The Real Culprit Behind BP's Oil Spill

America's unstoppable dependence on oil.

 

Coastal animals covered in oily filth have given us a visceral sense of what the BP oil disaster means for our natural environment. The more disturbing news is that this oil spill represents a drop in the bucket--a small fraction of the petroleum that enters the world's oceans every year.

A NASA estimate found that roughly 6 million tons of petroleum products enter the world's oceans every year, or 0.25% of total world oil production. Water sewage treatment plants, for example, spew far more oil into the oceans than tanker spills in most years. Even leaving aside truly catastrophic spills like Deepwater Horizon and Exxon Valdez, estimates of average annual spills from rigs and tankers range as high as 250 millions gallons per year. These spills tend to attract far less attention. We don't see haunting photographs of oil-stained dragonfly's wings when a Nigerian tanker explodes. But irreplaceable forms of life are endangered all the same.

Armed with righteous indignation, a large and growing number of Americans are demanding that we end our reliance on oil and build a new energy economy in its place. The problem is that the American middle class can't afford sudden and abrupt change.

This past year the U.S. Department of Commerce published a fascinating report for the White House Task Force on the Middle Class. To provide a more vivid illustration of the choices facing middle-class families, the report's authors present three two-parent, two-child families at three different income levels: $80,600 for the median family, $122,800 for the family at the 75th percentile and $50,800 for the family at the 25th percentile. For all three families the cost of owning and maintaining an automobile is staggeringly high. The 75th percentile family spends $15,400 a year on two large sedans or SUVs at a purchase price of $30,000 and drives them a total of 25,000 miles a year. If this sounds profligate, consider that mobility enables a family like this to earn as much as it does: Both parents commute and work long hours, both make trips to the grocery store to stock up on prepackaged meals. The family winds up devoting far more resources to mobility than to medical care, college savings or retirement savings.

The median family is hit even harder by car ownership. Though this family purchases less expensive vehicles, it has to drive just as much. The $12,400 it spends on mobility matches what it has to pay in taxes. And for the family at the 25th percentile, which still has to drive 25,000 miles a year, the cost of mobility dwarfs the amount of taxes owed: $7,900 for two small used sedans against $6,000 in taxes. Consider what happens when you ask these two families to pay a much higher gasoline tax. Or what happens when you offer a tax credit to buy a new fuel-efficient hybrid vehicle. Given how little these families are able to save in an average year, there is no asset cushion that would allow you to buy your way out of oil dependence. The Commerce report sheds light on the angst and anxiety caused by spikes in the price of gasoline, and why efforts by congressional Democrats to pass cap-and-trade have met such ferocious resistance.

It also tells us why environmental outrage tends to dissipate after the networks stop showing footage of baby pelicans weighed down by thick globs of oil. Think of how a working parent at the median income or at the 25th percentile must feel every time she sees the price at the pump, and how it determines how much she can save for her child's college education or for her own retirement. Once a symbol of freedom and independence, the automobile is increasingly seen as a punishing and inescapable burden. It has an appetite almost as bottomless as that of a child, only it never loves you back.

All hope is not lost. We can reduce our dependence on oil and reduce the danger it poses to our natural environment. The surest route to that end is to make more families--here and around the world--affluent enough to bear the very high transition costs. Because that process will take a very long time, we need to consider a more urgent approach.

Decades of mortgage subsidies pushed homeownership to levels approaching 70%. Though the number of homeowners has declined in the wake of the recent housing bust, millions of Americans are still tethered to homes they can't afford in weak job markets. Rather than increase overall spending, thus pushing up the tax burden on middle class households, we'd do well to shift some of the $200 billion we spend a year on housing subsidies to easing the economic costs of clean mobility.

Lisa Margonelli, author of Oil on the Brain, has crafted a reform proposal designed to reduce oil dependence without overburdening working and middle class families. A broader package could include everything from generous subsidies for transit to loans designed to encourage the purchase of fuel-efficient vehicles, perfectly targeted to meet the needs of households at the 25th and 50th percentiles. This approach is far from perfect. But it may just give us the political capital we need to fight pollution.

By Reihan Salam, who is a policy advisor at e21 and a fellow at the New America Foundation. The co-author of Grand New Party: How Republicans Can Win the Working Class and Save the American Dream, he writes a weekly column for Forbes.

Newscribe : get free news in real time