The costs of oil policies and personal choice

The costs of oil policies and personal choice

By Bob and Sonia Vogl, Illinois Renewable Energy Association

Federal oil policies and personal transportation choices cost us far more than we realize.

The entire system of federal subsidies and tax exemptions in the United States causes confusion and undermines the economics of local communities. One of the most damaging subsidies is given to transportation. Shipping goods and services for global markets is only affordable because the price we pay for oil is far below its real cost, providing the illusion of inexpensive transportation. The World Resource Institute estimates that federal subsidies for auto and truck transportation in this country total $300 billion annually. Other studies calculate that we should be paying between $6 and $12 per gallon for gasoline. If we conquer Iraq and accelerate pumping oil from their fields, we could add another $1 per gallon.

If we increase fuel efficiency, either through mandatory or voluntary action, the sense of urgency driving Middle East policy might not exist. We could double the fuel efficiency of vehicles as we did from 1974 through l988. Incidentally, it was government mandates and not volunteer efforts by industry that improved fuel efficiency for that decade. In fact, by heeding the call for less government in our lives and allowing the marketplace to work its magic, the combined fuel economy of cars and light trucks has now fallen to its lowest level in

20 years.

The federal government’s extremely aggressive efforts to expand energy supplies and increase control over them suggests officials will increase our economic dependence on oil. If supplies increase dramatically, energy prices will fall dramatically, providing the economy with a temporary economic boost. However, it will come at a price in terms of increased military spending, balance of payment deficits, federal debt, homeland security expenditures, global warming, local air pollution, and asthma rates. While the price of gasoline at the pump will fall, the bill for all of this will be passed on to people via income taxes and

environmental and human health costs.

If you are not one of the self-satisfied Americans who thinks cheap gas, large engines, and unlimited driving privileges are your divine rights, what can you do about it?

If you would like to save about $7,600 and stop driving 15,000 miles annually as you probably do now, consider selling the car. It will cause you to rethink your life. You may move closer to work, carpool, take the bus, walk, or ride a bike to work. You might get creative and form a car-sharing club in your community to spread the costs and benefits of car ownership.

If you are unwilling or unable to totally abandon the internal combustion engine, consider a hybrid electric vehicle. Check some out at a local Honda or Toyota dealer. Toyota is planning to expand production of its hybrids and offer additional models in future years. Honda has added a hybrid to its Civic line to provide a four-passenger model in addition to its two-passenger Insight. All three major U.S. auto manufacturers are expected to add hybrid offerings as well.

While government policies have the most far-reaching impacts on petroleum consumption, personal choices can help ameliorate the effects of policies that encourage waste.

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