About Gasoline Price Truth

The publication by the OECD International Energy Agency in 1998 of ‘World Energy Outlook’,
a year after the Kyoto Earth Summit, was a pivotal point in understanding world energy and
pollution problems.

The basic message was that, as people now live longer, energy usage and pollution rise exponentially and a ‘brick-wall situation threatening in ten years’ time means that
we cannot stay as we are’.

It was also from this point that the major G7 economies took global warming seriously. China, too, takes it seriously, realizing that nine-tenths of its population live in
its southeastern corner delta region, which could be subject to flooding if global warming is not seriously addressed.

World oil supply is expected to peak in 2010 and then tail off; this is unless
the cost can be met of tapping into the vast oil deposits beneath the polar icecaps. But North
American motorists remain blissfully unaware of these threatening situations.

While the UK and Europe pay what gasoline and diesel actually costs, in total, US users have an enormous effective subsidy which hides the governmental costs, and keeps them oblivious to the problems involved.

Fuel/vehicle taxes in the UK pay for road building, health care related to accidents, also defence costs relating to naval protection of oil rigs, whereas in the USA the petrol price paid at the pumps 90 Lightweight Electric/Hybrid Vehicle Design Fig. 4.6 GM Precept PNGV car.
is the direct cost of the fuel at world market prices.

Even the cost of the US fleet in the Middle East is reckoned by some to be equivalent to a subsidy of $1/gallon and of course there is no contribution to the health-care costs associated with exhaust pollution.

In the US such costs are covered by road tolls and other forms of local/central taxation. It is considered that Americans pay pump prices which cover only one-third of the real costs, the other two-thirds being borne by the state and, in the USA, local oil extraction has been declining since 1975 to the point where nowadays some 70% is imported.

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