Hidden Oil Subsidies: We Need to END Them
by Michael Graham Richard, Gatineau, Canada on 07. 2.08
Econ 101: Subsidies
One of the many problems with subsidies is that they are almost impossible to repeal. That’s because they usually give big benefits to a small group of people at a relatively small cost to a huge number of people. For example, corn-ethanol subsidies are going to be very hard to phase out because they might mean hundreds of thousands of dollars to farmers, while their cost is spread over the rest of the population and almost invisible. Farmers are a lot more motivated to lobby politicians than the average taxpayer, even if they only represent 1% of the population. The green impact of this is that corn-ethanol, a biofuel that would not necessarily be used much otherwise, is now made competitive with taxpayer dollars (and by putting tariffs on the greener Brazilian sugarcane ethanol), and that makes it harder for other alternative fuels to supersede it (and it also drive food prices up, something that affects most the poor).
Hidden Oil Subsidies
The real price of gasoline is what people actually pay for it, not just what they pay for it at the pump. That might seem subtle, but there’s a big difference. (read more)
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A couple of ?
If oil is a Supply and Demand commodidity, why is the price of gas cheaper in China and Developing Countries than in the U.S. and Canada ( If it is subsidizes in China, why are we not raising heck to lower their subsidies to raise prices to curb demand?) Unfair playing field.
Oil Sands Alberta. In the recent past, it didnt mattter where the gas and oil came from. As long as it made your car go vroom, who cared. Now with the dependeny of US on oil from foriegn suppliers, they are getting more fussy about the location of oil. If the US starts to discriminate about where the oil is comming from…look out. Middle East will be pleased to oblige. They will be branding their oil as the clean oil. The Oil sands will have to discount the oil to sell it because no one will want the Dirty oil. We will pay different prices for imported clean oil. I can see it now, “My prius only uses the imported gas, Saudi Premium please”. I think we can be going down a slippery slope, soon we could see different prices for oil depending on enviro, political and personal choice. I know they cant even track where tomatoes are grown, not that it matters where… unless there is a problem.
Funny how the risks of off shore drilling diminish at $145.00 oil.