Friday, June 4, 2010


President Barack Obama on Wednesday called on Congress to roll back billions of dollars in tax breaks for oil and pass a clean-energy bill that he says would help the nation end its dependence on fossil fuels.

And the plan is....

Drive up the price of existing energy sources to a level that makes immature and unreliable "green" alternative technologies a viable alternative, thus ending our dependence on fossil fuels and foreign oil.

Great for the environment, good for green technology investors and companies, bad for the American consumer.

So, which party is it that is in bed with big business? Oh yeah...that's right, BOTH OF THEM! They're just in bed with different businesses, lobbies, and donors.

As of 5/31 the average price of gas in the US was $2.73 of that 47.7 cents went to the government (18.4 cents federal). So, for a gallon of gas that average US worker had to work 7 minutes.

The average price of gas per gallon in the UK is currently 120p/liter, at 3.79 liters to the gallon the price per gallon in the UK is 4.54....but wait, that's in the current exchange rate of 1.4643 dollars to the pound the price of a gallon of gas in the UK is $6.66 USD (Honestly, that number is just coincidence...the price is 6.6596).

Of that 120p per liter, the UK petrol tax is 56.9p per litre, almost half (47.4%)....but wait, that's before the 17.5% VAT tax... with the VAT the total tax on petrol is roughly 65% of the cost versus 17.5% in the US.

Who gets hurt by higher gas prices? The average American worker.

With gas at $2.73 a gallon the US average hourly wage is $22.47

With gas at $6.66 a gallon the UK average hourly wage is $19.05 USD (Thats 488 pounds for 37.5 hours of work in 2009)

In real terms a gallon of gas is 7 minutes of work in the US and 20 minutes of work in the UK

British cars on average are 20% more fuel efficient than American cars, but gas cost roughly 140% more.

The average economy of 2009 new passenger cars was 32 MPG and the average US commute was 16 miles. That's 1 gallon of gas round trip (ideal), $2.73 cents, or 7 minutes of work. With British gas prices and fuel economy that would equate to $5.32 cents or 14 minutes of work.

Raising taxes or rolling back tax breaks for oil will both do the same thing, raise the price of gas, this will also cause price increases for everything else due to increased transportation costs. When the general prices of goods rise over time in respect to currency, that is inflation, plain and simple.

The false assumption is that when common market energy costs rise, the costs of alternatives won't. What is your viable alternative to fossil fuels? Electric cars? When the price of fossil fuels rise, the cost of the electricity used to charge them will also rise. A Toyota Prius currently gets 48-52 MPG under ideal circumstances. If the price of gas goes up 140%....are you going to be happy with a car that gets 60% better mileage? Even with a Prius the commute that now costs you $2.73 is going to cost you $4 (instead of $6.66) and that doesn't include the increased cost of charging due to increased fossil fuel costs for those of you with plug-ins.

Keep in mind that $6.66 petrol prices in England has not spurred a massive development and market of alternative fueled vehicles. The vast majority of cars in England still burn fossil fuels, albeit most are low displacement turbo diesel sub-compacts with mileage rates similar to the Prius and we all know how you environmentalists feel about diesel. The vast majority of high mileage turbo-diesels in the UK aren't for sale here because they can't pass the EPA standards for diesel emissions.

Take an easy example:

US Volkswagen Golf 2-DR 2.0 TDI/UK Volkswagen Golf Match 2-DR 2.0 TDI

US: 30 city/41 highway, MSRP $22,354 USD
UK: 46 city/70 highway, MSRP $30,625 USD

Another good example for you performance enthusiasts is the Mercedes C350

The British petrol version of the C350 has the same size engine (3.5 liter V6 200 kW (268 hp) has a top speed of 155 and a 0-62 of 6.4s (62 because that is 100 km/hr) it gets 20/38 mpg and has CO2 emissions of 232 g/km.

The American version has the same size engine (3.5 liter V6 268 hp (200kW) has a top speed limited to 130 mph and a 0-60 of 6.1 seconds but it only gets 17/25 mpg and has calculated* CO2 emissions of 487g/km. You can't say that American Mercedes enthusiasts wouldn't flock to a C350 that gets 38 mpg on the highway for a performance sacrifice measured in tenths of a second.

* The UK MB website provides the CO2 g/km figure, no figure provided on the US MB website, but the EPA provides a figure of 9.2 metric tons/year. A little research provided the EPA calculation is based on 11720 miles per year and is based on gallons of gas consumed (metric tons/gallon times gallons used). I converted the metric tons to grams (9200000), converted 11720 miles into kilometers (18862) and divided... coming up with 487.75 g/km. Now I have no idea how the Europeans calculate that, but I would guess it's measured. This is the best figure I can come up with for the American version... any engineers out there are free to correct me.
So the question is: Why can't you buy a European C350 in the USA?

And don't think it's just European manufacturers... the European Ford Focus Econetic gets 62 mpg, the best you can expect from the US version is 35 mpg.

That all comes down to NHTSA and EPA regulations, the US blocks the importation of vehicles built to the international ECE standard and it currently impossible to build a vehicle that meets both the ECE and US FMVSS. The two standards are not as divergent as you would think, one major sticking point in reconciliation being headlight design. I don't think many would argue that European model cars are not as safe as their American counterparts. Differences in environmental testing diverge less in end results than in testing methodologies and individual focus. A European clean diesel engine is arguably more environmentally friendly, yet will not pass US emission requirements.

Repealing oil tax breaks and driving up the price of gas is not a winning move for the American public. We don't need more fossil fuel regulations and taxes to promote green energy. The answer is less regulation not more. Want a 70 mpg car? adopt the international ECE vehicle standard and allow the importation of European models into the US. Afraid of killing off the rest of the automotive industry? Provide a 1-3 year window in which American manufacturers can retool, say allowing sale of ECE vehicles by American manufactures the first year, and gradually raise the number of allowed foreign ECE imports by 20% per year in subsequent years for 5 years until we are back to a free-market on sales.

If you're for penalizing fossil fuels to promote green technology, follow the money... Oil loses, Coal loses, the American Public loses, who wins? It's certainly not the environment.




Lisa said...

Thank you for that bit of education.
That's 2 wins for Obama. The world turning on Israel and his big dream of environmental justice or in layman's terms further destroying the economy.

Christopher - Conservative Perspective said...

Good info and well compiled i.e. great post.

The problem is any lib who may start to read this post will stop at the first number,,eeechhh, and gloss over the rest and if they bother to comment it will be; 'Go Green'.

Libs cannot be bothered with facts and figures.

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