Category Archives: gasoline

Miles Americans drove in May

Down again. The price of gasoline obviously does matter.

John McCain’s priorities

Ezra Klein points out the gap between the Republican presidential candidates words and his … well, his other words:

He supports a “market-based program” to “beat climate change” in the abstract, but he also wants gas tax holidays, domestic drilling incentives, megapork for nuclear and coal, no boosts in sector-specific efficiency or fuel economy standards, limited public investment, and enormous tax cuts. When the abstraction bumps into the conservative interest group, the abstraction gives way. Yep. McCain totally believes in global warming and the need to get away from fossil fuels. He has a policy that will do this by raising the price of carbon, and thus of fossil fuels. He also believes fossil fuels should be cheap and plentiful, and has policies meant to lower the price of gasoline and drill more oil.

Americans drove less in March

So says the transportation department:

Americans drove less in March 2008, continuing a trend that began last November, according to estimates released today from the Federal Highway Administration.

“That Americans are driving less underscores the challenges facing the Highway Trust Fund and its reliance on the federal gasoline excise tax,” said Acting Federal Highway Administrator Jim Ray.

The FHWA’s “Traffic Volume Trends” report, produced monthly since 1942, shows that estimated vehicle miles traveled (VMT) on all U.S. public roads for March 2008 fell 4.3 percent as compared with March 2007 travel. This is the first time estimated March travel on public roads fell since 1979. At 11 billion miles less in March 2008 than in the previous March, this is the sharpest yearly drop for any month in FHWA history.

Drivers seem to be slow to react to changes in gas prices, but during and after the post-Katrina price spike, there was definitely an effect. Let’s see whether this keeps up.

Expensive gas can be a problem for suburban sprawl

Duh.

Who built the electric car?

Marc Gunther updates entrepreneur Shai Agassi’s still-quite-plausible plan to bring electric vehicles to the masses:

How does the business work? Essentially, by exploiting what Agassi argues are the cost advantages of electric cars over vehicles powered by gasoline and, yes, you read that right—he says it’s significantly cheaper to operate an electric car than a gas-powered one, particularly with oil priced at more than $110 a barrel. (The economics work with much cheaper oil, too, he says.) The low-cost advantage for electric cars is even greater in Europe, he says, where gas prices are the equivalent of $7 to $9 a gallon.

His claim depends on a lot of assumptions—that a battery with a sufficient range can be produced for $10,000 or less, that he can bring the cost of renewable energy down by committing to buying lots of it, and that the costs of building distributed networks of recharging points and service stations will not spiral out of control.

If he’s right, the cost of powering the electric car will be about 5 cents a mile. As for a gas-powered car, you can do the math, but fuel costs for a car that gets 25 miles to the gallon with gas priced at $3.75 a gallon amount to 15 cents a mile.

Even so, there’s a problem—many people don’t want to pay an extra $10,000 up front for a battery, not knowing how long it will take for them to get their money back in the form of reduced fuel costs. So Agassi isn’t asking for that money up ront. Instead, he intends to sell his customers the cars for much less than they cost, provided that they agree to long-term service plans that will supply them with electricity, battery changes when needed, replacement batteries, etc. He estimates that he could afford to give people a free car if they agree to sign onto a service agreement for six years.

Stop subsidizing ethanol

I haven’t had very much time for the National Review since it devolved from Republican-oriented conservatism into full-throated Bushism a few years ago, but maybe its editors are looking ahead to a post-GWB America and realizing they’re going to have to stand for some principles again.

And this is a good one: mandating the consumption of ethanol and subsidizing its production is bad policy, for the United States and for the world.

Congress has created an artificial demand for ethanol to satisfy the farm lobby, which is one of the most powerful in Washington. To make matters worse, almost every major candidate for president in the last 20 years has supported ethanol subsidies because of the program’s importance in the capital of corn, Iowa, which holds the nation’s first presidential caucuses. Hillary Clinton and Barack Obama are not exceptions to this rule. Both voted for the 2007 energy bill, and both declared their support for ethanol while campaigning in Iowa. Obama, from the corn-growing state of Illinois, has been singing ethanol’s praises for a long time.

But John McCain somehow made it through the early primary gauntlet without going back on his long-held opposition to ethanol subsidies. To be sure, he took a lower profile on the issue and made some comments about how ethanol “makes sense” now that oil prices are so high, but when questioned about these pro-ethanol comments he reiterated his opposition to the federal government’s meddling in the market.

The Iowa caucuses are over, and McCain no longer has any reason to obscure his opposition to U.S. ethanol policy. In fact, he has several good reasons to voice his opposition to the ethanol mandate loud and clear. For one thing, he can point to it as a clear difference between himself and both remaining Democrats. They support a policy that is contributing to higher food prices for Americans. McCain opposes it.

Both Democrats (and McCain) appear to be in favour of doing all they can to make gasoline cheaper, too, even as all three paint themselves as greenies. It’s not what you’d call a consistent position, and it speaks to the difficulty that even a U.S. president who wants to tackle pollution and global warming will have in actually doing so.

ecoSCRAPPED

A year ago, the federal government launched a program to levy an extra charge on gas-guzzling vehicles and rebate a chunk of the purchase price on small, efficient ones. They called it ecoAUTOI was skeptical.

Today, they put it on Death Row.

The Conservatives did not, however, replace it with an emissions tax, or anything resembling one, which would be the logical replacement.