From today’s Washington Post comes news that the market actually works.
Gasoline prices have tumbled in recent weeks from their hurricane-induced highs, sliding 10 cents to a national average of $2.38 for a gallon of regular yesterday compared with a week ago, according to the U.S. Energy Information Administration.
Prices peaked at nearly $3.07 a gallon nationally after Hurricane Katrina struck oil operations in the Gulf Coast region. Hurricane Rita caused further damage, keeping prices elevated.
But since then, gasoline imports have increased, domestic refineries and oil production have been coming back on line, and consumers’ thirst for gasoline has dipped. Gasoline prices, however, are still above levels of a year ago, when a gallon of regular was nearly 38 cents cheaper than it is today, according to the Energy Information Administration.
In other words, supply and demand have readjusted and prices have gone down, all without government intervention. Of course, that hasn’t stopped our Congress-critters from getting involved.
The declines come as lawmakers have raised the alarm about high prices and record profits at oil companies. Chief executives of major oil companies, including Exxon Mobil Corp. and Chevron Corp., are scheduled to testify on Wednesday at a Senate hearing that will address the spike in prices.
Ummm, what spike in prices ?
As this Op-Ed piece in the Washington Times points out, Congress needs to resist the political pressure to intervene and let the market do its thing:
Federal meddling in energy markets does not benefit consumers or oil companies. Remember the long gas station lines and shortages of the 1970s? Our economy suffered as energy shortages contributed to record inflation and high unemployment rates.
Rather than try to scapegoat oil companies, Congress should look to its own role in oil and gasoline prices. Tens of billions of barrels of oil are locked up on public lands in Alaska, including the Arctic National Wildlife Refuge, the Western U.S. and on the Outer Continental Shelf. Yet there has been a moratorium on new oil and gas development and production off the coasts of California, the East Coast and much of Florida since 1990.
These shortsighted policies faced relatively little opposition when put into effect because few politicians were willing to fight a vocal environmental lobby when supplies seemed abundant and prices relatively low. But that’s no longer the case; today, the policies are foolish.
One can only hope that Congress will listen to this wise advice.
