Low gas prices or the environment: choose one

gasprices.jpg

The days get longer. Trees grow heavy with leaves. And politicians yammer about high gas prices. Ah, it must be silly season again.

The goofiness of legislative proposals to lower gas prices is such that normally staid environmental economists foam at the mouth whenever this topic comes up. In an effort keep my own mouth-foaming at a minimum, I’ll present a simple bulleted list of non-controversial (to me) propositions:

  1. Gas prices should be higher, not lower.
  2. No one is “gouging” consumers.
  3. The problem is oil consumption, not oil companies.

This is pretty simple. You can’t simultaneously fight for low gas prices and fight climate change. These are opposing policy objectives. The whole idea behind the various climate change bills presently haunting the halls of congress is to raise the price of energy consumption. Although none of these bills propose a direct tax on gasoline, all of them will lead to an increase in downstream costs for consumers. As they should.

I missed the recent Democratic presidential debate, but apparently Wolf at one point asked the candidates what was to be done about high gas prices. As ever, it fell to a non-contender to provide an honest answer. Mike Gravel came out and said: nothing. High gas prices are a good thing.

Contrast this with John Edwards’ “Plan to Relieve Families from Rising Gas Prices,” a strange mash of policy proposals couched in a healthy dose of demagoguery. To be fair, elements of this plan are sensible — but only because they have nothing to do with high gas prices. In fact, many of the elements of the plan will raise gas prices.

The only credible way that the government can lower gas prices is by raising fuel economy standards for cars. Mandated efficiency measures will reduce demand for gas, and then the market will do its thing. Of course, the market should eventually do its thing even in the absence of government mandates. Given enough time, Americans will switch to more fuel-efficient vehicles. But only if gas prices remain…wait for it…high.

OK, I think I’m foaming a bit now, so time to wind down. I recognize that high gas prices cause economic pain for many Americans. I also recognize that oil companies make boatloads of money, receive lots of unnecessary government support, and are just generally unlikeable. But none of these facts are the basis for a sound energy policy. Gas prices are high because people really want to consume gas, and any solutions to our energy and environmental problems have to address — and change — that fundamental reality. Lowering gas prices is a step backwards.

Update: I am very well aware that I’m going to get flayed in the comments, but I want to at least try to head off one flawed line of criticism. Someone is inevitably going to write that oil companies are unfairly subsidized and that therefore…I don’t really know what. The logic kind of breaks down at that point. Oil companies are subsidized, and those subsidies should be eliminated. But that’s a separate issue entirely that has little to do with gas prices. In fact, eliminating subsidies to oil companies could only have the effect of making prices rise further.

Author Bio

adam

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  1. Otto Van Druck - June 5, 2007

    I’m pretty sure I don’t agree on the gas price issue — though I definitely understand where you’re coming from — but you’re definitely right on the oil consumption part.
    I work with the Alliance of Automobile Manufacturers, and one issue coming up soon in the U.S. Senate is S.1419 — that would impose some pretty extreme fuel economy standards for pick-up trucks, minivans and SUVs.
    There’s a future in biofuels and other alternative energies, but Washington can’t just “make it so” like Picard. What they really can’t do very well is pick winners. Click on my name for more info, if interested — you may disagree, but we think the bill is a bad idea.

  2. Niklas - June 5, 2007

    I absolutely agree! If only it were politically feasible to advocate a gasoline tax! It just might be if all the foaming-at-the-mouth environmental-economists gave rave-reviews! Keep it up Terrapass!

  3. jane - June 6, 2007

    Thank you about your article opposing lowering gas prices. There has been a chain letter floating around the internet complaining about the high prices of gas and trying to get Canadians to boycott our biggest fuel company in an attempt to create a price war and lower the cost of gas.
    I just sent off your article as my response to this idea.

  4. peggy - June 6, 2007

    In the long-run, I couldn’t agree with you more. In the short-run, I have a concern.
    One, what happens to the working poor who depend on automobiles to get to their one, or two, or even three jobs? I don’t see how we can support keeping gas prices high without some equivalent of the Food Stamp program for fuel.

    On the other hand, I’m not sure about your analysis of high gas prices.You argue that oil company subsidies are not the problem but what about bloated profits and executive salaries? Also some economists maintain that speculators are even more key in keeping fuel prices high. If you want more information on this, you could contact nreubens@msn.com; he is a Professor Emeritus, City University of New York (as well as my father).

  5. Sam - June 6, 2007

    I would say high gas prices are a good thing from the stand point that the inflated prices are making people more aware that we need to change the way we consume precious natural resources. Unfortunately, it has to take a hit to the wallet and not sound rational thinking and concern for our environment that makes us change our ways.
    Concerning Mr. Van Druck’s comment…Washington doesn’t need to “make it so” for change to happen. Public awaresness, education, and the efforts of individuals as consumers pressuring industry does not hurt. Record sales for Toyota’s Prius is a strong message.
    Now, record profits for oil companies while they receive government subsidies…I don’t think so.
    Cheers.

  6. Susan - June 6, 2007

    Yes, yes, yes! The lightbulb lit up for me sometime in the 1990’s, when I witnessed that gasoline in England cost the same per liter as it was costing in the US per gallon. And, I saw many more small fuel efficient cars on the road in the UK compared to the US. People normally direct a horrified look in my direction when I express this opinion, and I don’t even foam at the mouth! Thanks for printing this!

  7. Lee Ann - June 6, 2007

    I agree that high gas prices are not a bad thing in the long term, and also agree with Peggy that the working poor, especially in areas without mass transit, will be the ones to suffer the most. A stamp program for gas would probably cost more than it would help. Moveon.org, which I think is a positive force in the political arena most of the time, has it wrong with the requests to e-mail Congress people about a gas price cap and I have expressed that to them.
    Let’s continue to keep the environment on the front burner and try to cut our consumption of fossil fuels.

  8. pgnbri - June 6, 2007

    My concern is much the same as Peggy’s. I think the theory of higher gas prices being better is sound. However, I am one of the “working poor.” I try to do all that I can to be more environmentally friendly, but finances often limit my choices. I do NOT have the option of buying a hybrid (or other fuel alternative) vehicle. Public transportation in my area is extremely limited and I work to far from home to walk or ride a bicycle. My husband and I commute together to save on expenses but every time gas prices go up it has a significant effect on our lives. Fuel has become far too large a portion of our budget.
    So, I ask, How do we balance a desire to help the environment against the problem of forcing those of us who are barely making ends meet further into poverty? I don’t have an answer, but I’d like one.

  9. peggy - June 6, 2007

    TWO THINGS:
    WHEN YOU SAY, LEE ANN, THAT A STAMP PROGRAM WOULD COST MORE THAN IT WOULD HELP, I WONDER HOW YOU MADE THAT CALCULATION? CERTAINLY THE FOOD STAMP PROGRAM COSTS TAXPAYERS BUT IT KEEPS LOW-INCOME PEOPLE FROM EATING CAT FOOD. WHAT I’M PROPOSING WOULD KEEP THE WORKING POOR FROM POTENTIAL HOMELESSNESS. BOTH CAT FOOD AND HOMELESSNESS COST TAXPAYERS MORE IN THE LONG-RUN FOR SOCIAL AND MEDICAL SERVICES – NOT TO MENTION EMPATHY.

    SIMILARLY,I VISIT EUROPE OFTEN AND SEE WHAT SUSAN SEES ON THE ROADS: SMALL EFFICIENT CARS. HOWEVER, POOR PEOPLE IN THIS COUNTRY CAN’T BUY THE NEW PRIUS, NOR ANY NEW CAR. THEY ARE USUALLY FORCED TO DRIVE VERY USED GAS-GUZZLING MACHINES NO MATTER WHAT THE LARGER MARKET FORCES MAY BE DOING TO THE REST OF US.

    ON A DIFFERENT NOTE, I OMITTED THE NAME OF THE ECONOMIST I REFERRED TO ABOVE. IT IS EDWIN REUBENS, PH.D.

  10. peggy - June 6, 2007

    I was glad to hear from pgnbri above. I also realized that everyone may not be familiar with the federal Food Stamp program. It uses a means test to determine the need for food subsidies. These originally were delivered to recipients in the form of coupons worth a designated amount of money – but now they use a laminated picture ID for obvious reasons. This is presented to the cashier at checkout and one is allowed to use cash to pay for purchases over the F.S. limit.
    I’m curious to hear why anyone thinks a similar system could not be applied at the gas station.

  11. walter - June 6, 2007

    Gas prices probably need to rise to $5.00 a gallon and stay there. Nothing else seems to register with the majority of Americans; entitlement is so thoroughly ingrained in our culture that it will take a bomb to begin change. And as usual the working poor will be the first to suffer and the parasite class hardly at all. Finally, at what point might it become completely irrelevant whatever we do? But, in the meantime, keep up the pressure on corporate America and the politicians in Washington. Change often comes from we know-not-where

  12. CKC - June 6, 2007

    I agree with higher gas prices and I agree with an alottment program to help the poor.

  13. Al - June 6, 2007

    I live in an area that has a lot of recreational toys, and the pickups and SUV’s needed to tow them. If a family owns a collection of snowmobiles, jet skis, etc, they also obviously have to have a big gas hog to tow them to their playgrounds. We see lots of pickups towing huge camp trailers, and a big boat behind the trailer. These are serious recreationists. A survey a few years ago showed that these recreationists have significantly higher middle class incomes than non-recreationists. What level of gas price will deter them from their fuel-burning ways? I personally own two sailboats with a tow weight of about 2500 lbs each. My recreation uses very little fuel (5 gallons per season) for the outboards to get me in and out of the marina. I use a Honda Odyssey for towing, and I have never gotten less than 20 MPG in ordinary driving and 17-18 towing. $5 gas will not cause me to get a more fuel efficient vehicle, and our family income is less than $60,000 a year. We burn about $3200 a year in gas now, and upping that to $5000 will not change my behavior. The snowmobile and jet-ski owners have far more income, so I don’t think that $5 gas will deter them. They just might do a little less cruising in their big boats, which burn 10-20 gallons per hour.

  14. Rio Rico Jack - June 6, 2007

    I agree with your observations! Totally. I’d like to see a Federal Tax of $1.50 per gallon, with the money funding infrastructure, including schools. Also, I rarely see suggestions on how easy it is to cut one’s driving. Over the past year, I’ve reduced my mileage by 40%, (from1,000 miles a month to 600) mostly by making lists and doing one shopping trip rather than 2 or 3. Plus walking more. And, of course, I save money with less maintenance, lower insurance costs. It seems a no-brainer way to reduce oil consumption.

  15. Jason - June 6, 2007

    I was glad to read your comments. I would only add that higher energy prices should really help most working poor if prices get higher due to taxation and not just demand. The difference is that the revenues from taxation can be redistributed progressively.

    If gas (and energy) prices are taxed aggressively and then redistributed, the only people who lose are people who are using more energy than the average (do poor people heat 6000 square foot homes?). And if the revenues are not just redistributed but redistributed progressively, the only big losers are those who simultaneously use and have a lot. Some poor people will not benefit, but most will, and progressive taxation can make sure that the traveling poor can simultaneously be encouraged to do better (drive less, carpool, drive slower, drive smaller cars, install better insulation in the house) and not take a big beating.

    And if trucking goods from California to New York means that maybe local produce becomes relatively less expensive, I don’t see that as a problem.

  16. Dan - June 6, 2007

    Man, I agree with you comletely and love your article. If gas prices remained high for a while, we’d all start buying more fuel efficient cars. I know it hurts some people and that it’s not practical to trade in your 5 year old car, but I see people with 16mpg SUV’s griping about fuel prices. I think that fuel taxes should be based on the fuel efficiency of the car. Hummer’s should pay about 5-6 bucks a gallon and Prius’ should pay about 1-2 bucks a gallon. What an incentive to buy a fuel efficient car. There would have to be exceptions, some people have to have bigger cars, but this could all be done through rebates or something and federal exemptions be given for those who qualify. People would find and exploit loopholes, but I think it would be a great start!

  17. peggy - June 6, 2007

    I’m happy to have sparked a discussion here that’s “class-conscious” as well as environmentally conscious. The only issue I have with Jason is that redistribution takes too long. I’m concedrned with people who live check-to-check and can’t wait for their future tax refund to pay for today’s gas.
    Now if we had a truly progressive tax system in the first place..

  18. I.D. - June 6, 2007

    There is no evidence that raising the cost of gasoline would decrease driving. You might say that common sense would suggest that it will, but, if you are paying attention, common sense clearly does not fit into the American driving mentality.
    While it is true that we have an overconsumption problem, higher gas prices is not the answer.
    Higher gas prices will increase the cost of necessities – such as food – that have to be transported.
    Those who can afford the higher gas prices will continue to drive, and pay higher prices for food, clothing, medicine etc; those who cannot will be penalized for these “luxuries”.
    As to your statement, “no one is “gouging” consumers”, this is not based on facts. The oil companies are making historically high profits.
    Instead of calling for an additional burden on poor, working people, perhaps you should be devoting your energy to figuring out a way to compell the oil companies to put their obscene profits toward developing alternative, clean energy.

  19. nontoxic - June 6, 2007

    Thank you, Adam,

    When I first received the ‘Boycott Exxon/Mobil-don’t buy gas on May15th’ e-mail from my sister-in-law in early April, my first reaction was, “What? I WANT gas prices to remain high!”…for the reasons you outline. But I began to think I was nuts as I received more of these same e-mails, seemingly from everyone in my address book, as April and May progressed.

    Now with your observations, I can rest comfortably because I know I am not insane (yet)! Others DO feel the same way. I do of course, have concerns about how the working poor like pgnbri above will deal with these price increases. How about folks with the biggest gas guzzlers on the road (within certain tax brackets) being required to subsidize those who cannot afford them?

  20. Adam Stein - June 6, 2007

    Wow. I didn’t expect to see such support for this idea. Some comments:
    Gas price increases are regressive. They hurt the poor the most. This is a very bad thing, and I’m actually pretty sympathetic to the notion that while high gas prices might be good in the long term, short-term spikes have consequences that we want to mitigate. Unfortunately, all of the best ways to do this involve long-term planning and redistributive policies. I don’t have a great answer for the short term pain. Of course, neither do the politicians planning investigations.
    Al, you raise the point that demand for gas is strangely inelastic. No matter how expensive it gets, people seem to keep wanting to use it. This has historically been true, although gasoline doesn’t exist entirely outside the law of supply and demand. In the ’70s, when prices spiked, demand fell quickly and significantly. Nevertheless, I do favor mandates for higher fuel economy, for the reason you mention.

  21. Bruce - June 6, 2007

    In a society organized by market ideology, the most powerful mechanism for change will come through pricing. That’s just a plain fact, not a good thing; rational long-range planning and policy would be preferable but this is not the American Way, for now at least. So yes, gas prices should rise.

    With regard to the oil companies, I’m not sure how gouging differs qualitatively from other supply/demand responses so don’t bother to regulate that. But a windfall profits sounds like a great idea and should prove politically popular.

    Regarding the poor and working people dependent on expensive gasoline to survive. Some short-term subsidies should be considered as part of a transitional energy plan. But in the long run, Americans rich and poor alike need to feel the higher prices so they demand higher efficiency vehicles and move closer to cities where they can utilize public transportation. Maybe the low-income energy subsidies should be used only to assist with the purchase of high efficiency vehicles or to help with the cost of moving to a more energy efficient location — but should not be used for gasoline purchases.

  22. Nick - June 6, 2007

    Comment by Nick @9:40 A.M. 06-06-07
    I agree with Dan re: his earlier thought of different gas prices for vehicles of different sizes. Maybe we can put part of the blame on auto/truck manufacturers on this; because it seems that more SUVs and big trucks for individuals are promoted every day. My last four cars have been the number one sellers, which have provided excellent gas mileage.
    Even with that, I do not like paying for the prices listed at the pumps. For those of us who try to drive effciently, we should not have to bear the high costs that are caused by not only the owners of the “biggies” sucking up the fuel, etc., it is also those who drive those monsters at excessive speeds which causes a demand for more fuel.

    As said on an earlier post, it is not only the expense at the pump causing many of us pain, it is also the ripple effect of higher costs for goods, which effects those without much cash in their pockets. As one well known commercial on TV exclaims…”what’s in your wallet”? Not much after some are paying$70 or more to fill up.

  23. Xta - June 6, 2007

    Thanks so much for this article. Not enough people are saying this. Every time gas prices go up I cheer and bike more. I’m spending less on gas now than I did three years ago because I am driving about half as much as I did back then.

    As to the issue of working poor being hit hard by gas price increases it seems to me like the simple solution is to RAISE the minimum wage. Which I believe our new congress passed recently.

  24. Al - June 6, 2007

    Gas consumption is not inelastic with price. It just takes a while for the effect to be evident. The lag time might be several years, and only after we finally accept that high prices are here to stay. For the family who uses a gas hog for their recreation, buying a diesel pickup or SUV the next time they buy a vehicle, will negate an increase in fuel price from $3.50 a gallon to $5.00. Now gas at $7-8 a gallon will probably get their attention, and they just might modify their perceived vehicle needs. We drive 10,000 miles a year visiting our grown daughters. At 24 MPG, which our Odyssey gets at 75 MPH, we burn roughly 420 gallons. At $3.50 that is $1470, and at $5.00 it would be $2100. For slightly over $600 a year I would not give up the comfort and versatility of the Odyssey. An increase of $1500 would have me doing some serious rethinking.
    I think that the $7-8 range is proper and good, with a rebate of $1500 per tax return to assist the poor.

  25. Windowdog - June 6, 2007

    Higher gas prices are not driving down consumption. US consumption of oil might be falling off, but oil was driven high in the first place by increased global use, especially in china. The oil is still being burned, just in different areas.

  26. Anonymous - June 6, 2007

    Hi All,

    Does anyone remember the gas crisis in the mid 1970’s? I do. It was different in that there was a gas shortage caused by a boycott by oil producing countries, and people had to line up to buy gas.

    But here is what happened: gas prices went up. Congress lowered the national speed limit to 55 miles an hour and mandated higher MPG cars. Everyone paid a lot more for gas and also more for new cars.

    And *over time* gas consumption dropped. It just took a while.

    We carpooled a lot. We insulated like crazy and dropped our thermostats (that really sucked). We bought substantially smaller cars and drove more slowly on highways. President Carter wore sweaters.

    The economy went to sh*t from the oil shock. Prices shot up because transport & manufacturing were expensive due to gas prices. We were poorer so we bought less. At the same time. It was a nightmare.

    Let’s hope we don’t see those days again.

  27. Jimmy - June 6, 2007

    High gas prices are a good thing! However that doesn’t mean that it is a permanent fixture in our economy. Most likely the destabolization of Venezuela will cause an oil supply drop which will increase prices even more in the short term. It is possible to see prices drop with conservation or if Congress mandates a uniform petroleum blend across the country. Once all the refineries are turning out the same blend we can hopefully see lower prices. One has to remember that prices really have nothing to do with the environment. Once China and India start driving all of our conservation will mean squat!!!

  28. veektor - June 6, 2007

    -One of the objections to the current situation is the unpredictability and instability of fuel prices. Here’s one solution which will help the environment and help stabilize prices.
    -If I were king, or Bush, here’s what I’d do:
    –next year, announce that the federal government will raise the excise tax on gas by 25 cents per gallon, regardless of what the market price will be (the actual tax increase is arbitrary but should be a gradual and significant rise).
    –in the following year, another 25 cents (or so) will be added.
    –in the third year, another 50 cents will be added.
    –in both the fourth and fifth years, the tax will be increased by another 75 cents, and so the overall gas tax will be raised by a total of, say, $2.50 over the next five years, regardless of what the market price for gas may be. This will allow consumers and commercial users to plan their purchases knowing that prices will rise predictably and with stability over the next five years. People and industries can plan to increase their fuel use efficiency, knowing that, yes, gas prices are indeed going to go up substantially.
    -What about the excess revenue? This is a separate issue and does not matter quite as much as the effect of increasing both prices and stability. Our friends the politicians could use the money to provide tax relief to lower-income consumers, invest the money in more fuel-efficient infrastructure, pay off the national debt, help the auto makers design more economical vehicles, etc. Some breaks could also be given to commercial users.
    -Producers of genuinely more efficient products and capital goods (say, wind generators) would benefit from the added revenue they would receive from their products.
    -The end result would be higher prices (good for the environment) and greater price stability and predictability (good for consumers).

  29. Anonymous - June 6, 2007

    I AM the working poor (less than 12,000 dollars per year. And, I might add, 100 dollars per month Food Stamps for us both, total.I have internet service as I take college courses over the internet, so this is a “must have” expense.Everything else is paid for by me, not the government.) I am also now on foot as I CANNOT afford gasoline, PERIOD. My handicapped daughter walks with me to my various jobs (housekeeping) around town. There is no public transportation here. BUT, I DO agree that gas prices need to stay high. One benefit to high prices is more people actually having to move their rear ends using leg power rather than by using their vehicles.Just an added benefit from higher gas prices that I’ve not seen mentioned here yet.

  30. Jay - June 6, 2007

    The price at the gas pump is a deceptively cheap and does not reflect the real cost of burning gasoline. For starters, the pump price does not include the billions of dollars we are spending each month on wars fought to secure oil from hostile parts of the world. You pay for these wars from your income taxes. Many have paid with their lives. And the three dollars you pay at the pump does not include the cost to clean up the environment polluted by burning the gas or for the health care costs created by the polluted air and water. Nor is the looming cost of catastrophic climate change part of the pump price. If these immense hidden costs were added to the pump price, the price would be more than way north of $10 per gallon. At that price I don’t think you’d see many Hummers hogging our roads and resources.

  31. Rio Rico Jack - June 6, 2007

    There’s a fine non-alarmist DVD, “A Crude Awakening: The Oil Crash, 2006.” Rent it if you can. It may make most of these observations sort of, well, academic?

  32. Chad - June 6, 2007

    Yes, fuel prices should be higher. Gasoline and the like should be taxed, but the number should not be based on speculation. It should be based on careful study of all the externalities related to its production and use. Such studies typically find that the taxes should be on the order of $1.50-$2.00 per gallon.
    Also, I think peoples’ behavior is more elastic than others do. I make a quite nice salary, yet recently cancelled a seven-hour planned drive to Chicago because my friend couldn’t go and I didn’t want to pay $150 for gas by myself, for example. Other’s decisions may not be quite so concious but the pattern is the same.

  33. Anonymous - June 6, 2007

    [Ed — please refrain from insults. I’ll let the comment stand, but a little humility on your part is in order, particularly given how badly wrong this comment is.]
    To produce lower consumption The answer is NOT higher gas prices. This is the kind of moronic oversimplification that many fools make. Gas companies get away with these kinds of high gas prices because they understand that for MOST Americans the amount of gas they use has become a non choice.For example my wife drives an economy car that gets great mileage ,she drives 5 miles to work and 5 miles back. We live within a mile of the grocery store and our son is too young to go to school. I work from home with only a minimum of driving to and from an office (less than 3 miles ) twice a week for meetings.Whether gas was $10.00 a gallon or $1.00 a gallon those miles would still have to be driven. Add to that the fact that major gas supply companies were recently purchased by BP British Petroleum and it’s not hard to see why the price is going up. In Europe they pay $7.00/gallon plus and BP doesn’t understand why it should be any different here. After all “we’ve been getting away with it far too long” in Europes opinion

  34. Jim - June 6, 2007

    There is a misconception about oil executive salaries/oil company profits and what this does to the price of gas. Salaries and profits are incomprehensivelyhuge to be sure, however, they pail in comparison to the bulk of the oil dollars slushing around in the market. If you do the math (remember, ALWAYS do the math), we can figure that Americans spend about 300 billion a year putting fuel in their vehicles (perhaps someone has a more solid number but I am being conservative here). If Exxon reports a 10 billion dollar profit this only represents about a 3.3% of the dollars we spend. Looking at a price of a gallon of gas then, if corporate profits are what drives the price up then gas should only go up roughly the same percent as corporate profits right? So what, then, is driving the price of oil? How about instability in the region of the world that pours oil into the market. Instability equals risk; risk equals higher potential profits, which translates into higher prices on the consumer end. How about CONTROLLED instability? Now THERE is where the REAL profits are to be made. Isn’t this what America is doing as we speak? It’s the same old card trick politicians and oil men have played for years. Sad thing is that now we have a president who IS an oil man. The Perfect Storm…

  35. Rio Rico Jack - June 6, 2007

    To repeat: There’s a fine non-alarmist DVD, “A Crude Awakening: The Oil Crash, 2006.” Rent it if you can. It may make most of these observations sort of, well, academic?

  36. Jim - June 6, 2007

    Peggy:
    We should be careful when we use “hurting the poor people” as a reason to rally behind these issues as it just makes one look overly emotional and silly. Yes, there are poor people in this country but using such emotionally-charged sentences like “keeping them from eating cat food” is never an effective approach.
    You wrote:
    “HOWEVER, POOR PEOPLE IN THIS COUNTRY CAN’T BUY THE NEW PRIUS, NOR ANY NEW CAR. THEY ARE USUALLY FORCED TO DRIVE VERY USED GAS-GUZZLING MACHINES NO MATTER WHAT THE LARGER MARKET FORCES MAY BE DOING TO THE REST OF US.”
    Really? Most “poor people” I know choose the type of car based more so on fuel economy than anything else. Back when I was not making a lot of money (if you consider $12,000 a year working full time with a student loan not a lot of money) I drove a Geo Metro. It cost me $1700 and got over 40 mph. Seems to me the only people driving around in Gas-guzzling machines are the (seemingly) middle and upper class folks with their SUVs, hummers, and the like.
    Let’s keep the “poor people” poster child mentality out of the arguement. Better to stay objective and emotionally neutral as it will be more effective at keeping all sides around the negotiating table.

  37. Rio Rico Jack - June 6, 2007

    Disclaimer: I have no financial involvement with “A Crude Awakening: The Oil Crash, 2006.”

  38. Gurkie - June 6, 2007

    Agree, the high prices are a very good thing.

    Osama bin Laden and George W. Bush should be credited for their contribution to the high oil prices.
    No carbon tax will ever have such a big impact in such a short time…
    Would we, in the end, be better off with more murder, instability and cluelessness? Interesting, how things sometimes evolve.

  39. anonymous 3 - June 6, 2007

    Recipe for improvement:
    1. raise fuel efficiency standards across the board,
    a lot
    2. develop the most efficient plug-in hybrids and
    recharge from wind and solar sources and give THEM
    tax breaks, not the oil companies
    3. have a widespread campaign to make this cool and sexy
    –even make exciting Hollywood movies with this
    mentality embedded in the story line(did you see Schwartzenegger talk on global warming? Contrast his glitz and charm with Gore’s? there was a difference in his delivery that was remarkable)

    4. export this new cool mentality to China and India
    because America has influence
    5. stop the oil subsidies
    6 investigate big oil for price gouging
    7. raise gas prices and roll the extra $ into renewable
    energy development
    8. give tax breaks for the economically challenged or
    gas stamps
    9. develop more mass-transit and make that cool and sexy
    10. Incentivize to the max the most reasonable and
    healthy behavior for our society: manipulation,
    shameless marketing( no one will even notice, we all think wer’re too smart to fall for marketing schemes)
    and, leveraging with money,goods, and services
    We are able to change anything we have the will to change.
    Best,

  40. Krystal - June 6, 2007

    I am kind of laugh to myself when I see the news covering a story about the woes of high gas prices, and then they interview someone with a Lincoln Navigator at the gas station, who is stressed over the high prices (mind you, one person in the car).
    I think we should pay for what we use, regardless of economic status (I am a nursing student, working part time). IF the environmental impact of gasoline production, transportation and use is finally being recognized, the smart thing to do would be to pass some of the cost on to the consumer. However, because this market is so inelastic, the companies can get away with passing most if not all the cost on to consumers unless where government regulated. Although I can’t even imagine the problems and hoops you have to jump through to create a mainstream complement for auto fuel/energy, that is what will need to be done in order for there to be any incentive to lower prices.
    On the other hand, I think taxing and taxing gas is also going to make people think more about their car’s emissions. The only problem is, how do we know that this gas tax revenue would be to offset the environmental burden by being used for R&D into alternative fuels? We don’t, and I am very skeptical this appropriate distribution is happening already. And if the tax money is being wasted on things other than R&D for alternative fuels, I definitely don’t want to be giving any more money to the government than I already have to.

  41. Greg - June 6, 2007

    Many of these comments are pretty good, some seem short sighted. I really like what Jason had to say earlier – gas taxes should be used to raise the price of gas and then they should be redistributed progressively. This is exactly what needs to occur! For those concerned (the working poor) that redistributive policies take too long – we could institute a policy to redistribute this specific tax monthly, sending checks to peoples’ houses.
    I want to address one other thing people brought up – a food stamp-like program for gas or energy. This is not what we want at all. Ultimately, we want the right incentives in the system so that people make the choices that include the externalities involved by energy consumption. What I’m saying is that we want energy prices to be higher than they are so that people use less in order to stave environmental consequences of gas use. Therefore, we should not try to lower the price of gasoline for anyone (poor, hybrid users [especially them – since they already pay less for a mile of driving, we shouldn’t encourage them to drive even farther by further reducing that cost – I drive a hybrid, fyi], or anyone else). What many people have correctly brought up is that these higher prices impact certain groups more negatively than others. Thus, we should compensate them for that impact or at least try to mitigate it. Thus, we should merely give them money, in whatever amount we decide. Then, the poor would face the same prices as everyone else, with the incentives for lower use involved, and could use that extra money for whatever they want to increase their own utility. This might include using that money on energy – but they would have to pay the higher price for it… it could also mean the poor conserve more and are able to afford more medicine or whatever it is they want to buy.
    In conclusion – high gas tax = good. Poor and hybrid users should pay the same as everyone else for energy. Compensate poor with money, not “gas stamps”.

  42. Malia - June 6, 2007

    Many good points are being made concerning the price of gas. I think a point remains to be made that we are spoiled. Is there any other country where people are so concerned about the price of their gasoline? Most have grown accustomed to high prices, and most places have sufficient alternatives to alleviate this burden to people’s budgets. Regadless of the reasons why gas prices may be high or low, and that they may again be reduced after a time, the fact remains that we MUST consume less oil. High gas prices may help us to reach this end, but there is so much more that needs to be addressed.
    As has been noted, many Americans are not fortunate enough to live in communities with sufficient public transportation options. What if this problem could be solved with smart community planning standards? If more people lived closer to the places they most often go to, then we could all walk or ride our bikes – it’s what great portions of the world’s population does. What if all the oil company subsidies were instead diverted to public transportation companies? What if a gas tax were created that was used to pay for public transit instead of highway maintenance?
    It’s also been noted that our automobiles are not as fuel-efficient as they could be. Let’s fix that – whether it’s through federal standards or consumer purchasing power. Why are most cars still only getting 40 mpg? That was considered efficient in the seventies – hasn’t technology advanced enough in 30 years that a non-hybrid car should be able to get at least 60 mpg?
    I’m sorry I don’t have all the answers on how to make these things happen, but I’m pretty sure that lowering the price of gas is not an answer. High gas prices will make things tough for many people, but may also inspire some action on these other issues. No great change is easy, but we can’t afford not to change.

  43. Anonymous - June 6, 2007

    Now that I’ve read more of the posts leading up to post 33 ,I must say that most of you have bought the concept of the war being about oil and the taxes on gas being too low and that prices in general are not high enough, even though as in post number 29 this particular person has completely accepted the idea that we should all be on foot and that somehow higher gas prices will put us there. HE OR SHE totally misses the point that higher gas prices will only put poorer people on foot and thus make them more dependant on the very rich who will continue to drive their SUVs just like our “INCONVENIENT EX-VICE PRESIDENT” who by the way tells all of us to cut back on our use of fuel as a means to stop global warming while maintaning a household with a utility bill nearly three times the annual income of post #29. Disparity? yes but it is only there because the less the “common man” has the more he is dependant on those who have more.

  44. Jan - June 6, 2007

    I am much impressed with the discussion; a lot of smart, sincere people with worthwhile things to say. For my 2cents I’ll say the following;
    1-adamantly support higher gas prices–climate warming is urgent and we can’t wait to do everything we can.
    2-agree the poor will be hurt while the more affluent won’t stop driving; this is unfair and serious for the working poor but we must find other ways to address; artificially low gas prices isn’t the answer–some good ideas in the comments
    3-favor tax incentives for fewer cars per family & more fuel efficient cars.
    4-obviously need fuel standards improved (I’ve heard we can’t sell U.S. cars in China because we don’t meet their fuel efficiency standards.)
    5-let’s bring back the electric car (recommend the movie Who Killed the Electric Car?–the technology is here today)(Available on Netflix)
    6-penalties for short trips via tolls near the large cities. I live 5 miles away from NYC in NJ & work in Manhattan. I commute via commuter bus (gas but at least high vehicle occupancy). I heard the results of a study that said the greatest trips into Manhattan came from the buroughs where we have cheap public transportation! Those trips should have to pay higher tolls. Isn’t London doing something like this? Rural folks may not have a choice of driving but city folks do & should exercise options to use public transportation which should have more money allocated to them to increase trip frequency and routes.
    7-funding for the development of better & more public transportation. My husband would love to take public transportation from our house in NJ to his job in NJ but there is no public transportation available to do that; instead he sits in terrible traffic every day and it takes him on average 90 minues to drive 15 miles.
    (Apologies for any repeats of ideas already mentioned–at work & didn’t have time to read every post.)

  45. LSG - June 6, 2007

    As long as we need to use a car to travel, gasoline will be consumed regardless if the prices are high, low or in-between. We are a very lazy society and opt to drive rather than walk or bike (which btw is much better for humans to increase one’s fitness & health)or even dare I say it….carpool. Our public transportation system in many areas sucks so that’s not an option (also making streets “bike friendly” like in Europe is non-existent in in USA). Electric cars were killed and the idea of rising up against the oil companies, lobbyists and government to pass alternative fuel sources is a long time coming because the wheels of progress and change are too slow to turn. So as we watch the polar ice caps melt and the polar bears become extinct what do we do? If everyone just kept it simple and did their part…let’s say…being conscience…eliminate unnecessary driving by combining errands, trying to drive with someone, walking or biking somewhere instead of driving, driving a more fuel efficient car….sounds familiar, repetitious, somewhat annoying…I hope it does… because guess what? If humans began to all do just one, two or even all of these things, collectively we could actually make a difference. We need to stop being so selfish and think outside our own personal world or it will not continue to exist.

  46. stanislaus - June 6, 2007

    Because of the radical lack of leadership in this country, we’re increasingly a house of cards ready to collapse…and sooner or later, with or without leadership, gas prices will go through the roof, suburbs will be in deep doo-doo, casual air travel will be a thing of the past and the era of the 3000 mile Ceasar salad will be over. Personally, I tilt heavily towards making oil and gas more expensive…but my greater concern is coal. As one energy expert in my hometown says: coal is the devil. And now they’re talking about squeezing oil out of coal and even folks like Obama are behind such absurd schemes to perpetuate our fossil-fuel economy. Oil will dry up…but there’s mega tons of coal (90% of the fossil fuels left are this form of buried solar energy) and if we burn it all over the next couple hundred years, the greenhouse forcing will more than quadriple. Getting off this global fossil fuel economy and back to basics must be the aim, not simply trying to find creative ways to wiggle out of the dire straits we’re in.

  47. Anonymous - June 6, 2007

    My mother is on a fixed income and needs to drive 500+ miles a week for work and to drive herself and my father to doctors’ appointments. The increase in gas prices, which in turn has caused an increase on everyday items such as groceries, has hurt her finances significantly. She drives a small, 4 cylinder Mazda sedan and even though she gets upwards of 30 mpg, filling up her tank costs her $40+. Raising gas prices isn’t the answer. How about putting a hefty luxury tax on vehicles that get 15 mpg or less (except for those used for work purposes, such as heavy duty trucks in farms and construction) and using the money from the tax to help low income people? This may also discourage families of 3 from buying that Suburban they don’t need. And of course, research into alternative fuels should be encouraged.

  48. Bill - June 6, 2007

    It does seem obvious that what we pay for gas should be high; higher than it is now if we’re going to help the environment. However, I don’t think $5.00 gas revenues all going to the oil companies is the right approach. That additional revenue, as long as it lasts before consumption hopefully declines, should go to fund new energy technology and mass transit systems which work. Ah, mass transit, aniother discussion huh.

  49. Jason - June 6, 2007

    Greg and I are on the same page. If you raise the taxes on energy and redistribute progressively (biweekly or monthly, as Greg points out), you don’t have to worry about using the revenues on R&D. The market will take care of it as energy-intensive products and practices (SUVs being just the beginning, also think about manufacturing processes, which make up a good percentage of CO2 emissions) become relatively more expensive and less attractive than the less energy-intensivce alternatives. The poor really don’t have to be hurt by a energy (gasoline included) tax increase.

    I don’t buy it that $10 a gallon gasoline wouldn’t change people’s behavior. Of course it would. It might take a few years, but it would influence the next car purchase for sure. And the same goes for all energy usage — you think higher prices on natural gas wouldn’t convince people to turn down the thermostat a few degrees in the winter?

  50. KChapmans - June 6, 2007

    Oh, post # 43, I have NOT missed the point at all (post # 29). (BTW–I am female.) I live smack dab in the middle of the SouthWest oil fields. Money and then some, but not for me! I still see those HUGE Ford trucks with mega-tires, the Suburbans, the Escalades driving all over the place just to go a block to the store. Yes, it chaps me royally that they blissfully spend over 100 dollars to fill their vehicle, while my child and I must walk (and our temps now are hitting 100 degress outside this time of year.) No, its not fair, but that’s just the way it is for now. I’m not fatalistic about this. I’m just in no position to “fix” this. For me and my child, it is either gas up the vehicle (even if it is only 5 bucks) or buy groceries, which are rapidly getting higher in price along with gasoline. The choice for me was easy. WALK! I know not everyone can do this. I’m lucky to live in a small town where everything is within a mile of everything else, not to mention that I am capable of walking. The bigwigs and high mucky-muckds are going to do what they have always done…make a buck off the little guy. As for THIS “little guy”, they will get as little of my hard-earned dollars as possible.

  51. Geoff - June 6, 2007

    Adam,
    Excellent article and topic. I’d like to throw in one caveat that I don’t see reflected above. The US car fleet only turns over at about 5% per year. Even if that 5% accounts for a disproportionate share of the miles driven, waiting for higher fuel economy standards or better technology to bring down gasoline consumption and prices will require loads of patience. In the meantime, consumers can have a bigger impact on their gasoline expenses by slowing down, inflating tires properly, using AC less, and avoiding long periods of idling. No one wants to hear that their own behavior contributes to the problem, but isn’t that what TerraPass is all about?

  52. Michelle - June 6, 2007

    The argument in this is flawed…if the high gas prices went to research alternative energy, if high consumption, luxury cars had higher taxes, if the money went to support the infrastructure which is falling apart, especially in the inner cities…i might agree. Right now all it does is line the already over stuffed pockets of the oil companies and polititians. We need to limit how much they can make off of us…of course, there will be an outcry of ‘free market’…but let’s face it. The market is only free if you already have money…not if you have to work for a living.

  53. Anonymous - June 6, 2007

    Ed. — comment deleted. These issues have been thoroughly covered over at Grist:
    Mars and Pluto myth
    Solar radiation myth
    My question to global warming deniers is always the same: given that climate science is an extremely complex discipline, don’t you think the scientists have already taken into account these obvious issues?

  54. Warren - June 6, 2007

    Several interesting comments have appeared in this discussion.

    It could be easy to ameliorate the effects of a higher gas tax, by using the increased revenues to compensate for a simultaneous reduction or elimination of payroll taxes. Revenue effects would be neutral. This idea has been around for a few years. It has the advantage that it would reward and encourage work and productivity while discouraging gasoline consumption. The money needed to pay the gas tax would appear in an employee’s paycheck every two weeks as an increase in net pay.

    Unfortunately, it does nothing to help the poor deal with higher fuel prices which did not result from a fuel tax. One controversial idea, which would further encourage fuel efficient vehicles while discouraging gas guzzlers, would be to have a tax on gas guzzlers (over and above present taxes), with that revenue going to the poor as a subsidy to buy (only) fuel efficient vehicles, whether new or used.

    There is a strong case for the first idea. The second is more controversial, and has both significant advantages and disadvantages. Comments?

  55. Anonymous - June 6, 2007

    also those of you still asking for higher GAS taxes are unfortunatly under the impression that the government knows best what to do with your money. Let me ask all of you. do you know what the current amount of tax is that you pay on fuel. There are federal and state taxes PLUS state sales taxes. In most places Fuel would be $.75/GALLON or more CHEAPER without the taxes.NOBODY should be made to choose between fuel or food.The State and Federal government are ACCOMPLICES
    in the whole problem.I’d be in favor of more taxes if ANYONE and I mean ANYONE can prove with documentation
    ONE case of a program brought about by taxes that is actually as economically efficient as it was presented and accomplished the goal it was designed for in the time frame given in the original bill. You won’t find one. Even Income Tax was originally a “temporary” tax.

  56. Gary - June 6, 2007

    Responses reveal a wide and thoughtful look at this complex issue.
    One point from Anonymous: the mother drives 100 miles a day to work. Can she move closer to work? Not just the cost but the time lost and the greater risk of being involved in a crash. Being near work and shopping is important for mitigation of air pollutants, too.
    I like Bill’s point that price increases should be implemented by the government with the amounts being distributed locally,for help for the poor, transit, bike lanes, sidewalks, and assistance for improved urban design.

  57. veektor - June 6, 2007

    -I would agree that using the regressive tax argument is fraught with peril. Poor people arguably pay more social costs for “cheap oil” than anyone else, and they (like everyone else) would benefit from the better environmental conditions that more expensive oil would provide. As bad as the government can be, I would rather have the government get (and perhaps redistribute) the proceeds of higher oil taxes than give the money to oil companies or OPEC in the form of profits and power. I think the government is more likely to equitably distribute the extra income from higher taxes than OPEC or Exxon would do with higher profits, so I would (regrettably) favor higher taxes as a means of checking the artifically low cost of energy.

  58. Anonymous - June 6, 2007

    For SOME ,and in this case I speak of many in my area of northern California . A commute to work means something very different than what it means in MOST of the country. We have a situation where,in Modesto where I live, homes a 1/2 to 1/3 the cost of home near where the jobs are. I am not one of these,as I work from home,BUT,many move here because the lower price homes mean they can actually have a home that,nearer to work, may be only a dream. These people commute
    1 1/2- 2 1/2 hours ONE way to work.This allows their families to live in smaller towns where perhaps the threats one lives with in a larger city such as Oakland or San Francisco are somewhere 20 yrs in the smaller towns future. Most of these folks drive little
    “commuter”cars such as the Geo metro type cars that get well over 30mpg.For them gas is a non elastic need
    what sacrafice would you have them make. Keep in mind that 80-90 miles one way (in rush hour)means sometimes 2 1/2 hours driving each way.While you consider this problem ,please also consider that unlike MOST of the country a 1300 s.f. home in our area sells for over $220.00 a square foot and in the bay area the same home may be more than $600.00 a square foot.The difference is extreme. I buy homes here and there around the country (relax they’re beaten up really cheap ones) and I repair them and make them liveable again.In much of the country a new home will cost somewhere between $75.00/s.f. and $120.00/s.f.
    despite what most in this country believe the wages here may be higher than most of the country but the costs a equivelant to the income.THE POINT ? The BIG picture is larger than most of us understand. But believe me adding to the cost of fuel will do only three things.1.) raise the price of EVERYTHING WE BUY to offset the fuel costs of the manufacturers
    2.)Give the gvt. MORE money to waste
    3.)Make all of us more dependent on an already FAT and INEFFICIENT government

  59. Anonymous - June 6, 2007

    Ed. — Your comment, like the one above, was deleted because it was entirely off topic. Our posting guidelines are clear. The people on this comment thread are discussing gas prices, not the temperature on Mars.
    Further, you are not advancing an “argument.” You are repeating a set of easily debunked myths about global warming. We can argue opinions. Facts are a different matter.

  60. Al - June 6, 2007

    Long Commutes. These are a real gas waster and will become a strange aberration of the Time of Cheap Gas. Let’s let the number speak for themselves. A 90 mile each way commute will cost $45 round trip at $0.25 per mile. That’s even in a cheap car. Assuming a $15,000 car lasts 200,000 miles, that’s $0.075 per mile. Add in repairs and upkeep at $0.05 per mile, and gas at 30 MPG and $3.60 a gallon, that’s $0.12 per mile for a total of $0.25 per mile. That’s $10,800 a year. A person could spend an additional $150,000 on a house and break even. That’s not even counting the value of time, and the additional risk of driving all those hours on crowded roads in a small delicate car. Those people are kidding themselves.
    High gas prices are going to result in changes in the way we live. They are inevitable, with or without government intervention.

  61. Anonymous - June 6, 2007

    What about if big oil was forced to pay for the “food stamp” fuel program for the poor out of their record profits? The oil companies would join forces to create a sliding scale system, capping out at 30k annual family income. For example, if a family made less than 20,000 they would be eligible for an 50-75 dollar monthly credit. Additional credits could be made based on the size of the household.
    This way, the oil companies could pay to help the poor, which would improve their image, and also keep the government from spending even more money. Both sides win!
    … just an idea.

  62. Anonymous - June 6, 2007

    why not all get off the internet argueing and invent something. Take a look around, you are all still wanting the GOVERNMENT to re distribute money instead of taking on the challenge of seeing
    where can you limit your OWN contribution to the problem. Also folks this will NOT be a situation of let the OTHER guy pay for it,he’s got more than me and he can afford to. Anything you do right now to add to the cost of fuel will ripple through the economy like a tsunami. Everything will cost more,fuel companies will still have their profits because they’ll add to the price to make up the huge taxes you all want. Consequently even chewing gum will cost more. Much like the price of cigarettes went sky high because of gov’t taxes,and guess what tobacco companies were smarter than that.They own the company that makes your peanut butter etc. and they just adjusted the costs of a diversified product line to compansate for the added tax on Tobacco. All the hype,hatred and common sense arguements against tobacco and FOR higher taxes on it did nothing but make us ALL pay for the sins of a few.

  63. SteveWV - June 6, 2007

    I think that the problem isn’t gas prices per se, the problem is where gas prices are going. No one can tell me that there is no price gouging going on when 1 bbl of oil is $7 less than last year (or roughly 17 cents/gal) while gas prices were UP nearly 50 cents/gal ($21/bbl) before the recent donwtick. I drive a Ford Escort and live in a place where there is no mass transit and I have a 43-mile one-way commute to work (I live near my grad school, so it’s really a question of pick your posion.) so I end up eating over $25/mo with gas and I only drive to and from work, except when I have to go to the grocery store and the post office, and I always try to be economical with my driving.
    However, the problem is that the gas prices are going to fatten corporate bottom lines, whereas I would gladly pay more per gallon of gas if I knew that money was going towards paying for mass transit, so I wouldn’t have to drive so much anymore. I think that if people saw that our gas bill was going there, we would be a lot more comfortable with it.

  64. Alan - June 6, 2007

    I’m impressed with the article, Adam. I mostly agree. Sure, no one wants to deal with high gas prices. Despite all of “Gas prices are too high”, “Blame the oil companies”, and conspiracy types of articles written on the subject, we still buy gas. Lots and lots of gas. When gas topped $4, how much less gas did you actually buy?

    Prices increase because of the nature of the global energy market. Demand for oil increases exponentially every year, and supply decreases every year. Energy saving technologies are available, but oil is far too cheap still to really push people to alternatives. Oil is far to profitable and alternatives are too risky for most investors to push. Relatively little money is invested into the research and development of alternative energy simply because it is a bad investment so far.

    Buying gas will have to hurt our pockets and lifestyles before the energy market really changes to what the nice people of Terrapass envision.

  65. Penny - June 6, 2007

    Does anyone even consider the amount of WATER that is used to make these bio-fuels. We won’t be finding more water on this planet… All of it is here. The best idea today was stop complaining and go invent something that works and is planet friendly.

  66. Adam Stein - June 6, 2007

    There’s much here that I want to comment on, but I can’t resist chiming in on #62, which wins the prize for weirdest comment in the thread. If gas taxes are like cigarette taxes, then bring ‘em on, I say. Cigarette taxes have been quite effective at discouraging smoking.
    As for the notion that cigarette taxes make peanut butter more expensive…reality doesn’t work this way. Makers of commodity products can’t just choose prices at will. If they had the power to increase profits by raising peanut butter prices, then they would just raise peanut butter prices, even in the absence of cigarette taxes. But peanut butter is presumably already priced at the profit-maximizing point, and no amount of taxes on cigarettes is going to affect that.
    I really don’t know why I’m getting drawn into this. Bad economic logic is like catnip to me…

  67. Dick Thornton - June 6, 2007

    Great info. We need debates like this. The worlds Thirst for OIL will continue to grow, and there is a delicate balance,of SUPPLY. We should have HAD a gas tax years ago, so people could make choices about their lifestiles. Biofuels are not the long term answer as they are subsidisized , and drive up the cost of food and etc. More people must buy small cars.
    Oil company profits are going into producing more oil AND GAS, WORLD WIDE . A shortage (ANYWHERE WILL CAUSE OUR GAS PRICES TO GO UP). Give the poor a break, but not a tax reduction, because they don’t pay taxes.

  68. Tracy - June 6, 2007

    Good discussion. Lower gas prices and fighting climate change can at least co-exist within a strategy to reduce demand. In my opinion, the tax code is a blunt instrument at best to enforce social policy however a program of incentives for environmentally sound behavior needs to be part of any solution involving a gas tax. I also agree that the present government is clearly so infected with special interest money that it is nearly incapable of sound policy making. My suggestion is to organize and communicate. I encourage everyone to increase their involvement in the political process and harness all of this good energy. Unfortunately, it seems to have gone beyond merely being the change we wish to see in the world.

  69. MNWalleye - June 6, 2007

    Has it ever occured to people at how life in America has dramatically changed?

    For those who grew up in the 60’s, remember when we rode our bikes EVERYWHERE! To school, to the store, even to the suburbs on occasion. We walked about as much as we rode our bikes. We lived in neighborhoods that usally had a school, church and grocery store as the center of the community. Remember when going to see a family member get on a jet plane to go somewhere was a family event?

    What does this have to do with gas prices? Well for one gasoline and energy consumption has greatly increased every year because people demand it by the everyday choices they make. Choice’s where they live and work. Choice’s on where they’ll go on vacation and of course choices on what kind of vehicle and how much they’ll drive. I think most people don’t have any idea on how much energy they really use and demand, they only know the price.

    I for one don’t like high gas prices as it affects every aspect of live here in America. Politicans on both sides of the aisle realize this fact. Coming up with a scheme to charge more depending on the type of vehicle seems way too complicated and unworkable. Gas guzzlers are already paying a hefty price to continue to drive.

    Sure you can require the Federal Government to raise vehicle milage standards. You’ll get more cars like the Geo Metro and Yaris style cars for the people that can’t afford a hybrid. We already have this class of cars, all you have to do is go out and buy them. They’re very inexpensive.

    It’s really up to you,

    MNWalleye

  70. Jim - June 6, 2007

    Good job everyone! Now, let’s all make a deal.
    Let’s all agree that if our cars don’t get at least 35 mph we will get rid of them and buy something that will. Used Honda Civics, Geo metros are all good options (my 1995 Accord cost me $3500 and gets 32 mpg on the highway, and a swift little rice burner she is). Imagine what this move alone would do to our collective fuel consumption? And now let’s make another promise and that is to carpool to work at least twice a week. Now lets make a third promise and that is to ask our bosses if we can all telecommute once a week (or, work longer days and cut the week to nine days every two weeks [every-other Friday off!]). Now we are down to driving our own vehicles to work just two days instead of five (40%), and using a vehicle that uses just 70% of the fuel (assuming that we go from a 25 mpg to a 35 mpg car). Now we are using just 70% (better mileage vehicle) of 40% (only driving to work two out of five days). Wow! Now we are using just 28% (70% x 40%) of what we did before! My one-dollar calculator tells me that we just cut our fuel consumption during the work week by a whopping 72%, and we didn’t even have to invent anything or vote in a president that promises to do something about this mess!!! Now, for arguements sake let’s assume that this plan works only half as well as we would like. Even then we would still cut our fuel consumption by a staggering 36%. Math really IS our friend.

  71. Jim - June 6, 2007

    MNWalleye wrote: “We already have this class of cars (metros), all you have to do is go out and buy them.”
    Amen brother…

  72. WhiteRabbit - June 6, 2007

    A few points (showing my age).
    – I voted for H. Ross Perot for President back in ’92 (?) because of a single issue that earned him 20% of the vote: raising the gasoline tax, and using the revenue to pay off the national debt (anyone still talk about the national debt?) The rest of his policies were a bit wacky, but for me and a lot of other folks the good that this single policy would accomplish was worth it.
    – One reason the economy hasn’t been impacted as dramatically as the oil shocks of the ’70s is that Carter reduced the oil intensity of our economy by half – that is, oil price increases now hit us half as hard. Executive orders used for good; crazy idea that.
    – Other policies than gasoline taxation at the pump can help the working poor pay for newer cars: check out Amory Lovins at Rocky Mountain Institute. The guy’s a font of policy ideas, including schemes where Hummer purchasers and their ilk get taxed more, with those taxes put right back into paying folks to trade in their guzzlers for fuel-efficient cars. Let the Hummer drivers subsidize the Prius buyers!
    – To whoever said BP is trying to turn our gas prices into European ones, actually, the Western European governments decided long ago to tax gas right on up to $5/gal. When you visit there, you’ll see their smaller and more efficient cars immediately, everywhere. It’s no wonder those guys live on half the energy we do, and they take reducing even that very seriously.

  73. Bryan - June 6, 2007

    Yo, people. Ever heard of Peak Oil? It’s here. Prices will continue to go up. Prices will go higher and higher when gasoline is available otherwise there will be shortages. Expect rationing as the solution to out of control prices and shortages. I am amazed that so many people think “somebody” can do “something” about high gas prices. Relentless permanent declines year after year in world oil production have begun.
    You probably won’t hear about this in the news. Instead you will hear a blame game and promises of techno-fixes that don’t come remotely close to matching oil.
    Get educated. Do not look for somebody to blame. Start thinking about how you will live in this new post-peak oil world. Most importantly, think about what changes you want to see happen in your community. Face reality and choose policies that will facilitate relocalization.
    The media scares you every chance they get with terrorist news. When was the last time the media attempted to scare you about the reality of the world oil production situation? They don’t want you to know because then you will start conserving and stop consuming and that’s bad for business.
    http://lifeaftertheoilcrash.net/

  74. peggy - June 7, 2007

    Bryan’s comment (#73) echoes something that I think about intermittently but with a lot of feeling when I do consider it. I went on your website and found it to be the best summary I’ve seen, and urge others to read it. I guess my own position is twofold: work in all the ways we discuss here to funnel funds into alternative energy development (while protecting lower-income people) AND at the same time, strategize about the survival of ourselves and our next generations in the next 20-50 years: politically, safety-wise, and food/energy-wise. Bryan’s site details these areas. If even a portion of the forecasts he quotes (from reliable sources) come true, we will be in deep trouble and its often too depressing to contemplate. But I agree that we have to try.

  75. Sorina - June 7, 2007

    Adam, wonderful article. It is so interesting to read these comments. My favorite is #70. Jim, you are so right. We all can make choices and changes, along with getting our representatives and our government to enact better policies. We have to make our voices heard.
    Perhaps some of the gas tax money could go into building a better public transportation system in this country. We live in a culture of mobility, and I think we need to start moving away from it: a 1 hr drive to the mall is really not reasonable. Nobody in Europe would ever do such a thing unless they could take public transportation. We need to think more local, eat more locally grown food, find local entertainment and jobs.

  76. Chad - June 7, 2007

    “Sure you can require the Federal Government to raise vehicle milage standards. You’ll get more cars like the Geo Metro and Yaris style cars for the people that can’t afford a hybrid. We already have this class of cars, all you have to do is go out and buy them. They’re very inexpensive.
    It’s really up to you,
    MNWalleye”
    Personally, I find CAFE standards a cowardly policy. What we really want is for people to drive more Metro’s and fewer SUVs. The best way to do this is raise gasoline taxes. Customers will then demand Metro’s and Yaris’s, and the car companies will be happy to oblige.
    Unfortunately, Democrats are unwilling to impose a gas tax, even though it is by far the most effective, fair, and efficient manner to achieve their goal – AND THEY KNOW THIS. Instead, they take the cowardly path of trying to impose CAFE standards, which is nothing more than a method of trying to pass the buck onto the auto manufacturers. The problem is that the companies cannot force their customers to switch until the customers want to. Telling GM to sell more mini’s and less SUVs is meaningless unless the customers desire this change. If we want change, the CUSTOMER has to change. GM will follow.
    We should impose a broad-based carbon tax, including, obviously, a tax on gasoline. The American consumer will change their preferences, and average fuel economy will change appropriately without top-down, heavy-handed government mandates.
    If we are too cowardly to do this, so be it. We should not make up for our failure by taking the coward’s path of CAFE standards.

  77. Larry - June 7, 2007

    A few comments about keeping prices up until our esteemed politicians mandate higher MPG in our vehicles…

    Eurpoean and Asian nations have been using vehicles that are extremely economical (many diesel) and their fuel prices have continued to rise over the past 25+ years. There is no proof that ours will go down (eventually) so that is more hypothetical (idealistic) than anything else.

    The fact is the lobby that pays for the political machine dictates the consumption of fuel (oil companies) need to be stopped so that we have a chance at alternative energy; which we should have been doing during the 1970’s when the first oil embargo took place. Our nation has a habit of not learning too quickly and this must STOP NOW. The issue of fuel, environment, climate, global warming is the beginning of the domino effect of a disaster waiting to happen. TEACH YOUR CHILDREN so they don’t make the same mistakes.

  78. SteveWV - June 7, 2007

    Part of the reason for our lifestyle choices are the zoning and tax policies of the last 60 years. Housing and highways were rewarded, and high-density housing suffered. The other thing with European cars is that they decided to tax the living daylight out of gasoline there so people could pay toward the solution. Look at the public transportation in Europe and then compare it to all but a few US cities. The difference is astounding, and it’s because they decided to set their policies to create the solution.
    Just raising taxes on carbon without earmarking them is a bad idea, because it will not produce solutions. The same with a carbon tax to replace payroll taxes. If you tax above the level of externalities, you will get a situation like cigarette taxes in some states where they are actually trying to avoid smoking-cessation efforts because they need the money to fund things. To a certain extent, you will make the government overreliant on things that you want to reduce/eliminate, and that will mean delaying the problem. So, someone smarter than I am in economics needs to figure out the externalities of a gallon of gas, and in addition to increased CAFE stanrards, at that level of taxation to gasoline so that money can be earmarked to the construction of mass public transit with clean energy.

  79. Dragonfly - June 7, 2007

    Do ANY of you know anyone who is “poor”? I am one. I do not work because of disabilities. I live far from the city (25 miles) because it is the only place I could find that I could afford to live. Low income housing in the urban areas is scarce and waiting lists loooong. I have always done the best I can for the environment, and those stupid emails calling for a one-day boycott make me crazy. I drive a 1982 Honda Civic, and get 38 – 40 miles to the gallon. Wish I could ban SUV’s etc. If I had any money I would buy the 2008 Jetta so fast it would make your head snap. Now . . . tell me again about your plans for the “poor”?

  80. Aaron A. - June 8, 2007

    Dragonfly (#79), we’ve had others chime in on this thread, and I’ve written more than once*, that several of us have had (or still do have) first-hand experience with poverty.

    Unfortunately, the level of price change that would inspire conservation among the middle class would be crippling to the lower class. Which is why I don’t like the idea of artificially increasing gas prices. But let’s suppose that I were the Grand Poobah of Climate Change, and could do whatever I want. What then?

    Better public transportation, for starters**. My commute takes 20 minutes (each way) by car, or 90 by bus. And it’s only seven miles. I, for one, choose the 40-minute bike ride, but the average “I’m so busy, I don’t have time for anything, I’m stretched to the limit, but somehow I have time for three hours of television every night” citizen hasn’t ridden a bicycle in years. So it’s either a quick ride in the car, or spending three hours each day on a slow-moving vehicle, surrounded by strangers.

    If public transportation were a more reasonable solution, more people would use it, and demand for gas will decrease. What’s more, low-income families could save money by buying a $40 bus pass instead of paying for insurance, gas, and maintenance.

    * although it seems many of my articles get selected for “review” and never get posted.
    ** I’d also like to see better education opportunities for low-income workers, so they could move up to better jobs. Minimum-wage jobs are good for learning the ropes, but hardly appropriate for somebody who has to live off of that paycheck.

  81. Rose - June 8, 2007

    Adam — great article! I heartily agree, although as someone mentioned, I am starting to see this whole question as purely academic — we are going to get higher gas prices whether we like it or not. Period. In the long run, the market will do what markets do. In the short term, it will hurt. It’s going to get worse (I believe, a LOT worse) before it can get better. Right now, I’m stuck in the ‘burbs, not making enough to afford a hybrid, driving my gas-guzzling little used Dodge car 25 miles each way to work and back. At some point, I may be forced to move to the slummy area nearer my job, when the pain gets bad enough…. Right now I’m loving where I live, loving my job, and gritting my teeth every time I fill the gas tank…. But higher prices are coming, and with it, quite possibly major changes in the way our entire communities are laid out. I tend to agree with author Howard Kunstler, who says that the suburbs are not a sustainable way of life in the coming economy. (Sorry for getting a little off-topic there.) :-)

  82. T - June 14, 2007

    Interesting take on all this, and for the most part I agree.
    However, I can choose not to use my vehicle as I don’t travel to work. I can choose to purchase a new higher MPG vehicle as I can afford it.
    My sister, on the other hand, cannot. She HAS to go to work, drop the kids in daycare and her husband has to work. They NEED to put gas in their car. With a family of four they are BARELY making it and have accumulated debt to basic necessity things. They CANNOT afford new vehicles, let alone get approved for credit needed to buy them. I imagine MANY others are in this same boat.
    This is a vicious circle, and I don’t have any easy answers. I wish I did as I don’t like to post without any potential solutions attached.

  83. Alan - June 14, 2007

    Here’s an interesting piece of technology that might just start working. Owning a pure electric car is difficult because they typically get only 100 miles to the charge. While most people don’t drive over 100 miles a day, the pure electric car has never been a big seller. California began to implement an infrastructure for electric cars, but that stopped.
    A hybrid car already gets good gas mileage. However, most of the hybrid cars on the market are more expensive than regular cars to where the extra cost is larger than one might save in gas. However, if one could purchase a hybrid car that can be charged for the first hundred miles and operate as a conventional hybrid when it doesn’t have a stored charge. Charging a car is a lot cheaper than filling the tank! Check this out and keep an eye out for big car companies doing this. The last I heard was that Toyota was doing some R&D on this front. Maybe the electricity that will charge your future hybrid for the first hundred miles would come from nuclear, wind, or some other source of oil alternative.
    http://en.wikipedia.org/wiki/Plug-in_hybrid_electric_vehicle

  84. Jon Norelius - August 22, 2007

    I agree. Gas prices (and electricity, natural gas, heating oil, trash, sewage and water) prices are all too low. Until we finally accept the full “ownership lifecycle” of living, we will continue to damage ourselves past the point of repair … or return.

    Once we get over our assumption that environmental damage, and a military in the middle east, is a cheap option then alternatives will suddenly become much more attractive.

    It’s time to learn our lessons and pay as we go. The drycleaners are now charging for environmental impact so why not other industries?

  85. Paul West - May 2, 2008

    I have a major problem with a story I heard the other day about that so-called fuel-efficient car that two brothers created or should I say modified for about 3 grand that supposedly can get 100 miles to a gallon. As a self claiming poor scientist and inventor, I just don’t get it. If I remember correctly that nationwide contest that offered $10 million to anybody who could build a car that gets at least 100 miles to a gallon of gas without being electric or a hybrid has not been fulfilled. I find myself dumbfounded that nobody thus far has figured out that unbalanced gas fuel consumption equation.
    In conclusion, there’s absolutely nothing wrong with any of our cars or trucks including the big ones (SUVS) that a little reverse engineering can’t fix. You people as usual are once again on the wrong track; miniaturization of the car and its primary engine components is not the answer. Perhaps it’s time to put away our logic and look to the earth’s own gravitational field for the answers to his ever-growing fuel problem.
    Note:
    Thank you for at least reading this you may reply directly to me using my e-mail address for more intense info. I will continue gathering the necessary funds to modify an existing car that utilizes a quite remarkable invention, which we have all come to love over the years called “The internal combustion engine.”
    End data note
    The end result of my research will allow this type of engine or any type of internal combustion engine to operate at 100% efficiency on absolutely nothing whatsoever. Yes read it right! Absolutely positively no fuel of any kind! No batteries to charge. No bright sun light required. No nothing! Just you and the open road. Call me a dreamer, however if it wasn’t for us

  86. Dandy - May 11, 2008

    With a little help from…
    GasDandy is an easy-to-use tool that tracks a vehicle

  87. Sawyer - May 15, 2008

    I am amazed at the complete lunacy in the majority of these comments.As for my vote,I’ll take the low fuel prices any day.My family and I happen to enjoy our full size vehicles,boats,ATVs and oh dread, I nearly forgot
    we are involved in agriculture and trucking,my
    goodness at the fuel consumption !!
    You all might want to keep in mind,
    No Farms=No Food No Trucks=No ANYTHING !!
    EVERYTHING,Food,Clothing,Vehicles,Building Material, The List Goes On and On and On, is made accessable to Y-O-U, VIA FUEL GUZZLING,
    UNDERPAID,OVERTAXED T-R-U-C-K-S.
    Thank You,Thank You,
    For This Opportunity To Enlighten & Educate
    An Obviously Needy Group.
    P.S. Please Tune In To Talk Radio,
    Limbaugh & Hannity Could Be Good for You All

  88. Adam Stein - May 15, 2008

    One of the odder claims made by truckers is that if fuel prices go up, then somehow trucking will just stop and we’ll all starve to death in our homes, or something. What will actually happen is that the costs of shipped items will go up, and we’ll all pay a little bit more until clever people figure out more efficient modes of shipping and production.
    I actually am very sympathetic to the truckers and consumers who will be affected by this economic dislocation, but it won’t be the end of the world. Gas prices have roughly tripled in the past ten years, and we all seem to be doing OK.

  89. TM - May 15, 2008

    Absolutely agree. Gas prices should be raised much further in fact, with higher gas taxes, as in much of the rest of the world. The income generated should be used for development of better public transit.

  90. Danan Fitzpatrick - May 26, 2008

    If it meant saving the planet…The earth keeps us alive…it shouldn’t be the reverse of that.