We pay about $3.00 for a gallon of gasoline at the service station. But the
real price of gas is much higher and camouflaged by myriad direct and indirect
costs associated with maintaining our oil economy. How much are you actually
paying for gas? Take a closer look at the hidden bills footed by your
The federal government subsidizes the oil industry with numerous tax breaks and
government protection programs worth billions of dollars annually.
These benefits are designed to ensure that domestic oil companies can compete with
international producers and that gasoline remains cheap for American consumers.
|The cost of securing our access to Middle East oil..is estimated at $50 billion per year..
Our dependency on oil from countries that are either politically unstable
or at odds with the U.S. subjects the American economy to occasional supply disruptions,
price hikes, and loss of wealth, which, according to a study commissioned by the
of Energy, have cost us more than $7 trillion present value dollars over the last 30 years.
That is more than the cumulative cost of all of the wars fought by the U.S. since the
The transfer of wealth to oil-producing
countries - $1.16 trillion over the past thirty years - significantly increased our trade
Department of Energy estimates that each $1 billion of trade deficit costs America 27,000
jobs. Oil imports account for almost one-third of the total
U.S. deficit and, hence, are a major contributor to unemployment.
The cost of securing our access to Middle East oil - deploying U.S. forces in the
Persian Gulf, patrolling its water and supplying military assistance to Middle East
countries - is estimated at $50 billion per year, which adds additional dimes to
each gallon of gasoline we purchase
Political instability in the region breeds wars and embroils the U.S. in costly
military actions. The 1990-91 Gulf War broke out as a result of an oil dispute
between Iraq and Kuwait. The cost to the international community reached almost
$80 billion. The cost of the 2003 Iraq war and the following occupation of the country
is estimated at $200 billion.
To ensure access to the oil that fuels our economy, the U.S. is forced to maintain
continuous presence in the Middle East. This presence has been a rallying cry for
anti-Americanism and Islamic fundamentalism.
According to the National Defense Council Foundation, the economic penalties of America's
oil dependence total $297.2 to $304.9 billion annually. If reflected at the gasoline
pump, these “hidden costs” would raise the price of a gallon of gasoline to over $5.28.
A fill-up would be over $105.
Fatwas (religious rulings) issued by Al-Qaeda in 1996 ("Declaration of War against
the Americans Occupying the Land of the Two Holy Places" and in 1998 ("Declaration
of the World Islamic Front for Jihad against the Jews and the Crusaders")
emphasized the presence of U.S. soldiers in Saudi Arabia, the home of Islam's
two holiest places. It was claimed that this was the greatest transgression
against Muslims and that U.S. support of local regimes was unacceptable. Hence,
the September 11 attacks were motivated by Al-Qaeda's desire to drive the "infidel
armies" out of the oil-rich Persian Gulf.
The total dollar value of the attacks is rather difficult to quantify but it
is certainly very high, surely in the range of hundreds of billions of dollars.
|"I swear by God, […] neither America nor the people who live in it will dream of security before […] all the infidel armies leave the land of Muhammad."
World competition for dwindling oil reserves will force the U.S. to increase its
footprint in the region while oil generated wealth would continue to provide
extremists the capital to market and implement their ideas worldwide. The
unavoidable result is even more terrorism and instability. So when it comes
down to the question of whether we can actually afford to shift away from
petroleum-based energy system one should remember that the combined impact
of wars, terrorism and environmental degradation is likely to send the price of
oil right through the ceiling over the next two decades. Alternatively, the cost
of emerging technologies is likely to decrease over time, as mass production and
commercialization takes place.
Furthermore, if history is our guide, we can see that every industrial and
technological revolution in history inspired an economic boom. Building an
infrastructure for next-generation energies would generate millions of jobs
around the world, and revolutionize the automobile industry as well as other
Researching, developing, and introducing new transportation technologies that
are cleaner, safer, and less economically destructive should, therefore, be our
top national security and economic priority.
More information on the cost of gasoline:
National Defense Council Foundation report: the hidden cost of imported oil
Milton R. Copulos testimony in front of the Senate Committee on Foreign Relations on the hidden cost of oil
Center for Technology Assessment (CTA): The Real Price Of Gas
Oil Imports: An Overview and Update
of Economic and Security Effects
Costs of Oil Dependence: A 2005 Update (prepared by Oak Ridge National Laboratory)
Costs of Oil Dependence: A 2000 Update
(prepared by Oak Ridge National Laboratory)