GCC: House Committee OKs New Refinery Legislation

Great catch by Mike over at GCC: http://www.greencarcongress.com/2005/10/house_committee.html

The House Energy and Commerce Committee last week approved refinery legislation--HR 3893: Gasoline for America's Security Act of 2005--out of committee.

One of the semi-conspiracy-oriented Peak Oil theories is that oil companies don't want to build more refineries, because of their secret knowledge that oil production is about to peak. There's no point in building additional refineries if there isn't going to be any more oil to refine. I wonder how believers in this theory react to the advent of the new legislation?
Well the other claim was that the oil companies couldn't build refineries because of too-strict environmental regulations.  Even with two Bushes and Cheney in the gov't, they just couldn't swing the permits.

Now we have legislation wherein the gov't will "encourage" the building of refineries.  Doesn't that mean we are helping to pay for those refineries?  

I tend not to subscribe to theories about vast and long-running conspiracies since such activity by companies is generally illegal.  I therefore don't believe that lack of refinery capacity is because of secret information about Peak Oil.  

In an oligopoly such as the petroleum refining industry, it is quite simple for signaling to occur since market participants can make some of their strategic moves transparently.  An obvious strategic response to overcapacity and low margins in the industry has been to reduce capacity. This approach has been facilitated by regulations which can serve as barriers to entry by non-incumbents.

Of course, the industry runs the risk that such common strategies could be misinterpreted as a conspiracy or an exercise of market power.  If prices spike, a regulatory or legislative response is likely as we are now seeing.  The energy crisis in California is another good case study of this industry/government dynamic.  In fact one could argue that the failure to account for this regulatory/legislative reponse is some evidence of the absence of a conspiracy; otherwise the conspiracy could coordinate their actions to avoid such additional regulation.

This is the same Joe Barton that wants to review the records of various climate scientists and drag them (including Michael Mann -- "the Hockey Stick" result) in front of his house energy subcommittee, thus applying "McCarthyism" to climate science. I note that "[the bill] codifies the President's ability to waive fuel quality standards in time of emergency" and "promotes new pipelines by altering [read weakening] siting requirements for pipelines and for pipeline expansions". Then, there's the usual nonsense about price gouging. I could go on and on. Finally, we see that
Our country needs more oil refineries because the people who work for a living need gasoline to get to work. These are the people who earn paychecks and buy groceries and pay their bills, including their taxes. That means they use gasoline every day. They need it, and they need it at a price they can afford to pay.
Afterall, the American way of life is non-negotiable. And in the meantime, while we wait several years for these new refineries to be built, we will decide which oil-producing nations to invade next and conserve for a while. What a great American he truly is.
Now that all the cards are in the air.  Does anybody know the fate of the low-sulfer diesel fuel regulations?
Sometime back, Econbrowser criticized the AG of California for initiating a price gouging investigation into gasoline pricing. Of course other politicians (Bush, Barton, Kennedy) and even the CEOs of ExxonMobil and Chevron have also expressed concerns about price gouging.  Although over 20 states have laws against price gouging, interestingly, this bill is the first to introduce such a Federal law.  The economists must be gnashing their teeth.