Secrets of the Gasoline Price Hike of 2000
Congress, particularly the left side of the aisle, is in an uproar.
The big oil companies are gouging consumers with exobitant
prices at the pump that approached $3 in late Spring of 2000.
They are out for blood. And it fits their populist rhetoric, and
overly simplistic view of the world. It also allows them to try
to score points early in this election year. But the problem is
not big oil. The problem is those meddling interventionist environmental
Beginning with June 1st, the oil companies were mandated to have
a new grade of gasoline available for consumers, and there has not
been the capability to produce it adequately. This is in large measure
due to the over-regulation of the oil industry by the government, which
has led to a situation in the Midwest where there are fewer refineries
than there used to be and than there need to be. One fourth of the oil
supply of the Midwest must be piped in from the south and there have
been difficulties with the pipelines that aggravate the shortage.
A similar shortage began to be manifest in St Louis in March and the
Energy Department and EPA granted a waiver to help that situation then
which also compounded the situation in the Midwest around supplies through
Chicago in June.
The oil companies have been attempting to deal with the shortage in June
by flying in drivers to the Midwest from the South and trying to augment
supplies by trucking gasoline in. There are not enough trucks.
The situation should be smoothed out by July, but there is no guarantee.
And there could be other wrinkles that develop. What should not be overlooked,
however is that the problem has been caused by government over-regulation.
It is not the oil companies. It is the government -- or at least that liberal side
of the aisle that is squealing so loudly -- a twist on that old adage about the
squeaky wheel needing oil.
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