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The Journal of the American Enterprise Institute

House Democrats: Confused at the Pump?

Tuesday, May 29, 2007

Wednesday’s legislation on fuel price “gouging” was an odd moment for Democrats. If they really care about global warming, they should be glad to see gas prices go up.

It's an era of uncertainty for oil companies in America. With gas prices racing past $3 a gallon in recent weeks, there has been a lot of tough talk against oil companies early in the new Democratic majority’s tenure. What does the future look like for Big Oil? Will Democrats really tear them apart with price controls, investigations, and trust-busting as they have been promising? Or will they take a softer approach?

The view embodied in this bill—that a high price at the pump is an “unfair” price—sits uneasily with the Democrats’ stance on global warming.

Every year since at least the beginning of President Bush’s tenure, complaints about gas prices and suspicions of “gouging” by oil companies have surfaced. Democrats complained in their 2004 platform that the Bush team had “done nothing as gas prices have soared to record levels. Even the Administration’s own economists have found that their energy plan will do nothing to reduce gas prices.”

On Wednesday, the talk finally turned to action, as the House passed a bill that would outlaw charging “unconscionably excessive” prices for fuel—whatever that term, undefined in the statute, may turn out to mean.  

The view embodied in this bill—that a high price at the pump is an “unfair” price—sits uneasily with the Democrats’ stance on global warming. That stance that has grown stronger with Al Gore’s documentary “An Inconvenient Truth” and his subsequent activism.

Last week (May 18), Democratic congressional leaders urged President Bush to not soften his stance on global warming. Their letter to the President referred to a need to “cap global warming pollution and cut it dramatically over the coming decades.” What such a policy might do to prices at the pump, they did not specify.

Why aren’t Democrats cheering the rising gas prices? The most natural and effective way to drive consumers to pollution-cutting measures such as driving their car less, getting a hybrid or using public transit is to hit their wallets. If anything, fuel efficiency standards that make it cheaper to drive a mile in one’s car tend to motivate people to drive more, not less.  

Oil companies will probably face at least some retribution. The Democratic Party may eventually push through a bill that sets a tax targeted at oil execs, or conjure up criminal charges based on the as-yet undefined practice of “price gouging.”

But eventually, Democrats will have to recognize that by fighting for low gas prices while at the same time trying to get people to drive less, they are waging a war against themselves.

Daniel P. Taylor is a freelance writer living in Falls Church, Virginia.

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