MinnPost photo by Steve Berg
Cheap gas is so important to Americans that we're willing to lie for it and die for it.
Social Security has long been the third rail of American politics; touch it and you die. The gasoline tax may have achieved similar status.
Every president since Richard Nixon has promised to wean us from our foreign-oil habit, but none has dared to do what needs to be done, which is, as columnist Thomas Friedman never tires of pointing out, to raise the gas tax to a level that would promote conservation and bring American lifestyles more in line with those in the rest of the advanced world.
I used to think that a higher gas tax was a no-brainer. But since the onset of the economic troubles in 2008, I've come to appreciate the anxiety that rising gas prices bring. People feel as if their jobs and livelihoods are hanging by a thread and that employers are looking for any excuse (including higher gas prices) to cut the line. More than that, the fear is palpable that higher prices at the pump will drive higher prices for everything else while incomes continue to stagnate.
We've arranged our lives around cheap gas. Where we live and work, how we schedule our time, how our economy delivers our products, all of these things depend on a reasonable price at the pump.
We lie for it and die for it
Then there's the fundamental truth about cheap gasoline. As pathetic as it sounds, it represents freedom. We have built this country on the enduring myth of the frontier. Cheap gas is our open range. It lets us drive where we want, when we want, and as much as we want. Even pious urbanists like me secretly enjoy the personal liberty that cheap gas provides.
Cheap gas is so important to Americans that we're willing to lie for it and die for it. We deceive ourselves all the time about why we're involved in bloody foreign adventures in Iraq, Afghanistan and now Libya. If you drill that well deep enough, you'll find oil. It was our presence in Saudi Arabia that first drew the attention of Osama bin Laden and his murderous pack. We weren't in Saudi for the sunshine.
Connecting these dots doesn't make for a flattering portrait of the American consumer; the oil companies have us where they want us, and we're eternally grateful for it. We pay just enough at the pump to earn them ridiculous profits, but not enough to break our habit. There's no talk in Congress about weaning us; there's talk only of finding a bigger spigot to keep us happy.
Way cheaper than shampoo
Actually, as a liquid commodity, oil is amazingly cheap considering its importance. At $3.89 per gallon for regular, it's only a bit more expensive than a gallon of Coke ($3.84) and quite a lot cheaper than gallon of milk ($6.04), orange juice ($7.68), Tide detergent ($19.20), shampoo ($25.60), Starbuck's latte ($32) or Guiness stout ($64).
Of course, a gallon of gasoline won't take you very far while a gallon of shampoo might be all you'll ever need.
Still, the price variation for gasoline from country to country is amazing, with taxation reflecting national policy and goals. This comparison is from mid-November, when the world price was one-third lower than it is now.
| Country | Price per gallon (Nov. 2010) |
| Libya | 0.45 |
| Yemen | 1.32 |
| WORLD CRUDE OIL | 1.93 |
| United States | 2.88 |
| Argentina | 3.63 |
| Canada | 4.58 |
| Australia | 4.58 |
| Singapore | 5.37 |
| Ireland | 6.74 |
| United Kingdom | 7.31 |
| France | 7.49 |
| Norway | 8.02 |
Source: GTZ.de/fuelprices
BTW
State and federal gasoline taxes at current levels won't be able to sustain the maintenance and new construction of major roadways for much longer. Transportation finance experts are exploring a shift to mileage-based fees for a number of reasons. One is that hybrid vehicles and other mpg advances are lowering revenue yields. Efficient vehicles add to road damage and congestion yet don't pay their fair share of upkeep and expansion. The expectation that mileage fees will replace or augment gas taxes provides an excuse for not raising gas taxes.
Cheers and jeers
• Jeers to the state's GOP leaders for disproportional cuts for Minneapolis, St. Paul and Duluth. The cuts would hammer the state's bigger cities and exacerbate problems with schools, crime, homelessness, infrastructure and property taxes. It's a perfect example of kicking somebody when they're down. St. Paul Mayor Chris Coleman is right when he says that the cuts "will have a profoundly negative effect on Minnesota's economy."
• Cheers to the Urban Land Institute for its latest comprehensive report: Infrastructure 2011. It's a daunting look at the investments flowing into transportation in many countries compared to America's 30-year history of neglect. The report does praise Minneapolis-St. Paul for its construction of the Central Corridor LRT but warns that other advances may be slowed by lack of funding.
• Cheers and jeers for President Obama's draft of a new transportation bill. It moves in the right direction (more livability, more choices) but fails (surprise, surprise) to specify how our newfound mobility will be financed.
In metrospect: Stories you may have missed
• Religion spawned cities, not the other way around. This National Geo piece puts you on a remote hilltop in southern Turkey; a spot where 11,600 years ago humans may have first gathered in a city, of sorts. Best as they can figure, archaeologists say they gathered to worship.
• Inviting immigrants to repopulate your city. The 2010 Census was a painful revelation for many Midwestern cities (like Detroit) and Midwestern neighborhoods (like North Minneapolis) that are losing population big time. According to this piece in New Geography, Winnipeg may have the answer: immigrants.
• What if you built a park and no one came? That seems to be the problem with Boston's Big Dig. Above the massive tunnel, the city installed a gorgeous park. But there's not much in it to hold people's interest. It should be a reminder for the folks planning a major new park near the Central Library in downtown Minneapolis: Beauty is important, but it doesn't guarantee a successful place.
More like this
- Highway funding system is running out of gas
- Figuring out the Volt value proposition: It's not as neat, nor as green, as you might think
- R.T. Rybak's plug-in car: It keeps going and going
- Cheap gas is a relief – but a terrible trend if it lures us back to old habits
- Oberstar points to road problem: a shortage of federal gas-tax revenue
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Comments (14)
The blessings of the endless space taken from the Native Americans will turn into a real curse in a world of declining and more expensive resources. It takes a lot of energy to get from place to place and maintain the enormous infrastructure that is critical but not widely used in remote places. The whole attitude of the replaceableness of everything, new frontiers after the old is spoiled, the ability to make the world into what you want, and the ignored lessons of history have much to do with the apparent ability to move to a new frontier when desired.
With respect to the Big Dig park, it seems to be more of the equivalent of Victory Memorial Drive in the immediate shadow of a highly urbanized area. Its a relatively narrow winding strip of green through the city with heavy traffic on all sides and many cross streets and not a park with sufficient concentrated mass for people to see it like a Central Park type park. Not a surprising result.
In my experience, a portion of transportation practitioners put too much focus on the mileage tax, I think because in an academic sense it ties so transparently to vehicle miles traveled, which is correctly a central benchmark of good transportation planning. But that isn't the only policy goal a tax needs to address.
In focusing on the mileage tax we forget that there are other policy concerns to consider. Much as the highways and urban renewal of the 1960s focused on a narrow definition of problems and thus an ill-concieved solution, we may risk the same thing today if we don't fully define the range of challenges before us.
Given environmental crises, peak oil, and high oil prices, policymakers should be doing all we can to promote hybrids and electric vehicles, not disincentivizing them. You've illustrated that in context, shifting the way we pay for transportation improvements more to a tax on mileage would effectively act as a disincentive to cleaner fuel technologies such as hybrids and all-electric vehicles, which don't use as much (or any) gas.
Finally, it's worth noting that even all-electric cars have to pay taxes on their fuel - it's just through an Xcel Energy bill, not through the local Holiday or BP station
Well said, Steve, if too gentle.
Young people from Minnesota are dying in the Middle East so that their fellow Minnesotans can continue to drive an SUV. The freedom the troops are protecting is the freedom – and it IS a freedom, though not on the order of the 1st Amendment – to drive when and where we want, and for an artificially-low price.
Far-flung suburbs will seem a LOT less attractive with gasoline at $8/gallon, a price that's politically disastrous here, but that would reflect both declining supply and the reality that our transportation infrastructure is in major decline due to lack of revenue for maintenance, both locally and nationally. Anyone who drives metro area streets can see (and feel) this.
As has been pointed out numerous times in this and other contexts, we want services and facilities, but we want them at either bargain prices, or we don't want to pay for them at all.
My only quibble, and it's a minor one, has to do with wear and tear on the roads. A Prius, or the Honda equivalent, doesn't create a lot of road damage. What mangles roads (besides Minnesota weather) is weight. An 80,000-pound 18-wheeler is orders of magnitude harder on any road than a 2,500-pound car. Oil has not only dictated our development pattern in recent decades, it's also the basis for "convenience," and a primary ingredient of that convenience is the over-the-road trucking industry. If $8/gallon gasoline is hard for automobile drivers to deal with, think what $9 or $10/gallon diesel fuel will do to the trucking industry.
Jim Kunstler has advocated for years a return to passenger rail and a renewed emphasis on rail as the means to move freight most efficiently over long distances, and that will make current business practices for inventory control obsolete. We might have to wait a couple weeks for that stuff we ordered from the online merchant, and that won't sit well with people who are used to convenience, either. That hasn’t kept Warren Buffett from investing in railroads, however. Maybe he knows something…
The consensus of a number of studies that I reviewed several years back is that gasoline should be in the range of $12/gallon to internalize the social costs of its use (and this doesn't account for, e.g., the military budget, which reasonably could be argued to be pretty much entirely a social cost of our petroleum dependence). The problem isn't the high price of gas (even at $4/gal it's still far below the "market" price), it's that the cash goes to the oil companies (and then on to members of congress) as windfall profits rather than being redirected to compensate those bearing the externalized costs and being used to transition our society out of petroleum dependence. The other major aspect of the problem is that folks' ability to respond to price signals is limited ... they can't instantaneously relocate their homes or businesses. My layperson's concept: (a) a clear and credible message that gasoline prices will never go down again and we're going to evolve as a society; (b) a gas tax that is gauged to internalize social costs, with the proceeds used to retool our society away from petroleum; (c) a need-based "petroleum subsidy," phased out over, e.g., 10 years (so that folks and small businesses have time to adjust their location choices/technologies to the new "market" environment); and (d) the leadership of our politicians and the maturity of our citizens needed to carry it out. That last one, of course, is when you burst into sardonic laughter.
Boston has it's "big dig" but we have our "Little dig" the road and LRT "tunnel" of Hiawatha/55 near Minnehaha Park. Almost no one visits the parkland/flower garden built above this faux tunnel.
Curious! Canada exports fuel to Minnesota but has 50% higher gasoline prices. Hmm! Maybe that is why "liberals" got clobbered in the last election.
As to the immigration experience of Winnipeg, Canada tends to have a "reverse means testing" for a lot of it's immigration. Basically, if you are rich, you can immigrate to Canada. This is far different than the "Minnesota model" where a refugee immigrant group spends a generation or two on the dole before becoming productive (as a statistical group).
To reduce fuel consumption try some "strategic planning". Basically live near work and stuff you do.
Two benefits here. Fewer miles driven and with the shorter trips vehicle comfort is less important. (that said I have become hooked on air-conditioning). Also, the more compact vehicles work better in an urban setting.
If it wasn't for "gopher work" I do with my fuel efficient 2005 Ford Ranger for personal use I could go a month on a tank of gas. Maybe $50 per month gas at current prices.
Still, I try to think out trips and combine before firing up the 4 cylinder stick Ford Ranger.
Steve, thanks for sharing a few of the urbanist-themed readings you've come across lately. As to gas taxes, I don't understand why, if we wanted to charge per mile traveled, we wouldn't just open toll roads. Seems like a waste to try to track everyone's mileage with technology when we could just make you pay for a certain stretch of road and have the exact same effect. On the other hand, I don't think that hybrid or even fully-electric vehicles do anything to help our situation--we just burn less oil and burn more coal, but I guess it's at least a start.
IF we find cheaper, renewable resources for our personal cars, we will end up with guilt free grid lock on our roads. It does not matter if we scoot around the city in a "green" car (electric or not). It is still an anti-city form of transport. Go car free> use the money savings to fund buying local; live longer; meet people on the bus you will never meet; use the space in your garage for a new hobby; use the occasional taxi if you must; it all adds up to a personal choice to destroy your own nest thru a choice of convenience or live in a beautiful urban environment with abundant public transportation, bikeways and pathways that are easy to use and free of cars.
Gasoline is basically a bulk generic commodity. $6 for a gallon of milk? At Aldi it used to cost $2.20 and now $2.50. Hardly anyone charges more than three dollars for a gallon-gallon of milk. Again, if we go generic with shampoo Suave works out to around $5 per gallon. Orange juice costs around three dollars per gallon. The coffee and beer seem "on sale" price where you are basically paying for use of the coffeehouse or bar. It is sort of like calculating food prices via menu prices at a good sit down restaurant.
Eleven 12 ounce bottles or cans of beer are a bit more than a gallon. If you price shop a bit like you would with gasoline a twelve pack of Guinness Stout should be well under $20.
Should we trust someone who tells us that a gallon of milk costs $6?
The paradox of "going urban" is that your miles driven goes way down. Also a large vehicle is more difficult to navigate and park in the city. With short trips vehicular comfort is less important. This naturally favors smaller vehicles if you are "urban".
Before I retired, when my parents were still alive and gas was really cheap I only put 6K miles on my 4 cylinder "stick" mini pickup per year. Now I try to consolidate trips to save gas but I would currently be using less than a tank of gas a month in my 2005 four cylinder "stick" Ford Ranger without "go-for" work for other people.
Until the 1960s up to 90% of freight was carried by railroads. Then a few people figured out that they could essentially do truck dispatching out of a phone booth and get an essentially free ride on the nation's freeways, since the taxes they pay don't begin to cover the damage they do. I think only the barge industry has a better deal. The railroads couldn't compete. Their former warehouses are now condos and office buildings. The nation's freeways are now the warehouse, with "just in time" delivery.
Until about the same time, people could also travel to just about anywhere in the country by train. While the automobile and cheap gas were factors, the final blow to that system was the termination by the Post Office of the railroads' mail contract in 1962 in favor of trucks and airplanes--both heavily subsidized and fuel-prodigal.
Used to be that new housing subdivisions and streetcar lines were planned in concert. Then GM and Big Oil got together and terminated the streetcar companies in favor of diesel buses.
We've been making poor transportation decisions for a long time.
My Minneapolis Longfellow neighborhood was built up right after WWI between 1919 and 1920. It had one streetcar line which got relatively low usage except the WWII when there was gasoline and tire rationing.
My theory is that the "golden age" of the Twin Cities streetcars was between 1890 and the end of WWI.
After WWI there were more cars and "jitneys" or buses skimming street car business. In 1925, when the 1875 original 50 year franchise came up for renewal there were work and service stoppages. Basically, I believe the streetcars were losing money by then but the streetcar operators were also land developers. They probably bought up a lot of land then ran streetcar tracks to it.
In the early to mid 1930's President Franklin D. Roosevelt issued an order forcing the streetcar lines to divest themselves of their electrical generation systems. This was likely "cash cow #2" for the streetcar lines. Streetcars use a lot of electricity and they use a lot less once "rush hours" are done. A factory could be located at the end of the new streetcar line and sold midday electricity. During the Great depression a lot of people had trouble paying residential electric bills and electrical cutoffs were politically unpopular. On the other hand if a factory has to shut down for a while it will use very little electricity.
The Twin Cities streetcar decision to go from two to one person operation seems to coincide with the electrical generation divestiture order. The streetcars were busy during WWII but the final new streetcars were bought with a federal government grant.
A mileage charge might work if it is not tied to GPS. Virtually all cars and trucks built in the last 20 years have a "core" computer tied to the vehicle that records total vehicle mileage. You probably have not heard of "odometer resetting" in decades. Basically, a dealer or any facility with a good diagnostic computer can plug into the "core" computer chip that has a unique serial number (like a modem or network IP #) that is registered to the specific vehicle.
Warranty repairs are expensive so auto manufacturers aggressively fight odometer resetting. You could conceivably make a cheap wifi or cell-phone type device that stays plugged into your main car computer and records only mileage numbers when queried. When we fill up with gas (or whatever) or when we pass a checkpoint (probably a filling station) the mileage total would be read with no other information including time and day within a week. We could get out "bill" via email or have it added to our Federal income tax bill. If not paid it can be added to the vehicle licence renewal cost.
Without GPS, this would work best for federal gasoline taxes. The administering agency could be the IRS. If you say you are a drug dealer or whatever else illegal and report your income to the IRS you tax reporting cannot be used against you in a court of law. At most the IRS can report your stated income. It could be the same with stated mileage.
The public might be more sympathetic to higher fuel taxes or a non GPS mileage charge if gasoline and potential mileage charges are actually used for automotive roads and bridges. Now they are a "slush fund" to reduce the federal deficit or to fund public transit or bike paths.
Freedom is slavery, and it's 1984.