Build a post-peak infrastructure with higher gas tax

Thursday, August 24, 2006

Energy-economist and transport-economist Charles Komanoff wrote:

Today, America's and the world's prodigal use of fossil fuels is creating twin crises: a climate crisis from emissions of heat-trapping pollution into the atmosphere, and a security crisis self-created by the industrial world's thirst for other people's oil.

We can solve both crises, but only if we relinquish deep-seated beliefs about fuels and energy. And the attitude we must fling overboard first is our sense of entitlement to cheap energy. We need to recognize that energy does not cost too much; in fact, it doesn't cost nearly enough. To preserve Earth's climate, and wrest political authority from the corporate oil barons and petrodollar sheiks, we must conserve fuel massively and permanently, starting now.

RENEW's executive director Michael Vickerman offers another dimension to Komanoff's propsal -- rebuild a post-peak petroleum infrastructure:

Agreed that current energy prices are, across the board, too low and as such encourage wasteful consumption.

According to EIA weekly petroleum reports, demand for gasoline in 2006 is running 1.5 – 2.0% above 2005 levels. Even with population growth taken into account, it would appear that high fuel prices have had no material effect on gasoline/diesel consumption. But they are taking a fair amount of starch out of the current economic expansion, leaving open the distinct possibility of a recession for 2007, which would not be easy to control given ballooning public and private debt.

I do think we need to raise taxes on fuel, but not for the purpose advocated in the Charles Komanoff essay. A fuel tax (or a windfall profits tax) is needed to build (or rebuild, in some cases) what I would call the post-peak petroleum infrastructure. The centerpiece of that endeavor would be the strengthening of non-private car, non-truck modes of transporting people and goods. Serious public dollars are needed to refurbish and electrify railroad corridors, increase group transport options (buses, streetcars, community cars, ferries, etc.). This sort of funding is not going to come from the private sector, because it is too wedded to the status quo. Therefore, a tax is the only other vehicle for collecting funds for this purpose, though I can’t emphasize enough how important it is to protect such proceeds from diversion by Congressional buccaneers toward other, less noble purposes, like fighting wars in the Mideast. More than $300 billion has been already spent on the current war/occupation of Iraq, all of it charged on the national Visa card. The obligation to pay off these accumulating expenses weakens our capacity to underwrite a more sustainable transportation infrastructure out of general revenues. The only alternative would be a pay-as-you-go mechanism that collects petroleum-based wealth (which is currently being channeled into increasingly unproductive ends like high-end golf-course communities, helicopter skiing, spas for pets, vanity expeditions up Mt. Everest etc.) and redeploys it into transportation modes that will make us less abjectly dependent on petroleum for moving goods and people around.