CONGRESSIONAL CRITICISM MISSES MARK ON GAS PRICES
May 14, 2007
As gas prices pass $3.00 a gallon, several members of Congress have taken aim once again at oil companies, promoting everything from a windfall profits tax to breaking the companies up. Yet rather than attacking "big oil," Congress should look in the mirror, says H. Sterling Burnett, senior fellow with the National Center for Policy Analysis (NCPA).
The real problem is that while energy prices are subject to the basic economic laws of supply and demand, Congress continually restricts supply, says Burnett. For instance:
- Congress chose not to lift the moratorium on new oil and gas production on the U.S. Outer Continental Shelf, putting more than 85 billion barrels of oil (quadruple current U.S. reserves) off limits.
- Congress has repeatedly refused to allow oil development in the coastal plains of Arctic National Wildlife Refuge (ANWR), putting 16 billion barrels of oil off limits.
- Congress dictates the types of gasoline that Americans burn, mandating 57 different gas blends that must be refined with seasonal changeovers.
"The rhetoric coming from Congress shows a naïveté about energy markets and a blatant disregard for their own role in causing high prices," says Burnett. Further, by limiting domestic supply opportunities, Congress has required that oil companies, and therefore pump prices, are reliant on oil from foreign countries sold on the world market, rather than their own domestic reserves.
Source: "Congressional Criticism Misses Mark on Gas Prices," Earthtimes.org, May 11, 2007.
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