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Tom O'Donnell : Our modern “Fire Water”
addiction: From Native American salesmen

 

Yesterday, I went with my brother from his small farm (en America Latina se dice “ una finca” ) to the nearby Seneca Indian Nation Reservation-  NE of Buffalo, NY ( here is the nation's official web site ), to buy gas for his pickup.  Many of the locals hereabouts do this frequently.  The Seneca are, by treaty with the US federal government, a sovereign nation, so they are not required to charge federal or NY State taxes on gasoline.  So, there are a few very busy gas stations on the reservation where local Western New York State residents come frequently to buy discounted gas, and the Seneca do a good business. 

The Seneca also do not have to charge taxes on cigarettes and cigars, and they also do a brick business in discounted tobacco products.  However, this exemption has long been hotly contested by NY State which only five days ago was barred by the State Supreme Court (see Wall Street Journal ) from collecting the $4.35 per pack state taxes from sales on the reservation.

I am reminded of  how the European settlers in the 19th Century often sold “fire water” (that is, whiskey) to the native people at a nice profit while devastating their societies due to the indigenous American genetic susceptibility to alcohol addiction. 

So, now the tables are turned:  We descendants of European and other settlers, are addicted to petroleum, and  many are also addicted to tobacco–both of which are  having long term devastating impact on society.  Yet, we flock to any place that saves us several cents per gallon to get the  modern version of “fire water.”  

Well, of course none of this is anywhere as nefarious as the old whiskey peddlers who sold illegal “fire water” on native reservations.  And, before one joins in the chorus of criticisms against thes tax-free sales, its good to remember this history.

Nevertheless, I believe something does have to be done about the sale of cheap cigarettes on this and other reservations.  Either through some sort of agreement with the state to significantly increase prices closer to what the cost is with taxes off the reservation, or by simply collecting the taxes.  After all, there is real harm being done here, as it has been clearly demonstrated that this addiction causes lung cancer and that smoking can be significantly reduced through high “sin” taxes. 

Gasoline is another matter.  Washington has done very little to end this addiction.  The real solution begins in Washington; and, in a democracy, that means it begins with all of us who can vote.  As I explained in my post of a few days ago that included a  video inervew ( watch here ), the solution to gasoline addiction in the USA does not require any new technological breakthroughs.  We consume twice the gasoline per capita as the remainder of the industrialized world.  If we lived more like France, Belgium, Germany and Japan on the transportation front, we would have a great decrease in petroleum dependence. and greenhouse gasses.  This means adopting not only much higher-mileage cars, it even moreso means avoiding the use of oil-fueled personal vehicles altogether by adopting a national strategy to go to alternative modes of transportation: to new mass transit and light-rail systems, to new high-speed intercity trains, to more busses and trolly cars, etc.   Especially trains, whether subays inside cities or fast trains between cities, especially avoid the use of petroleum, as they depend on electricity generated from diverse sources that can much more easily include non-fossil,  low-carbon sources.  This is the only way to get away from the world's 95% dependence on petroleum for transportation (98% in the USA).

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Tom O'Donnell, Ph.D. is a professor at The New School, New York City and Michigan Center for Theoretical Physics (MCTP) of The University of Michigan, Ann Arbor. He was a U.S. Fulbright Scholar in Venezuela at the  Centro de Estudios del Desarrollo, at Universidad Central de Venezuela, Caracas (CENDES-UCV). He is a frequent lecturer and article writer on Oil and the Global Economy and Geopolitics, Environmental Economics, Energy Resources and Markets ( including Venezuela), Issues in Latin American Development. His most recent articles can be read in O'Donnell's blog The Global Barrel. Petroleumworld does not necessarily share these views.

Editor's Note: This commentary was originally published by The Global Barrel , on June 15, 2011. Petroleumworld reprint this article in the interest of our readers.

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Petroleumworld News 07/13/2011

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