Years ago the International Center for Technology (icta.org) issued a comprehensive report entitled “The Real Cost of Gasoline”. The goal of the researchers was to identify and quantify the various secondary or “hidden” costs of using gasoline as a fuel for transportation. They categorized these costs into four sections:
- Tax Subsidization of the Oil Industry
- Government Program Subsidies for Oil
- Protection Costs Involved in Oil Shipment and Motor Vehicle
- ServicesEnvironmental, Health, and Social Costs of Gasoline Usage
- Other Important Externalities of Motor Vehicle Use
These external costs, according to the report, total 0.6 to 1.7 trillion dollars per year. Since the goal of the ICTA was to assess the total cost of gasoline transportation, they included certain items that would, by necessity, remain in an electric car society.
There is also one notable cost that was excluded from the report and is of particular importance in March of 2009; the economic costs of a disruption in oil. Most recessions suffered in the United States since 1969 (Peak Oil) have been preceded by a spike in the price of crude oil. These economic costs far outweigh the infrastructure subsidies we currently have and bring the “hidden” costs of a gallon of gas to a conservative $7.00 making the true cost of gas around $9.00 today. This is slightly higher than the average cost of gas in Europe due to higher transportation and security factors.
“So what?”, says the American driver, “I am only paying two bucks a gallon”. True, but if you pay taxes you are paying for these subsidies. And if you own a house, have a retirement fund or earn your sustenance from our economy, you are picking up the tab.
Here is an easy example of how heinous these subsidies can be. Let’s say our government policy makers decided to subsidize Harley-Davidson at the same rate we currently help gas. Our tax dollars would give Harley around $14,000 per bike sold and the consumer would only pay $4,000 per cycle. Great time to get a new ride, but the long term effects would include; the elimination of the competition, no incentive for Harley to make better bikes, no incentive for productivity enhancements, and so on. The quality would deteriorate and there would be no alternatives because other companies could not compete at that price. The subsidized company or industry gets a virtual monopoly that is very difficult to bust.
This is our current problem with alternative energy. When all-electric automobiles are compared to internal combustion using a subsidized yard stick, gas wins. But when the comparison is made using real costs, the electric car shows it’s true economic potential. For example, the real fuel cost of a gas car traveling 100 miles is $36 ($9 gal / 25 MPG). The electricity required to travel the same distance costs around $2.40 (0.12 Kwh / 5 MPkWh). With the average driver traveling 11,000 miles a year, that’s a $3,700.00 differential per year. That’s enough to fund an economic stimulus package every year.
If you want to add a little “gas” to the fire, imagine how advanced our transportation system would be today if our representatives would not have been “protecting” our wallets for the last 35 years.