August 31, 2009
By Ben Lieberman
Labor Day signals the end of summer-vacation season. Will this
summer also turn out to be the last cheap one for gasoline? The
Obama administration and Congress certainly seem intent on making
Although pump prices from Memorial Day through today were far
from a bargain -- about $2.60 per gallon -- they were more than $1
lower than last summer, when prices exceeded $4 a gallon for the
first time ever.
We can attribute much of the drop since then to the recession
and reduced demand for gas. Millions of people no longer have jobs
to drive to. Others have saved money by cutting back on or
canceling vacation plans; businesses have made fewer deliveries,
But recessions don't last forever, and if nothing is done to
boost the supply of affordable fuel, the pain at the pump will
return as soon as the economy recovers and demand increases.
Politicians should use this time to help stave off the next gas
price spike. Instead, they're trying to do the opposite.
The worst "solution" is the Waxman-Markey "cap and trade" bill,
which aims to cut emissions of carbon dioxide from energy use.
Proponents claim that emissions are warming the planet to
dangerous levels, so they're seeking to limit how much gasoline and
other fossil fuels Americans use. The bill would cause gasoline
prices to rise high enough so the public would use less and meet
the bill's ever-tightening energy-rationing targets. It's a
deliberate effort by the U.S. government to make gasoline -- not to
mention electricity and natural gas -- less affordable.
According to a Heritage Foundation analysis, the bill would
boost the price at the pump by 20 cents per gallon when the
provisions take effect in 2012. The targets get tougher each year,
and by 2035, the increase would be an inflation-adjusted $1.38 per
gallon -- and that's on top of any other price increases that might
By the way, even if one assumes the worst of future global
warming -- though there are sound reasons not to -- climate
scientist Chip Knappenberger of New Hope Environmental Services
estimates that this bill would reduce the Earth's future
temperature by no more than 0.2 degrees Celsius by 2100. In other
words, it's all economic pain for little or no environmental
At the same time, President Obama and Congress are cracking down
on domestic production of oil. Last year, in the wake of public
outrage over $4 gas, President George W. Bush and a Democratic
Congress repealed the restrictions on energy leasing in 85 percent
of America's territorial waters. However, the Obama administration
has reversed the pro-energy momentum from last year, thus far
refusing to open any new areas to leasing and even canceling some
Meanwhile, Congress has introduced bills that would further
restrict domestic oil and natural gas drilling, both onshore and
offshore. As it is, the United States. is the only oil-producing
nation that has placed a significant portion of its domestic
potential off-limits, and Washington is about to make it worse.
Gasoline prices are notoriously hard to predict, but it seems
the current respite from high prices is likely temporary. If demand
comes roaring back while supply is constrained by federal
global-warming and anti-drilling policies, we easily could see a
return to $4 gas -- or worse -- in the summers ahead. Better hold
off on those future vacation plans.
Lieberman is a senior policy analyst in the Thomas A. Roe
Institute for Economic Policy Studies at the Heritage
First Appeared in The Washington Times
Labor Day signals the end of summer-vacation season. Will this summer also turn out to be the last cheap one for gasoline? The Obama administration and Congress certainly seem intent on making it so.
Energy & Environment Initiative of the Leadership for America Campaign
Senior Policy Analyst, Energy and Environment
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