It is an article of faith among planning advocates that the automobile is heavily subsidized and those subsidies include subsidies to the oil industry. What the innumerate can’t understand is that the automobile is so heavily used that what subsidies there are amount are tiny when measured per passenger mile.
As has been previously noted here, highway subsidies amount to less than half a penny per passenger mile. By comparison, transit subsidies are more than 61 cents per passenger mile.
But what about subsidies to the oil industry? A recent paper from the Energy Information Agency compares federal subsidies to all forms of energy. According to table 36 of this report (on physical page 128, numbered page 108), subsidies to oil and natural gas amount to 3 cents per million BTUs.
That’s just about the smallest of any energy source: coal is 4 cents per million BTUs, solar is $2.82, biofuels are $5.72, and “other renewables” are 14 cents. Only geothermal, at 2 cents per million, is less than oil & gas.
There are 125,000 BTUs per gallon of gasoline, so subsidies amount to 0.375 cents per gallon. If you get 22 miles per gallon and your car carries an average of 1.6 people, that’s about 0.01 cents per passenger mile. By comparison, if you burn ethanol (which only has about two-thirds as many BTUs per gallon as gasoline), you not only pay more for the fuel, you are being subsidized at the rate of 1.235 cents per passenger mile — i.e., more than 120 times as much as gasoline.
Now, the Antiplanner is not excusing subsidies. All subsidies should be ended. But ending subsidies of 0.375 cents per gallon is simply not going to have much of an effect on driving habits. Nor does such a subsidy justify increasing subsidies to transit, which is already getting too much subsidy.