Who is to blame for high oil prices?

Big Oil or Congress? Big Oil is an easy target. Too easy. [Link]

If any one entity should take the blame for high gas prices in the US, Mackubin Thomas Owens writes in today’s Wall Street Journal, it should be Congress. Instead of loosening restrictions on domestic supplies when increased future demand from Asia was easily predicted, Congress tightened them instead. They also increased the tax burden on producers at a time when prices had already begun to rise, amplifying the increase and adding to its inflationary effect:

Gasoline prices are through the roof and Americans are angry. Someone must be to blame and the obvious villain is “Big Oil” with its alleged ability to gouge consumers and achieve unconscionable, “windfall” profits. Congress is in a vile mood, and has dragged oil industry executives before its committees for show trials, issuing predictable threats of punishment, e.g. a “windfall profits tax.”

But if there is a villain in all of this, it is Congress itself. That venerable body has made it impossible for U.S. producers of crude oil to tap significant domestic reserves of oil and gas, and it has foreclosed economically viable alternative sources of energy in favor of unfeasible alternatives such as wind and solar. In addition, Congress has slapped substantial taxes on gasoline. Indeed, as oil industry executives reiterated in their appearance before the Senate Judiciary Committee on May 21, 15% of the cost of gasoline at the pump goes for taxes, while only 4% represents oil company profits.

Read the rest.

Until we start building more nuclear plants and opening up our own reserves, prices will keep going up.