I'm angry. I can't believe we're right back where we were a year ago. Gas prices are rising and Congress is trying to do something about it. Eighty-two Democrats and 3 Republicans in the House have proposed the Federal Price Gouging Prevention Act (H.R. 1252) otherwise known as the FPGPA, pronounced STUPID. So let's take a look at the STUPID price gouging bill...
NOTE: My serious take on the solution is at the end of the post...so if you want to skip my sarcasm, skip to the last paragraph.
The STUPID price gouging bill will make it a federal crime to:
...sell crude oil, gasoline, natural gas, or petroleum distillates at a price that is unconscionably excessive or indicates the seller is taking unfair advantage [of] unusual market conditions (whether real or perceived) or the circumstances of an emergency to increase prices unreasonably.
Unconscionable excessive? Unfair advantage? Increase prices unreasonably? Yikes.
Allow me to interpret. The STUPID bill makes it a federal crime to:
...sell crude oil, gasoline, natural gas, or petroleum distillates at a price that makes my constituents complain because they are too lazy to drive less at higher gas prices.
There are two possibile explanations for the Democrats proposal of the STUPID bill. 1) They think the public is too stupid realize they are trying to "do something" by proposing a STUPID bill, or 2) They are idiots. Since Env-Econ readers obviously represent a cross-section of the public, and since Env-Econ readers are smart enough to know that this bill is STUPID, I have to conclude that 1) is logically impossible and therefore, 2) must be true. So we've now proven that Democrats are idiots. We're halfway there.
In looking into the STUPID price gouging bill, I came across the Republican Study Committees reports on the STUPID price gouging bill. In it, they list a set of alternative proposals for lowering gas prices. They are:
- Streamline the environmental hurdles to building new oil refineries.
- Make it easier for small refineries to increase capacity.
- Allow more offshore (e.g. Outer Continental Shelf) and inland (e.g. Arctic National Wildlife Refuge) oil drilling.
In other words...screw the environment and roll back new source review.
- Temporarily suspend the gas tax.
...because driving more is always a good short-term solution.
- Temporarily suspend the gas tax and temporarily suspend spending on all transportation earmarks in the most recent surface transportation reauthorization bill.
...because driving more on crappy roads is an even better short term solution.
- Permanently reduce the gas tax.
...because driving more on crappy roads is an even better LONG term solution.
- Waive or repeal gas formulation (e.g. oxygenation) requirements under the Clean Air Act and related regulations.
...because somehow removing solutions to environmental externalities is what everyone wants.
- Encourage private-market projects to recover usable energy from oil shale and to otherwise increase production of renewable/alternative fuel sources.
- Strengthen the existing investment tax credit for Enhanced Oil Recovery (using modern technology improvements to extract oil from previously unavailable sources) in section 43 of the IRS Code.
...because we like free-markets especially the kind that subsidize our buddies.
- Waive the tariff on imported ethanol and waive regulations that limit refined gasoline imports.
...I actually like this one because it removes an inefficient policy.
So the Republican solution is to remove all of the policies that are designed to capture the external costs of driving whcih in turn would increase the social costs of driving. Hmmmm...lower the individual cost of driving which will actually increase the overall social cost of driving. Republicans are idiots.
Since independents don't matter, I conclude my proof. All politicians are idiots.
Look, in all seriousness. High gas prices are NOT an economic or political problem. They are the result of the natural workings of markets. There is nothing wrong with the market--and no reason, other than self-preservation and the false appearance of being able to do something, for politicians to intervene. Supplies are decreasing--both temporarily through unexpected refinery shut-downs and permanently through stock depletion. Demand is increasing--both in the U.S. and worldwide. Both of these will cause gas prices to rise and that's good. If gas prices don't rise, we will consume gas even faster and run out sooner. Higher gas prices encourage conservation and encourage investment in alternatives. High gas prices might be uncomfortable while we search for viable long-term solutions, but they're more comfortable than the alternative: no gas and no solutions.
