Gasoline

[.... callchet ....]

How does gasoline affect our future?

[NJmaverick]

1. The government should tax it, so that it stays at $2 or $2.50

a sliding scale tax. If the price drops too low, it's only going to encourage bad habits. The tax would also help solve the budget woes. It's a win/win situation.

[Arctic Dave]

2. How about legitimate reasoning for either.

[Citizen Number 9]

3. What we need to do

is slap a huge tax on gasoline which would go directly to mass transit and supporting alternative propulsion sources. About two dollars a gallon might be just about right. Diesel would get a $1.50 surcharge with an exemption for those engaged in intra-state commerce such as long-haul trucking or railroads.

[RC]

4. The problem with high gas prices is the cost of almost everything else go up.

The solution is most definitely not another republican think either/or-black/white answer. We need to get as far away from that kind of thinking as we can.

Mass transit doesn't work too well out here in the boondocks. Economy's of scale and all that. Light rail for towns of 250 people... Don't think so.
We need to look at energy efficiencies for the jobs being done. What is really needed is the equivalent to a nuclear power plant that two people can pick up and carry.

[GliderGuider]

5. They need to be quite a bit higher

I described why we need much higher gasoline prices here: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=52910&mesg_id=52919

[.... callchet ....]

6. The poor

When gas was $5 a gallon, I knew people that spent half there weekly earnings on gas. They were bottomed put. Couldn't change jobs, couldn't buy a

fuel efficient car. What about a gas voucher for the working poor that would give them a certain amount of gas for free and then put a $5 a gallon tax

on gas that wouldn't hurt the rest of us.

[Citizen Number 9]

10. NO! They need to alter their commuter ways!

There is no such thing as a right to cheap gas. It's a privilege that has been facilitated for far too long due to our economy and power in the world.

[rrneck]

7. Gas prices need to drop

because of a collapse in demand. Causing prices to spike through what amounts to a regressive tax hurts low income people first and most, and does little to prompt the affluent (who hold all the power) to make any meaningful change.

If we are going to use government regulations to impact the market, start at the top. Don't tax gasoline, tax luxury cars, cars that get low mileage, cars that weigh too much, cars that go too fast, cars with a dozen cup holders...

High taxes on gasoline is just trickle down economics in reverse.

[happyslug]

8. The price has to go up for several reasons.

First, the only DROP in oil usage in the History of the US was in 2007 and 2008. It was less then a 1% drop in 2007, but over 5% come 2008, do to the increase in the price of gasoline over the last few years. This drop in usage is what lead to the present drop in price. Historically prices have gone up when demand fell within 5 % of output (The 5% difference is probably do to errors in the calculation of both imports and exports, probably mostly do to the fact the US does NOT record as imports into the US, fuel exported from OPEC nations to US Military bases overseas, and the countries those bases are in do not register such imports as imports for it is for the US Military NOT that country's internal use i.e. those exports are NOT reported as imports into any country and is the best explanation of why prices only start to drop as supply exceeds demand by 5% or more).

Now the 5.5 % drop in oil usage is for the US only, the rest of the world had similar drops in usage, but mostly do to the collapse of international trade caused by the market collapse since the summer. Thus worldwide supply exceeds demand by more then 5% TODAY, but that leaves the question how long will that last?

Side Note: In every election since the late 1800s, the price for energy has dropped right before an election. This started with the price of Coal in the late 1800s but switch to oil as oil became the more important fuel in the 20th century. Thus in addition to the drop in usage do to the high price, you had the traditional election year drop in price. Together with a drop in usage by the US military is the best explanation for the collapse of the price of oil since the summer. How long will this last? The Military can only cut back so far, sooner or later it has to return to full scale buying of oil (and I suspect it already has). The lower price of oil has caused some people to go back to big cars, but most people are viewing this as a temporary lull, thus the effect of the high prices over the summer is still with us as far as drivers and domestic use is concerned. International trade is deader then it was in the fall, and looks like that will continue for some time. Thus the two biggest reasons for the dropping price, a drop in demand domestically and for overseas trade, will continue for some time into 2009. Thus the conscience is the price of oil will not go up till after this recession is over and trade re-starts, but that is not considered possible till 2010, thus we are looking at one to two years of low prices before the price of oil starts to raise again.

Remember the reason we had high prices in the summer of 2008 and before was the demand for oil came within 2% of the output of oil world wide. This tight market started around 2002 and slowly, but steadily pushed up the price of oil till the Summer of 2008. Why the tight market? England's North Sea started into decline in 1999, the North Slope of Alaska started even earlier, mexico biggest field peaked and went into decline in 2007 (Losing 30 % of its daily output by early 2009) and they are reports that the biggest field in Saudi Arabia is also in declined, thought the House of Saud denies this to be true (Through when Saudi Arabia put more oil into the market, it was heavy sour oil NOT the light Sweet oil from Arabia's premium field, NOT a good sign for that field).

World wide peak oil production is presently believed by some to have occurred in 2005 and that was what pushed the price up to the point when people stop buying oil. The sudden drop in price is characteristics of a market in short supply, slow steady growth in price till you reach a point where people stop buying the item, and then a short quick collapse in price as people see the price drop and wait for it to drop further before buying any more then they need today. Once the price has bottomed out I expect a bunch of hoarding as the price goes up, thus a short period at the bottom, a short period of almost no growth in price (and people buy up the excess for later use) and then a slow steady increase (as people accept that prices are going back up and cut back usage but pay whatever the price is when they need it), finally the price will peak as speculators get into the market as it tends to peak, driving the price upward rapidly (i.e. the prices in 2008) till it peaks for no one can afford it at that price and you have a subsequent quick drop and the whole process starts all over again.

What is needed is a Two to Four dollar tax on oil, to discourage its use. The Taxes should be used to first improve the roads, so that people use less gas while driving (This covers even rural areas, for most of the bridges in this country that needs to be replaced and replacement of those bridges and other road improvements will reduce oil usage in much of Rural America. The second thing the money needs to be spent on is to provide non-oil based transportation (Bike-ways and Electric rail service). Both will reduce oil usage even further by providing people in urban areas (in the case of Electric Rail and bicycles) and rural areas (in the case of Bicycles) an alternative to using oil. Furthermore this reduction is use of oil in urban areas will reduce the demand for oil and thus its price even in rural areas. Finally the money should be use to help insulate low and medium income housing in the US. Such Insulation will help reduce the price of oil by reducing how much oil is used to heat or cool such housing. A lot of low and Medium income people do NOT have the cash to pay for such insulation do to their income, again this will reduce demand for oil by reducing how much oil is being used even in rural America. We have to considered not only how we can reduce oil consumption in urban America by also rural America, the above three things do both AND keeps the price of oil down do to an overall reduction in usage.

Yes it sounds illogical, increases taxes to keep the price of oil low, but once you accept the fact that the best way to reduce DEMAND for oil is to increase its price and the best way to reduce the price of oil is to reduce the demand for oil, this makes sense. The taxes keeps the demand for oil low and thus its non-taxed price, while low oil taxes, has little or no affect on the demand for oil so the demand for oil increases with low oil taxes and thus forces the price of oil up. For that reason we have to increase the price of oil, it will hurt a lot of people, but mostly suburbanites more then rural Americans. The reason for this is Rural Americans have alternatives to driving, much slower but they do exists (bicycles, walking and even using horses). Suburbanites MUST still get to their jobs in the Inner Cities (or,as most suburbanites do today, in other suburbs). This require a car, a car that uses oil. In such suburbs bicycles may be usable, but most do NOT have sidewalks and have to much traffic for people to safety walk suburban highways (And horses are generally forbidden on the roads, like in most urban areas). Rural residence also move by car today, but it is easier to change their life styles to one of living within the area they can walk to (Or make limited long distance trips by car i.e. once a week or once a month). Rural America will have to revert to what it was around 1900s, Small farms with most workers living on the farm their are working on or near by (Those people who live on farms on the outsides of Suburbia will have to move closer to their jobs or become self-sufficient farmers or other rural business, both of which will be easier for rural American than Suburban America).

[anigbrowl]

14. your post is full of win - wish I could rec it.

I fully agree with your points about demand destruction and demographic change.

[Hawkowl]

9. Taxes as motivation are ineffective

This is more Chicago school, Milton Friedman, free market economics bullshit. The theory says that taxing something provides a disincentive and people will change their behavior because they are RATIONAL. Bullshit. It's hard to be rational when you have no alternatives. Most people live in the suburbs. How do you get to work or to the market?

If we want to change our economy into something other than oil based, simply let the government do it directly. Force the oil companies and the power companies to put electrical power outlets at every station, or hydrogen pumps or whatever.

Build the infrastructure first and then mandate it. It is the most efficient way. Look at WWII. All the companies making cars, and washing machines etc. one year, the next the government essentially forced them all into making munitions overnight. Voila problem solved the economy completely retooled.

A gasoline is a regressive tax on the poor. Period. If you must tax something than tax the gas guzzlers instead of giving them tax credits like Bush did. You want a 8 mpg SUV? Cough up an extra $10K in greenhouse/ anti-social tax.

[Citizen Number 9]

11. Where have you been all this year?

When gas went to $5 a gallon, people absolutely did change their ways.

Maybe they should have voted for mass transit rather than thinking about how great it was they could burn cheap gas to get to work and checking the "NO" box. That would have provided an alternative for both them and the poor.

[Statistical]

12. It has been proven that price of fuel and consumption are highly inelastic

Someone commuting 30 miles has to commute 30 miles. They aren't going to stop working to save gas $$$.

Freight is still moved regardless the cost just passed on to the consumer.
This is why weight dependent items like food saw a massive run up in price compared to things like HDTV (high price per lbs).

Gas prices tripled and consumption went down 1%.

To have a meaningful impact to prices the tax would need to be so high as to be punitive.

Remember prices rose from $2 to $5.50 and consumption dropped 1% (before recession slowed deliveries).

A tax of maybe $3.00 a gallon "might" reduce individual consumption 5%-10% but immigration & birthrate would simply keep national consumption flat.

A punative tax of $3.00+ would be crippling to the poor and lower-middle classes of US.

[GliderGuider]

13. Don't conflate the elasticities of gasoline and diesel fuel

Gasoline demand is more elastic than diesel. Much car driving is discretionary, while very little trucking is discretionary. The trucking industry is already close to maximally efficient. You can't car-pool two loaded 18-wheelers...

[happyslug]

15. Yes you can car pool loaded 18 wheelers, it is call a "Train"

And the high price of diesel was the main reason Fright train traffic was up all year long. A lot of companies decided to ship their trailers via trains to a point close to where it was going and then trucking it the rest of the way. This was how a lot of long distance trucking defected to the railroads this year. Train is still slower then truck, if you value speed over everything else, but as the price of fuel went up, the number of trailers on trains went up.

[GliderGuider]

16. Fair enough, there's no question trains are much more efficient than trucks.

We need to be using fixed-line transportation for both goods and people a lot more than we are, with cars and trucks being strictly a "last mile" solution.

I'm suffering through the 28th day of a bus strike here in Ottawa, and having to carpool into downtown (or drive myself) about 10 km each way every day. It sure makes me appreciate public transit a whole lot more. I found out today that there are only 32,000 parking spots in downtown Ottawa, for a combined car/bus commuting population of five times that number. What a nightmare. Maybe that explains part of my sour mood about transportation...

[Citizen Number 9]

18. It's been proven, huh?

Here's your "inelastic" demand.

http://tonto.eia.doe.gov/dnav/pet/hist/wgfupus2W.htm

Do you know the difference between this equation: momentum = mass X velocity

and your statement?

Your statement isn't always correct. We could argue over the definition of "highly" all day, but the truth is that at gasoline prices such as we saw this year, the demand curves did indeed change.

I saw lots of people carpooling this year and the sales of gas guzzlers fell off the chart. It might take a while to have effect, but it will have an effect.

[happyslug]

17. You are confusing long term with short term economic trends.

In the short term, most people can NOT move nearer their job, can NOT trade in the car for a more fuel efficient one, can NOT move to an area where it is easy to take mass transit to their job as opposed in a car. For economic proposes short term includes actions that can occur within one year.

On the other hand, in the long term people can and have changed. In the 1970s the sale of large cars declined, people actually started to drive less and you had the only decade in the 20th century where people moved from the city to the country (Very marginal movement to the country, with some of the "country" being the edges of suburbia, but the big movement Rural to Urban to Suburban did cease as people made adjustments do to the high prices of oil). The change took time, most people could NOT change in 1973, it took most people till 1979 to trade in their large cars for compacts. This changed helped Reagan in his early years when the price of oil was just as high as it had been under Carter, but as the oil glut took hold people slowly changed again, returning to a more car driven approach to living and the SUV craze of the late 1980s, 1990s and early part of this decade.

If you look at Europe, it has had high fuel prices since WWII, and has excellent mass transit but all of the cars are small. Italy actually has more cars per person then the US, but drives them less then a 1/3 of the time as an American (again do to the fact most live close to their work and the excellent mass transit system). In Europe a car is a luxury, in the US it is a necessity. We have to change that and the only proven way is a high tax on fuel. It is the only way to raise the needed funds.

As to your proposed tax on cars, why? Such a tax actually defeats the purposes of reducing driving. Once it is paid, the cost to operate the vehicle will be minimal, and it is the cost of operating the Vehicles NOT the Vehicles itself that reduces the pollution caused by cars. For example is it less polluting to transport 4-8 people in a large SUV as opposed to the 4-8 people going in 4-8 cars? The answer is it is less polluting to take one big Vehicle then 4-8 vehicles. People can NOT do that if the large Vehicle is priced out of existence. On the other hand the high price of oil will force Large Cars to be used ONLY when their larger capacity is needed. I know a lot of people buy large cars for show not to haul people, but a high fuel tax will force such people NOT to drive that large car do to the cost of operating that car (Notice the cost of buying the car is a minor factor, for that cost is a gimme and once bought no longer in the control of the car owner, but operating cost like the cost of fuel is in the car owner's control and sooner or later the Car owner will follow his or her wallet as opposed to his or her ego.

Now i have to say I foresee a near future where the number of cars people own will INCREASE, even as the miles they drive declines. I see people Keeping a car to haul themselves and their families on long trips, even if the trip is just to go to the Mall, while having a smaller car for their commute to work and back. A tax on large Cars would defeat such a move and people will rebel (i.e. no political support for such a tax on cars). Furthermore driving a four person car to the mall is less polluting and more fuel efficient then driving two cars to the same mall. This will drive the move to having a Family car for such trips, and a commuting car for trips where the rest of the family is not going with the Driver (These other "cars" may be people taking improved mass transit to and from work instead of their large cars, thus the large cars will NOT be polluting during the commute to and from work, but only when a family believes a large car is the best way to move the family to and from a location.

As to your other plans to replace oil based cars, how are you going to pay for those improvements?
How do you force people to install "power outlets at every station, or hydrogen pumps or whatever" unless it is paid for somehow. Gasoline taxes provides the money, you can NOT force people to do things without paying for it somehow, that will either by tax money OR by an indirect tax saying that the stations will be fined if the "improvements" are NOT installed. Furthermore if you look into non-oil technology (including bio-diesel) you quickly find out that that none of them comes even close to replacing oil, as we have been using oil for the last 100 years. Thus the better solution is a return to Rail transit, powered by wind, solar and hydro (Recently there has been a huge break-through as to using the current of flowing rivers to provide electrical power WITHOUT having to build a dam, this offers something Solar and Wind can only wish for, a steady source of power). Yes, fully expect to have to walk back and from work, to live near where you work and shop, and any long trips will be by train (Steel Wheels on Steel Rail is still the most energy efficient way to move things). Streetcars will make a comeback, based on that simple energy factor. People will abandon suburbia, more to be able to get to high population areas where Streetcars will exist then anything else. Rural America will become less mobile, only going to the town once a month or less to get supplies, and then by horse drawn wagon to the nearest rail station (where they will hope a train). Now the trains will be electrically powered, but given their efficient do to the steel on steel technology, they will outdo any other form of transportation (This will be re-enforced by the fact the electric train will NOT have to depend on a battery for power, Batteries noted for low energy efficients i.e. for every watt that goes into the battery it produces only 1/4 watt out, fuel cells do better about 50 % with fly wheels doing even better at 90% but as the efficiency improves the expense of each increases as does its dangers, a Fly wheel, if freed from its container would be a killer).

My point is simple, sooner or later we have to accept the fact that the car society that the US has been since WWII can NOT long survive any drop in oil supplies. It may survive 20 years but sooner or later we have to give up on it, the sooner the better and a oil fuel tax will lead the US into a post-oil age (Notice I said post-oil not pre-oil, the Interstate highway system will survive for Centuries, if properly maintained, even if all that is going on them are bicycles and horse draw wagons. Steel wheels will become the norm for most wagons, for if you keep the speed under 25 mph Solid Steel Wheels are even more efficient on roads then pneumatic tires (Through Pneumatic tires are superior at speeds over 20 mph, and why they are used today and have been the dominate form of wheel since the early 1900s). Bicycles, given their narrow tires, are better with pneumatic tires even at slow speeds (Thus Bikes will continue to use Pneumatic tires well after oil is gone). Notice I am describing a different society then we have today, one where energy is restricted to its most efficient use (It probably be found that it is more efficient to use what bio-fuel that is produced to push into orbits satellites so out internet system will survived, it is a lot less energy wasteful to pull down a book or other data via the net then to hall a set of books around, thus my point we will be living in a post-oil world NOT a pre-oil world). Actually farm work may have to be done by horses, as would any heavy hauling (I can see the last days of oil, where a horse drawn wagon goes from seeper pump to seeper pump to get the last drops of oil for use by the Military, or to add to the bio-fuel used to push satellites into space). Sooner or later we have to start in that direction, the sooner we do so with high taxes on oil the better off we will be as a nation.

[natrat]

19. out of my oil swing long-now watch it go to da moon