May 17, 2001 | WebMemo on Energy and Environment
President Bush released his energy plan for the nation Thursday, and liberals had started attacking it days earlier. But their alternative is flawed. See the following talking points for more information.
The liberal plan will not work
Liberal proposals are similar to the failed policies in California. It calls for more government intervention, increased regulation and manipulation of the market.
Price controls do not work
Price controls artificially set the price, encourage consumption and fail to increase supply. As history has taught us, if the market is allowed to work and set the price, supply will increase.
Apparently the liberals like what's happening in
California, because their policies would create the same problems
throughout the country
Either that or they need to take a course in Economics 101. This is simple supply and demand, with demand is exceeding supply.
The free market, when left alone, will find a price that
will encourage conservation and stimulate investment
Both conservation and investment will increase supply and that will bring prices down. The Democrat plan manipulates the market with artificial price caps, micro-manages supply and demand, places massive federal controls on the energy sector, and impedes investment needed to get energy from the producer to the consumer.
Gas prices will drop when refinery capacity
Refinery capacity has not increased in the United States in over 20 years. Refineries are currently operating at 96% capacity. Gasoline prices will only drop to lower levels if refining continues operating at this level uninterrupted. This is unlikely, however, because operating refineries at maximum capacity over a sustained period of time will inevitably lead to breakdowns and disruptions in supplies. We simply need more refinery capacity.
Charli Coon is Senior Policy Analyst, Energy and Environment at The Heritage Foundation