Printer-friendly format

Lay of the Land

The Hidden Cost of Gas

Gasoline is cheap–or at least it appears to be. The average U.S. pump price at the time of this writing was $1.15, lower than it’s been in decades. One reason is that the real cost of gas is paid not at the pump but in your taxes, medical bills, insurance premiums, hours wasted in traffic jams, and the loss of open space. In 1998, the International Center for Technology Assessment tried to tally the hidden tolls, which ranged from outright government subsidies to oil companies (like the Percentage Depletion Allowance that lets them write off $784 million to $1 billion a year for oil they’ve already pumped) to providing military protection in the Middle East ($55 billion to $96 billion per year). Other effects are harder to quantify, like the social price of noise pollution, sprawl, and increased mortality through air and water pollution. Depending on the way the Center reckoned these factors, it came up with total external costs between $559 billion and $1.69 trillion a year. Using the higher figures, here’s how it might add up per gallon:

Tax subsidies, new roads, pollution cleanup: $1.01