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Regulatory Sclerosis in Energy Markets:

It is still "Energy Week" on NRO. Among today's articles is this piece by my former colleague Andrew Morriss on the regulatory sclerosis afflicting energy markets. His bottom line:

On the rare occasions when energy markets have been allowed to work relatively unimpeded by political efforts to serve special interests, market forces and private enterprise have delivered dramatic improvements in energy. Competition, not government tax breaks, drove the "octane race" of 1930's that boosted gasoline quality. Market forces, not government regulations, led some U.S. oil companies to lead the world in the development of the tanker fleets, oil terminals, and exploration rights around the world that brought America falling energy prices throughout the 1950's and fueled the post-World War II boom in automobile travel. Companies seeking an advantage in sales, not bureaucrats, drove the development of retail innovations, from clean service station restrooms, to today's pay-at-the-pump technology. Improved blends of gasoline for high altitudes and cold weather came from entrepreneurs, not regulators. If we unleash the power of markets and entrepreneurs on our energy problems, American consumers can count on economical, safe, and reliable energy supplies. If we let politicians in Washington and state capitols force feed our energy markets more "regulatory cholesterol," we face a future of rising energy prices, shortages, and an increasingly unreliable infrastructure.

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