Like frightened minnows skipping across a pond, US lawmakers flit from mistake to mistake on gasoline. Consumers can't afford much more of this.
The latest blunder comes from the House, which on May 3 passed a bill setting criminal penalties for "price-gouging" in sales of crude oil, gasoline, diesel fuel, home heating oil, and biofuel.
So who's price-gouging? That depends on what "price-gouging" means, a detail over which the 389 minnows who voted for HR 5253 couldn't be bothered. In an appalling dodge, they gave the Federal Trade Commission 6 months to concoct a definition.
Sponsors tried to portray the move as helpful standardization of definitions that vary widely among states that have passed antigouging laws. In fact, any such definition represents political artifice because competition in a free market precludes the targeted behavior.
The House has not just perpetuated a destructive myth here; it has passed a bill making punishable by up to 2 years in prison, plus heavy civil and criminal fines, behavior it can't define. It committed this act of legislative negligence after rejecting a helpful measure that would have streamlined refinery permitting.
The House seems to consider it better to demonize the companies that find, produce, process, and deliver essential products in a tight market than to do anything about supply limits. So mistakes pile up.
Of course, past hunts for price misbehavior have turned up nothing, and there's no reason to expect otherwise from the new mischief. If enacted, however, HR 5253 would hurt the industry and its customers.
It would say that the oil industry deserves suspicion and extraordinary regulation, that industry profits reflect antisocial behavior, and that selling oil when prices are high can land a person in jail.
Who would work in an industry like that? Probably not enough of the young professionals that the oil industry needs to hire and train soon to replace retiring veterans and meet rising demand for its products.
An important limit on future oil supply—an imminent labor shortage—thus would remain in place. And consumers could thank Congress for fuel prices elevated by yet another mistake.
(Online May 5, 2006; author's e-mail: [email protected])