When a crisis strikes, Americans can count on Congress to swing into action. So as gasoline prices soared toward $3 per gallon, lawmakers did what they do best: They complained.
"We believe that federal law enforcement agencies and regulators
should take every available step to ensure that all federal laws
protecting American consumers from price-fixing, collusion, gouging
and other anti-competitive practices are vigorously enforced,"
House Speaker J. Dennis Hastert and Senate Majority Leader Bill
Frist wrote in a joint letter to the president.
Their colleague Sen. Ted Kennedy (D-Mass.) apparently agrees. He
told NBC's "Meet the Press" on April 23, "The president should have
called the head of the oil companies into the White House and
started jawboning. He should have done that a week ago."
Stern calls for investigations may play well politically. But they
won't accomplish anything. For one thing, an investigation -- one
ordered by last year's energy bill -- is already under way.
Besides, price gouging isn't the problem. The Federal Trade
Commission already "tracks retail gasoline and diesel prices in
some 360 cities across the nation" through daily updates from the
Oil Price Information Service, a private data-collection
company.
The FTC's Web page explains, "An econometric model is used to
determine whether current retail and wholesale prices each week are
anomalous in comparison with historical data." In other words, if
someone's gouging, the feds will know about it.
As for "jawboning," there's enough of that, too. The Democratic
Congressional Campaign Committee recently recommended candidates
for Congress "hold an event at a gas station." Good idea -- if your
goal is political gain. But it won't do a thing to lower prices at
the nearby pumps.
Gasoline prices are governed by the laws of supply and demand. If
we want lower prices, we must bring more gasoline to the market.
And here's where policymakers actually can help. President Bush has
already taken one step to provide short-term relief by temporarily
suspending the environmental rules for gasoline. Congress should
step up now and repeal regulations that require different blends of
gasoline, at different times of the year, for different areas of
the country.
Refineries must produce more than a dozen blends of gasoline and
ship them out to various parts of the country on a strict schedule.
That slows the supply chain and causes shortages. Lawmakers should
allow gas to become a true commodity again by letting refiners make
a single blend and sell it nationwide.
Meanwhile, Congress forces refiners to use ethanol in their fuel
blends. A large part of the recent increase in gasoline prices has
occurred because the price of ethanol has almost doubled in the
last year, and logistical hurdles block its widespread use. Remove
these mandates, and prices will decline.
The long-term solution to our energy woes also would require
congressional action. We need to increase domestic supply and
refining capacity. Tens of billions of barrels of oil are available
in the United States. They're under the Arctic National Wildlife
Refuge and off the coasts of California, Florida and other states.
But federal law doesn't allow companies to drill for that oil.
Lawmakers should change that.
Meanwhile, the president recently called on oil companies to
reinvest profits in new refining technology. They probably would,
if they could. But legislation and regulation have made it
virtually impossible to open a new refinery; we haven't brought a
new refinery online in three decades. No wonder prices are
skyrocketing.
With vacation season under way, Americans can expect a long summer
of accusations. "Anyone who is trying to take advantage of this
situation," Hastert and Frist wrote, "should be investigated and
prosecuted." Yet it's lawmakers who are taking advantage. They're
using high fuel prices to score rhetorical points when they should
be taking action to increase gasoline supplies. The question is,
will they act? Or simply keep complaining?
Edwin
Feulner is president of The Heritage Foundation
(heritage.org), a Washington-based public policy research institute
and co-author of the new book Getting
America Right.
First Appeared in the Chicago Sun-Times