In a baffling series of remarks this week, President Joe Biden admonished gas station owners to slash prices and to “do it now,” blaming the latest gasoline price increase on greed. The president’s comments came as the average price per gallon hovers around $3.80 and as millions of Americans are worried about the rising cost of heating their homes.
Amid global instability, wildly fluctuating energy markets and rampant inflation, the president fails to realize that government policies and regulations have made matters worse.
There’s even more proof of this at the state level, where policy decisions have caused energy prices to vary significantly state by state. The glaring differences in electricity and gasoline costs are revealed in the new Energy Affordability Report from the American Legislative Exchange Council (ALEC).
States in the Northeast are among the most victimized by bad government energy regulations. Many of these states relied on natural gas imported from Russia due to New York’s ban on pipelines from the gas-rich communities in Pennsylvania.
With a significant portion of overseas imports cut off due to Russia’s aggression in Europe, as well as the enormous price increases due to limited supplies readily available on the global market, energy prices are set to skyrocket in New England.
It is no coincidence that Connecticut, Rhode Island, Maine, Vermont, Massachusetts and New Hampshire all fall within the top ten most expensive states for electricity, and all have some form of a cap-and-trade energy scheme, a round-about way of taxing energy production, thus making it more expensive.
When government mandates driven by political interests pick winners and losers in individual energy markets, Americans get stuck with higher energy bills. Top-down mandates, such as renewable portfolio standards and carbon taxes wildly distort energy markets at the expense of consumers.
Meanwhile, Louisiana, Oklahoma, Iowa, Utah and Wyoming, which comprise the five least expensive states in the nation for electricity prices, do not impose the same technology mandates or cap-and-trade schemes.
The new ALEC report also looks at fuel costs. At the state level, regulations, permitting challenges and tax rates play a significant role in consumers’ pain at the pump. For example, states with more stringent fuel content requirements and above-average state gasoline taxes generally have higher overall prices.
Lawmakers should examine California’s regulatory regime as a case study in how overregulation has led to the highest gasoline prices in the nation.
When state and federal lawmakers begin crafting energy and environmental policies, they need to understand that imposing more government control hampers market innovation. Market innovation and technological advancement are essential to both keeping costs low for consumers and protecting our environment. Facilitating a flexible and innovation-friendly regulatory environment will pay enormous dividends to the states that choose that path.
Increased energy costs are especially troublesome for American families whose wages aren’t keeping up with inflation. Moving forward, state energy policies must be based in the reality that electricity and gasoline are the backbones of our nation’s unparalleled economic success.
Anything less could lead to a significant downfall in all sectors of the economy, putting the American dream in peril. As for the president, it’s time to drop the misguided attacks on gas station owners and bring back American energy independence. But with this administration, we won’t get our hopes up.
Joe Trotter is the American Legislative Exchange Council (ALEC) Energy, Environment, and Agriculture Task Force Director and author of the Energy Affordability Report, 2nd Edition.
Lee Schalk is Vice President of Policy at ALEC and editor of the Energy Affordability Report.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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