Written by William F. Pickard   

The Energy Opportunity of a Lifetime:
Tax [gasoline] and Spend [on infrastructure]


If you too are older ‘n’ dirt, then you doubtless are familiar with homesteader ballads like “Starving to Death on my Government Claim” with its unforgettable couplet “I’ve nothing to eat and I’ve nothing to wear. But nothing from nothing is honest and square!” Or maybe you remember nostalgically “Little Old Sod Shanty on My Claim” [ https://www.youtube.com/watch?v=yiftEk3JgX4 ] . Whichever! The bottom line was that the homesteaders had spotted opportunity, had the gumption to seize it, and were hanging on – maybe more from pure cussedness than anything else. Nevertheless, many survived, eventually flourished, and became the leather-tough ancestors of many a proud Red Stater.

Today, over a century later, we have another once in a lifetime opportunity, this one brought to us by American entrepreneurial endeavor and America’s technological advances in hydraulic fracturing (aka “fracking”). The world supply of oil being pumped has risen to a level at which the market price of crude has done a nose dive. And suddenly the oil-using public has received a delightful windfall to support the purchase of stuff they could not previously afford: each dollar drop in the per-gallon price of gasoline at the pump saves the public about 135 billion bucks a year. If the Feds levied a transportation tariff on gasoline of just four bits (50 crummy cents a gallon), the public would still have most of the windfall to raise its standard of living: AND our cash-strapped government would have maybe $80 billion of new money to spend on energy and transportation improvements, each and every year. What’s not to like about this?

Every four years, the American Society of Civil Engineers releases a Report Card for America’s Infrastructure. In 2013 we got a D+. It turns out that, by themselves, “surface transportation” (not including rail) and “electricity” could use $120 billion a year of additional (and presently unbudgeted) capital improvements: and that does not include massive electricity storage, without which our switch from fossil fuels to renewables will be crippled. Obviously, if our switch to renewables is scuppered, then our precious economy is very apt to go down the gurgler with it.

How did we manage to paint ourselves into this corner? That’s easy! We didn’t! A previous generation (aka “ants”), believing contrary to fact that we’d take really good care of the wonderful infrastructure they bequeathed us (aka “grasshoppers”), stuck us with it. And now it’s falling apart! What ever shall we do?

STRATEGY ONE. Do nothing. Muddle along the same as during the last thirty some years. If a bridge prepares to collapse, simply close it. America functioned before it was built, and America can learn to function without it. If a stretch of highway develops a host of potholes, simply lower the speed limit by a factor of two or three and make do. We got by before that stretch was built, and we most certainly can do so again. Prioritize and postpone: Americans are famous for this sort of “can do” spirit.

STRATEGY TWO. Float infrastructure bonds. ¡I beg your pardon! OUR generation used up the infrastructure given us by the previous generation. Shouldn’t we bite the bullet on the repairs rather than burdening our descendents with it. I’m sorry, but I’d hesitate to vote for a congressman who voted for those infrastructure bonds: to do so would leave me feeling like a deadbeat taxpayer.

STRATEGY THREE. Tax ourselves. We all know that the term “tax increase” borders on the politically incorrect. But if we do not tax ourselves today, then future generations will have a far worse crisis to confront; and maybe, just maybe, their economy will go into a death spiral.

Fortunately, the cash flow we need is in the economy right now thanks to the collapse of crude oil prices. And it has not been there so long that we’ve all gotten used to it. This is a chance too good to waste. Our congressmen should be given marching orders: RIGHT NOW! AT ONCE! IMMEDIATELY! Introduce legislation to put an ADDITIONAL 50 CENTS PER GALLON tariff on gasoline, the proceeds to fund ADDITIONAL renewal of our transportation infrastructure and ADDITIONAL research development and demonstration of MASSIVE electricity transmission and storage. We’ll need that transmission and storage when the fossil fuels runs out.

Sure we could put that 50¢ to good use for something else. But with gasoline now a buck-fifty cheaper than just a few months ago, we’re not exactly getting stiffed. It’s a fair split of the windfall: ⅓ for our descendents and ⅔ for us.

The homesteaders who worked so long and so hard to make a better future for their offspring had what America the Beautiful describes as a “patriot dream that sees beyond the years”. And I’m pretty sure that their dream included neither a broken down transportation infrastructure nor an existence in which their descendents were energy starved.



William F. Pickard, older ‘n’ dirt, is a retiree (from Washington University in Saint Louis) who specializes in energy matters. He’s pretty much clueless as to how to how the crises confronting America might be surmounted. But at least he has had the good grace not to stand for public office.