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Your myopic focus on the direct subsidies that Tesla receives from the US government blinds you. The price you pay at the pump for gasoline does not capture all
by FullMtlAlcoholc 10y ago
Your myopic focus on the direct subsidies that Tesla receives from the US government blinds you. The price you pay at the pump for gasoline does not capture all the costs. The true price of gas is much higher and camouflaged by myriad direct and indirect costs associated with maintaining our oil economy.
National subsidies to oil, gas and coal producers in the US amount to $20.5 billion annually, with almost all of those subsidies being received in the form of tax or royalty breaks that benefit producers. Many of the largest US national subsidies take the form of tax exemptions for specific production activities and investments. For example, Master Limited Partnerships (MLPs) are a tax-advantaged investment structure with an estimated cost of $3.9 billion per year. Another example is the Deepwater Horizon oil spill. BP claimed a $10 billion tax deduction due to an estimated $32.2 billion in cleanup costs. In 2015, BP reached a final settlement with the US
government and five state governments totalling $20.8 billion. However, only $5.5 billion of this is in the form of a non-tax-deductible penalty, and the remaining $15 billion can be written off by BP.
Also, this shale revolution America had is over as the underlying geology—deeply buried shale rock that contains diffuse hydrocarbons—looms as a more fundamental limit on fracking's future. Recent projections indicate that by decade's end or a few years after, U.S. oil production from fracking will likely flatten out as supplies are depleted. Currently, US shale is less than $1 cheaper than importing it from Nigeria, Mexico, or Venezuela. Foreign oil is cheaper and refineries prefer it after investing heavily in assets to process heavy oil.
And this is without mentioning the 800lb gorilla and the elephant in the room. When foreign oil is cheaper, we become dependent on receiving it from countries that are either politically unstable or at odds with the U.S. subjecting the American economy to occasional supply disruptions, price hikes, and loss of wealth. Then there's the whole climate change thing, the huge costs to deal with that and the global instability it promotes. Arctic sea ice will be almost completely gone in a decade or so, and then America and the world will either be dependent on Russia for oil and gas or competing with them and incurring costs for the eventual military buildup. Russia openly and brazenly interfering with the US election tosses out a chance of cooperation with the newly forming shipping/trading routes and access to oil and gas deposits.
So yeah, this is a fucking bargain in comparison. It's an investment in future security and prosperity. It's a transparent investment as opposed to the opaque pricing of fossil fuels. It is meant to stimulate and hasten the adoption of clean energy vehicles. And as a bonus, it doesn't totally fuck up the environment and destroy biodiversity. Much like SpaceX, it is a model for public/private partnerships. Honestly, in what reality is Elon Musk a robber baron on the scale of Rockefeller? He's not content to take his paypal money and shrewdly invest it. He's investing his own fortune and trying to solve the biggest problems we face as a species through the creation of new technoogies.
It's understandable since it is rare since most people do not take externalities, whether they be positive or negative, into account
- norikki 10y agoI don't want fossil fuel subsidies either! We should focus on killing externalities like you said, especially environmental ones, and stop the abuse of our tax money. If Tesla is to succeed, it must succeed without federal subsidies. The subsidies at best hasten the advent of EV by a few years, and that is not worth the Billions of graft and waste that occurs with these federal grants, loan guarantees and rebates. Especially if it turns out the EV wont happen for another few decades. In that case, all these subsidies are a waste because the underlying battery technology is insufficient. I don't know if Tesla will succeed or fail. If you think it will succeed, then buy their stock. But i don't want to be forced into investing through my tax dollars. That is not the role of government.
- FullMtlAlcoholc 10y ago>But i don't want to be forced into investing through my tax dollars. That is not the role of government. The world is more complicated then that. If those subsidies suddenly disappear, guess what. The US is a unique nation and first with no equals in projecting both its soft and hard power. Like it or not, we are the police securing the global commons which is essential to functional, consistent global trade. If you really don't want to invest your tax dollars and are approaching this from a selfish standpoint., incorporate yourself. Contributing productive activity to society generally exempts you from all number of taxes. If you want to pay no taxes, become extremely wealthy. That's the lesson this country teaches you :) > We should focus on killing externalities like you said, That's nearly impossible. We generally do a piss poor job of capturing the true price of things. Externalities are often times diffuse and not acute. Most externalities exist because of our lack of knwledge about how costs and benefits are shared between individuals, firms, and societies. >stop the abuse of our tax money. I've just come to accept that governments are not hyper-efficient economically and never will be. Our government is a nasty, messy thing at times. Honestly, if everyone's taxes were suddenly lowered in this economic environment, it would cause inflation so there'd be little actual benefit