Experts say rush to regulate fuel costs will do little

The temporary gas shortages and nationwide price spike brought on by Hurricane Katrina are spurring some lawmakers to take action.

Several proposals put forward in the U.S. House and Senate are designed to combat the post-Katrina price jump and minimize the impact of similar situations in the future.

Many experts, however, said more regulation would do little to improve gas scarcity.

"I am just very skeptical that any government control won't just make things worse," said Ed Erickson, professor of economics at N.C. State University.

U.S. Sens. Richard Burr, R-N.C., and George Allen, R-Va., proposed legislation that would require prompt reporting of fuel shortages so the public would be quickly informed about any problems with energy availability.

Doug Heye, Burr's spokesman, said current procedures failed to get the information out effectively. Burr's legislation calls for the Department of Energy to combat future communication problems.

"With what we've seen in the past couple of weeks, there wasn't a clear line of communication," Heye said. "Clearly, we need to ensure that we've got a stable supply of gasoline."

A bill offered by U.S. Rep. Maurice Hinchey, D-N.Y., proposes that gas prices be frozen at pre-Katrina levels.

Jeff Lieberson, Hinchey's spokesman, said the gas companies have reported substantial profits in recent years, demonstrating little need for them to continue benefiting in a crisis situation.

"This is a way in which (Hinchey) thinks he can effectively help the American people at the gas pump," Lieberson said.

But implementing government price controls for gasoline doesn't really address the problem, said Tom Crosby, vice president of communications for AAA Carolinas.

"That's penalizing private businesses," he said. "Whenever governments try to regulate and legislate in these situations, it just doesn't work."

With fuel costs having risen steadily for most of the last year, the sudden jump after Katrina might have put pressure on lawmakers to provide relief.

"Some of (the legislation) is well thought out and overdue," said John Tobin, executive director of the Energy Literacy Project Inc. "But some of it is, I'm afraid, frankly political."

"Between the energy crisis and the public, frankly, Congress doesn't know which way to go."

Katrina did help spotlight the long-running issue of tightening fuel supplies, Tobin said.

But it remains to be seen whether a renewed push for conservation will take hold once supplies are back up and prices begin to decline.

"Regretfully, if history repeats itself, we do panic," Tobin said. "But once the issue goes away - we tend to return to our old habits."

Erickson said that the gas shortage is primarily a supply issue and that legislation could have done little to prevent the hurricane from knocking out refineries and pipelines.

"All the legislation in the world is not going to cause Katrina to do anything but what Katrina did," he said.

 

Contact the State & National Editor at stntdesk@unc.edu.