Quit helping Big Oil
Vail CO, Colorado
The days of rolling into the gas station and hollering “fill ‘er up!” while you went inside for a carton of milk and a bag of chocolate chip cookies are over. We no longer have full-service gas stations, milk is full of hormones, cookies aren’t in the Zone diet and it takes a second mortgage to top of the tank.
Compounding the frustration at the pump is the fact that the oil industry continues to report record profits while at the same time remaining inconsistent in defining the reasons for fluctuating prices. While complaints against the high price of fuel are warranted, a more important issue lies hidden in the true cost of a gallon of gasoline.
As you sit at the pump carefully watching the gallons slowly pour into your tank and the money quickly drain from your children’s day care fund, it may not help to know that currently just about every cent you pay for gas is funding the continued profits of the oil industry while at the same time furthering the degree by which our society is dependent on fossil fuel for survival.
In other words, you are paying for a future of unrelenting price increases and deepening our addiction to oil, insuring that those higher prices will be paid.
Repeat after me: “Thank you, sir and may I have another?”
The existing price of fuel reflects the cost to the industry of bringing oil from the fields to the pump. By manipulating the factors involved, such as the price of crude oil and the costs of oil refinement, and by playing on our society’s insatiable demand for fuel, Big Oil is essentially able to dictate the price we pay at the pump. The reasons for increased prices vary widely and seem to follow some sort of oil industry secret set of criteria.
For example, though the price per barrel of crude oil is down nearly $10 from a year ago, the price of gas is up almost 40 cents. Last year’s price, a high price at the time, reflected anticipated shortfalls in crude oil based on negative hurricane season predictions.
This year, the price of gas raises daily based on continued consumer demand and a growing number of outdated refineries breaking down and unable to keep up. To make matters worse, though Big Oil receives government subsidies totaling nearly $14 billion a year to insure the gas keeps flowing, they have no real incentive to spend that money on refinery maintenance.
The sad truth is that companies like Exxon Mobile, who reported profits exceeding $40 billion in 2005, actually see greater profit when gas production is down. By controlling supply in a market with voraciously high demand, prices are driven higher and profits continue to set records.
Instead, Exxon and the others spend money on the exploration and exploitation of future oil sites as well as the development of new methods for extracting oil from large deposits found in sand and shale. So confident in their ability to control supply and insure their prosperous futures, many oil companies are reinvesting in themselves by buying back stock in their own companies.
In addition, several million dollars a year are spent on funding think tanks designed to create skepticism towards efforts to mitigate climate change. The American Enterprise Institute, funded by Exxon to the tune of $960,000, recently released a statement proclaiming, “The most recent studies now cast major doubt on global warming itself ” the basis for all the gloom and doom predictions.” The American Legislative Council added, “Global warming could actually save lives.” A statement made after a $712,000 Exxon donation.
To be fair, this isn’t entirely the oil industries’ fault. For years government subsidies have worked to mask the true cost of fuel production while keeping the price at the pump disproportionately low.
Additionally, taxes collected by governments at the state and federal levels have furthered the U.S.’s dependency on oil by expanding an already sprawling, automotive-dependent infrastructure.
What the current pricing structure ignores are the costs associated with oil industry tax breaks, subsidies and supply protection, as well as the health and environmental costs relating to the allocation, refinement and burning of fossil fuels.
These are real-world expenses directly related to the production and use of petroleum-based fuels and indirectly paid for by tax dollars.
These factors alone, according to a study done by the International Center for Technology Assessment, amount to at least an additional $9 a gallon. This in effect means that the $3.50 per gallon you are complaining about paying at the pump is a really a mere fraction of the actual cost you are paying to fuel your ride.
Should we be responsible for the cost our driving habits have on the planet’s social and natural environments?
Yes, we should.
Should we be responsible for funding the continued record profits of Big Oil through tax breaks, subsidies and supply protection?
Despite the pain we feel with each visit to the local petroleum palace, we must understand that though the price for gas is high, it very possibly should be and most probably will be, higher. What we must insure is that the price of gas reflects its true cost to society.
Ultimately, when we run out of oil, it will be society that is held accountable, not the oil industry. The time has come to end oil subsidies. Moreover, gasoline taxes should be raised and used in the development of cleaner burning, more efficient forms of energy.
Though we will never again see the euphoric days of cheap gas at the pump, we may very well preserve the ability to enjoy a bag of cookies and carton of milk within a healthy social fabric and under a clear blue sky.
Currently a bill passed by the House that would end government subsidies for the oil industry sits stalled in the Senate. This bill would redirect nearly $14 billion towards the development of clean energy.
Do your part by writing your senator, encouraging them to cut oil industry subsidies and invest in a clean energy future.
Ryan Sutter of Avon writes a biweekly column for the Vail Daily. He can be reached at firstname.lastname@example.org.
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