How Much do we Support Other Countries?

I've often wondered how much of my gasoline expense is going to support other countries, especially ones that don't agree with us or are hostile. I looked up some figures, made some calculations, and came up with this:

$667.03

of my gas money goes to other countries this year. That compares with $72.73 in Federal highway tax, $104.35 in Michigan highway tax, and $83.79 in Michigan sales tax. That's a total of $260.87 in taxes to my own governments, only 39.1% of what I send overseas.

Curious? Concerned? Read on...

Suppose you own a mid-size sedan and drive it a moderate 15,000 miles each year - an average car driven an average distance. According to AAA, 11% of your cost is for fuel. They estimate a national average cost of $8,106 for car ownership and operation in that case, so the cost of gas for a year is $1,581.

Michigan's Attorney General (Republican Mike Cox) has posted a Web page giving the breakdown of the cost of a gallon of gas. It's based on the June 5, 2009 average cost of $2.89 per gallon of self-serve regular. Based on that breakdown, we pay 4.6% in Federal highway tax, 6.6% in State road tax, and 5.3% in state sales tax (which is less than 6% because the state doesn't tax the highway taxes). That's 17% in taxes, $260.87 annually for our average case.

Since the Attorney General's information lists only the wholesale price of gas, we have to dig deeper to find out how much of what we pay goes to the cost of refining crude oil, and how much is for the crude itself. I went to a U.S. Department of Energy page that gives a rough idea of that breakdown. Of the 2008 average retail price (the most recent), 69% was the cost of crude oil ($1,058.96 in our average case), and 7% was refining and profits ($199.51). Of course, that's as volatile as the the cost of crude, so we can use it only to get a general idea of where our money goes.

OK, so how much of our crude oil comes from other countries? According to another Department of Energy table, the U.S. imported 63.0% of its oil (2.9 billion barrels) through the end of August, 2009 (the latest figures available). So of our yearly gasoline payments, $391.93 goes for U.S. crude, and $667.03 goes overseas.

The sources of imported oil are listed by country in an on-line table. Now comes the fun part. I divided the source countries into three groups by their political stance toward the United States:

• Friends (including our two biggest sources, Canada and Mexico):
  1.9 billion barrels imported, 40.8% of an average gallon of gas, costing the average motorist $436.06 yearly;
• Questionables (such as Saudi Arabia, our fourth-largest supplier, which is politically aligned with the U.S. but has a repressive government and holds values very much at odds with ours):
  7.4 million barrels imported, 15.8% of our gallon, adding up to $167.48 yearly; and
• Non-Friends (such as Venezuela, our third-largest source of oil - and the country where I was born! - whose leader Hugo Chavez campaigns actively to discredit and undermine the U.S.):
  sending us 3.0 million barrels, 6.4% of each gallon, costing us $67.50 this year.

Let me emphasize, this categorization of countries is solely mine, based on my news sources. If you'd like details, just ask.

It's of some concern that 22.2% of our gas money to enrich countries that are either questionable friends or outright unfriendly. That amounts to $234.97 we're paying each year in "taxes" that benefit shaky friends and unfriendly governments. And there's not a thing we can do about it.

Except one: reduce our dependence on imported oil.

How?

We can wait for more efficient, non-petroleum-dependent cars to come out. May they come soon - and may they be affordable!

But in the meantime, there are tried-and-true ways for all of us: take public transit, walk, or ride a bike.