Congress is considering legislation (the Gasoline Regulations Act of 2012) to require the federal bureaucracy (the Environmental Protection Agency, or USEPA) to use some additional common sense in its rulemaking process, especially with regards to those regulations which could cause price increases for consumers at the pump. Regulations, regardless of merit, exact a price on consumers indirectly through higher production costs. The legislation essentially delays further work on three distinct rulemakings until their cumulative impact on gasoline prices is analyzed and reported back to Congress before proceeding further. The proposed rules would also be assessed to determine if they would result in a loss of American refining capacity, employment, and international competitiveness.
We all understand global crude prices have a significant impact on gasoline. In fact, according to the non-partisan US Energy Information Administration, crude oil prices currently are responsible for 67% of the cost of a gallon of gas. However, there is also no doubt that increasingly-stringent regulation of refinery operations also affects the price of gasoline. The US Department of Energy acknowledged this in March of 2011 within a report that noted “the cost of compliance contributed to economic stresses that resulted in the shutdown of 66 refineries from 1990 through 2010.”
It seems only logical that as the federal bureaucracy works through its often less-than-transparent rule making processes, it now takes time to gain a better understanding of how these actions will affect gasoline prices. The bill does not stop these rules or permanently prevent these regulations from being adopted. It only delays them until a clearer assessment of costs…and benefits…can be made. Not all regulations are bad, but certainly all can likely be made better when their impacts are more clearly understood.
The fact that some agency bureaucracies, particularly USEPA, do not consider the cost and impact of its regulations is a surprise to many Americans. The fact that anyone is opposed to considering these effects is unfortunate. What the legislation does is ask the federal government to properly balance the need for economic growth with the need for environmental protection and to think through more comprehensively what are the possible unintentional consequences of these regulations.
As our economy continues its slow recovery, broad-reaching regulations like those under consideration by the federal bureaucracy which will impact gasoline costs have the potential to create devastating and long-term hardships for many Americans. To implement additional regulatory constraints on gasoline without considering the totality of their impact or how much they will cost Americans defies common sense.
It is our belief that elected representatives and bureaucrats alike would welcome and encourage these practical procedural protections. No one should want to blindly impose further regulations that have unintended consequences, reap little or no benefit, and potentially cost Americans at the gasoline pump.