(The Fisher Institute, 6350 LBJ Freeway, Suite 183E, Dallas, Texas 75240) • 129 pages • $5.95 paperback
Standing in a gas line can be a frustrating experience. But because most Americans didn’t understand what caused the long lines of 1973-74 and 1979, they directed their anger at the wrong people.
The blamed the oil companies. But oil companies don’t earn profits by holding prices below market-clearing levels. And they don’t make money by allocating gasoline to rural areas while supplies in the cities are drying up.
The federal government does these things. It took government intervention to disrupt the flow of gasoline and create the maddening lines.
Now that the Department of Energy has relaxed its controls over the pump price of gasoline, supply and demand are again in approximate balance, and the lines have disappeared. However, Merklein and Murchison show, our basic energy problems persist. The Department of Energy continues to discourage natural gas exploration by controlling the wellhead price. The same holds for crude oil. On top of this, Congress has imposed a “windfall profits” tax (actually an excise tax) on the oil companies.
These misguided policies are a political response to the misdirected anger of the American people. When the public understands the causes of our energy problems, these policies will be changed. Those Gasoline Lines and How They Got There, a well written, carefully documented analysis of the energy crisis, is an excellent place to begin that understanding.