Acton Institute PowerBlog - Entries tagged as gasoline

Dealing with Rising Gas Prices

Tuesday, May 27, 2008

As the Drudge Report today hails the coming of the fuel-efficient Smart car, it might be worth pointing out other ways in which people are adapting to deal with higher fuel prices. I don’t mean to minimize any of the pain associated with skyrocketing energy costs, whether personal (I feel it, too) or economy-wide, but it is interesting to observe the myriad and often unexpected effects of price changes. It’s the market working. Or, to put it another way, it’s the human mind working to adapt creatively to the challenge of scarce resources.

The search for fuel-efficiency has, for example,...

...hurt the trucking industry, but given new life to long-suffering railroads.

...convinced growing numbers of urbanites to use mass transit.

...been a boon for bicycle shops.

...hurt many parts of the auto industry, but has also spurred a sharp advance in hybrid auto sales.

Posted by Kevin Schmiesing in General at 10:06 | Comments (2) | Trackback

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gas prices, gasoline, hybrid cars, mass transit

Praying at the Pump

Thursday, June 21, 2007

Do you consider gasoline to be a gift from God? You should.

Andy Crouch, editorial director of the Christian Vision Project at Christianity Today, writes in a recent Books & Culture piece, “As our family sits together, eyes closed, we say grace. Today it’s Timothy’s turn. ‘God, thank you so much for all we have,’ he begins in what turns into a typically prolix nine-year-old’s prayer. Eventually he is done—’in Jesus’ name, Amen’—and I turn the key. We have just filled up our car with gasoline.”

The Crouch family has introduced a tradition of praying at the pump, to recognize the gift that is the ability to fill up with gas and drive around. I think that’s a great thing to do.

But even still, Crouch seems to have a hard time fully admitting that petroleum products ought to be seen as manifestations of divine grace.

“Unlike a well-prepared meal, gasoline does not prompt gratitude unbidden. The stuff is smelly, dangerous, and not at all self-evidently good in itself. It is a means to my ends, juice for a momentary sense of power and control. It is surprisingly hard to remember to stop and say thanks before I pull out, a little too quickly, into traffic,” he writes.

I have to say that I’ve had some meals of my own that were pretty smelly and/or dangerous, and the parallels between food fuel for the human body and gas fuel for the car could perhaps be expanded further. But seriously, it seems to me that, despite the new family tradition, Crouch is having a hard time admitting that something like gasoline is just as much a gift from God as our daily bread.

I’m not quite sure what this means: “I can reasonably expect that the food I eat today will be replaced by a fresh crop next season. But the gallon of gas I burn today is gone for good (though it does leave behind 19 pounds of carbon dioxide for the biosphere to absorb). In this fleeting historical moment that will be remembered as the petroleum era, saying grace seems like the least we can do.”

Maybe we all should think about thanking God for gasoline, not only when we are at the pump, but also when we’re sitting down to our “well-prepared meal,” which was made possible by the foodstuffs delivered from all over the world by petroleum-powered vehicles.

Posted by Jordan J. Ballor in Environmental Stewardship at 12:47 | Leave a comment | Trackback

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environment, gasoline, god, grace, petroleum, prayer, stewardship, thankfulness

2006 in Review, 2nd Quarter

Wednesday, December 27, 2006

Our series on the year in review continues with the second quarter:

April

“Surprise! Evangelical Politics Isn’t Univocal,” Jordan J. Ballor

So from issues like immigration to global warming, the press is eager to find the fault lines of evangelical politics. And moving beyond the typical Jim Wallis-Jerry Falwell dichotomy, there are real and honest disagreements among evangelicals on any number of political issues....

May

“How Do You Spell Relief?” Jordan J. Ballor

If Congress really wants to address the rising price of oil over the long-term, the only thing it can really do is act on what it directly controls. Congress doesn’t control supply and demand, but it does control how much it adds in taxes to the price per gallon. Why not cut or suspend the federal gas tax indefinitely?...

June

“There are more environmentalist misanthropes than you think,” Jay Richards

But anyone who reads widely in the environmental literature knows that suggestions such as Pianka’s are not uncommon. In fact, the desire for mass human death follows logically from the anti-human beliefs of some radical environmentalists. Some are more consistent in their beliefs than others. But Pianka is by no means the only person to express such opinions....

Posted by Jordan J. Ballor in News and Events at 07:23 | Leave a comment | Trackback

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2006, environment, eric pianka, evangelicals, gasoline, misanthropy, oil, politics, prices, stewardship, taxes, year in review

Plug-In Hybrids Are Not So Green

Thursday, October 26, 2006

The Wired.com blog Autopia passes along this NYT story outlining some of the fundamental challenges facing plug-in hybrid electric cars. The basic formula for the appeal of such hybrids is as follows: “The electric system runs mostly on coal, natural gas and uranium, all relatively plentiful. Cars run mostly on oil, oil and oil, which lately has been expensive. Wouldn’t it be nice to connect the two?” And as attractive an option as this might be, the NYT story writes that “despite the hopes of policy makers, engineers say there is no prospect of this happening in the near future.”

Coal Burning With Scrubbers

John Gartner is not so pessimistic about the short-term prospects for plug-in hybrids, and concludes, “The competition between the oil companies and electric companies will result in cleaner and more cost-efficient choices for consumers, and that we can all be happy about.”

But here’s the kicker for advocates of plug-in hybrids: The main source of electricity for the United States is fossil fuels, according to the DoE providing “nearly two-thirds of our electricity,” and more than half of that comes from coal. So it isn’t the case that moving from gasoline-powered engines to plug-in hybrids will move us away from the use of fossil fuels. It will, for the most part, simply shift the consumption from oil to coal.

That has some attractive national security implications, since “one quarter of the world’s coal reserves are found within the United States,” as opposed to our need to massively import foreign oil. It is on this basis that Frank J. Gaffney, Jr. argues, “It makes eminent sense to make as rapid a transition to those plug-in hybrids as we can.” This of course assumes that the withdrawal of international trade actually improves rather than worsens the prospects for international peace. Let’s leave that questionable assumption aside for now, which contradicts Bastiat’s observation, “When goods don’t cross borders, soldiers will.”

With respect to the “green-ness” of plug-in hybrids, their environmentally-friendly image belies the fact that such hybrids will to a large extent be running on the energy provided by coal. Until our nation’s electricity comes from renewable and alternative sources of energy, such as nuclear power, the environmental attractiveness of hybrids will remain illusory.

In a previous commentary examining some related aspects of these issues, I ask rhetorically, “Just how many coal-powered SUVs have you seen lately?” Well, if there were plug-in hybrid SUVs, they would to a great extent be coal-powered...and not so green as you might first think.

Posted by Jordan J. Ballor in Environmental Stewardship at 06:45 | Comments (9) | Trackback

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coal, electricity, fossil fuels, frຝéric bastiat, frank j. gaffney jr., gasoline, hybrids, international trade, national security, nuclear, oil, peace, plug-in hybrids, suvs

High Gas Prices are Good

Tuesday, May 9, 2006

You may have seen an op-ed in the NYT last week by Tom Friedman, who noted that when oil and gas prices go up, bad things happen in oil producing nations abroad. The tendency is for the oppressive regimes in oil producing nations to consolidate their power and be less responsive to the demands of their citizens when they have the added buffer of huge profits from the sale of oil.

And domestically many have made the claim that rising oil and gas prices are a bad thing. Many people’s pocketbooks have been hit hard, when they stop to fill up at the pump and over the course of the long winter. So many people are against high gas prices that politicians at almost every level have felt the need to respond and make some sort of gesture, token or substantive, to address the issue.

There’s no doubt that the poor, as in most cases, are disproportionately affected by high energy prices. People on fixed incomes often have trouble paying their utility bills when prices spike. Others who must commute to their jobs have trouble filling up the gas tank. Attention needs to be fixed on the people in these sorts of situations, and help should be there when they need it. It must be noted, too, that increased taxes have the same drawback as increased prices from market-pressures: they are regressive.

But for the vast majority of Americans, if addressed honestly, the rising cost of oil is more of an inconvenience than anything else. If people can afford to buy expensive new SUVs and large trucks, they can afford the pinch on their disposable income that higher gas prices mean.

Even so, the inconvenience does have the ability to change people’s behavior, and this is why I’m making the argument that high gas prices have the potential to be a good, albeit a costly one (so to speak). People might drive less, carpool more, walk to the corner store instead of driving, and so on.

But an even bigger point is this: as gas prices rise the cost relative to other forms of energy is bound to decrease. This is why so many environmental advocates have long been arguing in favor of some sort of hefty additional petroleum products tax, which would make other sources of energy more competitive.

But what so many fail to see is that the market can accomplish by itself what such artificial and authoritarian measures are intended to do. Clearly the price we pay at the gas pump includes a huge amount by way of taxes to the various levels of government. But when gas prices rise without an increase in the amount of government taxation, the market itself is making other cleaner and renewable sources of energy more competitive.

As the Cornwall Declaration observes, “A clean environment is a costly good.” This has never been more true than in the case of rising gas prices. The wealth created by market economies allows the creation of new, better, and more efficient technologies. And the market itself gives strong economic incentive to the pursuit of such endeavors, especially when oil prices are on the rise.

It’s high time that environmentalists stopped being so wishy-washy about the market. As Paul Jacobs points out, they like the market when the prices are high but hate it when they are low. On this inconsistency, Jacobs is right. But where he’s wrong, I think, is that arguing for the positive effects of the market in this case automatically means that you must otherwise be for increased taxation to accomplish the same goals.

Related Items:

“Bodies for Barrels,” The McLaughlin Group, May 5, 2006 (archived text of issue available here; search for “ Issue Two: Bodies for Barrels.”) Key quote from Tony Blankley: “I’m in favor of free markets. The people will go to smaller cars if they want them. And trying to force people to buy cars they don’t want is foolish. And anybody who wants to protect their family, particularly if you have children, you want them in a lot of steel around them. And that to me is the better call to protect your children - driving around in Suburbans and large vehicles.”

Tom Daschle and Vinod Khosla, “Miles Per Cob,” The New York Times, May 8, 2006. Another installment of the “governments create markets” fallacy.

Jordan J. Ballor, “Humanity’s creativity helps environment,” Detroit News, April 22, 2006.

Jordan J. Ballor, “Cashing in on Carbon Credits,” Acton Commentary, April 19, 2006.

Posted by Jordan J. Ballor in Environmental Stewardship at 09:47 | Comments (5) | Trackback

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environment, gasoline, market, oil, petroleum, prices, stewardship, taxes

How Do You Spell Relief?

Monday, May 1, 2006

You may have heard about the debate in Washington that erupted late last week, as Senate Democrats and Republicans sought ways to respond to rising gas prices. According to Marketplace’s Hillary Wikai, the majority Republicans settled on “a $100 gas-tax rebate to be paid for by drilling in Alaska’s Wildlife Refuge.”

Michigan Democrat Debbie Stabenow proposed “a $500 rebate but pay for it by cutting the tax breaks for oil companies.” She said, “We should instead put that money back in the pockets of the people paying the high gas prices.” But one other Democratic plan was to stop taking that money from the people in the first place, at least temporarily.

The NYT reports that “Democrats were pushing for a 60-day suspension of the federal gas tax of 18.4 cents a gallon, and the Senate Republican leadership settled on the rebate.” The short-term nature of the proposed solutions lead many to suspect that any of the proposed moves are simply pandering to the voters in an important election year.

Indeed, Congress has good reason to distract us from the reality of the situation. As Benjamin Zycher comments (text here), “Oil industry earnings per gallon were about 19 cents in 2005, and have increased to about 23 cents more recently. Federal and state taxes per gallon of gasoline average 46 cents. And so by all means, yes: Let’s have a debate about who is profiteering from the gasoline market.”

Of the two options, clearly suspension of the tax is preferable to filtering money through the government bureaucracy and letting it trickle back to taxpayers. But why make it temporary? If Congress really wants to address the rising price of oil over the long-term, the only thing it can really do is act on what it directly controls. Congress doesn’t control supply and demand, but it does control how much it adds in taxes to the price per gallon. Why not cut or suspend the federal gas tax indefinitely? States could do the same, by the way.

Here are some of the reasons that even the 60-day relief plan was tanked, given by Congressional staffers:

Those leaders and Finance Committee aides said many Republicans opposed the Democratic plan because they feared that oil companies, which pay the gas tax, would not pass savings on to the public, or that the laws of supply and demand would push the price up again.

There was also the probable opposition of House Republicans, who have been reluctant to jeopardize the flow of the gas tax revenue to the highway trust fund that underwrites road and bridge projects.

“Our folks thought it might amount to nothing for consumers,” said one aide who was granted anonymity to discuss internal leadership deliberations.

The first excuse is really just quite lame. If increasing demand raises the prices further, they would still be lower than they would be if the 18.4 cent tax were still in place. The second paragraph really tells the tale. If Americans are addicted to oil, maybe politicians are addicted to taxes.

Instead of being worried that the move might “amount to nothing for consumers,” the politicians are clearly more worried that any move to cut taxes would “amount to nothing” in terms of spendable tax revenue.

Placing limits on the levels of government taxation of gasoline would be a much more substantial and effective move than attempts to set price controls, as advocated in an online petition introduced by Michigan Governor Jennifer Granholm.

According to MichiganGasPrices.com, Michigan gets nearly 20 cents (19.875) in tax revenue per gallon of gasoline sold, and this figure does not include the additional 6% sales tax that is tacked on.

Government leaders should never forget that they are entirely dependent on the productivity and labor of the nation’s citizens for their budgets. Their task is to responsibly and faithfully administer those funds, acting as stewards on behalf of the tax-payers. Attempts to point the blame for rising gas prices solely on oil companies, without acknowledging the basic role of rising demand and high levels of government taxation, is irresponsible and disingenuous.

Posted by Jordan J. Ballor in Business and Society at 08:55 | Leave a comment | Trackbacks (2)

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congress, gasoline, oil, prices, profits, senate, taxes