Rich Lowry: Energy outage

Rich Lowry explains why he thinks that some of the proposed energy initiatives aren't likely to work the way folks in Washington like to think they ought to work. For instance:

Bush’s latest proposal is to allow oil refineries to be built on former military bases. This is clever, since the bases are isolated — away from immediate neighbors who might object to refineries — and no one knows what to do with them otherwise. Why hadn't anyone thought of this before? Because no one wants to build refineries on military bases.

Bush argues that regulations and community opposition have kept any new refineries from being built since 1976. But the refinery industry has been upgrading existing refineries that are conveniently located near oil terminals and pipelines (and, notably, not on military bases). In contrast, the expense of building a new refinery is a risk in a highly competitive business with narrow profit margins. In other words, it doesn’t make economic sense. Ain’t the market inconvenient, especially for a politician trying to “solve” high gas prices?

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