Senator calls for yet another futile federal investigation into gasoline costs

www.reviewjournal.com Monday, March 10, 2003 Las Vegas Review-Journal

EDITORIAL: Grandstanding on fuel prices

As sure as winter is followed by spring, you can bet some California politician will raise a ruckus about rising gasoline prices and call for something to be done. This year's bleatings originate from Democratic Sen. Barbara Boxer, who wants the General Accounting Office to investigate whether oil companies are taking more gasoline refineries "than usual" out of commission for maintenance ... all with the intent of cutting supplies, thus boosting prices and profits.

"I am extremely concerned about the rising gasoline prices ... particularly with regard to the possible manipulation of supply due to idle refineries," she said.

Rather than calling for another formal investigation of the oil industry -- the 29th since 1979 -- the grandstanding Sen. Boxer would better serve her constituents and the rest of the nation if she dusted off her Economics 101 textbook and reviewed the sections on supply and demand. She'd find that price increases are predictable, for several reasons.

For one, the price of crude oil is at a two-year high, not only because of jitters about the likely war with Iraq, but also due to uncertainties about the availability of oil from Venezuela and its crazed socialist dictator Hugo Chavez.

Another is the pending change in gasoline formulas which takes place each spring in California and other areas that require specialized fuels to reduce pollution during the winter months. As April approaches, and refineries prepare to make the switch to spring and summer gasoline formulas, supplies often run low, causing a boost in prices. California faces an additional problem this year, as it's phasing out the additive MTBE and switching to ethanol, again cutting into production.

Sen. Boxer also might want to review recent history. The Cato Institute's Jerry Taylor and Peter Van Doren note that every one of the 28 previous federal, state and local investigations of alleged price-gouging by gasoline manufacturers has "ended in the complete exoneration of the industry." And when adjusted for inflation, gasoline prices are still roughly 50 cents per gallon cheaper now than they were when they peaked during the Iranian hostage crisis.

All of which suggests that Sen. Boxer's crusade is little more than a publicity stunt, designed to grab headlines and foment populist outrage, all the while squandering taxpayer dollars on a frivolous government investigation.