Conscious Choice: Beating the High Cost of Gas

August 2000 | News of the Earth

Beating the High Cost of Gas

by Dave Aftandilian

We all know the problem: that big ouch in the pocketbook when we gas up the family automobile for a summer trip and find we’re paying $2 or even more a gallon, almost twice what gas cost last year. So what are we going to do about it?

The Chicago Sun-Times reports one illegal solution: speed away from gas stations without paying after you fill up, which twice as many people did along the tollways between May and June this year. Another obvious and completely legal solution: drive less. Walk, bike, or take public transit when you can. Still, that only goes so far, especially if you have no choice but to commute to work in your car because public transportation isn’t available when and where you need it.

Short-Term Solutions

Of course, the folks in Washington, D.C., have some bright ideas on how to ease the gas crunch. One of the more inspired (ahem) comes from our friends in the congressional delegation from Alaska: open the Arctic National Wildlife Refuge (ANWR) to drilling. Why, according to the U.S. Geological Survey, there might be as many as 16 billion barrels of oil under that soggy coastal tundra — enough to fuel America’s petroleum habit for a whole two and a half years! Never mind those pesky environmentalists who say that only about 3.2 billion barrels’ worth of it is economically feasible to recover (a six-month supply), and that drilling in ANWR would seriously endanger the feeding and calving grounds for a 129,000-caribou herd as well as the crucial fueling-point for hundreds of bird species trying to store up enough food to last them through their long migrations. According to Alaska Representative Don Young, "If you think billions of barrels of oil will stay in the ground, you’re smoking pot."

So gosh darn it, let’s make drilling ANWR mandatory, say oil-industry buddies Senator Frank Murkowski (R-AK) and Senator Trent Lott (R-MS). We’ll just attach our little rider, S.2557 or the "National Energy Security Act of 2000," to the Labor and Health and Human Services appropriations bill to do just that, as well as provide tax breaks and other giveaways to Big Oil. Too bad the Senate didn’t buy it — but maybe we’ll try to attach our rider to the Interior appropriations bill, which is moving through the Senate as this column is being written.

Thankfully, President Clinton isn’t buying this drill-ANWR-or-bust approach either. Word has it he may add ANWR to his legacy of national monuments before he leaves office, making it off-limits to drilling forever. (If you like that idea, you might want to drop the president a note to let him know. And while you’re at it, you might ask him to veto any appropriations bill that crosses his desk with an ANWR death warrant rider attached to it.)

Well, how about this, then? Why don’t we force the U.S. EPA to back down from the new clean fuel rules that went into effect this June? The EPA says the newly required oxygenating additives are only tacking $0.05 to $0.07 onto the price of each gallon of gasoline, and are reducing smog-causing carbon monoxide in exhaust so that folks in the Midwest can breathe more safely in the summertime (especially children, the elderly, and people with asthma or heart problems). But Wisconsin governor Tommy G. Thompson and other lawmakers in his state, who have filed suit against the EPA to get the new rules dropped, say that pipeline problems in shipping the reformulated gas and Unocal’s patent royalties on the reformulation technologies, together with higher wholesale gas prices, have caused pump prices to skyrocket — by as much as $0.50 a gallon, according to the Congressional Research Service. The Saudis agree; their Oil Minister, Ali Ali Nuaimi, told the Washington Post that rising gas prices in the United States should be blamed on the new clean-air rules, not on OPEC.

It’s a safe bet that EPA and not Wisconsin or the oil industry is right on this one. Industry has a history of screaming about how much new environmental regulations are going to cost, only to backpedal later when it turns out the new regulations cost nowhere near as much to implement as big industry claimed they would. As Russell Mokhiber and Robert Weissman note in one of their "Focus on the Corporation" columns, oil companies had six years to prepare themselves for the new clean fuel standards, which the industry also helped develop. So they don’t have a lot of excuse for suddenly raising prices to cope with "new" standards they’ve known about for six years. It’s also telling that although prices jumped unusually quickly on June 1 when the new clean-fuel rules went into effect, they went down just as fast when the Federal Trade Commission began investigating potential price-fixing in the consolidating-toward-monopoly oil industry. Furthermore, the Associated Press reported that while wholesale gas prices in Chicago dropped from $1.60 a gallon on June 15 of this year to $1.31 by June 17, retail prices at the pump increased by $0.02 resulting in a per-gallon price of $2.13 during the same week.

Other D.C. politicos have suggested opening the U.S. strategic oil reserves. Considering those reserves are meant to be used only in times of real gas crisis — e.g., war in the Middle East — it doesn’t make any sense to drain them now, when gas is pricey but not extremely scarce.

Federal politicians aren’t the only ones coming up with ways to lower the high cost of gas. Right here in Illinois our reelection-minded state representatives gathered last month in a special legislative session reluctantly called by Governor George Ryan and voted 106-5 (House) and 55-1 (Senate) to repeal the state’s 5 percent gas tax for six months. A Chicago Sun-Times survey found that most gas stations in the Chicago area dropped their prices in response (though the legislation only required them to post signs at the pumps announcing the sales tax rollback, not to actually lower prices). But the average drop was only $0.07, rather than the $0.10 the state had predicted, which means that some gas station owners are pocketing the difference.

Not everyone thought rolling back the state gas tax was such a good idea. The six-month repeal will cost the state about $180 million in tax receipts. Governor Ryan asserted that social services would not be affected by the cuts, which the state plans to recoup through $75 million in unexpected revenue and state agencies trimming their budgets by 2 percent. But the Illinois Federation of Teachers opposed the cut because they’re convinced it will affect social services. As House Majority Leader Barbara Flynn Currie (D-Chicago) put it, "This $180 million is going to come from somewhere. It’s going to come from some program that matters to our constituents."

Cutting sales taxes on gas also sets a bad precedent. While gas and other carbon taxes are wildly unpopular because they are considered to be regressive — meaning that they hit hardest those who have the least money to pay for them — they are a good thing if for no other reason than that they remind us that the wholesale price of gas reflects very little of its true cost to the environment. Even the gas taxes we (used to) have in Illinois and at the federal level only pay part of the costs of road improvements, and do nothing to pay for the heavy pollution (and resulting public health costs from poorer air quality) incurred in the drilling, processing, and burning of fossil fuels. More than 40 percent of the oil used in the United States goes to fuel cars and trucks, which in turn produce 20 percent of the carbon dioxide emissions that play a key role in global warming. In the long run, we ought to be raising gas and other carbon taxes, and perhaps instituting an earned-income tax credit to help reduce the squeeze on lower- and middle-income families. But good luck getting that idea to fly in an election year.

There are, of course, other short-term solutions to the gas price increases that most politicians have not yet clued into. Mokhiber and Weissman suggest three: set up a windfall profits tax to stop the oil companies from profiting from our misery at the gas pumps, force Unocal to let competitors use its clean-burning gas patent for free (representatives Dennis Kucinich of Ohio, John Baldacci of Maine, Frank Pallone of New Jersey, and Tom Barrett of Wisconsin have introduced legislation to accomplish this), and think seriously about federal price controls on the cost of gas. Another good idea would be to reinstate the ban on exporting Alaskan oil that our friend Sen. Murkowski of Alaska helped overturn in 1995. The U.S. General Accounting Office found that "lifting the export ban raised the relative prices of Alaskan North Slope and comparable California oils between $0.98 and $1.30 higher per barrel than they would have been had the ban not been lifted." Members of Congress, led by representatives George Miller and Peter DeFazio, have called on the president to restore the ban, and have introduced legislation to reinstate the ban if the president doesn’t.

Long-Term Solutions

But these are all stopgap measures. The real long-term solutions to higher gas prices are increasing energy efficiency, campaign finance reform to reduce the oil industry’s overwhelming political clout, and more aggressive development of renewable energy sources that we can use to fuel transportation instead of heavily polluting, limited-supply fossil fuels.

As the Sierra Club puts it on their global warming program’s Web site, "raising automobile fuel efficiency is like finding a new source of oil under Detroit." First off, it’s high time we tighten the Corporate Average Fuel Economy (CAFE) standards, which were instituted in 1975 in response to another oil crisis. These standards required the auto industry to double the average fuel economy of cars gradually between 1975 and the mid-1980s, and resulted in savings of three million barrels of oil every day with no loss in safety or engine performance.

But thanks to industry lobbying efforts, Congress has frozen the CAFE standards at their 1994 levels — 27.5 MPG for cars, and 20.7 for SUVs and light trucks — through annual budget bill riders for the past six years. Finally, earlier this year, the Senate voted to allow the Department of Transportation to conduct a preliminary study on raising CAFE standards. Together with the National Academy of Sciences, the DOT will conduct a joint investigation on miles per gallon standards, and will report the results to Congress by July 1, 2001. DOT can recommend increasing CAFE standards in fiscal year 2001, which would mean the new standards could take effect as early as 2002. If we increased fuel economy by just 6 percent a year, we could reach 45 mpg for cars and 34 mpg for SUVs and light trucks in a decade.

As you might expect, SUVs are a large part of the problem. According to the Union of Concerned Scientists, "If SUVs were as clean as the average car, oil use in the United States would have fallen 5 percent from a decade ago, instead of rising over 10 percent." Because they are classed as light trucks, SUVs are not required under CAFE to achieve as good fuel economy as cars, despite the fact that SUVs and other light trucks make up almost 50 percent of new vehicles sold today. In other words, CAFE has a loophole big enough to drive an SUV through — and the auto industry has fought hard to prevent that loophole from being closed. This loophole is bad news not just for the environment, which gets more greenhouse gases dumped into it as a result, but also for consumers, as SUVs that got better gas mileage would mean less money sucked into the tank with each refueling. In fact, the Union of Concerned Scientists estimates that more efficient light trucks would save their owners more than $3,500 over the life of the vehicle at today’s prices.

The technology already exists to make more fuel-efficient cars and trucks; the auto industry has improved engines and transmissions and lighter, more aerodynamic body designs sitting on the shelf. But Detroit has shown no willingness to modify its assembly lines to put these designs into production. For instance, the Sierra Club and the Center for Auto Safety used off-the-shelf technologies — many of them available on cars currently in production — to improve the Ford Taurus’s fuel efficiency from 27.5 mpg to 42.3 mpg. And the Union of Concerned Scientists came up with a similar redesign for the Ford Explorer, showing how its fuel efficiency could easily be improved from 19.3 mpg to 28.4 mpg, at an extra cost of only $715 (and to 34.1 mpg with a little more effort and an additional $220). Tightening CAFE standards would provide the necessary push in the right direction to get less-gas-guzzling vehicles like these off the drawing board and onto the road. And hybrid gas/electric engines can do even better — you can already buy the Honda Insight, which can reach as high as 70 mpg, and the 55 mpg-Toyota Prius should be on sale by the end of the summer.

If the means to produce more efficient, less polluting cars and trucks already exists, why aren’t they being built? Simple — because manufacturing them would slightly reduce Detroit’s ballooning profits. Of course the auto industry won’t admit that. They claim that higher fuel efficiency has "led to the downsizing of cars, which has cost thousands of lives in traffic accidents," as one Chrysler spokesperson put it to Sierra magazine a couple years ago. Not true; higher efficiency with identical or greater safety features was and can still be achieved through better technology, not smaller cars. The auto industry also claims that building more fuel-efficient cars would cost jobs. Also not true, according to the American Council for an Energy-Efficient Economy, which estimates that although certain sectors (such as the oil industry) may indeed experience job losses, the auto industry alone would gain 47,000 new jobs. And if money saved at the pump through more fuel-efficient vehicles were pumped back into the economy, as many as 244,000 new jobs would be created nationwide.

Another long-term solution to the gas-price problem involves reducing the tremendous influence that oil industry dollars have over our elected officials. There’s a reason why CAFE standards were frozen for six years, and why last September the Senate voted 51 to 47 in favor of a proposal that allowed oil companies to pay a price they determine for drilling royalties rather than the (much higher) market price. According to Senator Russ Feingold (D-WI, who had the guts to speak out on the Senate floor about this; see the December 1999 issue of The Progressive for excerpts from his speech) and others, the culprit is the role that generous campaign contributions from Big Oil and other industries have been allowed to play in the political process. For instance, the Center for Responsive Politics reports that the top ten oil and gas companies donated $4.6 million to both political parties in 1997-1998 election campaigns, and spent $36.5 million on lobbying efforts in 1998 alone. So far, oil and gas companies have given more than $1.4 million to Governor Bush’s presidential campaign, $95,460 to Vice-President Gore’s, and $7,600 to Pat Buchanan’s. (Guess which industry will be the real winner if Bush is elected president in the fall?)

What You Can Do

If you’re in a letter-writing or phone-dialing mood, you can contact your elected officials in D.C. and tell them not to open the Arctic National Wildlife Refuge for oil drilling, not to backpedal on EPA clean-fuel standards, and not to continue blocking efforts to increase vehicle fuel economy through tighter CAFE standards and other avenues. While you’re at it, you could get in touch with your state officials as well, and ask them why they spend just $0.59 a person on pedestrian transportation, but $46 a person for highways (according to the Daily Herald). An election year is coming up, so your good words will not fall on deaf ears.

If you’re in the market for a new car, check out hybrids like the Honda Insight and the Toyota Prius. You may pay a little more for the car up front, but your investment will be returned with interest at the gas pump over the years. If you mostly want a car for use on the weekends and holidays, you might want to contact the Center for Neighborhood Technology and ask them about a car-sharing program they’re planning to start in Chicago later this year.

If you’re looking into buying a new home in Chicago, consider buying a property located near convenient public transportation. Not only will you save yourself commuting headaches, you may also be able to land a larger loan (and thus a nicer home) with a cheaper down payment through a program called the Location Efficient Mortgage, also sponsored by the Center for Neighborhood Technology. Again, contact them for details.

Finally, although I know you’ve heard this before, I’ll say it again: the best thing you can do to cope with higher gas prices is leave your car at home whenever you can. Ask your employer if the company has a program that allows you to buy transit passes with pretax earnings (and if there is no such program in place, ask the company to start one). Walk, bike, take public transportation, and feel good about saving yourself a buck and helping make the air a little more breathable for everyone

Resources

Center for Neighborhood Technology, 773-278-4800; e-mail: info@cnt.org

Center for Responsive Politics,
202-857-0044, e-mail: info@crp.org

Sierra Club Global Warming Program, 202-547-1141, e-mail: information@sierraclub.org
globalwarming

Union of Concerned Scientists,
617-547-5552, e-mail: ucs@ucsusa.org

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