Saturday, June 24, 2006

Premium Gasoline, Boutique Gasoline and Libertarian Environmental Ethics

The Washington Post reports that sales of premium octane gas are noticeably down in the U.S.

Gasoline sales figures show that drivers are forsaking the higher price in unprecedented numbers. After years of decline, the market share for premium gas dwindled to the single digits last year. Some analysts expect the drop to be more pronounced this summer, as the gap widens between the prices of regular and premium gasoline. Regular gas is averaging about $2.98 a gallon in the Washington region, up 80 cents from the comparable time last year. Premium fuel is selling for $3.25 a gallon, up 87 cents.

I noticed several weeks ago that one local, independent station where I regularly refuel stopped carrying anything but regular octane gasoline and diesel. With gas prices what they are, only people with vehicles whose manufacturers recommend the higher-octane gasoline due to their high-compression engines should buy it. And that's hardly anybody.

Actually, even when the prices are lower, there's no reason to buy higher-octane gas, unless your engine specifically requires it. Just ask Click and Clack (scroll down to Part 2 to read their whole rant):

Does your owner's manual say "Premium Unleaded Only"? No? Then don't ever use premium fuel. There. We just saved you 40 cents a gallon... or $8 on a 20-gallon fill up. If your engine is designed to run on regular gas, there's absolutely no benefit to putting in "high test." It pollutes more, it costs more, and doesn't give you any benefit in performance or fuel system cleanliness.

The fact that higher octane gas actually pollutes more without any benefit other than in the oil companies' pockets also makes it, in my mind, an environmental and ethical issue. Environmental despoliation is an unfortunate side-effect of human existence, as it is of the existence of any living creature. But we must always weigh the benefits of what we do against their costs. Extra costs, both fiscal and environmental, must be outweighed by their benefits. Here there are none, except for a very small percentage of drivers.

The gas companies keep complaining that boutique mixtures of gasoline keep gas prices up, though some recent reportage by the AP claims that a draft of an EPA report to the White House disputes that. Well, if the gas companies still figure that having different boutique blends is pushing up the price of gas at the pump, then they must know it's true due to their experience in providing three different octane grades nationwide.

As a left-libertarian, my belief is that voluntary cooperation of individuals with exclusive property rights in terms of pollution and truly free markets (i.e., not the oligopolistic corporate market we now have in the U.S.) would take care of both the pollution problems due to gasoline engines and the nonsense of people using a fuel grade that they don't need to use. Actually, the extent to which we have a free market in gasoline (the consumer side, mostly) seems to be already taking care of the latter problem.

An excellent resource for those who would like to look into free-market environmentalism is the Commons Blog.



Linking to: The Crazy Rants of Samantha Burns, Point Five, Assorted Babble, Selective Amnesia

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