So I have been thinking about the economics of taxes.

[Massacure]

7,446 Million Barrels of Oil Used Annually.
22 Trillion Cubic Feet of Natural Gas Used Annually.
1,072 Million Short Tons of Coal Used Annually.
3,848 Billion Kilowatt Hours of Electricity Used Annually.

Ton Coal = 21,100,000 BTU x 1072 = 22,619,200,000,000,000 BTU of Coal Annually
Barrel Crude = 5,800,000 BTU x 7,446,000,000 = 43,816,800,000,000,000 BTU of Crude Annually
Cubic Foot = 1,021 BTU x 22 trillion = 22,462,000,000,000,000 BTU of Gas Annually
Kilowatt Hour = 3,413 BTU x 3848 = 13,133,224,000,000,000 BTU of Electricity Annually

Total
102,031,224,000,000,000 BTU Used Annually.
102,031,224,000,000 Thousand BTU (MBTU) Annually Used.


3 Trillion Dollars / Amount of MBTU = 2.94 Cents per BTU of energy.

21,100 MBTU x $0.0294 = $620.34 per Ton of Coal.
5,800 MBTU x $0.0294 = $170.52 per Barrel of Oil.
1.021 MBTU x $0.0294 = $0.03 per Cubic Foot of Gas.
3.413 MBTU x $0.0294 = $0.10 per KWH.

When I think about this, I think that it is both creative and political suicide.

What do you guys think of the economics of this?

Edit: Oh, and here are my sources:
http://www.eia.doe.gov/emeu/cabs/usa.html
http://www.uwsp.edu/cnr/wcee/keep/Mod1/Whatis/energyresourcetables.htm


Edit Again : Ahhh, my math's wrong. Gimme a few minutes to fix it!!!

Math is fixed now!

[EVDebs]

1. Don't worry about the math, there's only about 35 years oil/natgas left

according to www.fromthewilderness.com and www.oilempire.us (scroll halfway down to 'peak oil' segment).

I've heard it said that for every dollar increase in the price of oil per barrel, it is equivalent to the loss of $6 billion in GDP. Consider that the 'oil tax' you are looking for.

[Massacure]

2. That is with income tax though, isn't it?

There is no messy income tax with my system.

OH, and I fixed the math.

[Terry in Austin]

6. 35 years is optimistic

I've seen this figure before, and it appears to be based on an extrapolation at current usage rates. This is not very useful, as consumption historically has increased about 2% per year, and more recently closer to 2.5%.

I've posted a summary of this elsewhere; the bottom line is that using the more realistic consumption figure, the theoretical exhaustion point comes in 2027.

Much sooner, though, we'll be having to deal with the effects of expensive oil on a civilization that is premised on cheap oil.

[happyslug]

3. Errors Conceptional not mathematical

First Electricity is an energy use NOT a source, it is produced by burning gas, oil, Coal AND Nuclear, Solar, wind, Hydro, and other sources. Thus you are adding its source twice, first as the coal itself than as electrical power.

Second you are ignoring Nuclear, Solar, Wind, Hydro power IF YOUR POINT IS ENERGY. If your point is CARBON BASED ENERGY, you have to take out the electrical energy produced by Nuclear, Solar, Hydro, wind and other non-carbon based energy sources (you also have to consider how to handle bio-diesel and other plant based energy sources that are Carbon based but renewable).

Third, If you are showing that we are producing 2.94 BTU for every Dollar of the Budget that is fine. But your last step is NOT relevant, a ton of Coal produces 21 MBTU while a Barrel of oil Produces 5.8 Mbtus. The value per ton and per barrel do NOT relate to each other. Approximately 4 barrels of Oil equals the energy from one ton of coal, thus to compare you must convert one form of energy to the other in energy equivalent terms (i.e. multiply the oil per barrel by at least 4). Thus on a per ton of coal equivalent energy oil produces about 680 btus compared to coals 620.

You also have to do the same with Natural Gas. Again using your figures, to convert natural gas to coal ton equivalent you have to multiply the Natural Gas number by 21,000. Which comes out to about 630 Mbtu.

I will not do electricity for the reason mentioned above (i.e. the key is what is producing the electric power NOT the electric power itself).

Thus your numbers should be about (Note I just approximated no extra calculations):
Coal 620 Mbtu per ton of coal equivalence
Oil 680
Gas 630

Now you have good number to compare, not apples and oranges. Furthermore these numbers source about right, oil is the most energy "rich" with Natural gas second and coal third. Oil biggest advantage is it is a liquid and thus compact but still flows permitting easy movement at low costs. It has the lowest costs of shipping no matter how it is shipped, boat, pipeline, truck, train etc.

Natural Gas is a gas and will take up up to 5000 times more space than a ton of coal, while easy to move, it is quick to lose if the shipping container is NOT sealed. Thus natural gas is generally shipped via pipelines. It can be shipped by ship, truck and trains but in such situations the gas must be COMPRESSED (Using 1/3 of its own energy to compress the Natural Gas). Once compressed the shipping containers must be VERY strong to contain the pressure AND the high temperatures involved with compressing gas to a liquid (and the low temperatures that occur when the gas is decompressed). All of these make Natural gas more expensive than oil to ship.

Coal is at the bottom of your energy list. Coal has several problem with it from an energy point of view. As a Solid to ship it on a pipeline requires a conveyor belt (unlike liquids and gases which only need to be pumped). Given the cost of such belts when it comes to maintenance any shipping of coal other than short distances (Short Distances means out of the coal mine or into a furnace) is done by truck, train or ship. Being solid no need to have complete cover (unlike natural gas which must be sealed to prevent gas leaks or oil which has to be seal from liquid leaks). Coal will no escape into the air nor leak into the nearby river (it may roll into the river but most of it will stay where it fell not washed downstream like oil). Coal also is a dirty fuel compared to oil and gas (I am ignoring global warming and greenhouse effect in this paper). What I mean by "dirty" is it is hard to use coal in internal combustion engines. The soot produced when coal is burns tend to jam such mechanisms. Thus when it came to transportation Coal was used in External Combustion engines (and used to produce the steam in Steam Turbines). When coal was used for heating it generally was used to heat water and the water transported the heat to the rest of the building (Either as hot water or steam through some forces air systems used coal but such systems had to be as sealed as a natural gas system).

My point here is while these numbers look close (and there are) it is these other factors that made oil the premium fuel of the last 100 years. Coal and Natural Gas can compete in certain applications but in the area of transport both a vastly inferior to oil. Natural Gas has to be compressed, coal has to be heat source for another form of energy (either steam or Electricity). As one person says nothing can really replace oil.

[Massacure]

4. Well,

First, I know that the electricity is made from coal, oil and gas. Not all coal, oil, and gas is used for electricity though, hence electricity is gotten a second time. Taxing coal encourages power plants to be more efficient. Taxing electricity encourages people to be more efficient. Taxing gas does both. Oil tax is based for cars and trucks.

Second, nuclear should still be taxed in the form of electricity, but it should not be taxed as much as coal. Home generated electricity such as solar and wind would not be taxed.

I'm confused about part 3 though. I meant to show that each BTU of energy would be taxed at 2.49 cents. If I understand correctly, you think I'm calculating BTU per one cent, while I'm really calculating cents per one BTU. Clear me up if I'm wrong though.

[happyslug]

5. Look at your second set of numbers

Ton Coal = 21,100,000 BTU
Barrel Crude = 5,800,000 BTU
Cubic Foot = 1,021 BTU
Kilowatt Hour = 3,413 BTU

I did not want to write down all of the Zeros so I used M for 1,000,000
so the numbers became:
Ton Coal = 21, MBTU
Barrel Crude = 5.8 MBTU
Cubic Foot = 1,021 BTU

As you can see 5.8 does NOT equal 21 nor does it equal .001021 MBTUs of natural gas. You have to convert these different energy types to each other. in the numbers you use one ton of coal equal 3.6 Barrels of Oil in BTUS. That same one ton of Coal will produce the same energy as 20,568 cubic feet of natural Gas.

Once you convert you have something to compare between the numbers, otherwise you have meaningless gibberish.

Now if you are just saying how much you want to tax each type of energy based on its BTU basis, than I see your calculations, but you also have to show people that this is EQUAL tax on all three forms of energy by converting to a some standard for all three. My quick conversion just shows that your idea for an energy tax at the rates you are proposing is almost the same on each form of carbon based energy.