Higher energy prices are needed now to signal the real
scarcity to come. Without higher prices we will not invest in the
alternative energy technologies needed for a smooth transition to the
post-petroleum age. Without higher prices we will not conserve the
fossil energy needed to manufacture those alternative technologies.
Without higher prices, argues petroleum analyst Richard Duncan, the
remaining life expectancy of industrial society may well be less than
40 years!
http://biz.yahoo.com/rf/981117/bbm.html
Tuesday November 17, 3:23 pm Eastern Time, 1998
Real cost of U.S. gasoline is $15.14 per gallon, report says
By Tom Doggett
WASHINGTON, Nov 17 (Reuters) - So you think you're getting a good
deal on a tank of gasoline these days? Not so, if all the oil
industry tax subsidies received from the federal and state
governments and other costs that went into producing that gallon of
gasoline were included in the pump price.
Such external costs push the price of gasoline as high as $15.14 a
gallon, according to a new report released Tuesday by the
International Center for Technology Assessment.
``In reality, the external costs of using our cars are much more
higher than we may realize,'' the Washington-based research group
said in its report.
The report examined more than 40 separate cost factors the group said
it associated with gasoline production but aren't reflected by the
price of gasoline at the pump.
These external costs total up to $1.69 trillion per year, according
to the report.
The group points out that the federal government provides the oil
industry with tax breaks to help U.S. companies compete with
international producers, so gasoline remains cheap for American
consumers.
The Department of Energy is forecasting that the national price for
regular unleaded gasoline will average $1.02 during the current
quarter, the lowest price on record for any three-month period when
adjusted for inflation.
Tax subsidies don't end at the federal level, as the group said most
state income taxes are based on oil firms' lower federal tax bills,
which result in companies paying $123 million to $323 million less in
state taxes.
In addition to tax breaks, the federal government provides up to
$114.6 billion in subsidies annually that support the extraction,
production and use of petroleum, such as research and development and
export financing.
The federal government also spends up to $1.6 billion yearly on
regulatory oversight, pollution cleanup and liability costs connected
to the oil industry, the group said.
In addition, U.S. Defense Department spending allocated to safeguard
the world's petroleum resources totals $55 billion to $96 billion a
year, according to the group.
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http://www.icta.org/projects/trans/rlprexsm.htm
The International Center for Technology Assessment
The Real Price Of Gas
Executive Summary
This report by the International Center for Technology Assessment
(CTA) identifies and quantifies the many external costs of using
motor vehicles and the internal combustion engine that are not
reflected in the retail price Americans pay for gasoline. These
are costs that consumers pay indirectly by way of increased taxes,
insurance costs, and retail prices in other sectors.
The report divides the external costs of gasoline usage into five
primary areas: (1) Tax Subsidization of the Oil Industry; (2)
Government Program Subsidies; (3) Protection Costs Involved in Oil
Shipment and Motor Vehicle Services; (4) Environmental, Health,
and Social Costs of Gasoline Usage; and (5) Other Important
Externalities of Motor Vehicle Use. Together, these external costs
total $558.7 billion to $1.69 trillion per year, which, when added
to the retail price of gasoline, result in a per gallon price of
$5.60 to $15.14.
TAX SUBSIDIES
The federal government provides the oil industry with numerous tax
breaks designed to ensure that domestic companies can compete with
international producers and that gasoline remains cheap for
American consumers. Federal tax breaks that directly benefit oil
companies include: the Percentage Depletion Allowance (a subsidy
of $784 million to $1 billion per year), the Nonconventional Fuel
Production Credit ($769 to $900 million), immediate expensing of
exploration and development costs ($200 to $255 million), the
Enhanced Oil Recovery Credit ($26.3 to $100 million), foreign tax
credits ($1.11 to $3.4 billion), foreign income deferrals ($183 to
$318 million), and
