Here's some interesting reading...

And sorry up front if this has already been discussed here - I looked and didn't find it.

The article is from 1998, so pretty dated, but pretty eye opening. I don't necessarily agree with lumping everything they do into the ~$14.00 per gallon number (1998 data), but it still made me stop and think.....

Quote:

The

http://209.200.74.155/doc/Real%20Pri...20Gasoline.pdf

 

let me know when they do a study on the "real costs" of milk, sugar, etc.,....

 

I'm not sure that dairies are subsidized nearly as heavily, but probably most all crops (of which I guess sugar is one) have some percentage of their cost subsidized by the government, thus their "true" cost is higher.

Still, do the math. The average American drives maybe 12,000 miles a year and has a car/truck/SUV that gets maybe 18 miles per gallon. That's 667 gallons a year. Now if we figure $14/gallon in 1998 dollars is more like $18/gallon due to inflation and the increased cost of oil, that means every American is spending about $12,000 a year on gasoline.

Now even if we only count 150 million Americans as driving and ignore all airline, bus, train travel, freight, ships, and so on, that works out to 1.8 TRILLION dollars. That's like more than the entire amount of money the federal government collects in taxes in a year. The study is obviously flawed because if you included trucking, shipping, and rail transport, it would imply that the entire USA GDP went towards fuel costs.

 

To help myself understand how they got to $14 I broke each area down into it's parts. Some is legitimate, but a huge majority...well judge for yourself. I think it's a joke.

Total Annual Oil Tax Subsidies:
Low estimate: $0.035/gallon High estimate: $0.06/gallon

The majority of this is actually tax breaks to oil producers not money paid to oil companies. They could just as well say I am being subsidized $30,000 a year because that is the amount I made that the government didn't take from me.

Total Annual Government Spending Subsidies:
Low estimate: $0.32/gallon High estimate: $0.95/gallon
Almost all of this (98%) is Road Construction and maintenance. We do pay for that already in gas tax and other taxes. What roads would we need with a Horse economy.

Total Annual Protection Costs:
Low estimate: $0.65/gallon High estimate: $1.05/gallon
$0.67 is Military and $0.29 is for Fire, paramedics, police.

So far not that much cost really considering we'd have to have some alternative (horses and wagons, sleighs in the north) that would have it's own expenses and controls.

It requires some creative assumptions from here on out to get to the big numbers.

Total Annual Environmental, Health, and Social Costs
Low estimate: $2.00/gallon High estimate: $8.13/gallon
$4 for Health costs, yet life expectancy has skyrocketed since the introduction of the automobile, another study could conclude that humans are living 30 years longer simply BECAUSE of automobiles, take your pick.
$0.30 for Visibility?
$2 for Sprawl? Would we not have sprawl with Horse and buggy, 90% agricultural society is the sprawl of the past.
$0.016 Oil spills, WOW not much.
$0.09 Noise pollution?
$0.20 Global Warming, that only twice as much as Noise pollution and 66% of Visibility costs?

It just get's silly from here.

Total Annual Cost of “Other” Economic Costs:
Low estimate: $1.59/gallon High estimate: $3.95/gallon
$1.30 cost of traffic delays. And Horse and buggy's would eliminate this how?
$0.57 cost Lost earning and productivity on the job due to accidents, none of which would happen with horses?
$1.49 Subsidized parking? No support, appears to be related to taxes not collected because parking lots aren't taxed? Enron played fast with potential profits in the same way. We could pay for global warming cessation, oil spills, and our military by eliminating this cost. No wait it's fake.

 

amen! from http://www.inflationdata.com/inflati...ices_Chart.htm
it shows that the inflation-adjusted price of a barrel of oil has quintupled since 1988...
and dropped by about 50% since 1980! unadjusted, i was paying 29.9 for premium in 1970, and that, adjusted, was 1/2 to 1/3 of today's per-gallon cost.

reminds me [again] of Falk's 29 and 31st Laws.... see... http://www.plusaf.com/falklaws.htm#30th

 

Well... if you REALLY want to see $14/gallon gas, all that has to happen is the collapse of the Saudi Arabian royal family. If Al Queda topples Saudia Arabia, all hell will break loose.

We could get $8/gallon if the Faux-Cowboy makes war against Iran and they respond by not selling us any oil.

 

I'm just hoping Iran uses their nearly-completed nukes against France, personally. Not that I have anything against them, but it would be pretty funny for the French military to get wiped out once again in history.

In all seriousness, yeah, it wouldn't take a lot to see some sort of super-spike to $10-15/gallon in a major global crisis, but it wouldn't last very long in the grand scheme of things. It would likely take only one to two decades to start plowing over the vast usable croplands the US has in a sustainable way to produce enough biofuels, along with migration towards vastly more fuel efficient mass transit and personal transportation. Telecommuting will also likely become mandatory for nearly all jobs where it's possible, and even jobs where it isn't possible, we'll see more of the 4x10 workweek or 3x12 / 4x12 workweeks to cut down on commuting.

This is a great nation, but an immensely stubborn one, to be honest. I can easily envision how it really could take two decades to get us back to something like $4-5 transportation fuels (like ethanol and biodiesel) but it wouldn't be the end of the world by any means. 1929 - 1945 was a pretty dark period, economically speaking, and we pulled out of that OK too. I think we could survive a global collapse of the old oil economy model, it would just be hard, much like the great depression was hard.