Low Income Fuel Subsidy

  Any person whose individual income is at or below the bottom 40% of the income distribution can apply for cash back for gas purchased that exceeds $2.50 per gallon.  A qualifying person will save their gas receipts and send them to the agency who will process the subsidies.  Once the receipt is received and it is established that the person qualifies they will receive a rebate via direct deposit or check by mail.  A qualifying person will be eligible for up to 100 gallons of gas per week.  

The gas subsidy will count as taxable income.  Although there is the potential for some to abuse the program, such abuse wil only take place among the most disadvantaged.  Although at the time this is written and gas prices are soaring, typical max weekly rebates are not going to exceed $50.  

To prevent disproportionate allocation to people in states and municipalities that have attached high taxes to the sale of gas the rebate amount will be based on the national average.  Today the national average is $3.28 per gallon.  If a qualifying person purchased 100 gallons of gas this week they would receive a rebate for the difference of 78 cents on 100 gallons or $78.

The real question is what is the total cost of this program on an annual basis?  There are 255 million adults in the United States.  40% of 255 million is 102 million people would qualify based on an income that is within the bottom 40% of the income distribution.  Secondary qualification includes a household income not exceeding $75,000 per year.  Given the household income qualifications, people without vehicles, and people who do not drive for other reasons, a generous estimate of eligible participants is probably in the neighborhood of 50 million people.  If the average cost per week per person is $50 the program would only cost about 130 billion dollars.  

While $200 may seem insignificant to most people, $200 a month for people in the bottom 40% of the income distribution can be the difference between having or going without necessities when fuel prices go up.  The primary purpose of this proposal is to minimize the impact high fuel prices have on the economy.  When fuel prices go up poor people still have to go to the places they have to go.  They don’t purchase less fuel because the price has gone up, instead they compensate by not making purchases they would otherwise make.  In addition to ensuring low income people in this country have the money to purchase the items they need when gas prices increase, we also keep more money in the economy that would otherwise be lost to higher fuel prices.  

Implementation could be processed through local human services departments.  The federal government will distribute annual funding for the specific purpose of the fuel subsidy to local human services agencies.  The human services agencies can incorporate submission of receipts through their websites.  An eligible citizen will submit their receipts through the website and an agent will approve the refund through direct deposit to a bank, debit, or EBT card in states where EBT card accounts are able to receive money.  

The legislation is the public subsidizing the economy through periods of high fuel costs to minimize the compounding economic impact of high fuel prices.  As previously stated, when fuel prices increase it isn’t only the increased cost of shipping and other associated costs, but it also the impact of people, especially poor people, not making purchases from other industries because more of their income is spent on fuel costs that take priority over other spending.  Since poor people must travel to earn wages and make other necessary appearances and appointments, they don’t purchase less fuel when prices are high.  Which means providing rebates to low income people for fuel will not lead to them purchasing more fuel leading to higher demand, higher prices, and higher emissions.  

Reducing global emissions is a priority to me.  I’m of the opinion that climate change has the potential to dramatically change what areas of the planet are habitable for human life, and believe soon after the turn of the century many of the places that are presently habitable may no longer be habitable due to desertification and extreme weather.  I believe the consequence of this change in habitable area will likely result in the use of nuclear weapons as nations compete for remaining habitable or newly habitable surface area to redistribute their populations.  

With that said, oil remains the life blood of all human activity.  Reducing people’s ability to make other purchases because of the price of oil does not reduce demand for oil.  Efforts to address emissions from transportation without first addressing the production of grid energy is about as backwards as any effort can be to reduce emissions.  The bottom line is oil demand is going to increase at least into 2040 irrespective of any changes made.  No amount of regulation or incentives to produce electric vehicles will change this.  We stop burning oil through decreased demand.  When demand dies out so will oil.  Any effort to curb oil consumption in the immediate future while demand is still high only harms the consumer and the health of the economy.  Harm to the consumer and harm to the economy also contributes to the growth of emissions, since individual green behavioral choices typically come at a cost, and people who are unable to afford those costs cannot make those choices.  

Human beings' best chance for avoiding the collapse of civilization or mutually assured destruction through conflict resulting from climate change may be weather modification.  The US government is presently conducting a study on the impact of introducing aerosols into the atmosphere to reduce the amount of the sun’s heat reaching the planet.  There was a recent study on this subject showing it would cost about 10 billion dollars per year to reduce the temperature at the poles by enough to preserve the ice caps.  

I mention the climate reality we are living with because subsidizing the cost of fuel for low income people in some people’s minds has consequences for climate change.  Although I’ve already explained that subsidizing the cost will not increase demand for oil but will instead ensure the economy doesn’t unduly suffer during periods of high gas prices, I want to make sure people understand that I am concerned about the climate.  Since I am concerned I’ve conducted research that leads me to the conclusion that we will reach a co2 concentration by the end of the century between 700 to 1000 ppm that will correspond to a 3 degree increase from pre industrial times, and a 3 degree increase will ensure 4 to 5 degree increases shortly after.  We are likely at a point where we need to find a way to incorporate carbon capture into the market, and we may require ongoing weather modification on a global level to reduce the amount of heat from the sun that will become trapped by greenhouse gasses to ensure a climate that remains habitable for human life, and conducive to human civilization.  

I do not subscribe to doing everything we can to reduce emissions.  By this mean that marginal decreases in emissions achieved through draconian regulation, mandates, and spending that is intended more to serve the interests of companies involved in the manufacture and sales of emissions reducing technology is inconsequential in consideration of the big picture.  While the United States is the greatest contributor of greenhouse gasses per capita, (especially when considering how US consumption creates emissions in other countries) fractional reductions of emissions within this country are overall insignificant to global emissions and the corresponding temperature increases we will experience with or without small mitigating efforts.  The point being is if some small effort seeks to reduce US emissions by one percent, this one percent is a quarter percent of global emissions and the difference between this quarter of a percent will not prevent catastrophic climate change.  I see many politically motivated efforts that always benefit industry and typically harm the public in the name of climate change as imposition without preventing imposition. 


I do have a legislative proposal that piggybacks an existing idea but I haven’t posted it to the OPL website because I require a team of engineers to create the specifics of implementation.  Grid energy is a priority and the public should benefit from the infrastructure it pays for is the premise of it.

Low Income Fuel Subsidy