The whole idea of the free market operating, without regulation by the government, has always been a cornerstone of conservative economic theory. So, it was a little surprising to hear about the pending investigation by the FTC into price gouging by oil companies in the wake of Katrina. The investigation comes at the result of a request by a group of eight Democratic governors.
Of course, the oil industry has gotten its way more than any other, between the votes of Republicans and oil state Democrats. And that includes deregulation. And, with two oilmen as President and Vice President, they have their way at the top as well. Of course, during the 2000 election, when oil prices were as high as $1.30 a gallon nationally, one argument that was advanced was that two oilmen would know a few things about energy policy, so they could get that down if they got their energy bill passed. Well, it's passed, including ANWR drilling, and even before Katrina, the price of gas had doubled (man, what I wouldn't give for $1.30 a gallon). Of course, oil companies have blamed many things for this, especially the fact that no refineries have been built in America for ten years, which they blame on environmentalists. Well, what about that one?
The answer is found in internal memos from Mobil, Texaco, and Chevron from several years ago which all say essentially the same thing. The thing they propose is, to intentionally limit the number of refineries in order to drive up gas prices and then, when it happens, to blame environmentalists.
And it's all right there in their own memos.
And, how has the refinery shortage and the subsequent disasters affected the oil industry? Not a bit. Oil companies have seen their stock prices about double so far this year on record profits. Station owners, at the front edge of customer complaints, typically make only pennies a gallon, and in fact crude oil prices haven't even risen by as high a percentage as gasoline prices have.
This is a perfect example of why deregulation and 'trusting' corporations to police themselves without government oversight is a bad idea.