and then you don't address the massive subsidies our government makes to keep oil priced as low as possible
If you count all the taxes paid by producers and consumers of oil and refined products, the net flow is to the government not from it, so the "subsidies" are negative. If you don't count that tax revenue the subsidies are still much less per unit of energy than they are most alternatives.
In economics, we price in externalities so that the true costs are known and accounted for in the market place.
By definition an externality isn't accounted for in the market price.
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The military costs are not subsidies or externalities, and would mostly be incurred if we didn't import or even didn't ue any oil. The environmental impact is an externality, but not a subsidy. As for below market leases, that's rather questionable. Below market, implies that the government could give the leases to someone else for more money, but without he demand from the oil companies you wouldn't even have a market in much of these areas. Also there are royalties, and other payments to state and federal governments for this oil, not just the lease payments.
As for "direct tax subsidies", the only thing that approaches that is more rapid depreciation, but that's mainly a time value of money benefit. The cost officially gets recognized sooner, but the costs aren't higher, over time. Yes getting money 5 years from now instead of today, is a real cost to the government, but its a much lower cost than never getting the same money, and shouldn't be counted as if it was the same. |
