Billion dollar state budget losses: The cost of fuel efficiency

Coming soon to a bridge near you?

In just 15 years Washington State could experience a $3.8 billion state budget shortfall because of a decline in gas tax revenues due to hybrid and electric vehicle adoption according to a new report. That means $3.8 billion less to pay for highway projects and to maintain infrastructure, and that's just one state.

Many other states, as well as the federal government, could experience similar shortfalls.

So, how will states and the feds make up this revenue? Higher gas taxes? M&S tax on all plug-in vehicles?

At some point, despite their foreign-oil and environmental friendliness, won't plug-in vehicles have to pay their fair share of costs for highways and infrastructure maintenance?

GM increases large SUV production

When will this be a plug-in?

GM is adding an extra shift to increase its large SUV production due to an increase in demand for these vehicles. Unfortunately, the far majority of this demand will not be for the much more fuel efficient hybrid versions of these SUVs.

In a country where the gas-guzzling Ford F-Series has dominated US auto sales for decades, and SUV interest is increasing just a couple of years after $4.00 gas, it's obvious that the small, hybrid and plug-in revolution has a ways to go in America.

Isn't it ironic, however, that only increased gas prices can reverse this trend, yet current gas taxes are insufficient to fund the basic maintenance and support of the roads these vehicles drive upon?

15 percent of Americans support gas tax increase

For most Americans an increased gas tax is a bridge to nowhere

Congress has plans to spend some $500 billion in road, bridge and transit projects. Unfortunately, current gas taxes are insufficient to fund these projects according to Transportation Secretary Ray LaHood. So, he and others have floated around the idea of an increase in gasoline taxes to fund these projects.

Hence, Rasmussen Reports conducted a national telephone survey to determine if there was support for such a tax increase. 15 percent of Americans said yes. Instead of raising the tax, most respondents would prefer that the government cut back on its transportation projects.

Hyundai adds name to gas tax call

One of Hyundai's hybrid concepts

Aside from economic recession, fluctuating gas prices are also contributing to the decline in US auto sales, according to Hyundai's top US executive. Because consumers don't know whether gas prices are going much higher, or possibly much lower, John Krafcik told the AP that many consumers are left feeling paralyzed. Quite simply they are afraid to buy the wrong vehicle.

Thus, Krafcik suggested a flexible gas tax to help stabilize gas prices by putting a bottom on the price of gas.

Americans overwhelmingly against gas tax

22 percent of Americans would buy a hybrid to help the environment

Talk to most auto executives about fuel economy and most of them say the same thing. Without higher gas prices most Americans just don't care. Cupholders are more important. Thus, many of these executives have claimed that without a gas tax, the idea of significantly increasing American fuel economy is a far-fetched idea.

Unfortunately, a new Rasmussen poll has found that 81 percent of Americans are completely opposed to the idea of a gas tax. In fact, only 8 percent of Americans would support a gas tax and the rest are undecided.

The poll also seems to suggest that most Americans will not buy hybrid cars until prices come down much further or gas prices rise significantly.

Will cap and trade increase auto fuel economy?

How much must gas cost to make the Fusion hybrid a big seller?

So, Bill Ford Jr. is now advocating a gas tax. It seems everyone in the auto industry is hyping a gas tax these days. It provides such a perfect excuse for Big 3 inaction on fuel economy. Of course, its hard to argue that Bill and others don't have a bit of a point.

Still, why now? Is it just because the White House has indicated a gas tax isn't even on the table, as it all comes down to cap & trade now?

I'm not really sure, but I have wondered lately how cap & trade would affect gas prices. One article in USAToday recently claimed that by 2015 a cap & trade program would add between .16 cents on the low end to about $2.58 on the high end to the price of a gallon of gas.

Certainly, an additional .16 cents won't accomplish anything. $2.58, on the other hand, would have a pretty big effect. Nonetheless, that's quite a range and a lot of uncertainty.

Obviously, cap & trade is about carbon, but is such a program too open ended if the goal is ending foreign oil dependency?

CAFE loopholes to increase oil dependency? More gas tax proof?

Just make it bigger?

So GM has a problem. New CAFE requirements will require that GM add hybrid technology to its Chevy Tahoe.

Good start, right? The Tahoe hybrid achieves much better fuel economy than the conventional Tahoe, especially in the city. Unfortunately, the added hybrid costs also suck out GM's profit margin, especially at today's gas prices.

Solution: Just make the conventional Tahoe bigger so it applies for a different class of fuel economy regulations and skip the hybrid version reports a scary article by BusinessWeek.

Hmmm. Waste tons of time and money creating complex, loopholed and ineffective legislation that swaps real costs for treasury bills owned by China, or initiate a simple, effective gas tax? And Congress wants to investigate credit swaps?

Cap & Trade versus Carbon Tax

The carbon challenge

I've long been a fan of a gas tax that puts a bottom on gas prices around $3.00, while providing tax credits for the buyers of efficient vehicles, such as hybrid cars. With the IEA now predicting no recovery in oil prices for the next year, gas prices are probably set for a significant pullback after the summer driving season. Eventually, as we claw our way out of this recession, an uptick in gas-guzzler sales might thus be imminent.

The current administration has not been supportive of a gas tax, but it has been very supportive of a CO2 cap and trade program. Yet, many claim that giving Congress control of trillions worth of CO2 waivers could be a dangerous exercise in Congressional pork-barreling. Thus, CNBC is featuring a special Carbon Challenge this week.

Today, CNBC asked which is better: cap & trade versus a carbon tax. Any thoughts?

Cap-and-trade or gas tax: Are we fooling ourselves?

Are both too offensive to Americans?

Oil is trading around $50 per barrel, yet supplies are building and there are oil tankers full of oil with no where to go. If oil prices were driven purely by the fundamentals, oil would probably be about $20 bucks a barrel. And, until the US economy fully kicks back into gear - something that could take longer than Obama's first term - oil prices probably won't increase significantly.

So, will $7500 tax credits on 60,000 Chevy Volts per year really inspire the American populace into greater fuel efficiency, or will 60,000 Volts simply serve as a tool to balance GM's CAFE requirements, enabling the sale of more gas-guzzlers?

Recently, because of Congressional concern and consumer sentiment, President Obama indicated that cap-and-trade could be put on hold. Likewise, Obama has not been a strong proponent of a gas tax. Still, aren't we fooling ourselves if we believe that real change can be achieved without a significant change in energy prices? Of course, aren't we fools to believe that Americans are ready for such change?

Playing tough with Detroit. Is a gas tax next?

Just a "sacrificial lamb"?

Last week I speculated that President Obama's task force would give GM and Chrysler the bailout money without any serious strings. Doing so, I argued, didn't make sense because GM and Chrysler just didn't seem very viable - especially not if the auto run rate in the US is only around 9 million vehicles per year, and much higher fuel requirements are in the mix.

Instead, Rick Wagoner, CEO of GM, is now gone, and the task force stated that neither plan was viable. And they aren't. While getting rid of Wagoner might not change much, some times real change requires a change in management. It just shakes things up. It happens all the time in professional sports.

Ultimately, I think this was the right move. However, if America is to challenge foreign oil dependency, while sustaining a viable auto industry, other moves need to be made. Somehow, everyday Americans need to be made part of this problem and they need to become part of the solution. While ideas like gas taxes are sure to enrage many, such ideas might be the only way forward.

UN to tax oil for green investments

A "Green New Deal"

Adam Steiner, Head of the UN Environmental Program, thinks it time for a green tax on oil to raise money to "revive the economy and protect the environment, according to Reuters. The funds raised, some $750 billion, would be used for "improved energy efficiency for buildings and solar or wind power to create jobs, curb poverty and fight climate change."

Gas tax, cap-and-trade: Can we go green without pain?

Don't energy prices have to increase?

There is no doubt that cheap gas has helped pump up the US economy. Unfortunately, Americans didn't use cheap gas to efficiently and intelligently create wealth, we used it quite inefficiently. American consumerism has devolved into bling, not necessity. Our car, for instance, had to be bigger, faster or shinier than our neighbors as we kept up with the Jones's.

Them days are over says the new sheriff in town.

Still, I've been watching a lot of Treasury Secretary Tim Geithner's testimony explaining that cap-and-trade tax revenue will help Americans deal with the future's higher energy costs via tax deductions and credits, etc..

Perhaps. Seems a little too perfect world for me to believe.

Nevertheless, considering the impact that foreign oil dependency has had on the world the last couple decades, coupled with the threat of global warming, shouldn't consumers have to accept their share of pain at the pump? Can US politicians put all blame for the inefficient consumerist habits of Americans solely on corporations? Or, do we the people also have to accept some responsibility?

Would a VMT tax kill fuel efficiency, EVs?

An electric car killer?

When gas prices surged this summer, demand for hybrid cars was intense. High fuel prices made fuel efficient vehicles a very valuable commodity.

Yet, the future may not be driven by fuel prices, but mileage driven if Transportation Secretary Ray LaHood and many in the White House have their way. Instead of increasing gas taxes to fund the growing gap in infrastructure funds, the future may by a computer chip in your car that enables the government to charge drivers for miles driven.

But couldn't that kill the electric car?

The cost premium between electric cars and conventional vehicles is steep and it will be for at least a decade, maybe decades. Many believe this cost will be significantly recovered via the relative cheapness of electric power versus gasoline. However, won't pushing Americans to drive less - via a VMT tax - lead to less oil demand and cheaper oil prices?

Of course, the same could be said of electric cars. As they are embraced, there will be less demand for fuel and, therefore, cheaper fuel prices. Ironically, however, electricity prices will increase.

Essentially, our entire automobile culture no longer makes economic sense, at many levels, and fixing that problem is going to have a huge effect on American car culture, beyond just new efficient technologies or even fuel prices.

I'm sure glad I live close to a subway line.

Ford CEO favors gas tax

Or at least some kind of consumer responsibility

CNBC's Phil Lebeau interviewed Ford CEO Alan Mulally just a few minutes ago, and one of the topics was a gas tax. Mulally told Lebeau that a gas tax or some kind of consumer participation in energy policy was needed if there is going to be a move to fuel efficiency in the US.

Can Obama survive cheap oil?

God bless oil

There are times when I think the whole green movement is going to accomplish nothing, but lots of lost cash. Why?

Not long ago Brazil announced a major oil find. Such finds, and a number of other factors, have some energy analysts predicting a possible, although short term, glut in the oil market within the next decade. Yet, such gluts can last years.

Today, oil prices fell $4.00 on falling demand and an increase in inventories, and Valero warned that it might actually have to shut down refineries due to lack of demand.

Oil supply is overwhelming demand, and with several months of a severely recessed economy almost a certainty, it's hard not to assume that supply could overwhelm demand for the next few years.

Couple that with potential new oil supplies, such as those in Brazil, or new operations in Libya, for instance, and a serious glut in oil demand could be imminent. The oil market has experienced such cycles in the past. Eventually, that has to mean lower gas prices.

Sure, cheap prices are unsustainable. Yet, how many Americans will continue to support Obama's green, efficient plans for autos if gas is cheap for the next four years?

Without a permanent floor on gas, it seems that Obama's green plans could come back to haunt Obama, and the green movement. Inevitably, cheap gas is not good for America. It's like smoking. It's a cancer upon our society. And, at some point one must ask is gas really cheap?

Forget the trillions we'll spend in Iraq. Today, it costs many billions for the Coast Guard and Military to secure US oil lanes out of the Persian Gulf - even at peace time - yet, those costs have never been included at the pump. Why?

Foreign oil has costs. It's time to accept them. It's time for a new gas tax - a tax the government returns to consumers via tax credits for compliant vehicles.

Democrats full of it regarding fuel economy?

America doesn't need $20,000 hybrids?

I've been reading a lot lately about the various tax incentive programs being created by Congress and states, particularly Michigan, to promote battery research and development.

Are these people on crack?

I'm 100 percent for incentives to push consumers into fuel efficient vehicles, but I think the facts are pretty clear. If gas is cheap, consumers WILL NOT buy these cars in numbers that will cost-effectively justify their production without 100s of billions of tax payer subsidies. Even then, the effort might still fail.

More important, according to a recent study, the costs of greening the auto industry are staggering, especially if you're talking electrification, and pay back will take decades.

Thus, how can almost bankrupt automakers survive by going green? They can't possibly afford to go green. They can't survive today without government help and next year is even supposed to be worse for automakers.

Going green means being put on the government dole, especially if we don't put a serious bottom on fuel prices that rewards fuel efficiency. And the government dole always breeds complacency and inefficiency, it doesn't breed the kind of competition that results in revolutionary innovations.

Today, the US auto industry needs to fight for survival, to question everything, to think further outside of the box than ever before if they are truly going to survive and compete. Otherwise, we might as well just nationalize these companies today.

Democrats, unfortunately, are acting as if just throwing 100s of billions at this problem will solve all the issues that created this mess in the first place (Of course, at least Democrats are trying something other than only drilling for more oil). Ironically, however, the one thing that created this mess, cheap gas, is barely even on the table as a topic.

Ultimately, if you can't address the root of a problem, can you really solve the problem? Is the green movement just turning into a porkfest for armchair liberals to get rich off the government at taxpayer expense?

Big 3 interested in gas tax

Detroit worried about the cost of gas

As the economy sinks and gas prices keep dropping, Big 3 automakers find themselves in a pickle. If sales don't pick up, bankruptcy is inevitable. Even worse, many of their new vehicles are being developed around fuel efficiency, but will consumers want to buy more expensive fuel efficient vehicles if gas prices don't spike? Certainly, gas prices will eventually go back up, but that could take a few years, and US automakers don't have a few years. Thus, there is a push, according to the AP, for a floor on gas prices to ensure that fuel efficient technology is a viable option for automakers as soon as the technology is released.

Ultimately, isn't Congress and its focus on CAFE a joke when it comes to fuel efficiency? Isn't a gas tax the only way forward?

The Volt will kick EV1 ass

Let's get real folks

I've pretty much had it with the EV1, GM killed the electric car, folks.

Did GM kill the electric car? Shut up.

Every automaker is working on an electric car today. No one killed the electric car. Cheap gas, however, delayed the emergence of the electric car.

Did GM screw up the EV1 program? Absolutely, but without much higher gas prices, how many EV1's could GM really have sold, especially if they sold them at real world cost? Honestly, 5 years ago, how many would have paid $40,000+ for a two-seat vehicle with 100 mile range and 6 hour charge requirements?

Certainly, some would have, but the EV1 would never have achieved the economies of scale to achieve profitability. NEVER. And, for GM haters, even Toyota has publicly stated that it could never achieve profitability on NiMH-powered EVs.

Nonetheless, could GM have parlayed the EV1 into 10,000 units a year and lots of positive green press? Yes. But, what would that have really changed? Ultimately, it would have just greenwashed the fact that gas-guzzlers were still GM's bread and butter.

If GM made a big mistake, in my opinion, it was that it didn't convert its EV1 experience into a Prius-like hybrid to help further develop battery technology while addressing fuel economy immediately. Yet, how much would a Prius-like hybrid have really helped GM? After 10 years of Prius production, it is unlikely that Toyota has yet recovered its total Prius investment.

Does that absolve GM's mistakes? Hell no, but let's keep some perspective people.

And, most important, the EV1 DOES NOT prove that NiMH batteries could now be powering the Chevy Volt. The EV1 had 100 miles of range, then required a 6 hour charge. The Chevy Volt, when not powered by grid electricity, uses electricity created by on-board generator. That means the Volt might go 500 miles without stopping, plugging into the grid, etc. Yet, for that entire 500 miles, the Volt will be relying on its battery pack as electricity always powers the Volt.

When did the EV1 ever go 500 miles without multiple charges? That's right, never. Not even close.

Inevitably, the battery requirements of the Volt and the EV1 are vastly different - it's apples to oranges - especially when you're going to offer a 10 year warranty on the battery pack.

Furthermore, as a consumer, if you could buy a 100 mile range EV1 for the same price as a Volt with unlimited range, which would you buy?

Yet, if gas prices are below $3.00, even the Volt won't really help GM much, and full electrification will still be decades away. So, if you want to get angry about the killing of the electric car, get mad at GM's lobbyists. Get made at your Congressperson. And, if you want to get really crazy, tell your representatives in Washington that you want higher gas taxes.

FORTUNE: A gas tax in America's future

Oil is no gas

Gas tax. Gas tax. Gas tax.

No one really likes the idea, yet the call for a gas tax is growing louder.

So far, Barack Obama has been against the idea, but Fortune's Alex Taylor suggests it's one of the critical issues that Obama can seize upon to have the greatest impact on the auto industry of anyone since Henry Ford. Now, that's saying a lot.

Likewise, another Fortune article has Paul Foster, the chairman and CEO of El Paso-based Western Refining, also calling for a new gas tax. In fact, he suggests a gradual increase of up to $2.00.

One might expect gas tax calls from liberal organizations, but when oil men and conservative business magazines start advocating a gas tax, you have to accept that it just might happen.

Gas tax gaining momentum, or at least air

A gas tax now inevitable

A gas tax is an idea that has been floated around this blog many times over the last few years. My gas tax - really an oil tax - was always a way to help fund credits for more fuel efficient vehicles. Likewise, the tax helps drive investment in non-oil fuels and technologies, while also changing consumer behavior.

Lately, the drumbeat behind a new gas tax has been increasing. MotorTrend, the LATimes, and the New York Times, for instance, have each covered the idea in the last few days.

New gas taxes are coming, but they won't be used to provide incentives for hybrid cars and other fuel efficient technologies..

Since gas tax revenue helps fund much transportation infrastructure throughout the US, and US drivers have been driving less, already there is a huge budget shortfall. Even worse, before Americans started driving less, most in Congress believed that current gas taxes were not sufficient, which helps explain America's dilapidated infrastructure. Thus, if Americans continue to drive less, gas taxes are an absolute necessity.

Oddly enough, higher gas taxes will probably lead to even less driving, which will require even greater taxes, while pushing Americans to more fuel efficient, but less profitable, vehicles.

Thus, can US automakers survive such a reality without far more massive cuts than already expected, and without many, many tens of billions more in US aid? Likewise, can America be a real technological leader in the world if we continue to strive for the cheapest gas possible regardless of any other costs?

Bailout Warning: Love affair with the car over?

Time to rethink transportation?

The Brookings Institution has released a fantastic study on the relationship of the car and America that adds an interesting element to the auto bailout.

"America is experiencing its longest and steepest drop in driving, signaling a permanent shift away from reliance on the car to other modes of transportation. In the coming years, this shift will have far reaching implications for transportation, environmental, energy, and land-use planning."

Even before the run up in gas prices in 2007 and 2008, the report finds, American driving habits were starting to plateau. Since, however, American vehicle miles traveled dropped by 90 billion miles. Obviously, higher gas prices helped put a spike in this trend, but cheaper gas has had little effect on reversing this trend thus far.

Thus Brookings warns, for instance, that the current gas tax will be insufficient to manage US transportation needs (although many argue it has been insufficient for years already), which probably means the need for higher gas taxes. Of course, higher taxes would help exacerbate this trend away from the car.

How would this affect the real world run rate of the auto industry?

Higher gas taxes for infrastructure, plus higher costs due to world oil demand, could mean much higher gas prices for the future. Such events could result in an even larger drop in miles traveled and much less demand for new autos. Such a scenario, according to Big 3 testimony, would crush the US auto industry, regardless of any bailout.

Will any bailout for the US auto industry even consider and utilize such findings?

Gas tax: Is Obama smoking something?

The EV1 and the Chevy Volt

I've never thought much of GM killing the electric car. Besides, it was really just a delay. Large automakers survive on economies of scale, and with gas prices what they've been, except for the last couple of years, there was never an incentive for such vehicles, especially if GM had to price them at a break even point, let alone a profitable price.

Recently, as gas prices rose, interest in fuel economy also increased because people could see a financial incentive to invest in more expensive hybrid cars. High gas prices, not the government, justified the higher price of fuel efficient vehicles, as anyone that shopped for a hybrid this summer learned.

Thus, with gas prices skyrocketing downward, it's a bit alarming to learn that President-Elect Barack Obama thinks that a gas tax is a bad idea. Obviously, I don't expect him to outright advocate for a gas tax, it's political suicide, but can the government solve all of America's problems without asking for any help from the people?

I guess I shouldn't be surprised. We're bailing out Wall Street, bailing out homeowners - many of whom were gaming the system from the beginning, bailing out the auto industry, etc., and we're going to upgrade our dilapidated infrastructure, build a $1/2 trillion super grid, add massive solar and wind capabilities, and it won't cost the taxpayer anything.

I guess there is such a thing as a free lunch.

Forget plug-in tax credits

Killing American fuel economy

Ethanol fans can't talk enough about how ethanol has helped America. Yet, when Congress struck a deal in 1988 to promote ethanol, they devised a tax credit scheme enabling 16 mpg gas guzzlers to have a fuel economy rating of 24 mpg. Thus, through the '90s, US automakers couldn't roll out enough gas-guzzling SUVs.

Yeah, that sure has helped America, not!

So, how are plug-in tax credits similar to flex fuel credits? They are not. Yet, I'd bet the first generation of plug-in vehicles are more about meeting new CAFE requirements than they are about killing the conventional vehicle. And, with billions in free money available both in cash handouts and tax credits, why not use that money to roll out enough plug-ins to attain green marketing cred and to help achieve new CAFE requirements?

Money for nothing and CAFE for free?

I say, enough government regulation. Let's make it easy. Increase oil taxes on gasoline, diesel, or any other petroleum products, and let consumers and innovators decide the winners. The flex fuel credit has proven that the government might have good intentions, but seldom do their intentions achieve intended results.

Forget plug-ins without a gas tax?

Insight: More realistic than plug-ins?

When it comes to buying a car, sticker price is the most important issue for most consumers. Unfortunately, hybrid cars and plug-in vehicles cost more, which makes it harder for manufacturers to turn a profit on such vehicles.

Thus, while GM has hung its green PR hat on the Chevy Volt plug-in vehicle, the Volt isn't going to help GM's bottom line for many years.

"In 10 years are they [at GM] going to solve the technological problems with respect to the Volt? Sure," says Maryann Keller, an automotive analyst and author of a book on GM. "But are they going to be able to stake their survival, which is really more of a now to five-year proposition, on it? I'd say they can't. They have to stake their future on Malibus, the Chevy Cruze, and much more conventional technologies."

Add $2.00 gas and how many consumers are really willing to pay a few thousand extra for a hybrid, or several thousand extra for a plug-in hybrid?

Is a mass conversion to plug-in vehicles possible in the next few decades without significantly higher gas prices? Isn't it time to get serious about a new gas tax?

F Congress: Give automakers the money

Or do I mean F America?

Congress is in a tough spot. The majority of Americans don't want Congress to help the US auto industry, despite the fact that all of the Big 3's competitors receive heavy subsidies from their governments.

I understand. For decades the Big 3 built a lot of crap and, even after 9/11, they still didn't react to fuel economy. Profit was more important than national security.

Nonetheless, Congress has to give automakers the money and, we the people, should accept that because we the people are also responsible for the state of the US auto industry. We bought the gas-guzzlers. We demanded that gas stay cheap. We voted for politicians that made gas taxes and increased fuel economy standards dirty word for decades.

I know. None of that justifies the failures of the Big 3, whom helped brainwash the people into gas-guzzling stupidity. And, I know most Americans want the corporate big wigs of America, including those from Detroit, to suffer. Yet, it will be average Americans - all over America - that will suffer most if Detroit goes under. Now is not the time to seek revenge, it's time to turn a wrong into a right.

Fast Money talks gas tax

Time for a floor on energy prices?

Dylan Ratigan, the host of CNBC's Fast Money, and contributor on other CNBC shows, brought up a gas tax twice today on Fast Money. The first time was in an interview with Dow Chemical CEO Andrew Liveris. Liveris claimed that a bottom on energy prices is much needed to maintain investment in alternative energies. And, if a gas tax was the best way to ensure that happening, Liveris would be a supporter.

Then, on Fast Money, the gang started talking about alternative energy investments, and the crew also doesn't believe that alternative energies are a great investment when gas prices are low. The idea of expensive plug-in hybrids, for instance, just doesn't make much sense when gas prices are cheap, Jeff Macke joked.

Is it time for a gas tax?

Can disincentives get the US off oil?

It's the auto, stupid

I'm a fan of the gas tax as a way to move America off oil, an idea which would push most Americans to call me crazy. Of course, I think most Americans are crazy for not taking foreign oil dependency - and their individual role in that dependency - far more seriously.

But, if a gas tax were utilized intelligently, which is a bit of an impossibility in today's Congress and political world, couldn't it be used to create effective change?

Finish: Can disincentives get the US off oil?

SUV drivers burning their gas guzzlers

Shoulda gotta hybrid

CNBC's HomeFront just ran a story about how insurers are seeing a big increase in insurance fraud regarding SUVs. Owners are abandoning and torching their SUVs in an attempt to offload their gas-guzzlers, since SUV value has gone through the floor. I'm sure some politicians will begin using this fact as proof that a gas tax holiday is needed to save SUVs before they go extinct.

If oil is going to $200, how does a gas tax holiday help?

By summer of 2010 oil prices could be $200?

So, let's say America is able to enjoy a gas tax holiday this summer and we all save $30.00 over the summer. Does that mean that big oil will have learned its lessons, and gas prices will slide back down towards $2.00? Will NOCs decide to give America some especially cheap oil, just for America?

If there is a good chance that oil prices are going to $200 (more), aren't gas prices probably going to go up in the future, not down? If so, shouldn't America be coming up with real solutions for the future? Shouldn't America be taking real action today to prepare for the future?

Instead of a gas tax holiday, why not new tax credits for fuel efficiency for the summer? Give consumers credits for buying smaller vehicles, hybrid cars, etc. Couldn't the auto industry use a little help anyway? Wouldn't that be a proactive way to help the economy, rather than promoting ideas that sound great, but cause more problems than we already have?

Economists SLAM gas tax holiday

Too bad he drives an SUV

“Unless the goal is to temporarily boost profits for petroleum refineries and foreign producers, the proposal makes no sense,” stated Len Burman, director of the Tax Policy Center, regarding the gas tax holiday proposed by John McCain and supported by Hillary Clinton.

When it comes to foreign oil dependency, I'm giving all three candidates a vote of no confidence. Has Ron Paul gone Independent yet? I have to vote for somebody.

China gives US smack down on pollution

LA's smog just can't compete with China's

New studies demonstrate that China is now the world's largest polluter, and the worst is yet to come, as the automobile takes over China. Thus, it's no surprise that emerging Chinese automakers are quickly embracing advanced technologies like hybrid cars.

Still, no worries America. All we need is a John McCain gas tax break to bring down gas prices and we can go right back to number 1, baby!

Is McCain insane?

Off his rocker?

So, Hillary will bail out the US auto industry if needed as President, and John McCain wants to reduce the price of gasoline this summer to help oil the economy.

Isn't this the worst kind of pandering? Cheap gas is threatening American security, the economy - dare I say the health of the world - and McCain wants to make gas cheaper? Am I missing something? And what about all the deteriorating highways and bridges across America that need that tax money?

When politicians pander to the people, rather than deal with reality, what hope is there for the future?

Why is gas so cheap in America?

Is $4.00 gas really expensive?

On Friday, regarding a question on fuel economy and CAFE, Bob Lutz stated, "Nobody knows how to get to 35 mpg with a portfolio of vehicles roughly equivalent to today's without loading in $6,000 to $8,000 of hybrid systems. We are not sure we can 'save' large vehicles."

Yet, if gas cost $6.00 or more per gallon, such as in Europe, $6000.00 worth of hybrid technology could easily be recovered in fuel savings. Then again, at $6.00 per gallon, how many would even want such large vehicles?

While Congress can blame automakers for not building 'relevant' vehicles and oil companies for making ridiculous profits, there is a more important question that must be asked of Congress.

Why is gas so cheap in America if it takes so much American diplomacy, military force - and blood - to secure America's foreign oil dependency? That's all free? And if gas hadn't been so cheap, overall, the last few decades, would America be so foreign oil dependent?

Cupholders: Proof America needs a gas tax?

Cup placement more important than foreign oil dependency

Americans might be worried about foreign oil dependency, but they are still more worried about where they will put their morning cup of coffee on their drive to work according to the latest research. Ultimately, Americans are concerned about fuel economy, but not enough to pay anything extra.

Won't it be impossible for America to end foreign oil dependency without some sort of gas tax? Wouldn't a gas tax be a great way to fund tax credits for hybrid cars, including plug-ins and other clean vehicles?

Romney wants to save US auto industry

Not bashing Detroit

After winning the Michigan primary Mitt Romney said he was going to save the US auto industry by "substantially increasing our investment in basic science and research, particularly in energy technology, fuel technology, automotive and material science technologies" (See the video).

Yet it seems the science and technology is largely available, it's making it happen that's key.

Hybrid cars, plug-in hybrids, electric vehicles, clean diesel, cellulosic ethanol, and lightweight materials are here today, it's making these technologies cost effective that's the problem. In order to do that economies of scale are probably the most critical factor. Unfortunately, Mr. Romney doesn't seem to address this issue.

Of course tax subsides and incentives might work, but it seems a gas tax is the easiest path forward, yet not one candidate running for President will touch such an idea with a 1000 foot pole.

My prediction: It doesn't matter one bit who becomes President, foreign oil dependency is tightening its grip around America's neck and the grip is only going to get tighter, much tighter. Too many Americans and EVERY single candidate for President can't handle the truth of artificially low gas pump prices and foreign oil dependency. So get ready to start choking.

Lithium: The secret weapon of the auto industry?

Bob Lutz stands next to the Volt at its debut at NAIAS

"Lithium battery technology is being husbanded in Japan. It's like a secret weapon," GM's Bob Lutz recently told reporters at a meeting of the Western Automotive Journalists association. Thus, many Japanese companies would not bid on the battery contract for the Chevy Volt.

Mr. Lutz also criticized the U.S. government for not being as aggressive as the the Japanese government with advanced batteries. Of course, maybe the government could criticize GM and US automakers for not being as aggressive as Japanese automakers on hybrid cars.

In addition to slamming the government, Lutz also attacked CAFE, calling a gas tax a more sensible approach to reducing fuel consumption. Also, even though Lutz defended ethanol, he did admit that corn-based ethanol has some problems and he stated that cellulosic ethanol was needed.

The economics of hybrids are taxing

Time for European style fuel taxes in America?

Today there is an article in the WSJ regarding The Economics of Hybrids, which starts, "For most U.S. consumers, they're still a money-losing proposition".

A couple years ago, however, some hybrid vehicles, such as the Toyota Prius were a good deal for most Americans. Of course, the difference between then and now is the $3150.00 clean vehicle tax credit, or the lack thereof.

Today, instead of tax credits for OPEC-dependency fighting hybrids, America will spend about $2 trillion fighting wars largely rooted in foreign oil dependency.

Isn't it time to put together a serious action plan for ending foreign oil dependency? Isn't it time to extend Toyota's tax credits? Isn't it time to consider new tax credits, new gas taxes and new visions of the future, such as the hydrogen highway and/or an electric vehicle infrastructure?

Isn't it time to make ending foreign oil dependency a National Cause?

CAFE versus gas taxes, etc.

The choice for 40 percent of car consumers?

"Applying taxes to consumers is an unpopular and unpleasant solution. But dependency on foreign oil and global warming are unpleasant problems. If other consumer-level, demand-driven tools can be devised, so much the better. If not, then taxes on engine power and fuel may be neccesary. But mandating command economy efficiency standards will not address the problem, no matter what Hudson River water-drinking columnists might fantasize," writes Dan Carney this morning on MSNBC regarding the whole Friedman, NRDC attack on Toyota and CAFE.

Will CAFE fix America's oil problems?

At today's level of foreign oil consumption, 35 mpg across the fleet will not end OPEC dependence, especially when foreign oil consumption increases almost every year. And, based upon past legislation, it can be assumed that there will be numerous loopholes in whatever CAFE legislation is ultimately passed.

While CAFE is getting some people hyped up, its not a real solution. It is, at best, a step in the right direction. On the other hand, making consumers responsible for their purchasing decisions utilizing a gas tax that better reflects the real cost of gasoline could have much quicker and much more dramatic effects than CAFE ever will.

So, won't the real activists please stand up?

Oil gone crazy - Will America ever change?

$100.00 before $70.00?

Crude oil hit $84.00 per barrel today because a storm building in the Gulf of Mexico shut down a number of platforms, and if the storm actually develops into a rig-destroying hurricane, $100.00 oil could be just around the corner.

Many, such as Boone Pickens, have suggested that $100.00 oil is coming, but most have predicted that such a level would not be achieved until next year's summer driving season at the earliest. The sudden resurgence of hurricane season, however, has changed everything.

One wonders, how long can America's oil craze continue?

Iraq, 9/11, oil-funded terrorism, oil-funded takeovers of iconic American businesses and financial institutions. What will it take for America to declare war on foreign oil dependency? Will we drive the oil crazy train to economic collapse?

Isn't it time for Congress to reinstate Toyota's clean vehicle tax credits for hybrid cars to reward consumers for taking responsibility and to pressure automakers?

Isn't it time to consider a gas tax? Sure it will hurt, but the longer America waits to take serious action, the more it's going to hurt in the future, and it just might be fatal.

Ford chief suggests gas tax for energy security

Hybrids not enough

"The United States should consider imposing a European-style gasoline tax if it hopes to improve energy security and tackle global warming," the head of Ford Motor Co. said Wednesday according to the AFP.

No chance for a "meaningful energy policy" from Congress?

Wouldn't a gas tax be better than dead soldiers?

"The dance that is going on between automakers, Dingell and other members of Congress is disheartening to anyone looking for a meaningful energy policy that will make the U.S. less dependent on foreign energy sources and for the the U.S. to finally act like a world leader when it comes to energy consumption and pollution generation."

Great quote from an interesting article on the BusinessWeek Autobeat.

Here's another, "Without a sustained communications commitment, most Americans just won’t get the fact that we are already paying huge gas taxes to protect the source of Middle East oil. It’s being sucked out of our taxes already to pay for the War in Iraq and other foreign interventions. That is adding to the deficit, and costing thousands of American lives."

How can a gas tax to fund things like hybrid cars and biofuels be bad when were spending 100's of billions in Iraq and sacrificing 1000's of American lives for what - cheap oil to soothe our gas-guzzling egos?

Gas tax: Why America is doomed

Without real action will the American dream go up in flames?

So, you don't like taxes, which makes you hate the idea of a gas tax. Furthermore, for working class Americans, a gas tax could make life extremely difficult, and it just might push the consumer driven American economy into a recession.

Nonetheless, what happens if an oil crisis irreversibly doubles the price of gasoline and other petroleum-based fuels sometime in the next few years?

Recently, I heard a statistic that America will increase its fuel consumption by at least 50 percent in just the next 20 years. At the same time, the IEA is reporting that an oil supply crunch in the next couple of years is going to make the U.S. significantly more dependent upon OPEC.

Well, isn't that great news!

Iraq is a mess that America is literally on the verge of handing over to Iran and Al Qaeda, as Iran develops nuclear weapons. Nigeria continues to unravel towards full scale civil war and Venezuela wants to partner with Iran to destroy American imperialism.

Yet cheaper oil prices are just around the corner?

Yes a gas tax will hurt, but not as bad as an unexpected foreign oil dependent driven catastrophe. So, let's use gas tax money to help Detroit build revolutionary automobiles, to help consumers buy hybrid vehicles and other clean technologies - in addition to more sensible vehicles. Plus, since a gas tax would be based upon the percent of petroleum content, biofuels would also become more cost effective.

America can choose to be proactive or reactive, but the problems caused by the politics of foreign oil dependency are only going to get worse. Will it be too late before America finally acts?

AutoNation's CEO, Mike Jackson, on fuel economy

Bush, and the last 4 Presidents, have accomplished nothing regarding foreign oil dependency

"We've had five presidents in a row who have said our dependence on imported oil is a matter of national security. Actually, on this issue you can pick whether you're motivated by global warming or national security—it doesn't matter. If you look at the issue and want a serious energy policy that's going to make a difference—because in this period with these five presidents we've gone from importing 30 percent of our oil to 60 percent of our oil—so, obviously we don't have a policy that's dealing with this."

"When it comes to fuel consumption and fuel economy do not listen to what people tell you they are going to do, look at what they actually do. Take model year '06 with all the discussions about fuel economy and everything else, fuel economy for the cars sold will be basically unchanged. It's the same as the last 25 years."

So, what's Mike Jackon's favorite solution? A gas tax.

(Source: BusinessWeek)

Americans already used to $3.00 gas - proof a gas tax could work?

Will $4.00 make any difference?

A new poll suggests that while $3.00 plus gas hurts, most Americans are getting used to it. And, while $3.00 gas is pushing more to consider more fuel efficient vehicles, it's mostly just causing consideration, not action. Will $4.00 be the magic number to force real change? Will we hit $4.00 this summer?

One thing is for certain. At $4.00 per gallon, there is no question about the cost effectiveness of hybrid cars, which makes me wonder, does this prove a gas tax could revolutionize America?

Say gas stays at $3.50 per gallon. Add an extra $.50 tax to fund clean vehicle tax credits for the consumers of hybrids, etc. America could easily generate billions to subsidize the extra costs of hybrid technology, and the fuel savings would essentially negate the tax for wise consumers.

Oh yeah, and the gas tax would increase the cost-effectiveness of bio-fuels - maybe we could move the massive ethanol subsidies to consumers, rather than profit-driven corporations?

Gas gouging and oil profits: An irony of Democratic proportions?

Hillary would like to tax oil company profits

A number of Democrats have loudly attacked Big Oil - probably because many Americans buy into the Republican - Big oil connection, and Americans love cheap gas. Thus, many Democrats have continually raised the issue of gas-gouging and gas-gouging legislation. Yet, the Democratic party is the largest supporter of global warming legislation and action.

Isn't that too ironic?

What if Democrats can make gasoline cheaper through windfall taxes, gouging legislation, etc.? Wouldn't Americans just increase their gasoline consumption, thereby increasing both foreign oil dependency and global warming emissions?

Ultimately and unfortunately, aren't high gas prices a good thing for those whom believe in global warming? Not only can increased gas prices reduce global warming-causing gasoline consumption, but higher prices can make alternative fuels more competitive, while also increasing the cost-effectiveness of clean technologies, such as hybrid cars?

Isn't that a good thing?

Obviously, Republicans didn't achieve any effective legislation towards fighting global warming, or even foreign oil dependency (if you don't believe in global warming) - something which is supposed to be a core Republican value. Sadly, I don't think Democrats can achieve much either if they keep engaging in double-speak.

Politics as usual? Are we, the people, simply incapable of accepting the truth, so we are habitually lied to by politicians whom just tell us what we want to hear? Are the people just too selfish and apathetic to even care about the truth?

Half of America supports a gas tax?

A fuel tax to fund alternative fuel research?

According to a survey released by the Civil Society Institute "more than half of Americans would support higher gasoline taxes if the money went to research into alternative fuels." (CNN)

I say, what a silly study.

While I favor a gasoline tax, I think the revenues derived from the tax should go only to consumers whom purchase hybrid cars, electric cars, plug-in hybrid cars, clean diesel vehicles, etc. Instead of using a gasoline tax to fund research, simply leave alternative fuels exempt from the tax. Thus, alternative fuels become more price competitive.

Giving tax revenue to fund research sounds too much like pork to me. Give it to 'the people', not to the people whom are owed political favors.

Would you support a gas tax to fight foreign oil dependency or global warming?

So, you're worried about foreign oil dependency? Or, maybe you're more concerned about global warming? But, are you REALLY ready to do something about it? Or, maybe you're all talk and no action?

"Raising taxes in the United States, say, ten cents a year until they reach $2, would stop people from driving their Hummers to get a quart of milk. For those who would be economically impacted, the extra money they pay in gas taxes could be returned to them as a tax rebate."

"But any system so simple and so fair hasn't got a prayer of becoming law in the current political climate, where politicians quake at the thought of asking voters to make sacrifices. And without incentives, consumers will continue to choose cupholders over good citizenship."

Alex Taylor, Fortune Magazine

Is a gas tax the best way to fight foreign oil dependency, and global warming?

More gas tax buzz

I was told that a bunch of economists expressed to the Wall Street Journal that a gas tax was probably the best way to increase America's fuel economy. I think the idea is very interesting, however, only if the tax revenue is used only for clean vehicle tax credits for consumers. Thus, those whom buy E85 would only have to pay 15% of the gas tax, but if they drove a flex-fuel hybrid they would also qualify for a tax credit, such as the one in place for hybrid vehicles today.

Jim Cramer calls for gas tax

O.K., I've been talking up the idea of a gas tax for a couple weeks now. Still, I know it's a crazy idea. It's so crazy I was originally against the idea, but I'm starting to feel maybe America needs to get a little crazy, especially at the consumer level. Then, as I'm flipping through TV stations, I catch Jim Cramer on Scarborough Country calling for a gas tax. "If you believe in national security, then we need oil higher not lower," Cramer told the host. Ultimately, Cramer said if natural forces don't take oil prices higher, then a gas tax is the next best path because only higher oil prices are going to force us to change.

Let's do it. I say we tax gasoline, which would make alternative fuels more competitive, and we can use the gas tax revenue to fund hybrid cars and other clean vehicle technologies.

Shell Chairman wants U.S. to decrease gas use by more than 20 percent

Shell's Chairman claimed Bush's proposed 20 percent reduction in U.S. gasoline consumption isn't enough. "Compared to that, Bush's proposal this week to reduce U.S. fuel consumption by a fifth was terribly feeble and a disappointment. Emissions from traffic are clearly less than half of total emissions," the newspaper quoted him as saying according to Reuters.

I'm not quite sure what the emissions statement means considering that the Chairman is not a proponent of mandatory carbon caps. Sounds like Chairman Jorma Ollila is engaging in some doublespeak?

Perhaps the Chairman would help fund a campaign for a gas tax since he cares so much, and he obviously realizes that the current cost of gas in the U.S. does not cover the environmental damage caused by gasoline consumption.

U.S. will need 50 percent more energy by 2030?

I just watched a commercial claiming that the U.S. will need 50 percent more energy by 2030. Now, this commercial was created by the gas and oil industry, so maybe the numbers were inflated a bit; however, what if they were not? Even if the real number is only 25 percent more that's still a huge number.

I think I'm starting to see the Admiral's perspective that a 20 percent drop in U.S. gasoline consumption in the next decade is nearly impossible. It seems he's right, unless we make drastic, revolutionary changes. In reality, as the Admiral stated, the U.S. will be lucky just to maintain current levels of consumption.

Consequently, I'm really starting to believe that a gas tax is absolutely necessary. Again, that's a gas tax whose revenue goes completely into tax credits for the consumers of hybrid cars and other clean energy technologies. The point is, America's energy habits HAVE to change and it will be far better for Americans if we prepare for the change, rather than wait until we have no choice but to change.

Another scary thing. If U.S. energy consumption is going to skyrocket in the next two decades, imagine what consumption in China and India is going to be like.