Fill 'Er Up: The Hidden Cost of Oil

By Jason Mark, AlterNet. Posted January 26, 2004.

How much did you pay per gallon of gas the last time you filled up your car's tank?

It was probably about $1.75 per gallon, give or take a quarter depending on where you live. In the grand scheme of things, this isn't much -- less, in fact, than you would pay for a gallon of milk.

But the price at the pump is nowhere near the real cost of that oil you put in your car. After you figure in the military expenditures of securing and protecting the petroleum, the cost of lost jobs and misplaced investment capital, and the burden of periodic "oil shocks," the price is much, much higher. According to a recent study by National Defense Council Foundation, the real price of gasoline is somewhere between $5.01 and $5.19 per gallon. That's as much as $93 to fill up a typical gas tank. Our oil addiction is burning a hole in our pockets, and most Americans don't even know it.

One of the most obvious costs of our oil dependence is the price of maintaining a vast military machine capable of keeping the oil flowing cheaply. Defending the oil that comes out of the Persian Gulf alone costs some $42.8 billion a year. This doesn't include military expenditures in oil-rich Colombia, nor the $87 billion in additional costs for the occupation of Iraq.

Then there's the damage to the economy. According to the study, the economy loses some $160 billion every year due, indirectly, to our addiction -- money wasted on unproductive industries and related health care expenses. Periodic oil shocks -- 1973-74, 1978-80, 1991 -- have cost American businesses and consumers another $2.5 trillion. It's almost as if we're paying for the dubious privilege of being ripped off.

The National Defense Council Foundation is a right-of-center think tank, its advisory board packed with people such as Senators Trent Lott and Orrin Hatch. That a proudly conservative group would go through the trouble of calculating the true cost of oil shows that concerns about the United States' oil dependence transcend party lines. It's just common sense: Oil addiction, like any addiction, is dangerous.

Yet the NDCF's numbers, however stunning, still don't give the whole picture. For example, the study didn't include the tax breaks and subsidies given to the oil industry. According to an investigation by Friends of the Earth and Taxpayers for Common Sense, the federal government gives oil corporations at least $4 billion a year in corporate welfare -- money that comes straight from your taxes.

The costs don't stop there. Oil addiction also contributes to human pain and ecological destruction that are beyond any dollar figure.

For how do you measure the value of the species wiped out in the course of oil drilling in sensitive rainforest ecosystems? What price do you place on the irrevocable altering of the earth's climate? How can you calculate the pain of a mother and father whose son and daughter has died in a war fueled by our relentless demand for oil?

There's no price tag big enough to capture the costs of such senseless tragedy. Our oil addiction carries a price that we cannot afford to keep paying.

Jason Mark is the Clean Car Campaigner for the human rights group Global Exchange. He is the co-author, with Kevin Danaher, of Insurrection: Citizen Challenges to Corporate Power [Routledge Press].

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