Just How Much Does a Gallon of Gas Cost, Anyway

Posted by By at 30 March, at 11 : 02 AM Print

The U.S. Senate this week decisively shot down a proposal to eliminate subsidies to Big Oil & Gas.

The tally was 51 senators, including two Republicans – from Maine – voting to end the subsidies, and 47, including four Democrats – from Alaska, Lousiana, Nebraska and Virginia – voting to keep them. The 100-seat senate has a nifty rule in place designed to increase the power of the minority party: 60 votes are required to pass a bill.

It’s probably coincidental that the four states whose Democrat senators opposed the repeal are heavily involved in oil production or transportation.

Pennsylvania Democrat Sen. Bob Casey voted to repeal the subsidies, and Republican Sen. Pat Toomey voted to keep them.

A report published last year said Pennsylvanians provide nearly $3 billion in subsidies to fossil fuel producers. It’s a subject that draws little media attention.

We humans are a weird animal. Gas goes up 10 cents and we scream in pain. It drops a nickel, and we convince ourselves we’re getting a good deal.

In 2000, the sign at my favorite gas station said regular fuel was only $1.49. I was impressed. A couple weeks before, we had driven past prices we considered low at $1.93.

In 1969, I paid less than a quarter a gallon for the most expensive gas available, Sunoco 260. I was young, my car was new, comfortable and fast, got 30 mpg at 70 mph, and I refilled the tank almost every other day.

As I write this, the cheap stuff is $3.89, darn near everywhere. For years, we have been told Europeans pay much more – $6 a gallon at today’s prices, I heard recently – and it’s true. Their gas doesn’t really cost much more than ours, but they have some pretty terrific taxes added on, to help pay for road repair and national health insurance and other such community expenses.

If our government, state or federal, would propose adding a tax to encourage mass transit, or build new rail lines and bicycle trails, our objections would be heard on Mars. Give the same money to the oil barons, and we’re fine with that. (Well, some of us will blame the governor or president for the high gas prices, but neither of them actually sets prices at the pump.)

One of my favorite excuses for gas pricing when I was a youngster had to do with the distance the filling station was from the pipeline. Local radio stations claimed each price increase reflected the cost of trucking the fuel from the storage tanks. As I got older, and started paying for my own gas, I started noticing it was sometimes a quarter more a gallon near the storage tanks, at the beaches during tourist season, than in my home town, two hours by the regular highway from the pipeline terminus.

Even today, gas in the blue-collar town of Hanover often is at least a dime less a gallon than in the tourist town of Gettysburg, 15 miles away, where I live.

Exxon Mobil had a rough time last year. In the fall quarter 2011, the company reported a 41 percent increase in earnings over the previous year. Stock in the company doubled in value; I wonder how much at taxpayer expense.

The trouble with subsidies is they’re difficult to end. They become like the so-called “Bush tax cut.” After a few years, allowing the tax cut or the fossil fuel subsidies to expire on schedule is considered a “job-killing” tax hike.

I filled my wife’s car this week, at $3.95 a gallon. Some financial experts predict $6 a gallon by mid-summer. I wonder what the real price comes to with the subsidies Congress voted to continue giving the oil companies.

Add in the cost to clean up our air from the effluent trailing from our tail pipes, and the health costs from people who have trouble breathing in the smoggier cities. And how much extra do we spend buying drinking water for residents whose wells have been destroyed by the chemicals in natural gas fracking operations?

And we are cutting gas with corn-based ethanol the way movie bartenders used to cut whiskey by adding water; the increased cost of truck fuel is not the only reason for the increase in bread prices.

“We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature’s inexhaustible sources of energy – sun, wind and tide. … I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.” (Thomas Edison, inventor, 1847-1931).

A friend pointed out electric cars were in use in 1895, as though to suggest the reason electric cars are not more in use today is because they are inefficient.

I submit it is easier to count profits from a technology that already has proven its ability in the marketplace than to prematurely invest sweat and treasure developing something “new.” Gasoline has been inexpensive, and we Americans have loved the neck-snapping power in a gallon of the stuff. Why bother trying to find ways to make batteries lighter and more powerful with metals and chemistry not yet even dreamed of?

But we know things now we didn’t know in 1895. We are chopping down our fence, and we know its materials are irreplaceable.

We would do ourselves a favor to demand Congress subsidize new jobs in new technologies, and stop giving away our money to century-old industries that are ripe for replacement.

Photo by counting chest bullets
This post was written by:
- who has written 169 posts for Rock The Capital
John Messeder is an award winning journalist with more than 35 years experience writing about education, environment and local government issues. He has lived in Maine, Florida, California and Alaska, and, by temporary turns, numerous places in between. John also is an accomplished photographer, and avid hiker, conservationist, oral history buff, and author of several books he has not yet got 'round to writing. He lives in Adams County, Pa., just over a hill from Gettysburg, with his wife and Golden Retriever. He may be contacted at john@JohnMesseder.com - Email jmesseder

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