A Good Step in the Right Direction

Fire of Liberty

The Wall Street Journal has a good editorial (See the whole thing at OpinionJournal- It's free via e-mail registration)up today that tries to place the rise in gas prices in a greater perspective and truly identifies the true culprit which is the heavy-handedness of the folks in Congress. Though some folks are calling for a top down solution via government intervention the editorial board of the WSJ is correctly notes that things would improve in the price of gas if the folks we elected would take the brakes off the private sector and allow them to get things done. (How many members of Congress do you know that can explore, drill and refine oil for fuel?) I have to say the WSJ gets it right when they note that Congress should free up the energy sector by doing the following:

Congress could help a little in the short term if it asked the Bush Administration to end the 54-cent-a-gallon tariff on imported ethanol. That would especially help drivers in coastal states suffering from spot shortages. Naturally, however, the domestic ethanol industry is threatening retribution against any Member who suggests such a thing; so much for industry gratitude.

The GOP might also refocus its attention on legislation the House passed last year to reduce the number of "boutique fuels" to six from 17. These special gasoline blends are required in different parts of the country in the name of reducing pollution. Their primary effect, however, is to raise gas prices and make it difficult to move gas around the country during shortfalls. The Environmental Protection Agency could also ease environmental rules for those parts of the country suffering shortages.

Meanwhile, we're also hearing more about the country's reliance on "foreign oil." But if Congress wants to ease that dependence, it will have to open more of the U.S. up to oil and gas exploration. Had the Senate opened up the Arctic National Wildlife Refuge to exploration when the Bush Administration requested it in 2001, some of this oil might now be joining American supplies. The same goes for natural gas drilling along the Outer Continental Shelf. Yet the very Democrats who deplore foreign supplies and shout about high prices vote again and again to block domestic oil exploration.

All in all, members of Congress have got to find a way to knock down the barricades of domestic energy exploration and production. In fact, it seems that Representative John Shadegg of Arizona (R.) is on the same page of the WSJ and calmer heads who see the rise in gas prices via a rising demand and a shortening supply of oil due to congressional restrictions and has made a move in calling for the elimination of tariffs against the imports of ethanol into this country. Here's what National Review Online editor Kathryn Jean Lopez pointed out over at the Corner on Rep. Shadegg:

Shadegg Offers Real Help on Gas Prices

Reducing Ethanol Tax Would Offer Immediate Relief

Washington - The law of unintended consequences is the one law Congress never fails to pass, and one of the consequences is the higher gasoline prices we face today. But Congress can bring down prices by cutting the tax on imported ethanol.

"This is a straightforward measure that will bring immediate relief to Americans facing $3-per-gallon gasoline prices," said U.S. Congressman John Shadegg, who today introduced the Ethanol Tax Relief Act. "With the gasoline additive MBTE being phased out, almost every gallon of gasoline sold in the United States is going to require ethanol. But right now our domestic ethanol supply is inadequate to meet this increased demand. As the cost of ethanol rises, so do gasoline prices. The answer is to temporarily suspend the tariff on imported ethanol."

MBTE is used as a fuel oxygenate to reduce air pollution. It currently constitutes 1.4 percent of the U.S. gasoline supply, but Congress' failure to pass MBTE liability protection last year means that MBTE producers are getting out of the business as rapidly as possible.

"Democrats in Washington are suggesting we raise taxes on energy companies - but that is exactly the wrong thing to do," Shadegg said.

The only remaining approved oxygenate is ethanol. In an effort to protect our domestic ethanol industry, the U.S. levies a tariff of 2.5 percent and a 54-cent per gallon duty on imported ethanol. For the time being, however, the domestic ethanol supply is simply inadequate. The result is higher gasoline prices. Rep. Shadegg's bill would suspend the taxes on imported ethanol until January 1, 2007, increasing supply and lowering prices.

"The U.S. ethanol supply will catch up to demand soon," Shadegg said. "But American families need help now."

Now if you've read my following posts you know that I'm no fan of mandating the use of ethanol(I love that we can make gas from corn or sugar but things have got to develop via the market not by a Washington dictate) because its being subsidized by the federal government and it's too darn expensive to buy in the country due to limited availability, transport costs (Attracts water thus can't flow through pipelines like LNG and gasoline.) as well as a the current tariffs on imports but it seems to me that Representative Shadegg sees the problem and seems to be using his mind rather than his mouth to solve the problem. Here's hoping others in Congress will follow suit.