As federal officials and lawmakers decry the current dramatic surge
in gasoline prices, they should "look in the mirror" if they're serious
about finding out who is most responsible, says the
California
Libertarian Party.
"The current wave of gas price increases is a normal market reaction
to supply and demand -- but endless government meddling makes gas prices
much higher than they otherwise would be," state party officials said
yesterday.
And, rather than "succumb to the urge to 'do something'" about high
fuel costs, the federal government first "should undo the mess it
created," said state chairman Mark Hinkle.
Specifically, Hinkle said, gas prices in the Bay area have raced past
the $2-per-gallon mark, "stunning motorists and leaving many to wonder
what's behind the latest increase."
The reason, said the state party chairman, is "government gas
gouging" in the form of high gasoline taxes, over-regulation and the
government's method of managing the country's strategic oil reserve.
California gas taxes are the nation's fourth largest, according to
the American Petroleum Institute, which comes
to 50.4 cents per gallon in federal, state and local taxes.
Regarding regulation, Hinkle said, California ranks among the
nation's highest in "burdensome" fuel and gasoline regulations.
"California gas is the most expensive in the country because of
state-mandated reformulated gasoline, which costs more to refine
-- between 5 and 15 cents more per gallon, according to the California
Air Resources Board." Ironically, the reformulated refining process
mandated by California state law may be damaging to the environment.
"It's absurd that gas sold in the other 49 states cannot lawfully be
sold in California," Hinkle said.
Finally, California Libertarians noted, the federal government's
policies managing the country's strategic reserve are not
cost-effective.
The government "spends $340 million per year to maintain the
Strategic Petroleum Reserve and other reserves, which energy experts
agree are ineffective and wasteful," the state Libertarian Party said.
"Government reserves also act as a disincentive for private companies to
maintain their own petroleum inventories. The result, according to the
CATO Institute, is that "oil price spikes are
far steeper than they need to be."
Red Cavaney, president and CEO of the American Petroleum Institute
agreed during testimony he gave before the House Commerce Subcommittee
on Energy and Power last Thursday.
"Americans believe our member companies are doing a good job given
this country's heavy dependence on foreign oil, the unwillingness of our
government to allow these companies to more fully explore for oil and
natural gas on federal lands, and the non-coordinated layers of
regulations that limit refiners' ability to keep the fuel flowing into
America's cars, homes and manufacturing plants," Cavaney said.
"Overregulation reduces the flexibility refineries need to respond to
the fast-paced change in today's world."
The petroleum institute estimates that over the past decade the
domestic petroleum industry has spent $90 billion on environmental
regulatory compliance alone.
"Government actions have also placed America's best prospects for new
oil and gas production off-limits to development, which has forced
increased reliance on foreign crude-oil supplies, driven jobs overseas,
and deprived markets of additional petroleum that would tend to push
prices downwards," institute officials said.
According to the latest statistics, domestic oil and gas production
generates about 8.4 million barrels of gasoline and 3.5 million barrels
of distillate (heating oil and diesel fuel) daily. However, the U.S.
imports about 10.5 million barrels of oil -- or roughly 54 percent of
the amount required -- every day.
The U.S. Department of Energy reported Monday that the nation's
average price per gallon for all grades of gasoline was about $1.57.
Mid-grade gasoline is running at $1.621, and premium grade gas is
averaging about $1.70.
"The solutions are simple: Gut the gas tax, revoke the regulations,
repeal the reserves, and allow the market to do its job," Hinkle
concluded. "And when politicians want to help us through an oil crisis,
don't listen -- they're just being slick."