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Americans, more than any other nation on earth, treat gasoline as if it were a necessary element for sustaining life, like air, water, and Caffè Lattes from Starbucks. We like to pontificate about unrestricted capitalism and allowing the dynamics of the free market to determine prices — but not when it comes to gas. When it comes to gas, we want it cheap, and the president had better get it for us or else, and if he can’t, then whatever else he’s done, he’s not doing his job. When the price of gas goes up by even a few cents, Americans go into a collective snit, outraged that they have to have to dig a little deeper to keep the family SUV filled.

A funny thing about Americans: we love to carp about paying too much for things we really need and are really a bargain, like gas and postage stamps, but we are more than happy to shell out outrageous sums for unnecessary stuff like gourmet coffee, fruit juice-infused water, and whatever new electronic gewgaw Apple is pushing this quarter.

Actually, the most astonishing thing about the price of gas in America is that Americans think the price of gas is astonishing. In most of the world a gallon of gas costs two to three times as much, except in a handful of countries where the price of gas is subsidized by the government (socialists!). For all our indignation, though, Americans do not demonstrate any sort of price-sensitive behavior when it comes to buying gas. According to the Oil Price Information Service, in a year when gas prices were at their highest level ever, Americans purchased more gas in 2011 than ever before. We bitched a lot, but we kept on pumping.

Maybe we should stop worrying so much about the price of gasoline and start considering its cost. The difference between what we pay for gas and what it costs represents the tax breaks and tax-funded services provided to energy producers to get that gallon of gas into your tank, along with other externalities, which are the costs of a private transaction borne by a third party.

Fuel-related pollution (vehicle exhaust, oil spills, et al.) and the health and environmental issues that result are negative externalities. More than a decade ago the bi-partisan International Center for Technical Assessment estimated that environmental, health and social costs represent the largest portion of the externalized price Americans pay for gas, with a total then approaching one trillion dollars annually.

Another hefty externality is the range of tax breaks and direct subsidies given to energy producers, dwarfed only by the indirect “program subsidies” Big Oil receives in the form of government-funded research and development, export promotion, infrastructure investment, environmental cleanup, and similar programs. All these subsidies, some $100 billion-plus according to the ICTA, are paid for by the American taxpayer.

Of course, much of the gas we use comes from oil imported from some notoriously unstable and often unfriendly locales. Even without adding in the hideous cost, both in dollars and in American lives, of the wars in Afghanistan and Iraq, U. S. defense spending for safeguarding oil interests in the Middle East and around the world typically total in excess of $100 billion a year.

We Americans must get serious about developing alternative fuels now, something which the rest of the world got serious about more than a decade ago. Even if we start drilling in every wildlife preserve and erect oil platforms off every public beach, we’d still be tapping only about two percent of the world’s oil supply. “Drill, baby, drill” isn’t going to solve anything, now or for the future.

The greatest irony of contemporary American life is that a nation which so prides itself on self-determination and independence has so willingly made itself a slave to oil, which corrupts our politics, dictates our foreign policy, threatens our environment, and bankrolls our enemies.

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Comment Preferences

  •  The reason most pay more than the US (1+ / 0-)
    Recommended by:

    is because gasoline is taxed so much.  For example, in Sweden, they pay about $8.75 per gallon.  Health care is very inexpensive.

    My take is they pay their doctor every time they fill up.

    Nothing is free.

    Actually, gasoline is overpriced considering world supply / demand.  Oil is traded in USD and we're at two year highs vs the Euro.  The only reason gas is so high is that entities like Morgan Stanley hold so many future contracts that they cn manipulate the price and keep it artificially high.

    I understand oil is dirty but the US is a big country - every time the price of gas goes up, are economy goes to shit - a lot of people, by no fault of their own are dependent on gas and have to buy it.  The oil industry, for their many faults is one of the most efficient industries from well to pump.  When oil grows, the economy doesn't - where else can you have one clerk - running 20 gasoline pumps AND a convenience store - who make about minimum wage.  That one person can take in a ton of money.

    Sorry, but I'll take cheap gas anyday.

    The care of human life and happiness, and not their destruction, is the first and only legitimate object of good government. - Thomas Jefferson

    by ctexrep on Sun Jul 22, 2012 at 05:30:52 AM PDT

    •  supply and demand is why gasoline is high (5+ / 0-)

      Number of gasoline/oil users worldwide has been growing rapidly in the past couple of decades. the supply has not.

      ask yourself - if there were lots of easy oil out there, why do oil companies go after such difficult/expensive/marginal resources, like deepwater, tar sands, fracking, etc?

      An ambulance can only go so fast - Neil Young

      by mightymouse on Sun Jul 22, 2012 at 05:58:51 AM PDT

      [ Parent ]

    •  Sorry, but you're completely wrong (4+ / 0-)

      We are literally going to the ends of the earth to drill for oil and trying to squeeze oil out of rocks and sand.  We are at Peak Cheap Oil, and there will be occasional drops in oil as the worlds economies stall, but in general, oil will continue to get much more expensive.

      Speculators have a very temporary impact on the $2.5 Trillion annual market, and taxes may have an impact on the price of foreign gas, but it's negligible in the U.S. market.

      At the first sign of a world recovery, (which may be several years), oil will shoot through the roof like it has in the past.  Even if the economy is stagnant, oil prices will slowly rise.

      They just aint making any more oil.

  •  Just got back from Italy where gas is about (1+ / 0-)
    Recommended by:

    $10/gallon (1.8 euro/liter).  Perhaps there would be even more cars on the roads if it was less, but there's still lots of people driving cars.  Smaller cars with good gas mileage, but cars nevertheless.  And they seem to drive faster on the highways than people here do.

    The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. Bertrand Russell

    by accumbens on Sun Jul 22, 2012 at 05:51:43 AM PDT

  •  i should point out that (0+ / 0-)
    Even if we start drilling in every wildlife preserve and erect oil platforms off every public beach, we’d still be tapping only about two percent of the world’s oil supply. “Drill, baby, drill” isn’t going to solve anything, now or for the future.
    Two percent figure represents proven reserves (about 22 billion barrels) and proven reserves “are a small subset of recoverable resources,” because they only count oil that companies are currently drilling for in existing fields."

    Other countries do not use that standard.

    So they exlude ANWR, the outer continental shelf and most of our shale oil. Even discounting them, our proven oil reserves today are higher than they were 70 years ago. They've gone from 20 billion to 22 billion while we've extracted 167 billion during that time.

    if i understand correctly, that happens because if you know where enough oil is today, you don't yet need to go looking for the next find. & technology allows us to get at harder to extract oil over time.

  •  if price rises slowly enough people don't complain (1+ / 0-)
    Recommended by:

    I think.

    gasoline is now firmly over $3.50 in my part of the world.

    it's the sudden jumps that provoke complaints.

    Agreed that the price of gasoline does not cover its true costs - the most important of which is climate change.

    An ambulance can only go so fast - Neil Young

    by mightymouse on Sun Jul 22, 2012 at 06:00:53 AM PDT

  •  OTOH (1+ / 0-)
    Recommended by:

    Smartphones may be helping people drive to where they want to go more efficiently too (maps and routing).  But on the third hand, smartphones let people find stuff they want to buy easier, so maybe they drive more...

  •  Gas prices and rail (0+ / 0-)

    That's why Japan and Europe have high speed rail and good public transportation.

    High gas prices.

    But what would happen to any US politician who proposed Japan/European level gas prices?

  •  Linked to this diary on my blog (0+ / 0-)

    "The party of ideas has become the party of Beavis and Butthead." ~ Paul Krugman.

    by Neon Vincent on Sun Jul 22, 2012 at 01:38:58 PM PDT

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