Friday, May 25, 2007

Not that Simple

[posted by Callimachus]

The developed world depends on a single substance that 1. has destructive consequences for the environment, 2. tends to put money in the pockets of some of the world's most unsavory characters, and 3. seems to leave most people too complacent to do anything about 1. and 2.

How to change that? A lot of people want to start with #3, and their answer often is "tax oil." Gas prices are too low, they say. The pain to consumers has to be sharper, so the pressure for change will be the greater. That's a free-market solution, on the one hand, and a government intervention solution on the other, which may explain why I see it promoted in certain quarters on both sides.

I'm willing to bet, too, when people imagine that "consumer" who needs to feel more pain at the pump, they're picturing the dimwitted fatcat's wife driving alone in her SUV.

This is why that's wrong.

In an index released this week, Oil Price Information Service, a source for petroleum pricing, broke down who's paying the most taking into account local gasoline prices and local monthly income.

The biggest losers are drivers living in Clay County, Ky., who shell out 14.78 percent of their monthly income to buy gasoline costing $3.156 a gallon. While the price there is far lower than the retail average in San Juan County, Wash., which is the highest in the country at $3.926 a gallon, Clay County's average monthly income of $1,423.67 is the lowest nationwide, making any increase in gasoline prices much more painful.

For their part, drivers in San Juan County use 6.78 percent of their monthly income on gas.

Rural poverty -- dispersed, inaccessible to public transportation, unable to affort hybrid technologies -- remember that?