Herb, you are an idiot. Without strong environmental laws the land, the air and the water would still be poisoneous. I can tell by your attitude that you are too young to remember the days before environmental laws were enacted.

Ken are you a parody bot or something? While environmental laws have done quite a bit of good, you can't be serious that there is no way in which things can be improved?

Also, Herb is retired so he is probably older than you.

First of all, I am not and will never be a lefty.

The answer to your question is easy,

Because the Drug Companies and the Oil Companies are GREEDY.

Greed will be the eventual downfall of our country. For me, I strongly feel that if anyone takes from me to enhance their own wealth at my expense, with total disregard to my basic needs, that is the same a theft. I sure hope you don't feel differently.

You really have all the answers, Yes, I do remember the long gas lines in the 70's, and perhaps I remember to well. I was a very frequent traveler with my work and I, during the 70's long lines, have seen with my eyes barge after barge after barge, full of gasoline parked on the Ohio River in Midland PA. waiting for the price to rise, I also remember to well in the 80's when there was a shortage of jet fuel forcing the airlines to tank fuel to the western part of the country. And all during the shortage, I personally knew a guy that was buying up jet fuel by the barge full in Memphis TN, then trucking the fuel to places like Denver CO and selling it at a handsome profit. Greedy, yes he was. but the shortages of gas in the 70's and the jet fuel shortage in the 80,s was not due to the environment, it was contrived.

I also remember when the bridge in the cuyahoga river burned due to the sludge dumped there by the steel mills. I also can tell you a lot about the coal sludge in W.VA, dumped there by the coal companies.

I fail to see the correlation you seem to have between air pollution and industrial waste that does not effect the air.

You don't need to tell me a thing about the past misdeeds of industry, I was there, you young yuppie whipper snapper.

You see Ken, I lived those times in real time, before you were born, I am 72 YO.

So there!!!!

The Cayahoga River in Cleveland caught fire due to industrial pollution and nearly burned down a bridge. Lake Erie was so polluted that fish could not be eaten from it and it was rapidly losing its ability to support aquatic life. Mine tailings poisened entire watersheds throughout the Appalachans. Smog hid bridle veil falls in Yosemite from sight, caused misiry for anyone who breathed and ate away at the marble features of the the stature of Lincoln in the Lincoln Memorial in Washington DC. This is just a small sample of the problems unregulated industrial polluters were causing America. Remember Love Canal killing children,leaded paint causing mental retardation, asbestos particles ripping apart lung tissue and mercury poisened tuna fish sold in cans?

If you don't face any of those problems today it is because of the environmental laws passed well before your time.

While you may not like the price gouging laws, the law is the law and you, I and everyone must obey the law.

True to a certain extent Herb, but there are also dumb laws that should either be repealed or ignored, and I feel this is one of them. It may sound good, but in the end it will likely mean less gasoline as it implicitly puts a price cap on gasoline. I know you remember the gasoline lines when Nixon tried explicit price caps, so you should know what I'm talking about.

At this point of time, I could care less what the environ(Mental) people think. They as individuals and as a group have done more damage to this country that the Russians ever thought of and for the oil companies, Steven Plunk put it best ” the oil companies have responsibilities”, not only to the stockholders, but also to America and Every American.

While I think it would be nice if firms behaved this way, I think a firms only responsibility is fiduciary in nature. It isn't nice, but then I'm never disappoited when a firm turns out to be nothing other than greedy.

I knew you'd make a good post out of this. You must have missed the other e-mail I sent you:

In a thoroughly misguided attempt to stem the rising price of gas, Hawaii is set to impose Nixon-style price caps on all the islands' pumps. The law, set to take effect Sept. 1, ties the price of gas to the wholesale price of gasoline at three price points on the U.S. mainland.

The Democrats in control of Hawaii's Legislature admitted back in 2002 when they passed the legislation capping the retail price of gasoline, and again when they revised it in 2004 to cap the wholesale price, that regulatory measures might not lower gas prices when implemented this fall. . .

So why bring back price controls more than 30 years after Nixon tried them and failed miserably, causing shortages, rationing, inflation and an economic crisis? It's hard to find a reason, other than to retaliate against the big oil companies, namely Chevron, which many Democrats tried to punish unsuccessfully in court.

Made up primarily of liberal Democrats with no economics training, no business background, an open disdain for the free market, and a lust for price caps (except on state taxes), lawmakers say they have to "do something" about the high price of gasoline.

I suppose this is another way of regulating the market.

Steve, eonomic theory is fine for the classroom but in the real world it just doesn’t work out that way. In a hierarchy of desires, your idealogical desire for perfect markets is always going to be less worthy than a desire for clean air to breath.

Ding, ding, ding. Strawman alert!

I didn't say a perfectly competitive or perfect market, but a competitive one. And breathing clean air is great, but you make it sound like there is only two possibilities:

1. Clean air and an ologopolistic oil/gasoline market.

2. Filthy air and a competitive oil/gasoline market.

There is a continuum between the extremes here.

Markets need always to submit to sociatal oversight otherwise they tend to destroy the society that permits them to function in the first place.

In a sense, sure, but you don't want to set up your oversight in such a way as to result in perverse outcomes.

Herb,

Steve, Thank you for your kind reply. I respect you ideas and opinions, but as is stated in the FTCR report, shortage of supply is generated by the oil companies themselves.

Sure it is, but the point is that the oil companies/refiners are in this situation because we gave them this situation. People like Ken who apparently want clean air irrespective of the cost, and those who don't know better but mean well don't think through the consequences of various pieces of legislation. So we end up with a fixed number of refineries and an industry becoming more and more concentrated. This allows for market power and increasing prices. Feel free to damn the oil companies all you want, but the only real long term solution is to increase competition, IMO.

As far as profits are concerned, I agree that everyone who invests in any company should be fully entitled to a profit, however when these profits are excessive as a result of a manufactured shortage of supply and everyone is hurt. The last I heard is that States have a price gouging law that is supposed to protect the consumer. I don’t know how you feel about it, but violations of the law should be pursued.

Yes, I'm aware of this, but I don't like such laws. The problem is that laws have isolated the oil companies/refineries from competition. Using the laws to hold down prices artificially will do nothing except result in a shortage. Thus, instead of paying via the wallet you'll pay by not being able to drive as much.

I very strongly agree with you on more refineries and the production of one grade of gasoline and only the politicians can change that.

Unfortunately the oil companies and the environmentalists will probably oppose this.

Steve Plunk,

Through implementation of environmental regulations the federal and state governments have created de facto public utilities to supply gas, diesel and natural gas. The natural gas segment is regulated as a public utility while the other segments are not.

It is time to examine this situation in more detail. I am not a fan of non-freemarket interventions but if regulations have already broken the market’s ability to work properly then it could be justified and reasonable.

The great privilege enjoyed by the large oil companies needs to have the accompanying responsibilities.

As somebody who works for a regulated company I'm reluctant to go this route. With regards to electricity and the transmission/distribution system I can see some justification. The transmission/distribution systems do exhibit the conditions of a natural monopoly. Electricity generation does not, but was traditionally lumped in with the transmission/distribution side of the business so deregulation for generation while I think possible is very difficult.

Gasoline on the other hand is not a natural monopoly (this is a technical definition in that costs have to be subadditive and there has to be a price that precludes entry, but allows the monopolist to earn a positive profit). Standardizing gasoline blends would, IMO, go a long way to solve the problem you have noted without burdening society with all the regulatory costs (i.e., oil companies hiring people like me to handle regulatory matters which would show up in the price).

Also, there is the issue of the various regulatory agencies being "captured" by special interests. Here in CA that has resulted in high energy prices due to "green/renewable" power which is typically very expensive. And if you go down the regulatory road then decide you don't like it, going back can be very, very hard (look at the CA electricity crisis).

Or in short, you observation that government caused the problem, hence we need more of it to solve the problem strikes me as a dubious proposition.

Wow That was a powerful statement, I wish I would have thought of it. You are RIGHT ON TARGET

It is time to examine this situation in more detail. I am not a fan of non-freemarket interventions but if regulations have already broken the market's ability to work properly then it could be justified and reasonable.

The great privilege enjoyed by the large oil companies needs to have the accompanying responsibilities.

As far as profits are concerned, I agree that everyone who invests in any company should be fully entitled to a profit, however when these profits are excessive as a result of a manufactured shortage of supply and everyone is hurt. The last I heard is that States have a price gouging law that is supposed to protect the consumer. I don't know how you feel about it, but violations of the law should be pursued.

I very strongly agree with you on more refineries and the production of one grade of gasoline and only the politicians can change that.

You are also right on the American people doing this to themselves by electing these self serving politicians, The recourse there is to either wait until the next election or do what they did in California, "Conduct a Recall"

Again thanks for the great article. While we disagree now in some areas, we are getting there.

Markets need always to submit to sociatal oversight otherwise they tend to destroy the society that permits them to function in the first place.

Right here.