Wednesday, June 23, 2004

My spider sense is tingling...

Here's The Weekly Standard's Irwin M. Stelzer on the lessons of the oil market. A quote that stands out:
The markets are also saying something about the state of the gasoline market. The margin between crude oil prices and gasoline prices has doubled in the United States, driving refining profits up several hundred percent. Yet, refining capacity has not increased. Oil industry executives with whom I have spoken say that environmental and other restrictions make it virtually impossible to build new refineries. Lesson number two for policymakers: Restrictions that were appropriate when crude oil was selling for $10 per barrel and gasoline for $1 per gallon are not economically sensible at current price levels. Revise them to allow more refineries to be built.
If this is the conservative conventional wisdom on oil policy, get ready to hear the anguished screams of the environmental movement.

1 Comments:

Blogger William said...

There is a point at which the environment needs to take a backseat to the welfare of man. This is one of those points.

While I do not advocate disregard of the environment, if we need to build new refineries to keep cars on the road, then it must be done. However, we must also make sure that we lower the number of gas guzzlers on the road. When I got my new car, I made sure to get one that averages about 20 mpg and this is average for today. Better technologies (ie hybrid cars) as well as thoughtful consumer spending should help this problem by lowering our need for gas. But, if it is near impossible to build refineries now, what happens when we NEED to as all of the old refineries start shutting down?

10:30 PM  

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