Why Is Gas Expensive??

According to the Energy Information Administration, between 1985 and 2005, the number of U.S. refineries fell from 223 to 148. A new refinery hasn't been built in this country since 1976. Through expansion and technology, refining capacity today is greater than it was 20 years ago (17,042 thousand barrels per day in January 2005 versus 15,659 in 1985). However, refineries are consistently running over 90 percent capacity utilization in recent years, compared to 78 percent utilization in 1985.

Now, understanding the laws of supply and demand, ask yourself who is responsible for the current situation and what is really causing the spike in fuel prices.


Welcome Google Researchers - August 12, 2005

I actually think about this issue and the government policies that impact it quite often as part of my job. I've blogged a bit on what I think are some of the big regulatory drains on our economy that force the conditions leading to high gas prices and sending jobs offshore (but for the most part avoid blogging about work).

Anyway, you can read more on the issue here, here, here, here. You can also read this post, and especially this post on the cost of regulations.