Category Archives: energy

$4,155 Per Year and Automobile Enslavement

So, it all started as a brief news item, with a handful of tantalizing facts

“…the typical American household will have spent $4,155 filling up this year, a record. That is 8.4 percent of what the median family takes in, the highest share since 1981″ —  At gas pump, 2011 was the year of the big squeeze. The AP / By Jonathan Fahey, December 19, 2011

It wasn’t clear to me who said so, but there was a reference to an outfit called the OPIS (Oil Price Information Service) and the facts seem to be wholly drawn from this item blogs.opisnet.com from their blog. Continue reading

Sales tax shortfalls delay highway plans

What? a sales tax to build freeways? Why yes, it’s true — sales, and other general funds are often used to build roads and freeways. Though this particular tax (the prop 400 one-half percent general sales tax) supposedly goes to pay for all sorts of transportation projects — including light rail, local street improvements, buses, roads and freeways — the largest amount goes to build or expand limited-access freeways. These freeways in particular aren’t even open to bicyclists; but, along with everybody else, must pay the sales tax. Oh, and it’s not as though bicyclists are left out; bicycle and pedestrian improvements combined get 2% of the funds.

What about fuel and other specific use taxes (like the VLT… for more, see Road Taxes)? They’re simply not enough. Automobility does not generate enough tax revenue to sustain itself, thus these subsidies to drivers paid from general funds. Not to mention any of the litany of externalities caused by driving — free parking, pollution, mayhem, etc.

Some Valley freeway projects will be delayed up to five years by a sharp downturn in revenues prompted in part by the recession, regional transportation officials say.
Proposition 400, approved by Maricopa County voters in 2004, imposed a countywide half-cent sales tax for 20 years to fund regional transit projects – freeways, streets, buses and light rail.
maricopa-county-proposition-400-funds-shortage.html

40 YEARS of sales taxes to build freeways

Here are a few of the ins-and-outs of this tax, as you can see it started in 1985, was renewed for another 20 year run starting in 2005 — in other words it is more or less permanent; see e.g. this AzRepublic article (my emphasis added):

Q: What does Proposition 400 do?

A: It would extend for another 20 years a half-cent transportation sales tax in Maricopa County that was first approved in 1985 to fund freeway construction. Without voter approval for an extension, the tax expires at the end of 2005.

Q: How much would be spent on each type of transportation in the MAG plan?
A: Of the $15.8 billion dedicated to program funding, $9 billion, or 57 percent, would fund freeways; $2.7 billion, or 17 percent, would fund the regional bus system; $2.3 billion, or 15 percent, would fund light-rail expansion; and $1.5 billion, or 9 percent, would fund arterial streets.
The remaining 2 percent would fund air-quality programs, bike and pedestrian routes and planning activities.

The 2010 Five-year update

Apparently there is a mandated audit to be performed every five years by the AZ Auditor General, here is the detailed report. The AZ Republic did a news story timed with its release, though it didn’t say much.

The detailed report has some pie charts that don’t exactly match up with the Q&A; for example it shows, in percentages exactly 3 components: Freeways 56.2, Transit 33.3, and Arterials 10.5% One guesses that the 2 percent catch-all (which includes bike and ped planning) is snuck in somewhere. The report gives no details on the ancillary activities. Oh, and I learned a new acronym: RARF, the Regional Area Road Fund is where the prop 400 sales tax monies go. (the HURF, Highway User Revenue Fund, is where motor fuel taxes and vlt goes).

The light rail came off pretty well; noting the thing was built on schedule and just slightly under-budget. Peer-city comparisons were generally favorable.

 

Road taxes

From time to time, we will see a recurring theme to the effect of “bicyclists don’t pay gas tax so they don’t deserve to use the road”. (for a good roundup of this and other similar issues see bicycledriving.org) There are certain elements of truth to this — bicyclists don’t purchase gas, it’s true. And there’s also an implication that motorist are “paying their way”, but that’s just not true. Gas taxes (and other direct taxes on automobiles) nowhere near cover the costs of building, maintaining, and operating roads. And that’s not to mention the (much larger) costs associated with death/mayhem and pollution impacts on human health and the environment. And none of that is to mention other more intangible costs like defending sea lanes worldwide; and propping up unsavory regimes so that oil can continue to flow freely. Continue reading

book: Power Hungry

I just got finished with Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future by Robert Bryce.

The basic gist is that everything you “know” about power, particularly if you are an American, is wrong. His data is no doubt correct, but I think he goes out of his way to sometimes mislead. For example he claims that the United States economy is somehow very energy efficient. To prove his point he gives figures for the change in energy intensity over some period shows that the US is “winning”, beating such countries as France and others. The trouble is, a simple trip to wikipedia shows that actual, and not the percentage change in Continue reading

Welfare Wagons

In a typical bit of masterful Jenkinsian prose, he lays out the case for raising fuel taxes, which I happen to agree with. However, he scolds “politicians” for not being courageous while at the same time not endorsing any such increase himself. This theme appears over and over in WSJ editorial opinions.

Even if you believe saving gasoline is a holy cause, subsidizing electric cars simply is not a substitute for politicians finding the courage to jack up gas prices. Think about it this way: You can double the fuel efficiency of any car by putting a second person in it. You can increase its fuel efficiency to infinity by refraining from frivolous trips.

These are the incentives that flow from a higher gas price. Exactly the opposite incentives flow from mandatory investment in higher-mileage vehicles. You paid a lot for a car that costs very little to operate—so why not operate it? Why bother to car pool? Why not drive across town for a jar of mayonnaise?

Welfare Wagons, WSJ, May 12, 2010

Use taxes are the best way to reflect the externalized costs of an activity.  E.g. in this example taxes on motor fuel. Fuel taxes have been falling for years, this makes the cost of driving less and less — which, as Jenkins points out, tends to make people drive more and more. There are a couple of reasons the tax is falling, one is the simply that taxes are levied on a per gallon basis and the amounts rarely change (Arizona has levied the same tax for around 20 years), this means the real price of the tax is continuously falling. for 20 years. Another is the tendency for vehicles to become more efficient over time, resulting in a lower tax per mile traveled.

Tar Sands: Dirty Oil and the future of a continent

a book by Andrew Nikiforuk.

This was mainly a polemic against the tar sands (though the industry prefers the term oil sands) industry as practiced in Alberta, Canada, and how it connects to provicial politics there. The problems with the industry are legion: they use enormous amounts of natural gas to extract and upgrade the tar; loads of water is used; this load of water is then collected in highly toxic tailings ponds. Open pit/strip mining uses less natural gas than in situ extraction, but leaves obvious scars. And in any event, only 20% of the bitumen is available through mining — the other 80% requires in situ (referred to as SAGD,  Steam Assisted Gravity Drainage). Continue reading

Detroit, hollowed out

Cars have a horrible tendency to hollow out cities from the inside; so it’s not surprising that Detroit should suffer disproportionately. The author of an excellent article from this past Saturday’s WSJ  In One Home, a Mighty City’s Rise and Fall: Price of Typical Detroit House: $7,100,  pointing out, I’m sure with intentional irony:

“By then (the early 1940’s), the street had slipped a notch in desirability. Detroit’s well-to-do moved to more grandiose housing in Grosse Pointe and other suburbs, their commutes made possible by the very automobiles that had made them rich” Continue reading

WSJ: just say no to taxes; and personal responsibility

In yesterdays ed, Tax My Products, Please the WSJ argues that Ford CEO Mually’s call for higher fuel taxes is like “a Google executive demanding a tax on software”.

That analogy being as it may; what they are really renewing is their intentional obliviousness to externalities. And the tacit cost-shifting that inevitably results. Combusting fuel is damaging on its face (even if you don’t “believe in” global warming — as the WSJ editorial board clearly does not). Both in environmental damage and the toll it takes on human health.

So, who pays for all the negative externalities arising from automobility? Drivers don’t; the costs are all shifted to “society”.

They firmly support the status-quo; dead-set against cap-and-trade, and dead set against any increase in fuel taxes. Fuel taxes, which are supposed to fund road construction and maintenance have been dwindling in real dollars for years. The gas tax, which is levied per gallon, hasn’t budged in years; and does not adjust for little things like inflation. It has been at the current federal rate of 18.4 cents per gallon as long ago as 1993 (going on 16years! The arizona state gas tax hasn’t changed in even longer). This leaving a gap which is filled from other funds, like income, sales, and property taxes. (sources that have nothing to with driving).

This underpricing inexorably (remember WSJ eds, the laws of economics?) causes a greater demand for driving, and more roads, and more driving…


To cap off this topic, I’ve pasted below the one letter-to-the-editor that ran in print edition today, March 20, 2009. At first I thought the writer was being ironic, but apparently not. On closer inspection, it seems that he is of the something-for-nothing school. He believes, for example, that a 5,000lb. truck can or should get “more than 30mpg” (though he doesn’t say gallons of what; perhaps it is rocket fuel or something). To support his belief, he cites an acquaintance that has done so; but for unstated reasons, no one sells what would certainly be a highly desirable vehicle — perhaps a conspiracy? In the real world, expect to get about 15mpg in a 5,000 pound vehicle. If automakers (and that includes not just the big-three, but all of them worldwide) could make their engines twice as efficient; THEY WOULD DO SO.

In response to Ford CEO Alan Mulally’s call for higher gas taxes (which you report in “Tax My Products, Please,” Review & Outlook, March 17), I would like to say that Americans don’t want smaller vehicles. We have great distances to travel, mountains and plains to cross in all seasons of the year. We tow our boats and other contrivances. We haul our children around and travel with them over the continent. Our businessmen drive long distances since they can no longer own corporate jets. What we want is a more efficient internal combustion engine, not a smaller car.

And do not tell us it cannot be done. It can be done, because efficient engines can be created today with off-the-shelf parts bought from General Motors, Ford or Chrysler.

A friend of mine has converted a GMC Vortec V8 gasoline engine for his 2.5 ton pickup truck and the engine delivers more than 30 mpg. Why can’t we buy this type of vehicle at the dealer? Why does individual ingenuity have to point the way to corporations that have the money, skill and engineering brainpower to deliver a more efficient engine? Why do we have to pay more at the pump?

The suggestion that consumers should pay more in gasoline taxes is a cop-out on the part of the auto makers, politicians and everyone else who supports it. This is not Europe. This is the United States of America, a vast country with amazing distances and varieties of geography and climate.

We do not want higher gas prices. We want more efficient engines to power our vehicles. We want the Big Three to use their brains to create something new, not deliver a rehash of junk from a bunch of whiners.

Bernard P. Giroux
Fall River, Mass.

Victory: the Reagan administration’s secret strategy that hastened the collapse of the Soviet Union

Victory: the Reagan administration’s secret strategy that hastened the collapse of the Soviet Union  / Peter Schweizer, 1994 (ISBN 0871136333)

This long subtitle serves as a reasonably good summary for this entire relatively small (<300 pages) book. I went out of my way to get it after seeing it referred to with respect to oil prices. Continue reading

Noted economist supports Gore carbon tax

Noted conservative economist Aurthur Laffer, writing in Dec 18, 2008 WSJ op-ed Obama Should Forget About Energy Independence says he “strongly supports” the idea of an carbon tax offsetted against payroll taxes, calling it a “win-win”…

“The only real solution is Al Gore’s proposal to offset a carbon tax dollar-for-dollar with either an income or payroll tax reduction. If a carbon tax increase were offset dollar-for-dollar with an income tax rate cut, I for one would strongly support the policy. The economy would benefit because the progressive income tax does far more damage than a carbon tax would, and we’d use less oil. It’s a win-win situation. Yet this perspective appears to be totally outside the Obama team’s ken.”