Gasoline prices around the word reflect social values as much natural resource scarcity
It was surprising to learn that there is a tremendous difference in the amount of money spent around the world to refuel cars. How much difference? From $.09 per gallon in Venezuela to just over $10.00 a gallon in Norway. I have known about steep prices in Western Europe having driven quite a bit in Germany and the UK. I kind of understood the idea was, that population density informed the choice in these countries. It makes sense that in a country like Netherlands where space for everything is at a premium, that car use and ownership would be be considered a luxury with corresponding expenses.
While it is true that the really cheap gas countries, Venezuela and Saudi Arabia are flush with oil. the difference in world wide pricing is at least as much a function of tax policy as it is of scarcity.
The US economy was largely built on inexpensive domestic natural resources and the huge post war manufacturing boom of the 1950's was based on cheap raw materials. When US domestic oil production began to decrease in the late 1950's, we became ever more dependent on foreign oil. In 1973 OPEC the newly formed oil cartel raised the price of crude oil by 70% and sent shock waves through the economy. I remember when I began driving in 1979 gas cost about $.80 a gallon this was considered scandalous since in the 1960's it had been less than one half of that amount.
Even at that time the prices contained significant federal and state taxes. These funds were often considered road taxes and used to cover some of expenses of building the massive US highway and bridge system. Little or no thought was given to other external costs such as pollution, the sustainability of a fossil fuel based economy, or the social costs of building a society based around the automobile.
The results were catastrophic for large metropolitan city's in the US. They watched their tax base flee to suburbia. Commuters drove in to city's to take advantage of economic opportunities but left in the evening to return to their new clean safe enclaves. Inner city Business closed leaving ever fewer opportunities for those unfortunate enough not to be able to escape by the federally built highway system. The poor and disadvantaged were stranded in decaying cities often with poor or non-existent mass transit solutions.
The past decades have brought about the resurgence of the large city. Many Millennial's choose to not even bother getting a drivers license today. The total of miles driven per year has been decreasing and fuel economy has been steadily increasing over the past few years. The desirability of urban life continues to revitalize cities in the US. Have we had our fuel priced correctly to reflect the needs of the country? My thoughts are, probably not. We have paid a steep price in blood and treasure to keep prices at the pump relatively low. We are just awaking to what our carbon based economy is going to cost the planet over the next century.
It is ironic that just this month the US has overtaken Russia to reclaim the title of largest petroleum producer in the world. This along with fewer miles driven and higher efficiency vehicles should keep the cost of fuel low in this country for the near future. I believe we need to keep in mind that cheap fuel has it's own costs and as the ad for gasoline additives said, "You can pay me now (a little) or pay me later (a huge amount)". we have been blessed with abundant natural resources in this country but, we have a responsibility to be a better citizen to the rest of the world going forward.
It was surprising to learn that there is a tremendous difference in the amount of money spent around the world to refuel cars. How much difference? From $.09 per gallon in Venezuela to just over $10.00 a gallon in Norway. I have known about steep prices in Western Europe having driven quite a bit in Germany and the UK. I kind of understood the idea was, that population density informed the choice in these countries. It makes sense that in a country like Netherlands where space for everything is at a premium, that car use and ownership would be be considered a luxury with corresponding expenses.
While it is true that the really cheap gas countries, Venezuela and Saudi Arabia are flush with oil. the difference in world wide pricing is at least as much a function of tax policy as it is of scarcity.
The US economy was largely built on inexpensive domestic natural resources and the huge post war manufacturing boom of the 1950's was based on cheap raw materials. When US domestic oil production began to decrease in the late 1950's, we became ever more dependent on foreign oil. In 1973 OPEC the newly formed oil cartel raised the price of crude oil by 70% and sent shock waves through the economy. I remember when I began driving in 1979 gas cost about $.80 a gallon this was considered scandalous since in the 1960's it had been less than one half of that amount.
Even at that time the prices contained significant federal and state taxes. These funds were often considered road taxes and used to cover some of expenses of building the massive US highway and bridge system. Little or no thought was given to other external costs such as pollution, the sustainability of a fossil fuel based economy, or the social costs of building a society based around the automobile.
The results were catastrophic for large metropolitan city's in the US. They watched their tax base flee to suburbia. Commuters drove in to city's to take advantage of economic opportunities but left in the evening to return to their new clean safe enclaves. Inner city Business closed leaving ever fewer opportunities for those unfortunate enough not to be able to escape by the federally built highway system. The poor and disadvantaged were stranded in decaying cities often with poor or non-existent mass transit solutions.
The past decades have brought about the resurgence of the large city. Many Millennial's choose to not even bother getting a drivers license today. The total of miles driven per year has been decreasing and fuel economy has been steadily increasing over the past few years. The desirability of urban life continues to revitalize cities in the US. Have we had our fuel priced correctly to reflect the needs of the country? My thoughts are, probably not. We have paid a steep price in blood and treasure to keep prices at the pump relatively low. We are just awaking to what our carbon based economy is going to cost the planet over the next century.
It is ironic that just this month the US has overtaken Russia to reclaim the title of largest petroleum producer in the world. This along with fewer miles driven and higher efficiency vehicles should keep the cost of fuel low in this country for the near future. I believe we need to keep in mind that cheap fuel has it's own costs and as the ad for gasoline additives said, "You can pay me now (a little) or pay me later (a huge amount)". we have been blessed with abundant natural resources in this country but, we have a responsibility to be a better citizen to the rest of the world going forward.
No comments:
Post a Comment