Government Policies Contribute to Higher Gas Prices

The summer driving season has yet to arrive, but gasoline prices are already steadily climbing towards $4 a gallon. There are many factors putting pressure on gasoline prices that are outside of our control, such as turmoil in the Mideast and growing demand for oil from China, India and other developing countries.  There are a number of actions that can be taken by our policymakers, however, to help alleviate pain at the pump.

The main thrust of President Obama’s recent remarks is that America uses too much imported oil (approximately 50 percent) and we must switch to vehicles powered by electricity, bio-fuels and natural gas. Electric vehicles have severe range limitation and are not widely available and hybrids vehicle sales make up only a tiny portion on new car sales. Ethanol fuel only exists with heavy government subsidies and mandates and other bio-fuels are not economically feasible with current technology. There are no natural gas-powered vehicles for sale in the United States for individual consumers. Even if natural gas-powered vehicles were made available to consumers, there is no refueling infrastructure and the cost of building one would require the expenditure of billions of dollars.

A government interested in helping to reduce gasoline prices should take the following actions:

• Reduce permitting red tape and encourage oil and gas development both offshore and onshore, including in ANWR.
• Reduce the myriad of boutique fuels required by the EPA and state environmental departments which serve to drive up the cost of gasoline.
• Place a moratorium on EPA rulemaking such as proposed rules on oil refiners and CO2 emission regulations that make it more expensive to produce gasoline.

The next time motorists pull up to the pump, they should be aware that it is not just the civil war in Libya that is driving up the price of gasoline.

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Russ Harding is senior environmental analyst at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.