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Bachmann’s Two Dollar Gas
Two dollar per gallon gas is possible, just not for the reasons recently advocated by Congresswoman Michelle Bachmann, (R-Minnesota.) Responsible energy policy must be rooted in reality, not political manipulation. Minnesotans, living in a cold climate state, understand that present policy isn’t working. Congresswoman Bachmann’s recent gas-price stunt underscores our state’s energy challenges and opportunities.
Minnesota doesn’t produce oil. While we process crude oil locally, creating gasoline for state consumption, every barrel of crude comes from somewhere beyond Minnesota’s borders. Complex geological processes created our beautiful, economically diverse state but it left us with no oil or natural gas deposits. Consequently, we import the energy sources necessary to heat and fuel Minnesota.
Energy independence in Minnesota means turning to science, realizing wind, cellulosic and solar energy sources’ potential. Only innovation will move us off of our oil and coal dependence. None of that, however, creates two dollar per gallon gas.
Plundering every square foot of American territory will never produce enough gas at the two dollar level to meet America’s established needs. The “drill, baby, drill” mentality works as a jingle but not as realistic energy policy.
Two dollar per gallon gas can only be achieved through massive tax subsidies, buying down gas’ price to the $2 level. While the current near-four dollar price isn’t gas’ “true” price, it nimbly illustrates a subsidy’s cost.
In the US, we’re consuming approximately 8.5 million barrels of gas per day. A barrel contains 42 gallons, translating into 357 million gallons of gas a day.
Let’s assume uniform national gas consumption patterns, which isn’t quite accurate but I like simple math. Minnesota has 5.3 million people, representing 1.7 percent of the US population. 1.7 percent of 357 million gallons is about 6.1 million gallons. At a $2 per gallon gas subsidy, that’s $12.2 million per day, just in Minnesota. Times 365 days and we’d be paying better that $4.45 billion a year to subsidize $2 per gallon gas through general state taxes. Just in Minnesota.
So, no. I don’t think a tax-subsidized $2 per gallon gas is any more realistic than Congresswoman Bachmann’s plan to drill for oil anywhere and everywhere within the territorial US in order to achieve the same end.
Instead, let’s aggressively pursue a clean energy agenda, rooted in innovation, that lowers energy consumption, increases efficiency and pursues true energy independence. It’s not a publicity stunt, just a responsible, realistic path forward.
Posted in Transportation | Related Topics: Energy Transportation Funding Fuel Tax
6 Comments
April 12, 2012 at 5:13 pm
Mike, what I am speaking of is hundreds of capped wells in the gulf waiting for, (as they say), the Cartell to pump all their oil first. No organization short of Chaves socialist ragiem has tried to take control of their countries production, and even their they end up selling most of it through oil companies anyway. As for trucking crude in ND, that’s hardly a cost effective arangement. They are working on hard pipe connections.
April 12, 2012 at 3:58 pm
Bill,
If there is no relationship between the cost of crude and a gal./gas at the pump, then how will drilling in the Gulf lower the pump price? What do you, or anyone else on here for that matter, know about US oil drilling? It is coming out of the ground so fast in ND that we don’t have room for the oil or the trucks that haul it. The export of refined gas is a big part of the problem but not the only one.
April 12, 2012 at 3:46 pm
So if we stopped all oil Company susidies and applied them to user subsidies, just how close to that $2 a gallon figure could we get nationally?
April 12, 2012 at 3:16 pm
Did everyone just miss the fact that the largest export by dollar value of the United States is gasoline? The crude oil is refined in this country and then gasoline is shipped to other countries where the price (and the profits) are higher. The price of gasoline in this country will not fall until there is a huge worldwide excess of oil, like we had during the worst of the recession in 2009. Given the current surplus of natural gas, in this country anyway, perhaps the era of natural gas powered vehicles has arrived.
April 12, 2012 at 8:08 am
There is more in what you don’t say than what you do say John. With crude hanging around $100 a barrel that is roughly $2.00 a gallon before refining. Then you say nothing of the massive amount of oil capped and doing us no good in the Gulf of Mexico because the Multinational oil Companies refuse to pump it. Nor are you addressing the issue that their is no longer any relationship between the cost of crude and the price we pay at the pump, diesle and fuel oil are clear proof of that as their refinement cost are fare lower than gasoline yet prices are higher. Then there are the speculators who scheme to drive prices up for their proffit. Attacking Bachman is an ongoing passtime for you and has been for years John on every opportunity. Your rehtoric is no better than hers on this issue.
Dan Conner says:
April 22, 2012 at 10:38 am
The price of crude is no longer set at the well or refinery. It is set in the commodity markets, Chicago being a key one. Oil futures are traded like agricultural commodities. Most recently, the price of oil was dictated by the crises in Libya and Iran, not the availability of oil.
Today, the US is producing more oil than it ever has in the history of our nation. There are more wells pumping than ever, all producing oil. Using capped wells in the Gulf is a phony story. Those well heads are from depleted reserves. If there was available oil there, those wells would be pumping considering the insanely high price of oil.
There is no doubt oil companies and refineries manipulate the price of oil by keeping tankers off shore to keep the price high. Also, I have no doubt they withhold oil in producing wells to drive the price up. However, isn’t that the “free enterprise” conservatives fawn over? There does become a point when oil price manipulation causes missed profits and an entrance to alternative forms of energy.