What Washington Can and Shouldn’t Do to Lower Gas Prices

My colleague at OTB, Doug Mataconis, has a post up there titled “Is There Anything That Washington Can Do About Gas Prices? Not Really”. I don’t know whether it’s due to a lack of knowledge on Doug’s part, lack of imagination, or conflating “can’t” with “shouldn’t” but I found the post nettling.

I do not necessarily recommend the following moves.

However, there’s plenty that Washington can do both in the short term and long term to lower gas prices.

1. It could remove the 18.4 cent per gallon federal excise tax on fuel.
2. It could open the Strategic Petroleum Reserve. Experience has suggested that we could expect a price decline of between 2% and 10% from that move alone.
3. The U. S. federal government is the world’s largest consumer of gasoline. The 210,000 vehicle Federal Vehicle Fleet uses about 270,000 gallons a day (based on my back-of-the-envelope calculation). Less driving of the FVF would result in a decline in demand at the margins and consequently a decline in price.
4. The U. S. military is responsible for about 1% of total U. S. energy consumption and consumes about a million gallons of fuel per day. About half that is jet fuel. Reduction in military flights would result in a decline in demand at the margins and consequently a decline in price. Reduction in other military operations would further reduce fuel consumption. BTW, the non-tactical DoD vehicle fleet is more than 185,000 vehicles (that’s over and above the GSA’s FVF).
5. Federal employees use about 6 million gallons of gas a day commuting to work. Mandatory telecommuting could reduce that overnight.

Those five immediate steps just occurred to me off the top of my head. I’m sure there are others. Longer term measures that would reduce the price of gas include:

1. Reduce the size of the military.
2. Reduce the size of the Federal Vehicle Fleet.
3. Reduce the size of the non-tactical DoD fleet.
4. Reduce military operations.
5. More telecommuting by federal workers, mandatory if necessary.
6. End the federal deduction for mortgage interest.
7. Stop building roads.
8. Eliminate reformulation requirements.
9. End the “Buy American” predispositions in purchasing the FVF and buy inexpensive and highly efficient (but foreign manufactured) diesel and gasoline vehicles rather than domestically produced “advanced technology vehicles”.
10. Reverse the cheap dollar policy we’ve had for decades.
11. Balance the budget.
12. Prohibit measures that inflate the prices of commodities, e.g. quantitative easing.
13. Produce more oil domestically.
14. Subsidize the building of refineries.
15. Relax environmental regulations to make it easier to produce oil and gas.

Again, just off the top of my head.

Repeat: I do not necessarily recommend any of the measures above. But they would serve to lower gas prices.

What do I recommend? I think there are strategic, geopolitical, and economic reasons to want higher gasoline prices. Stable prices are as or are more important than low prices. And why do we want to put money in the pockets of people who hate us? We should have a higher federal gasoline tax (I mean really higher). And we should have a smaller military that does less. But I’ve said that before.