fighting here. its hard to keep the tone civil when you get a completely nonsensical response. what we need is a valid reason to continue to donate money to companies that generate billions of dollars of profits every day while at the same time we cannot pay our basic governmental expenses.

now, we all know that a gasoline economy is unsustainable.

we know that our foreign oil is one of many things that is hurting us financially and there is no such thing as an insignificant amount when you are spending much more than you are making.

we all know that we are blessed with size, knowledge, space and resources to provide our own energy needs

we all know that every single dollar used to buy foreign oil must be borrowed and interest paid on that loan.

we all know each dollar that products, goods and services generates within the US is a dollar earned and spent over and over and over and does not have to be borrowed and each time it changes hand the government gets a piece to help pay a bill, a debt or a loan.


now, with knowing all that, what is the real question here?

 

And we all know (save one) that the price of fuel is not just "the cost involved in drilling, refining, and delivering it to the pump" (sic). I'm sorry, but that is, as I said, a very ignorant and indeed WRONG statement. If you take umbrage at being told you are wrong, then you have little business participating in an open forum.

If you think you are "right" then suggest by your arguments the flaws in my (or others) arguments, back it up with documented fact(s) and craft a rational counter argument, insted of complaining that people who consider your arguments wrong as degrading.

Icarus

 

When a bill was tried to remove tax breaks and loopholes from the oil industry it was projected that it would save $21 over 10 years.

http://www.nytimes.com/2011/05/18/us/politics/18congress.html

 

Thanks. I am counting things that those sources don't count, but lets use the $4B number, this was the number Obama originally sought to cut. In my example I talked about the fuel blenders subsidy, which is more than $5B a year, but since it is to pay people to add corn ethanol (already mandated by law and protected by foriegn sources by a tarrif) these subsidies that go into the gasoline along the way don't get counted.

This was a watered down version eliminating even less of the corporate welfare. Lest you believe removal of this pork is a tax increase, here is forbes editorial on the mater.

Eliminating Oil Subsidies: Two Cheers For President Obama Page 2 of 3 - Forbes.com