2008 Woodie Awards
Should you pay more for gas?
Professors debate whether low cost of fuel will lead to economic problems
By: Kim Nolan
Issue date: 11/10/05 Section: News
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One solution offered to increase energy efficiency among Americans was to raise the taxes of gasoline to reflect the true social cost. Associate professor Allan MacNeill said with America's current economic system, there is a high cost for low prices.
"What we don't pay for at the pump we pay for in other ways," MacNeill said. "The cost of consuming gas is imposed on society."
MacNeill, along with professor Dan Hellinger and lecturer Tamineh Entessar, led the discussion in the Sunnen Lounge.
MacNeill said pollution, suburban sprawl, insurance costs and global warming are some examples of 'externalities' from gas consumption. He explained that an externality is the spillover of a cost onto other people.
Hellinger opened the discussion with comparisons between 2002 and 2003 retail prices of gas per gallon.
"We are always going to be dependent on imported oil," Hellinger said. "The biggest difference between us and other countries lies in taxation."
According to geologists and geographers, easily obtainable supplies of oil are nearing an end, Hellinger said. The easily extractable oil from the biggest oil fields is almost exhausted.
"The United States' oil reserves can only cover about half of our consumption and we have very little left in terms of low cost fields," Hellinger said.
With Saudi Arabia being the United States' biggest oil suppliers, they have the lowest cost of production. Hellinger said that unconventional oil reserves, also known as hidden oil, are a more expensive process of production. Venezuela is one country that has unconventional oil reserves in the form of tar.
Hellinger attributes the ongoing oil conflict to environmental, cultural and economic factors.
"The environmental conflict is obvious," Hellinger said. "In places like Ecuador and Nigeria, the cultural conflict has to do with indigenous groups fighting to protect their lands."