Energy Costs and Highway Infrastructure
- davidcogd
- Sep 19, 2024
- 2 min read
Our Country has problems with energy costs, inflation, and lack of spending on infrastructure for Highways and Mass Transit.
The U.S. Can Reduce Gas Prices and Accomplish These Goals:
Reduce Oil and Energy Costs.
Dramatic Increase of Infrastructure Funds for Highways and Bridges.
Encourage Reduction in Gasoline Consumption.
Encourage Transition to Electric Vehicles.
Reduce Greenhouse Gas Emissions.
Improve the U.S. Economy and Increase Employment with Exports.
These intersecting issues can be addressed with policy changes proposed in this report.
Here is the policy proposal:
Encourage drilling and exploration of oil and natural gas in the U.S. as was the policy in 2017 – 2020.
Increase the Federal Tax on Gasoline and Diesel Fuel without increasing net cost at the pump. (Possibly decreasing).
These may seem like Conflicting Ideas. You may ask how we can drill more, raise taxes and satisfy the above Goals. Please follow this Report through for the Logic.
First, here is Background on the Current Situation. This will require you to absorb some facts:
Price History of Oil and Gasoline:
In 2017 – 2020, the Average Price of WTI Crude Oil was $ 53 per Barrel.
In 2021 – 2023, the Average Price of WTI Crude Oil was $ 80 per Barrel.
In 2017 – 2020, the Average Price of Regular Gas was $ 2.67 per Gallon.
In 2021 – 2023, the Average Price of Regular Gas was $ 3.72 per Gallon.
An increase of 39% in Regular Gas between the two periods.
Federal Fuel Tax History:
Gasoline at the pump includes a Federal Tax of 18.4 cents per Gallon.
That has not been changed since 1993, over 30 Years !
Diesel Fuel at the pump includes a Federal Tax of 24.4 cents per Gallon.
Total Funds collected from Fuel Taxes in 2023:
Taxes on Gasoline $ 25 Billion
Taxes on Diesel Fuel $ 11 Billion
Total Collected $ 36 Billion
These taxes are a primary source of funding for the Highway Trust Fund, which supports infrastructure projects across the country
Federal Funds Spent on Infrastructure for Highways, Bridges, and Mass Transit
In 2023, the Highway Trust Fund spent approximately $69 billion. This includes:
$45 billion for highways and bridges.
$15 billion for mass transit programs.
Observations:
Revenue for the Highway Trust Fund is profoundly short of infrastructure needs in the U.S.
The fund has required additional support from general government revenue in recent years to remain solvent, approximately $ 100 Billion. That support is also inadequate.
This country needs a massive upgrade of highways, bridges and mass transit. We are not close to the investment made by modern, growing countries.
The cost to our society for this short-sighted policy is hard to compute.
It would seem politicians prefer giving out personal benefits instead of building infrastructure that would create jobs, improve economic efficiency, and create a better quality of life for all citizens.
The next Cogport post will address the details of this proposal and the potential benefits.
David Hollaender September 19, 2024
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