How America Broke The Oil Addiction … Without a High Gas Tax

Bill Scher

A fascinating graphic presentation from Bloomberg shows how America has nearly achieved energy independence and broken our addiction to oil.

It’s not because oil got too expensive. The U.S. shale boom has helped drive gas prices to their lowest point in four years.

And yet, “the U.S. is consuming the least oil per dollar of gross domestic product in more than 40 years.” Oil consumption typically tracks gross domestic product growth; for the first time ever, consumption is trailing GDP. And over the past nine years, American consumption of domestically produced energy has gone from 65 percent to 89 percent.

As the Bloomberg data suggests, the various drivers are both policy-oriented – President Obama’s regulations and programs creating more fuel-efficient cars and renewable energy, smart urban planning and public investment attracting young adults to cities where they use mass transit – as well as demographic, with retiring boomers driving less.

All this has happened while the gas tax has not kept up with inflation. In other words, we didn’t need a high gas tax to break our addiction to oil.

I’m not opposed to a higher gas tax. It would make a lot of sense right now because it would solve our highway trust fund shortfall and would barely be noticed by drivers since gas prices have plummeted. Even some Republican governors capable of math are interested in doing it at the state level.

But few congresspeople are willing to take the risk on a gas tax increase. An example of the potential blowback: Massachusetts just repealed a gas tax increase at the ballot box last month.

Fortunately, we have more than one tool in the box.

The Obama administration’s success in moving America toward a clean-energy powered economy was thanks to a mix of regulations, investments, technological advancements and a little demographic luck.

More progress can be achieved with additional regulation, like the planned Environmental Protection Agency rules to cap carbon emissions from power plants; more dollars, and the possible international climate accord in December 2015 – which would end the conservative excuse that America shouldn’t act to cut carbon if other countries won’t.

Would a higher gas tax help? Sure. But it’s no silver bullet. The evidence from the past six years is a reminder that usually a range of approaches is needed in order to advance policy goals.

Isaiah J. Poole recently argued we need to “rethink the gas tax.” As it stands, the gas tax is linked to our transportation infrastructure funding. And as we become more fuel-efficient, we starve our infrastructure budget.

That problem can be solved with a higher gas tax. But we can be more fuel-efficient and fund our infrastructure in other ways, be it a mileage tax or interstate highway tolls that spreads the responsibility to all drivers, even the more fuel-efficient; a weight per axle tax that places a higher responsibility on heavier vehicles that do more road damage; or simply using the general fund so all federal taxpayers play a role in supporting the infrastructure we all need.

The highway trust fund runs out of cash at the end of May, so we only have a few months to figure it out. Thankfully, we have options.

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