But price controls won’t work, and allegations of price gouging and
“windfall profits” amount to nothing more than congressional
grandstanding. No government official or politician is fit to define a
“fair” price for gas or a “fair” profit for oil companies. This is not
the Soviet Union. The last thing we need is centralized government
planning when it comes to our precious energy supplies.
The price of oil, like
everything else, depends on supply and demand. What we really need to
focus on is how government keeps the supply of refined gasoline too low.
This is not as easy as demanding price controls, and does not fit into
30-second sound bites. But as with so many issues, we must peel away
decades of government interference to really understand the problem.
Most people understand
that federal restrictions on exploring, drilling, and refining domestic
oil have made us dependent on various questionable Middle East
governments. We should expand this into a greater understanding of how
American foreign policy increases gas prices here at home. Before the
war in Iraq, oil was about $28 per barrel. Today it is over $70. Iraq
was a significant source of worldwide oil, but its production has
dropped 50% since 2002. Pipeline sabotage and fires are routine; we have
been unable to prevent them. Furthermore, the general instability in the
Middle East created by the war causes oil prices to rise everywhere.
The sooner we get out of
Iraq and allow the Iraqis to solve their own problems the better.
Soaring gasoline prices are one giant unintended consequence of the war,
pure and simple.
Even so, many war hawks
are seriously agitating for an attack on Iran – another major supplier
of worldwide oil. They are not concerned one bit about the impact such
an attack would have on the wallets of average Americans; their
obsession with regime change in Iran trumps all common sense. But let me
be clear: An attack on Iran, coupled with our continued presence in
Iraq, could hike gas prices to $5 or $6 per gallon.