6/19/00 8:50 a.m.
Gas Pains
The Clinton-Gore hypocrisy on gas prices.

By Jonathan H. Adler

resident Clinton is "worried" about gas prices in the Midwest. Last Friday he told the Today show that it is "frustrating" that consumers must pay $2 per gallon or more for gasoline in Chicago and Milwaukee. Last week, amidst unspecified allegations of "price gouging," officials from the Environmental Protection Agency and the Departments of Energy and Transportation met with oil-industry representatives and demanded an explanation.

Consumers are understandably upset about higher gas prices, but the administration should view inflated energy prices as a policy success. After all, the Clinton-Gore team has sought to increase energy prices for years, and deserves a share of the credit — or blame — for the recent price rise. In their first budget, the Clinton-Gore team proposed a whopping tax on energy use that would have cost the average family an estimated $300 per year, far more than the recent upticks in the Midwest. A plan to boost energy prices in order to reduce use was also outlined in Gore’s tome, Earth in the Balance (on page 349 for those who are checking). According to Gore’s plan, "production of gasoline, heating oil and other oil-based fuels, coal, natural gas, and electricity generated from fossil fuels would trigger incremental payments of the CO2 tax according to the carbon content of the fuels produced."

At the time, Clinton officials explained that the tax’s impact on fuel costs was its primary virtue. Higher prices, they averred, would encourage conservation. Vice President Gore explained that an energy tax "reduces pollution, promotes energy efficiency, and helps us become more independent from foreign oil." Higher energy prices would increase the cost of everything from commuting and cooking a meal to shipping goods and heating homes. No matter, said the Clinton-Gore administration and their Green allies, it would be for our own good. Consumers didn’t feel quite the same way, and the proposed energy tax died a quick death; all that Clinton could get through the then-Democratic Congress was a 4.3 cent-per-gallon hike in the gas tax.

While they are loath to admit it, the administration bears much of the responsibility for domestic supply disruptions and higher prices. Environmental regulations, ranging from region-specific content mandates to barriers to facility modernization, have exacerbated the impact of OPEC’s price hike and a pipeline break in the Midwest. A dynamic national market has been hamstrung and Balkanized by environmental rules, making it more difficult for refiners to respond to local needs. Proposed new rules are expected to make this problem worse. Instead of accepting responsibility for hiking fuel costs, the Clinton administration is hurriedly seeking to shift the blame. EPA officials deny any responsibility and refuse to consider loosening regulatory strictures to ease the supply crunch. Instead, a Federal Trade Commission investigation of "price gouging" allegations is in the works. Energy secretary Bill Richardson took to the air Sunday morning to proclaim that energy prices were his top priority — and he’ll be as effective here as he was in enhancing security at the nuclear-weapons labs. The vice president, interestingly enough, is quiet.

So, if gas prices continue to climb this summer, and you find yourself stuck in service-station lines, don’t blame the oil industry. Thank Al Gore.