How Government Regulation effects oil prices at the pump

Allen Frederick

As is usually the case with government intervention into private enterprise the unexpected results are usually far worse than the original problem congress set out to solve. Doesn’t anybody study history anymore? It was not that long ago that the same ideas were floating around congress during the Carter years. Anyone remember the odd even gas days and the long lines at the pumps because of the government forced oil shortages of the 70’s

Among other mistakes from that period, the government increased the taxes levied on domestic oil producers, as if that would somehow help.

The result was “reduced domestic oil production from between 3 and 6 percent, and increased oil imports from between 8 and 16 percent.”

The government also instituted price controls, which only served to create the notorious gas shortages of that era. Yes, price controls meant consumers could get cheaper gas — but only after waiting in long gas lines and only if stations didn’t run out first.

clipped from www.heritage.org
When it comes to soaring gasoline prices, we need a federal government that does less.
We need fewer restrictions on domestic oil drilling.
The only reason not to drill is the environmental concerns.
We also need less regulatory red tape affecting refineries and gasoline supplies.
It would be worthwhile to streamline the regulations that make it all but impossible to build a new refinery and more difficult and time-consuming to expand an existing one.
Simplifying or eliminating the federal requirements that dictate the recipe (actually a dozen different recipes) for fuel also would help.
Worst of all the federal requirements is the one requiring that corn-based ethanol be mixed into the gasoline supply. Not only does ethanol use raise the cost of driving, but diverting corn from food to fuel has raised food prices, as well.
Congress needs to start undoing the damage it has done. If it enacts more of the same instead, get ready for $4 or even $5 gas.

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