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Tuesday, July 02, 2019

How Do You Pay for the Green New Deal: Cost of Fuel

I did some back of the envelope estimates of the cost of the fossil fuels we use in a year.  
The source of these figures is the USA DOE Energy Information Agency

But any mistakes in arithmetic are my own.


7.5 billion barrels of petroleum products consumed in USA in 2018
average price $69.78 per barrel
Cost of petroleum products:  $523,350,000,000

In 2017, the United States consumed about 27.11 trillion cubic feet (Tcf) of natural gas
average of $4.08 per thousand cubic feet
Cost of natural gas:  $110,608,800,000

EIA expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst)
$39.09 per short ton (2017 price) 
Cost of coal:  $27,011,190,000

Total:  $660,969,990,000

We spend nearly $661 billion per year or something like that on fuel alone every year.
And these are only ballpark numbers, probably on the low side.

With the 2018 USA GDP at $20.50 trillion, the cost of fuel is approximately 3.22% of annual GDP


Another "cost" of fuel is covered in the International Monetary Fund's recent report on fossil fuel subsidies, covering 191 countries:

They look at the difference between the market price and "how much consumers would pay if prices fully reflected supply costs plus the taxes needed to reflect environmental costs and revenue requirements."

Global fuel subsidies were $4.7 trillion (6.3% of global GDP) in 2015 and were projected to be $5.2 trillion (6.5% of GDP) in 2017
China subsidizes the most with $1.4 trillion per year
$649 billion in 2015 for the USA, 3.6% of GDP
Russia at $551 billion
EU at $289 billion
India at $209 billion

"Efficient fossil fuel pricing in 2015 would have lowered global carbon emissions by 28% and fossil fuel air pollution deaths by 46%, and increased government revenue by 3.8 % of GDP."

Subsidies consist of underpricing for local air pollution, the largest source (48% in 2015), 
global warming at 24% 
broader environmental costs of road fuels at 15% 
undercharging for general consumption taxes 7% 
supply costs 7%

Coal and petroleum get 85% of the global subsidies monies. 
Coal receives 44% of subsidy monies
petroleum 41%
natural gas 10%
electricity 4%

"If fuel prices had been set at fully efficient levels in 2015, estimated global CO2 emissions would have been 28% lower, fossil fuel air pollution deaths 46% lower, tax revenues higher by 3.8% of global GDP, and net economic benefits (environmental benefits less economic costs) would have amounted to 1.7% of global GDP."


The USA spends about $661 billion per year on the cost of fuel
and another $649 billion on subsidies for that fuel
That's about $1.2 trillion per year for the full cost accounting of fossil fuels and such fossil foolishness.
That's about 7% of USA GDP

The energy transition, Energiewende, of Germany is estimated to cost 0.5 - 1.2% of GDP per year

How do you pay for the Green New Deal?  You do away with the cost of fuel (and all the subsidies that go along with it).


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