According to James Ray, Acting Administrator of the Federal Highway Administration, the current system of deriving money for the upkeep of the nations roadways is "unpredictable and unsustainable." He adds, "Without a doubt, our federal approach to transportation is broken, and no amount of tweaking, adjusting or adding new layers on top will make things better." This view is understandable in the wake of record high gas prices, which are causing consumers to drive less and therefore produce less revenue from the gas tax. Ray has some suggestions to alleviate some of the problem, including paying a fee based on mileage driven, an increase in alternative transportation methods and incentives to drive during off-peak hours.

Hybrids, electric cars and other fuel-saving technology will further cause a dent in the FHA's pocketbook. In any case, Ray does not plan to increase the gas tax. In fact, the gas tax could be dropped completely in favor of a completely new system, one "more agile and responsive than the current gas tax." We'll keep our ears to the ground.

[Source: The Detroit News / Photo: splorp - Licensed under CC 2.0]

As you may have noticed when filling your tank, the plan for a gas tax holiday put forward by presidential candidates from both party brands, never came to fruition. The idea had been suspend an 18¢ per gallon federal tax on fuel from Memorial Day to Labor Day. Of course the fact that this would have saved average drivers a whopping $28 had little if anything to do with the lack of movement on bills from both Democratic Sen. Hillary Clinton and Republican Sen. John McCain. It turns out the real coup de grâce may have come from the road construction industry. The excise tax money which would have meant little to individual drivers, comes out to an aggregate $9 billion. That's money that is supposed to go toward building and maintaining roads around the country. Without that money, road construction projects would have to be put off. Canceled or delay construction projects would mean laid off construction workers, a prospect that no politician hoping to get re-elected relishes in an election year.

Rather than a tax holiday, drivers are in fact likely to see an increase soon. While high fuel prices have the benefit of pushing people to drive less, and consume less fuel, that starves the highway trust fund as well. As a result the fund is likely to be in deficit this year to the tune of $3 billion. As a result a fuel tax increase may be needed.

Looking ahead, we may need to start taxing electric bills to get funds to build roads. Even though electric cars use no petroleum, they still put wear and tear on the roads and it's only far that the drivers who use those roads should pick up the tab. Alternatively increased use of toll roads may be necessary, something proposed by Transportation Secretary Mary Peters.

[Source: Detroit News]

American drivers getting angry when the gas pump automatically shuts off $50-75 into filling their cars might want to stop whining. In Norway, it can cost upwards of $130 to fill the !3.2 gallon tank of a MINI at $9.85/gallon. A new survey indicates that even at above $4/gallon, American prices are still among the cheapest in the world, in large part due to low taxation. Only 19 percent of the pump price of fuel in the US is attributable to taxes. Pretty much the only countries in the world with cheaper gas than the US are major exporters of oil that essentially give gas away. In the UK, more than 81 percent of the current 9$ price of a gallon of fuel goes to taxes.

At the $4.15 that gas runs where I am right now, even eliminating the tax entirely would still bring the price to only about $3.40. Americans who really want to save at the pump are now following the path of drivers elsewhere and just migrating to smaller, more efficient vehicles, driving less and changing their driving styles. Europeans, on the other hand now actually have a reason to complain about high fuel taxes. Truck drivers, fisherman and farmers are all feeling the pain and pushing for some relief. The taxes in Europe made sense from a public policy perspective in the past to encourage efficiency, but with the price of crude so high now, it may be time to back off.

[Source: Detroit News]

Photo by Cyfer13. Licensed under Creative Commons license 2.0.

Before gas prices began soaring skyward, it had often been suggested that an artificial increase to the price of gas could have the effect of forcing consumers to purchase more fuel efficient vehicles and could keep people from making frivolous trips. It's now safe to say those projections were likely true. Now that fuel prices are what they are, more people are choosing hybrids and other fuel efficient models, and some are even choosing two wheels over four. Additionally, Jeff Rubin, chief economist at CIBC World Markets, projects that $7.00 per gallon of gas could potentially remove ten-million vehicles from roadways in the United States alone. What's more, Rubin predicts that by 2012, the average miles driven will drop by as much as fifteen-percent.

Interestingly, Rubin compares U.S. driving habits with those of individuals living in Britain. Statistics show that ninety-percent of American drivers commute every day to work in an automobile, while only sixty-percent of British workers do the same. Fuel prices in America, though rising, have yet to match those that many European countries have seen for years.

[Source: The Detroit Free Press]

Nobody likes taxes. Nobody likes high fuel prices. Combine the two and what do you get? Even higher fuel prices, which nobody likes. This might all seem rather obvious, but it is still relevant considering that there are movements to place higher taxes on gas for a variety of reasons. While many agree that drastic measures may need to be taken in order to wean the American people off of foreign oil, questions remain on just how to do that. Biofuels are an option, but there are significant drawbacks there; electric cars are a popular choice, but scanning the local paper reveals a dearth of current choices in the EV arena.

Consumers have shown that they are concerned about global warming, yet when polled (.pdf link) by the National Center for Public Policy Research, 48 percent of respondents said that there were unwilling to pay any extra at all in gas taxes. The numbers dropped even more when those same respondents were told that their efforts were largely in vain. Duh. We've posted a video after the break from Fox News about this poll, as well as the NCPPR press release.

Bush rarely takes questions and even when he does, it's never about green transportation. Unbelievably, on Monday, Bush was asked about the impact of fuel efficiency on the gas tax and the impact of ethanol on feed costs. Bush admits we have to move away from the gas tax because of higher fuel efficiency and he seemed to support any new user fee. Here is the full quote of the fuel efficiency question and the answer:

"Q I have a transportation question for you -- Raymond Burns with the Rogers-Lowell Chamber. For business to continue to grow in Northwest Arkansas we're going to have to help with our transportation infrastructure. (Applause.) Apparently, that's our number-one issue. Given that we collect taxes on gasoline by the gallon, and fuel efficiency means there will be less taxes collected, going forward, what will the priority for transportation help be, sir?

THE PRESIDENT: The -- step one, in order to make sure that that which we collect gets spent equitably, is to make sure that the committees in the House and Senate that appropriate the monies don't take a lot of the money as special projects. In other words, what happens is, is that the Public Works Committee is the largest committee in the House -- are you on Public Works, Boozeman? Yes. (Laughter.) It sounds like I better be diplomatic in the answer. (Laughter.) So what happens is these members say, okay, I want this for my district, I want this for my district, I want this for my district, so they get a unanimous vote out of the committee -- was it unanimous last time? Yes, that's what I thought.

And then so the money isn't equitably distributed. So step one is to make sure that the committees do their jobs the right way. Step two is to give states flexibility so that if they so choose -- which I think exists today -- that if you decide to have a highway for truckers paid for by fees, that you're encouraged to do so.

I mean, you're right, fuel efficiency is going to make it harder to collect gasoline taxes. Therefore, the next question is, what's the next best user fee. Gasoline tax is a user fee. Is there a better way to collect money, a better user fee system? And one thing I think is that if you've got a freeway, you ought to be able to parallel that freeway with a way to collect user fees, a toll way, and so people have a choice. You know, a trucker, if he's interested in moving through Northwest Arkansas in expedition [sic] fashion will pay a little extra money to be able to do so.

My attitude is, so long as the taxpayer has got a free alternative, I don't see why it makes -- why it's a problem to have the paying option available as a way to collect user fees to modernize the highway system. And so that's an idea for you right there."

Go below the fold to see Bush's response on ethanol.

[Source: The White House]

A lot of people hate taxes. If asked, would you rather have death or taxes, some people might need a few moments to consider the question. How much of a tax are we talking about, some people might need to ask before answering the question.

A hatred of taxes explains why you often hear people say global warming is real, and taxes are the right solution but don't raise my taxes. There is a 50 cent gas tax bill in the works now, and - I have to admit - I started thinking whether that 90 percent certainty (that humans are causing global warming) that the IPCC is talking about really isn't all that definitive. So, I thought, why not seriously consider some alternatives to the gas tax? Here are two of my favorites;

• Only tax when gas prices are low. A minimum price for gas would allow energy technologies that don't make sense when competing with low gas prices to develop. It would go a long way to answering critics that say gas prices are illegally manipulated anyway. Some states already have minimum prices for ethanol. I think gas deserves that kind of treatment.
• Tax gas but then give it back. Tax gas as much as you like but make the amount tax deductible. The plans vary but the gas tax could also be equal to a cut in payroll taxes, which could use some cutting. No one could complain about a gas tax then because it's not really a tax, it's more of a gas loan. The gas tax rebate has had problems because there really are no "lock boxes" in government for any taxes, and personally, I think I might drive more if I knew it meant lower taxes.

What's your favorite solution to the making gas taxes a little more palatable to a nation that started a revolution over taxes? I actually first heard about the gas tax rebate from a comment at AutoblogGreen. I would really like to hear your comments on this article. Below the fold is a video of David Brooks of the New York Times on the potential of a gas tax. David says no "living politician" would risk supporting it.

[Source: Times Herald]

Where does the state government get the money to maintain roads? Gas taxes. What if your car does not use gas? How is the state suppose to know if an electric car is using the road? Some states are planning on requiring GPS units in cars, tracking the distances you travel, then tax you for every mile you drive. Oregon just finished testing a year-long "virtual tollway" and will probably be the first state to have a GPS car tracking system working. Oregon's FAQ for the program explains why state-mandated GPS in cars is all the Prius' fault:

• "Fuel efficiency of Oregon's automobile fleet has eroded fuel tax revenues over the past 30 years. Further improvement of automobile fuel efficiency, particularly with the adoption of the hybrid electric vehicle engine, will have an even more dramatic effect on fuel tax revenues in the not-too-distant future."

You might say, why not just increase gas taxes? The legislature does not want to and Oregon says that at the heart of the matter, it's really a fairness issue. If electric cars "use the roads, you ought to pay for them." Wait a minute, you might say, isn't this the same State that gave perks for everyone to get hybrids and full electric cars? Now, they are going after us with a this tax? Basically... yes. I will let them explain:

• "From the transportation revenue perspective, fuel-efficient vehicles produce less fuel tax revenue because they consume less gasoline. While it is good policy to preserve our environment and our resources, it is not good policy to let transportation revenues decline so that the transportation system cannot be properly maintained or modernized. This may sound like a policy contradiction, but it need not be."

What about our privacy? The FAQ says "a GPS device only knows where it is; no one else does." LOL! Yeah, I believe that one. Why not just use a state odometer? An odometer won't work because it does not know when you drive out of the sate where they can't tax you legally. GPS is the only solution. Thanks, Treehuggers for buying all those fuel-efficient cars (he said sarcastically). Way to help the state invade everyone's privacy and usher in Orwellian tracking of cars.

[Source: USA Today, Oregon DOT]

As many people are aware, gasoline is taxed in an effort to pay for the nations roadways. Here in the U.S., we enjoy the freedom of being able to travel from one end of the country to the other with relative ease, and the system of highways and roadways that makes it possible obviously costs money. It seems that there are certain people who want to use the roadways without being required to support them, however, and for these people laws exist as a punishment for evading gas taxes.

Recently, a problem has been cropping up: alternative fuel users are being lumped into the same category as those who are willfully attempting to evade the gas tax. This is an understandable problem, of course. States want to get the money that they require to repair and maintain the roadways, and by using vegetable oil or waste vegetable oil instead of petroleum based diesel fuel, the tax-man is not getting his due. The question being posed in this article, as I see it, is this: should alternative fuel users be penalized or fined for not realizing they are breaking the law?

One one hand, ignorance is not a valid excuse for breaking the law. On the other hand, in a society where states themselves are encouraging alternative fuels and the president himself is advocating their use, should it be a punishable offense to use those fuels?

[Source: The Charlotte Observer]

After running their radio and print ads for the last few weeks, and creating a few websites all designed to sway consumer opinion away from higher government-mandated fuel economy requirements, The Auto Alliance is back with similar tactics, according to the Union of Concerned Scientists. The problem, as UCS sees it, is that the ads are only focusing on the surcharges that gas-guzzling vehicles would receive while leaving out the vital information that the other 65 percent of vehicles would qualify for a rebate or fall between the rebate and the surcharge - effectively zero-ing out. The Alliance has also created a California-specific webiste: wedrivecalifornia.com.

According to Charles Territo, a spokesman for the Alliance, "We fundamentally think that these car taxes are unfair to large families, small businesses, working people, farmers, contractors and anyone else who needs a larger vehicle." Read more to his argument here.

We've got the more of the statement from the Union of Concerned Scientists after the break.

Related:

• GM, Chrysler and The Auto Alliance create websites to sway consumers to contact Congress
• Automakers create radio and print ads in an attempt to stall fuel economy regulations

[Source: Union of Concerned Scientists]

While I was reading this column, I almost thought I was perusing my latest copy of Car and Driver. Then, I realized that the writing was not as good, and the attempts at humor less successful. But, anyway, John McCormick did cover some of the points that Patrick Bedard consistently seems to touch on in his monthly column. Namely that global warming is either fake or that man's contribution to greenhouse gases is insubstantial.

One thing that McCormick wrote did make me think, though. Is it really fair to "double tax" certain automobiles based on both their gasoline consumption and their CO2 output? I'll go out on a limb and say yes. Why? Because the two items are different. Gasoline consumption is closely tied with a vehicle's emissions, but they are certainly two different measurables of a vehicle's impact on the environment.

Walking further out on that limb, let me suggest that the gas-guzzler tax and the so called Clean Air Discount Bill which McCormick's article is about (not a law - just a proposal at this time) should probably not be as high as they currently are. A higher gas tax across the board would have greater effect, and isn't that the point of both laws in the first place? With a gas tax, all vehicles are treated exactly the same, which seems to make more sense.

As always, we welcome your comments and suggestions. Remember, if you want to have some influence yourself, you can always contact Congress as was suggested by the Auto Alliance themselves.

[Source: John McCormick / Detroit News]

From this article, "U.S. Transportation Secretary Mary Peters says that the federal highway trust fund will lack sufficient funding from taxes beginning in 2009. She has been pressing states to look for alternatives to gasoline taxes. 'The bottom line is that we are spending more than we take in, and we have nearly run through the balances that had built up in the fund,' Ms. Peters told Congress in February. 'The highway funding problem is not going to go away, nor can we put it off until the last minute.' The highway-fund shortage could be exacerbated if Congress raises fuel-economy standards to curb pollution and reduce reliance on foreign oil. Cars with higher fuel economy can travel longer without refueling."

Basically, what is happening is that states are trying to figure out a way to make more money in an effort to keep up their existing roads and to continue to expand on what is already there. The worry is that as cars get more fuel efficient, less money will come in from the gas tax. One potential solution that Oregon and other states are considering is to track the amount of miles a vehicle is driven and tax the vehicle on those miles, not on the amount of gasoline used to refill the tank. While that seems to make a certain amount of sense, opponents to this plan are concerned that consumers will be less inclined to purchase fuel efficient vehicles if it costs less to fill them up, as it would if the gas tax were dropped altogether, as it would under the mileage-based option. Perhaps instead, we should raise the gas tax? Any takers on this one? Here is one! And below you'll find a post with some other ideas about the highway system in America.

Related:

• Earth Day thoughts: is the US highway system "the silliest thing that any people ever did to themselves"

[Source: The Wall Street Journal]

You remember when we let you in on the news that for 2008 the EPA was revising their testing procedures to more accurately reflect the type of gas mileage that consumers are likely to get on their own, right? This change leads the numbers that a car is pegged with by the EPA to go down, which is probably a good thing, as the new numbers are most likely more accurate. And, now for the interesting part. I'm sure that you are also familiar with the so called "gas guzzler" status that many cars are assigned when their numbers fall too low. This has been in effect since 1991, and the way in which the numbers are calculated is not being changed. What does that mean? It means that some vehicles will qualify as "gas guzzlers" which did not previously qualify, according to this article. That article also gives a few examples, which I will relay here. The 6 Speed Nissan 350Z, previously not a "gas guzzler", is now, to the tune of a $1,300 charge. The Corvette Z06, already a "gas guzzler" fares even worse, as it's fine jumps from $1,300 under the old estimates to $2,100 under the new revised estimates. Note that the charges are assigned to the manufacturer of the car, which, in many cases passes that charge down to the consumer. Check the window sticker of your new 2008 vehicle to be sure what, if anything, you are being charged.

Interested in reading more? Here is a rundown of the EPA testing procedures. One might have assumed that the "gas guzzler" tax had been revised when the mileage estimates were revised, but one might have also been wrong. Why should they be, you might ask... well, the mileage of any given vehicle is not actually changing, only the way the EPA calculates it. So, the vehicle in question has not actually changed at all. So, there are two ways to look at this. One, the "gas guzzler" tax should go up, because we want to accurately reflect what is happening in the real world. Or, two, it is unfair to the manufacturers of the car who are being forced to hit a "moving target" after all of the engineering for the vehicle has already been done. Proof that manufacturers care can be found if you remember the infamous "skip shift" of the 90's 6 speed GM performance cars such as the Camaro and Firebird.

Feel free to read over the material on the EPA's site, and see if you are able to discern something different than what is being questioned here. Also, feel free to check the list of vehicles that have been assigned the "gas guzzler" tax, and note that there are no trucks, SUVs or vans, which do not qualify for the taxes of passenger cars.

Related:

• EPA does something about unrealistic mileage figures for new autos

[Source: Dubspeed Driven]

The leaders of the three US based automakers along with the CEO of Toyota's North American operations and the president of the United Auto Workers union faced off in an occasionally contentious hearing with a House Energy and Commerce subcommittee. The auto industry leaders acknowledged that fossil fuel consumption definitely needs to be reduced. The five also agreed to support regulation of tailpipe emissions of greenhouse gases. The fundamental disagreement is over the means to achieve these ends.

As might be expected, the car-makers don't want the entire burden put on them by simply jacking up the fuel economy standards. Realistically, any new regulations should also address the issue of boosting demand for more efficient vehicles. Therein lies the rub. The two means to achieve that would be tax credits for purchasing more efficient vehicles, or increased taxes on petroleum fuels. The former would be very complicated to implement and easily gamed, to make it ineffective. With Democrats currently in control of congress, the latter is also problematic, because any such move will surely be used beat up on them in the 2008 elections, and no politician wants to be seen as raising taxes, no matter how necessary it may be.

The biggest problem is that politicians like to try and find what appear to be simple solutions to complex problems. The most positive thing that came out of the hearing for the auto industry representatives was that Rep. Rick Boucher, D-Va acknowledged that new regulations would not likely be in place by July of this year. Both sides agreed that a much faster path to at least reducing foreign oil consumption, is dramatically increasing the availability of alternative fuels like ethanol. A lot of flex-fuel vehicles are already being sold, but few ever get anything but gasoline in the tanks due to the difficulty of finding E85. Hopefully, both sides were listening yesterday and will come to a more comprehensive plan to address the issues that we face.

[Source: Detroit News]

Shortly after the University of Michigan released a report indicating that auto executives believe gas prices and CAFE standards will increase dramatically in the next decade, Rick Wagoner said, "With the price of oil at its lowest level in 19 months, we run the risk of reverting back to our traditional energy policy, that is, relying heavily on the lowest-cost energy available on world markets, including imported oil, without providing adequate support for developing alternative sources.

"One of the things that government has to do to really promote energy diversity is proactively support the development of alternative fuel technology, And incentivize consumers through tax credits, fuel subsidies and so on to adopt these exciting new technologies."

Wagoner and GM have been focusing a good deal of research and development towards alternative energy vehicles in the past few years. This is evident by the release of the Chevy Volt, which was preceded by their hydrogen fuel cell platforms and the EV1 electric car programs, and even as far back as the 70's hydrogen tests. Also, don't forget their plug-in plans for the Saturn Vue hybrid. Additionally, GM has been producing E85 capable vehicles for a few years now, and last year advertised them heavily.

Although Wagoner believes that the government could and should help out, he fell short of suggesting that the federal gas tax be enlarged, as did Tim Leuliette, chairman and CEO of Metaldyne Corp. as mentioned today in a different post. These are certainly hot-button topics to many, and if you have an opinion you would like to share,
feel free to do so in our comments.

Related:

• Detroit automakers issue joint statement on their meeting with President Bush
• Detroit Auto Show: Will the Volt generate new EPA regulations and ratings?
• GM wants production to respond to gas prices

[Source: Detroit News]

(Whoops. Edited to correct name)