Gas costs much more than pump price
News reports this week are warning that gasoline prices could go as high as $5 a gallon by the summer—a daunting figure, to be sure. But in fact the cost of gas at the pump is only a fraction of its real cost, which the Center for Investigative Reporting estimates to be $15 per gallon, based on a $4-per-gallon at the pump price.
That figure includes the “external” expenses that society pays that are not included in gasoline’s pump price. Those include the health-care bills and lost productivity associated with pollution-triggered illnesses, reduced crop yields, oil-spill cleanups (think Deepwater Horizon) and carbon emissions.
And, because of climate change caused largely by the burning of fossil fuels such as gasoline, those costs are going to rise—and be paid for by our grandchildren.
One expense the CIR report doesn’t include is the cost of maintaining an American defense capacity strong enough to protect the countries that provide us with oil, including those in the Middle East. If those trillions of taxpayer dollars were figured in, the true cost of a gallon of gas would be much higher than $15.
Think about that the next time you feel like grousing about the cost of gas.