Tuesday, May 02, 2006

The cost of gasoline

Gasoline prices a "crisis": Bodman WASHINGTON (Reuters)
States sue Bush over fuel efficiencyNEW YORK (Reuters)
Bush Gasoline-Price Probe May Not Find Manipulation (Update1)

U.S. Energy Secretary Sam Bodman said today that high gasoline prices which have skyrocketed to a near record are a "crisis" for Americans.

In related news, nine states (California, Connecticut, Maine, Massachusetts, New Mexico, Oregon, Rhode Island, and Vermont) have sued the administration of President George W. Bush for lenient automotive fuel economy standards that they say worsen an energy crunch and contribute to air pollution and climate change.

Elliot Spitzer, New York Attorney General, said in a press release, "At a time when consumers are struggling to pay surging gas prices and the challenge of global climate change has become even more clear, it is unconscionable that the Bush Administration is not requiring greater mileage efficiency for light trucks."

The price increases have also prompted Republican Senators Arlen Specter of Pennsylvania and Mike DeWine of Ohio to propose enforcing U.S. antitrust laws against Saudi Arabia and other members of the Organization of Petroleum Exporting Countries. The Senate Judiciary Committee approved their plan on a voice vote today and sent the measure to the full Senate.

Our favorite antitrust expert, Professor Herb Hovenkamp, recently commented that applying U.S. antitrust laws to OPEC would go against a longstanding legal doctrine that U.S. courts don't have authority to rule on the legality of foreign government actions. It also might prove difficult to enforce.

The proposal also raises a foreign-policy issue because oil is ``a natural resource for these countries'' and ``the way they set price is by controlling output,'' Hovenkamp said.

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