“Gas, gas, everywhere and not a drop to drill.” Anon

“At the editor’s farewell party, he talked about how he got his start 60 years ago as a newsboy standing on a corner with a stack of papers.  No one was buying, so he started yelling, ‘Read all about it. Fifty people swindled! Fifty people swindled!’  Curious, a man walked over, bought a paper, checked the front page, and then said, ‘There’s nothing in here about 50 people being swindled.’  The editor-to-be started calling out, “Read all about it.  Fifty-one people swindled.” Marvin Olasky, World magazine, April 7, 2012, p. 84

“Read the following and discover fifty-two people swindled!”

“Where the [Obama] administration has done its level best to halt energy extraction on public lands, the GOP legislation would open up to drilling the Outer Continental Shelf, estimated to contain enough oil and natural gas to meet America’s energy needs for about 60 years.”  The Weekly Standard, April 2, 2012, p. 8

“Quick:  How many kinds of gasoline do we use in America?  Most people would say three or six: regular unleaded, mid-grad, and premium, along with the ethanol blends of the same that have become nearly universal.  The actual number is somewhere above 45, though hard to pin down exactly, according to the Government Accountability Office (GAO).  It might even be closer to 70.  Thirty-four states use specially blended gasoline, usually during the summer, which is one reason gasoline prices always rise during the ‘driving season.’ If you want a good idea of why this makes no sense, meet me in St. Louis.  St. Louis, Missouri, uses one kind of gasoline; East St. Louis, Illinois, right across the Mississippi River, uses a different blend.  Meanwhile, the surrounding suburbs use a third kind.  Same metropolitan area, different gasolines, and they can’t be sold across jurisdictional lines, so refiners and distributors must maintain three separate systems for the three parts of the St. Louis metro area.

“Is this a conspiracy of the evil oil companies to fatten their margins?  Mostly no:  It’s the product of EPA bureaucrats and the Clean Air Act, stubbornly maintained even though boutique fuels now deliver only marginal reductions in air pollution from cars, if any at all.  And it’s a regulation President Obama could clear away if he wanted to.  It wouldn’t deliver a large reduction in gasoline pump prices, but even 10 to 15 cents a gallon—a plausible figure for California’s market—would help.

“The bizarre world of boutique gasoline owes its origin to the usual suspects:  California (of course) and the congressional sausage-rolling involved in the writing of the Clean Air Act of 1990.  When it comes to air pollution, there’s always been the country as a whole and then California, which because of its unique geography and climate has always had the nation’s worst air pollution levels by a considerable margin.  Congress has always given California special leeway in crafting air pollution regulations that go beyond what the EPA requires of the other 49 states.  But this frequently wreaks havoc with national industries, especially autos, since any auto mandate passed in California essentially is imposed on the entire country.  Carmakers don’t want to make one kind of car for California and another for everywhere else.  But oil refiners are a different matter:  They could readily make a different kind of gasoline for California—one that would help the auto industry solve some of its compliance problems….

“Translation:  The proliferation of boutique gasoline suppresses competition and drives up prices. The Government Accountability Office looked into the matter in a 2005 report, noting that the adoption of boutique blends meant that in one East Coast area the number of gasoline suppliers dropped from a dozen to three.  Southeast Michigan has just two refineries and one pipeline supplying its boutique blend.  After studying gasoline markets in 100 cities, the GAO concluded:  ‘The proliferation of special gasoline blends has made it more complicated to supply gasoline and has raised costs…Of the 100 cities we examined, most of the 20 cities with the highest prices used special blends of gasoline.’  The Dallas Federal Reserve noted another anticompetitive effect of the mandate:  It bars gasoline imports from other countries, which don’t produce any of our special blends.”  Steven F. Hayward, “Bureaucratic Gas,” The Weekly Standard, April 2, 2012, p. 10, 11


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