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.
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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.
It is an article of faith among planning advocates that the automobile is heavily subsidized
Correction:
“It is an article of faith among planning advocates that the automobile has been heavily subsidized over a long period of time.”
As has been previously noted here, highway subsidies amount to less than half a penny per passenger mile.
Correction:
highway subsidies amount to less than half a penny per highway passenger mile.
Randal continues to forget to tell us what the subsidies for state, county, arterial, collector, and local access roads are.
—–
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
Ah. So oil is subsidized, despite profits in the $Bs. How is it innumerate to say oil is subsidized when Randal provides the evidence that oil is subsidized?
DS
On top of the cost of oil, people also have the cost of their vehicle.
“But ending subsidies of 0.375 cents per gallon is simply not going to have much of an effect on driving habits.”
This is assuming that there is some sort of rational economic formula that determines what the consumer pays at the pump. If we get rid of the oil subsidies, I think that the price at the pump would go up way more the $0.375/gallon (don’t ask me why, I have no insights into how gas prices are eventualy determined). As a result I think that driving habits would likely change.
Also, I’m not sure about the price per million of BTU’s and subsidies argument. In a post last week I fou this data: http://www.progress.org/2003/energy22.htm
So it seems that we would be paying close to $6/gallon if there were no oil/gas subsidies according to this link.
To quote my comment in the former post:
“We’ve seen a decrease in driving at the $4 mark, I think the trend would continue if we were paying market price for gas.”
I have a few thoughts. The first is that most pro-auto legislation doesn’t come in the form of subsidies, but rather top-down regulations. Zoning and minimum parking rules are the biggest ones. They’re not as easily quantifiable as subsidies, but in many ways that makes them more pernicious. The second thought is that this oil subsidy almost assuredly does not take into account the military expenditure required to keep the shipping lanes open.
Even with the very small subsidy to the auto users, the people still choose overwhelmingly to choose to drive their cars.
They vote with their feet or cars.
I wonder how much auto users and oil companies pay in taxes compared to wind bio-fuels ,transit, bikeing, etc.
I’m talking taxes or users fees on on fuel, autos etc. registration.
And all taxes paid for by the big oil companies.
Does the Antiplanner have figures on the total value of government subsidies for all road construction in the United States, in 2008 dollars? Why should we only care about the value of subsidies today while ignoring previous subsidies that paid for roads that we still drive on?
Is this a trick thread to see who actually read the report? I don’t think table 36 makes any sense without looking at tables 26 and 27, and even if I’ve competely misread it there’s not enough info to conclude that federal subsidies equal $0.375/gal. of pump gas.
Government just needs to get out. It’s too big and too complicated, which in turn makes it too inefficient, i.e. TOO EXPENSIVE.
However, you have missed one KEY factor when talking about oil subsidies: The billions of dollars our government spends, in the form of military action, to protect US oil interests in the Middle East. Believe me when I say that if the Middle East had no oil, the US would NEVER be there, regardless of how ruthless the leaders were to the people. Case in point, are we doing anything miliarily about the genocides in Africa? We spend billions of dollars in tax money fighting for oil. I’m not saying whether that is good or bad, or the right or wrong thing to do, BUT you should at least mention that in your analysis.
Oh yeah, I forgot to mention in my last post that you can read more about such topics at my blog. libertyalert.blogspot.com. Hope to hear from you there.
cut-pasted from a post from ~ a year ago:
That implied subsidy of 20 to 70 cents a gallon — which excludes social and environmental costs such as climate damage and uncompensated crash costs, which Delucchi has tallied elsewhere — equates to 7 to 25 percent of the current price of gasoline. On a dollar basis, U.S. drivers are underpaying local, state and national governments by $40 to $105 billion a year.
Delucchi’s conclusion, “motor-vehicle users in the U.S. — unlike users in most European countries — do not ‘pay their way’,” will come as no surprise to many of us. Still, putting the Delucchi seal of approval on the “subsidies for traffic” thesis is a watershed event. Dismantling those [egregious auto] subsidies may have just gotten a little easier. [last emphasis added]
DS
Regarding what Jason wrote, around the Persian Gulf they have black gold. In Africa there are only black people. This explains a major part for the lack of military intervention.
Uncompensated crash costs? how the heck does those matter in terms of taxes?
What are the “environmental costs”?
highwayman —> Africa’s got lots and lots and lots and lots of black gold too. Sudan, Angola, Nigeria, Sao Tome, both of the Congos, etc. Awhile back the French oil company Total used to derive 1/4 of their profits just from their operations in Congo-Brazzaville (the smaller, formerly communist Congo). They’ve also got butt tons of gold, diamonds, copper, molybdenum, aluminum, etc.
And now that’s got me thinking of a nice Tanzania Peaberry (Vienna Roast). MMMMMmmmmmm……..
Highwayman — You’re right. And I’m not arguing whether we should or should not pursue oil interests, but let’s not be naive here about why the US really even bothers with the middle east. I’m not saying it’s wrong, but we have to recognize it as a fact. Anyway, my point was that the money we spend protecting oil interests in the middle east needs to be included in this analysis.
14:
What are the “environmental costs�
Asthma exacerbations, lead poisoning (gone in US now), noise pollution, urban heat islands from pavement, respiratory illnesses, contributions to obesity, etc.
Come on, who are you kidding that you don’t know about these things?
DS
forgot some big ones:
…eutrophication of receiving waters from runoff, increased stormwater scouring from impervious, contributions to man-made climate change…
Come on, who are you kidding that you don’t know about these things?
DS
And those are just off the top of my head in 2 minutes, on my third glass of Merlot.
DS
PRK166 asked at 14:
“What are the ‘environmental costsâ€Â?
You have to consider not only environmental but also social costs when weighing the impact of the demon auto, the use of which has been linked to rock ‘n roll, gang wars, pot smoking, increased rates of illegitimacy, and a general lack of respect for authority. Fortunately, public transit has none of those side effects, other than an occasional problem if you happen to like sushi.
Dan, Thanks for the link to the Delucchi study.
I note that his basic argument is that every cent spent on roads and highways should come from user fees. This argument was adopted by Leeds University in their study for the British government but not in their study for the New Zealand government.
http://www.its.leeds.ac.uk/projects/STCC/surface_transport.html
http://www.transport.govt.nz/assets/Images/NewFolder-2/Overview-for-pdf.pdf
The New Zealand study accepts property taxes (roading rates) as a user fee, although the main study report didn’t clearly state why. The full report is no longer available from the government website but I do have the PDF on my computer if you want to read it.
Only the British study found that cars pay their full costs. None of the studies seem to have found that trucks pay their full costs.
America’s local taxes contribution to roading seem very mickey mouse. It’s impossible to tell from Delucchi’s paper whether landowner contributions cover the shortfall from road users.
In New Zealand land owners have never been fully releaved of their contribution to road maintenance on the basis that most traffic on local roads is still local just as it was before the advent of the motorcar. Perhaps New Zealand’s topography has gauranteed that only a few roads can actually function as national arteries, essentially following the coast from town to town, these are fully funded by road user fees. The remainder head into inland valleys which guarantees the traffic is local.
Leed’s Surface Transportation Cost Comparison study made some strange choices about what to include and exclude. Roading rates are included as user fees even though land owners pay them. Traffic fines are included although the don’t get spent on roads whereas the costs to the courts of traffic offence prosecutions is excluded. Health and welfare costs to government are included but sales taxes on road user spending are excluded. Logicly the two should be treated the same. Finally, becasue the railways were privately operated at the time of the study and had to earn a profit the requirement for return on capital was applied to roads. Removing the latter because the railway have been re-nationalised eliminates the “subsidies” received by road users.
New Zealand is unique in charging trucks a weight/distance fee calculated on the 4th power of axle weight. Consequently 8 axles are commonplace on truck/trailer combos grossing over 30 tonnes, 6 axles commonplace below that weight. It means there are no subsidies between different sizes/weights of trucks. Even though it results in New Zealand having much higher truck roading fees per tonne/km than either Australia or USA we actually have a higher percentage of tonne/km carried by road than either of those countries. You might have to look at an atlas to see a rather obvious reason for that. We’re too small to have interstate freight which is where rail really shines. The lack of integrated rail systems in Europe also leads to very low usage of rail for freight.
Kevyn, your
It’s impossible to tell from Delucchi’s paper whether landowner contributions cover the shortfall from road users
is true for many areas. I used to practice in Washington State, and the General Fund of my city paid for road maintenance – streetlights, repaving, sidewalk continuity, as did almost all of the other ~236 cities in the state. Here in the Colorado Front Range, one can only wonder how the shortfall gets covered in each city. Certainly CDOT is saying that wrt near future road maintenance, good luck, and many cities here are doing drastic cutbacks, so potholes, snowplowing, etc will be interesting to watch in the next 2-3 years.
DS
“Asthma exacerbations, lead poisoning (gone in US now), noise pollution, urban heat islands from pavement, respiratory illnesses, contributions to obesity, etc.
Come on, who are you kidding that you don’t know about these things?”
Again what are the environmental costs? You’ve mentioned some things that you blame on roads. But how much have they contributed to those issues? What are the increased costs from them? Who ends up having to pay for those costs?
I may seem I’m being daft. But I’m not. I live right outside of downtown and right off a major artery connecting downtown with the freeway. I can see the freeway to the west of me. Right next to it are lrt and train tracks. I’ve never heard any noise from the freeway but I hear the trains all the time. The same with the noise from the major street. So it’d be nice to see something showing the difference in noise pollution between the autos and trains. Something defining what constitutes noise pollution. And something explaining what those costs are.
Now I don’t think it’s fair to expect a lot of fancy stuff. But since there are a lot of folks making these claims around here surely touching on one or two of them every other time but just one or two folks should help lend something to the discourse.
What happened to annual registration fees, sales taxes on auto-related goods and services, sales taxes on auto sales, and income taxes on profits of the foregoing? To a dummy like me, those would seem to be important revenue streams. How much subsidy would autos receive if gasoline excise taxes went exclusively to autos, and sales taxes on autos and auto-related goods and services went exclusively to autos? I think the “no duh” answer is that there is in fact no subsidy of autos. The subsidy is an accounting artifact. If you take money from pot X and put it in pot Y, notice that pot X isn’t enough to pay for activity X, then take funds from pot Z to “subsidize” activity X, you aren’t actually subsidizing X. X = “auto taxes”, Y = “public transit”, and Z = “general fund”. I don’t think there’s any state in the US that doesn’t divert big chunks of its gasoline excise tax for public transit, just like the federal government does with its excise tax. Does any study of the alleged subsidy of automobiles show what would happen if the diversion was stopped?
But how much have they contributed to those issues? What are the increased costs from them? Who ends up having to pay for those costs?
A couple of books on my shelf come to mind to help you educate yourself on this issue: Daly and Cobb For the Common Good, Daly and Townsend (Eds.) Valuing the Earth, Kahn’s Green Cities, and decent solutioning in Farr’s Sustainable Urbanism: Urban Design With Nature. Something I’m reading now for more radical solutioning is Berry’s Sex, Economy, Freedom & Community: Eight Essays.
Good luck in your education.
DS
DS, I look forward to checking out those books. But if the antiplanner merely mentioned a few book titles as “proof” of his claims, he would get called out for cutting corners. Any chance you’d care to share a few precise sources on those claims?
For example, noise pollution. I hear people talk about it all the time. But I don’t understand how it’s a “cost” when it comes to cars. I live off a major artery in the city. I hear some cars hear and then. Most of the noise in my life comes from trains another mile or so to the west. Next are things like the police and fire trucks running their sirens (unfortunately a block north of a fire station). After that it’s drunk people. After that it’s helicopters (there’s a trauma 1 hospital a few blocks to the north of me). Don’t forget the lawnmowers and weed whips. So I fail to see why cars are singled out for “noise pollution” let alone how noise goes from just being people doing what they need to do (get drunk to let off some steam, take the train home, etc) to being harmful and being “pollution”. Is there a good study or two that covers that? At what point did they decided it was a problem? How did they come to that point? What sort of noise pollution costs did they attribute to automobiles?
As you can see, this isn’t about my education so much as helping everyone learn while ensuring we’re making claims that have some substance behind them.
BTW – Not one of those are carried by my library. 🙁
Any chance you’d care to share a few precise sources on those claims?
Ah. You want me to do the work to educate you in the details.
Why? You have a starting point. Go for it and get up to speed on the side effects of our choices.
For example, noise pollution. I hear people talk about it all the time. But I don’t understand how it’s a “cost†when it comes to cars.
Noise pollution has detrimental effects on human health. Google Scholar* has plenty of papers for you to peruse regarding the costs and where the noise comes from.
Good luck in your self-education.
DS
* http://tiny.pl/217f
Oh come on, I’m asking you back up you claims with just a little something here or there. Don’t be a drama queen about occasionally having a source for a claim. The reason I ask is shown by the source you did use for noise pollution. How is that any more of an argument for the cost of roads versus the cost of dense urbanization? The core issue seems to be too much noise, especially at night, and how it affects people. The side issue is how much more annoying people find road noise than rail. But both of those look to cause plenty of noise to have some of the health affects talked about.
What is the cost of noise pollution from roads? What type of roads cause that? How does that differ from rail? Was there a study you saw that compared these? I didn’t see one. For example, this one takes on air pollution and traffics deaths but doesn’t seem to give any numbers just for noise : http://herry.at/the-pep/down/trilateral1999.pdf
Same with trying to search for others.
Do you remember one or two that actually took on the actual costs of noise & broke out those costs based on road, rail, due to urban influences, etc.?
Oh come on, I’m asking you back up you claims with just a little something here or there. Don’t be a drama queen about occasionally having a source for a claim.
Learn the rules of rhetoric before you go calling names.
When a specific claim is made, one asks for specific evidence (eg a number) or a source to back that claim. When general claims are made, one asks for sources of the general claim. I made a general claim. I gave general sources.
You’ll find plenty to get you started in the titles above to learn about the issue.
Nonetheless, here are excerpts from a paper of mine in review. I find them adequate for the level of knowledge of one of the discussants:
DS
45 Delucchi, M., Hsu, S-L. 1998. External damage cost of noise emitted from motor vehicles. Journal of Transportation and Statistics 1:3 pp. 1-24.
46 Navrud, S 2003. State-of-the-art on economic valuation of noise. ECE/WHO “Pan-European Program on Transport, Health and Environmentâ€Â, Workshop on Economic Valuation of Health Effects due to Transport, June 12-13 2003, Stockholm. On-line reference at: http://www.herry.at/the-pep/down/navrud.pdf .
91 Sprague, M.W., Sabatier, J.M. 1996. Acoustic scattering from vegetation. Journal of the Acoustical Society of America 99:4 pp. 2488-2500.
95 Ishii, Mitsugi, “Measurement of Road Traffic Noise Reduced by the Employment of Low Physical Barriers and Potted Vegetation,” Proceedings of Inter-noise 94, Yokohama, Japan, August 1994. [both quoted in Hankard Environmental Consultants 2000. North End neighborhood noise study for the Colorado Department of Transportation Region 2 – January 2000 on-line reference at http://www.i25environment.com/noise/ncover.htm .
96 United States Department of Transportation – Federal Highway Administration 2002. Highway traffic noise. On-line reference at http://www.fhwa.dot.gov/environment/htnoise.htm.