Chacham's Journal: Verbiage: ANWR, gas, and gas taxes

With gas costs rising, i was arguing with a friend over Alaskan National Wildlife Refuge (ANWR) and gas taxes. I stated two things that i had heard, that taxes were about fifty cents a gallon, and that ANWR had about thirty years worth of oil. He challenged on both, and then provided the studies.

GasPriceWatch has information on gas taxes. Using their information, Michigan taxes, and $2 per gallon:

$0.18.400 Federal Gas Tax
$0.19.000 Michigan Gas Tax
$0.00.875 Michigan Environmental Regulation Fee
$0.12.000 Michigan Sales Tax
---------
$0.50.275 Total

So, if you're paying $2.50 a gallon (i'm paying more) just over fifty cents of that is tax. Or, in another way, the tax is 25%.

As for ANWR, noone can ever know. But, we can estimate. The U.S. Geological Survey
(USGS) has a report on the recent assesment, which is 7.7 billion barrels (with a 90% chance that the amount is between 4.3 and 11.8 billion barrels).

Now that we have an estimation, how much does the US use? For that, we go to the Energy Information Administration, part of the Department of Energy. (They have a specific page on petroleum.) Here's the 2005 report, in Excel format, for petroleum usage in the US. (I'm not quite sure where he found this link.) The report has the 2005 snnual average at 20.66 millions of gallons per day.

Total ANWR oil / Usage per day = Days of oil in ANWR.
7,700,000,000 / 20,660,000 = ~373

373 days of oil is just over a year. Or as he put it "Thus, ANWR oil amounts to 1.0 years (between 0.6 and 1.6 years, allowing for the uncertainty in the reserve amount) of current American oil consumption."

So, i was dead wrong on that thirty year thing. I have no idea where i got it from, and i'm glad he put an end to that.

He also pointed out that oil is drilled slowly so things don't collapse and for other reasons. So, the extraction time would ultimately need to be figured, and is likely more than a year.

The question is, how can about one year's worth of oil cause so much for people to talk about? And, how could this possibly put a dent in the price in the long run? With so little at stake, i'm wondering if it's even worth it. A Wildlife preserve isn't a bad thing.

ANWR

[Tikiman]

It is become entirely a symbolic line-in-the-sand issue. My understanding is that there A) isn't a tremendous amount of oil and B) a small fraction (8%) of the refuge would be even open to exploration, and the actual footprint would be even smaller. However, today I wouldn't be surprised to see the Reblicans push the issue through as people realize that a year's supply of oil (maybe 2 or 3 years when they can finally get the oil to market in 10-15 years) is more valuable preserving a habitat where the ani

Re:ANWR

[Chacham]

It is become entirely a symbolic line-in-the-sand issue.

I think so too. And perhaps, that's why the conservatives are so strongly for it. The liberals who would rather stop gas consumption completely, want to stop it here not based on the value of conservation being greater than the value of the petroleum, rather, being it is already locked up, they want to keep it that way, and hopefully lock more up. If the conservatives push them even on this, there's no chance of expansion of it.

OTOH, the liberals need

Misplaced priorities

[benhocking]

All this talk about eliminating the gas tax has me fuming. People are consuming too much gas as it is. We don't want to encourage even more consumption. Or, more accurately, we don't want to discourage a reduction in consumption that will occur if gas prices continue to rise. Hybrid car sales are already increasing and SUV sales are decreasing. This is a good thing. I know it puts a strain on the economy and causes prices to rise elsewhere, but right now our economy can handle it. Eliminating the gas tax ju

Re:Misplaced priorities

[Chacham]

While it may b a good thing, i do not believe in forcing people to it based on law. Artificiality based on human perception can be as warped as the underlying values that brought it up.

If petroleum runs out and prices rise, the people will switch because they have to, and enthusiastically loook toward other solutions. To force them by law, or tax, only generates minor forms of sedition, and poorly instituted solutions.

Taxes should be a last resort, for a government that has failed miserably elsewhere.

Hidden costs

[benhocking]

Part of the problem is the "tragedy of the commons" phenomenon where when a group people do what is in their individual best interests it turns out not to be in the best interests of the group as a whole. (I'm assuming you're familiar with the prisoner's dilemna where this holds for a group of two. If you're not familiar with it, then I'm assuming too much background for this discussion to make sense without me summarizing it.)

One solution is to adjust the value function. That's one purpose of taxes or fi

Re:Hidden costs

[Chacham]

Regardless. One solution is to adjust the value function. is an answer where one must be sought. For example, when raising children, or even in a strategy game. However, in life, when we recognize adults have the ability to make their own decisions, they should be able to shoot themselves in the foot if that is what brings them pleasure. To make a law on what people can do to themselves is to breach the most basic form of freedom.

Thus, i am against the tax. Unless, perhaps, a referendum finds that a solutio

As long as its their own foot, fine

[benhocking]

But I object when people aim for their own foot and hit mine. The problem is that the current system encourages just that. The problem isn't caused by a single person. It's caused by a very large group of people.

To make a law on what people can do to themselves is to breach the most basic form of freedom.

So, drunk driving should be legal - I mean, as long as they don't hit anyone?

The US is a democracy, and force should not bne abused unless the people ask for it.

Absolutely. I, and other people,

Re:As long as its their own foot, fine

[Chacham]

But I object when people aim for their own foot and hit mine.

That is a valid complaint.

The problem is that the current system encourages just that. The problem isn't caused by a single person. It's caused by a very large group of people.

And being it is the same people that deal with the consequences, the collective group should be allowed to shoot itself in the foot.

So, drunk driving should be legal - I mean, as long as they don't hit anyone?

Yes! As long as they can prove it. Be it on a private range, it wo

wow, you're easy

[Bill Dog]

Actually we only have a single day's worth of oil there! (At 36500% of our current consumption rate.) Aren't numbers fun?

You weren't challenged, you were fooled. The "ANWR is only good for 1 year's worth of oil" deception is based on the ridiculous assumption that if we began drilling there we would cease our receiving it from all other sources. Which we wouldn't. Because that wouldn't make any sense. Because there'd be no reason to do that. We'd draw from it as a supplemental source, and extraction until i

Re:wow, you're easy

[Chacham]

Woohoo! I finally got me a troll. :)

Re:wow, you're easy

[On Lawn]

He's not such a bad guy, and he does have a point. Any little bit helps. Also, it depends on how you crank the numbers.

Someone on a car mailing list pointed it out this way. Nothing is going to replace our dependancy on foreign oil -- nothing. However, 2% from turkey gizzards here, 10% from ANWR there (that'd make it a ten year supply), 25% from Ethanol, 30% from algae bio-diesle, nuclear, etc... and soon the numbers start adding up. Its how Brazil did it.

A commenter made the point above that this is a line

Re:wow, you're easy

[Chacham]

He's not such a bad guy,

Heh, i know. :)

and he does have a point.

Yeah, but it was so covered in muck, i felt it did not deserve a response.

Any little bit helps.

True, i agree with that. But the conservation is also a point. I don't think conservation is a bad thing, it's just that in most cases, human need outweighs it. However, the human need here is very little. The amount of oil is miniscule. That is, regardless of how it is spread, it is still only one years worth of oil. If we can a hundred deposits like

Re:wow, you're easy

[On Lawn]

I have a guilty confession to make. I like high gas prices. I'm not in big oil, and I am not a politician paid by big oil. In fact it hurts my wallet as much (if not more) than others because I have such a long commute each day.

So why do I like high gas prices? Because nothing drives conservation efforts more. Nothing gets people into little cars, drives auto manufacturers to make fuel flexible cars, promotes solar power panels on houses more. All these goodies that I like to see only come around when there

Re:wow, you're easy

[Chacham]

So why do I like high gas prices? Because nothing drives conservation efforts more.

As i said in a different response, this is an artificial cap. Let the natural forces play, not taxes.

Re:wow, you're easy

[On Lawn]

Let the natural forces play, not taxes.

Yes you did. Taxes are not the reason gas prices are high, they are just a reason they are higher then they could be. I don't think taxes should be higher than they need to be.

Even in free-market taxes represent something that market forces do not, and that is the cost that something causes others to pay. Market forces only prescribe the cost of extraction, refining, in other words the costs the provider pays just in bringing it to the market. It pays nothing of the ro

Re:wow, you're easy

[Chacham]

The problem is that government too works on market forces. Even taxes. They charge as much as they feel people will pay, and the more they are willing to pay for something the more they charge. Look at education, fire, police. Every time they raise taxes it is in the name of the things people want to pay for. The money, however never seems to reach where it was intended. In this way government acts more like a monopoly in free-market terms.

Well said.

Re:wow, you're easy

[Bill Dog]

Woohoo! I finally got me a troll. :)

Just be sure to throw me back when you're all done not taking me seriously! ;^)

You looked a bit like you had already made up your mind about ANWR, and were now looking for things to back it up, and even little white lies would suffice. As if phew that was a close one you almost had the wrong position on an issue but luckily your friend saved you with that specious argument!

Re:wow, you're easy

[Chacham]

Actually, the exact opposite is true.

And his argument is not specious, it is based on facts. Your's is speculation, and saying "eh, what do numbers mean anyway", which i find to be hypocritical in a conseravtive.

Now, i don't mean that *you* are a troll (even if a may have meant that at the time :P), i mean the post is.

Hey, i've done it too. :)