Raise the Federal Gasoline Tax

updated 1:22pm MT from Texas, USA

U.S. Gasoline prices jumped suddenly in the past few months, about 40 cents to $3.60 per gallon (aproximately $3.30 in 2005 dollars - perspective: gasoline was selling for $1.88 in 2004) according to US Energy Info Administration, as both the oil market and oil companies are raising prices ostensibly due to the strife in the Middle East.


But hardly any of our petroleum imports, if any, have anything to do with Libya or Egypt, and about half come from South and Central America.



My suspicion is that Big Oil is looking for a pretext to keep its enormous profits high or take them higher - Exxon reported a quarterly profit of more than $9 billion in January (WSJ.com).



But if American consumers are going to be pressured by prices at the pump, more of their money should be going back to their government than to the mostly wealthy shareholders and executives of the Big Oil companies.



If the US Government would raise the federal gasoline tax, that would probably be what happens - as Big Oil would likely resist pushing prices higher than $3.60 to $4 per gallon, and just take lower profits. The tax revenues our Federal Government could then apply to reduce the federal deficit, and/or funnel them into programs for alternative energy and energy-efficient technologies research and development or purchase incentive programs - such as for people or businesses buying solar panels or electric or hybrid vehicles.



Generally, we should desire higher gasoline prices in the United States (around $3 to $4 per gallon), because higher prices should moderate our consumption of this valuable natural resource, which we have been wasting for many years now, by making us switch to energy-efficient or alternative energy-powered cars, trucks, other transportation and appliances.


Oil is a limited natural resource - the market prices it according to present supply and demand, but not according to that future reality that eventually there will be no more or very little of it. Nor does the market consider the impacts on our environment of the extraction, refining, and combustion of its products...


We certainly do not want to find ourselves pumping the last drop of oil from the ground 30 years from now, because we desire to be wasteful today.


Given the inexorable advancement of alternative energy technologies, and, finally, the appearance of electric and hybrid vehicles on the market, we probably won't be pumping the last drop of oil from the ground - but if we want to reduce our dependence on foreign oil imports, generally safeguard petroleum supplies for the next century, as well as reduce our carbon dioxide emissions and impact on the environment, we should be continually making the effort to reduce our burning of gasoline...


2010 did see a significant decline in gasoline consumption, with deliveries down to 45 million gallons per day, compared to 50 to 60 million gallons per day from 1984 to 2009.


Oil has also been used to generate electricity, though that use appears to also be plummeting, from 200 million barrels of oil in 2001, to only 40 million barrels in 2010. http://www.eia.gov/cneaf/electricity/epm/table2_2_a.html


The Obama Adminstration should be fearless in its energy policy and recommend an increase in the federal gasoline tax of around 25 cents to 40 cents per gallon - though a general carbon tax on fossil fuels should also be considered ( See previous blog post Carbon Tax Time) - to encourage the transition to more fuel efficient, hybrid and electric cars and trucks.


other resources NY Times Greenblog

http://green.blogs.nytimes.com/tag/energy-policy/