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). Read the rest of this entry »

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” Read the rest of this entry »

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”. 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 autombiles) nowhere near cover the costs of building, maintaining, and operating roads.

Funding for local roads (the roads that both cyclists and motorists use) are paid for heavily through state and local tax general funds — not user fess like gasoline taxes. Cyclists are paying their way, just like everybody else.

Most/much of the direct user fees that motorists pay do go to fund freeways (limited access highways). These roads are used exclusively (with minor exceptions) by motorists — and yet even then the fees are not high enough, and have to be supplemented from other sources, like general sales taxes.

Specifics vary depending on location but the general theme is similar throughout the US.

What follows are specifics as we do things here in Arizona, and specifically Maricopa County and the Phoenix Metro area.

The HURF

Arizona levies two taxes directly upon motorists and the proceeds are termed the “HURF” (Highway User’s something Fund). The two souces are; motor fuel taxes, and VLT (Vehicle License Tax, a fee paid yearly based on the value of a motor vehicle).

Because the rate on gasoline is levied per gallon, 18.5 cents per gallon, and hasn’t changed since 199?, the amounts available to the HURF have been dwindling.

usgovernmentspending.com has some good charts of, e.g. ARizona state spending broken down in categories like education, police, transportation, etc.

Freeway Sales Tax

Maricopa county levies a 0.25% (check that) 20-year SALES tax to build freeways. First approved in 1985, it was set to expire in 2005 but extended for another 20 years by “Proposition 400″. The split was more favorable to public transit, but still heavily favors freeway spending. The most vociferous opposition came from those who specifically thought that not enough of the money would be used for freeways, and in particular hated that any monies would be spent on light-rail. See e.g. Prop. 400 foe wants to stop light rail., Arizona Republic, Sept 23, 2004.

I note that bicyclists do not ride bikes on freeways (in fact, bicycles are banned from freeways in the metro area).

So, the freeway sales tax is just another externality of automobility — drivers not paying their way.

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…

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.

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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. Read the rest of this entry »

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.”

Of Chicken Taxes, CAFE, and gas guzzlers

Holman Jenkins column today (How to Save Detroit And $50 Billion) reiterates his postion that CAFE (government mandated fuel-mileage standards) has at best not helped to reduce fuel consumption. This is absolutely correct — he does however stretch his arguement beyond the breaking point by ignoring (selective amnesia?) other, conflicting, regulation Read the rest of this entry »

Ding Dong TIME is dead

…for now, anyway. Backers are vowing to revive it. Read the rest of this entry »

More Drilling?

I  think any additional drilling for oil should be done only on the precondition that the additional supply would be offset by a decrease in demand (i.e conservation).  That way, it won’t just get pissed away on increasing domestic demand, like what happened in the mid-1980’s when a huge amount of new supply pushed prices way down and ushered in the SUV era. Read the rest of this entry »

The assault on the assault on the suburbs

Joel Kotkin is a noted scholar whose general line of thinking is counter to what loosely might be called the New Urbanism. As such he is an ideological soulmate of the WSJ editorial board. Read the rest of this entry »