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Politics at the Pump--Ehrlich Weighs In

Gov. Robert L. Ehrlich Jr's attention is quickly shifting from home energy costs to gas prices as the cost of filling up has soared.

At a news conference this morning in Baltimore that was billed as an event to highlight his clean air initiatives, the Republican governor had the awkward task of also announcing plans to suspend use of cleaner burning gasoline in the state.

When asked if a temporary halt in the use of gas with a cleaner burning additive would be harmful to the environment, Ehrlich said it would not.

"This is a short term remedy" aimed at bringing down prices, he said.

He said he is also "carefully researching" the possibility of suspending a portion of the state gas tax. "It's an option," Ehrlich said. "But it is not the preferred option."

Ehrlich's remark comes a day after Baltimore Mayor Martin O'Malley, a Democratic seeking to unseat him, called for a new state law to prosecute price-gouging by oil companies.

"Everytime you think it can't go up anymore, it does," said O'Malley, who was joined by his running mate, Del. Anthony G. Brown (D-Prince George's) and a stay-at-home mother who voiced concerns about whether she can afford gas for a recently purchased minivan.

Maryland currently has no law against price gouging. Legislation intended to provide the Attorney General with tools to prosecute such cases died in the last session of the legislature. Both O'Malley and Doug Duncan, his rival in the Democratic primary for governor, supported that legislation.

Yesterday Duncan's campaign called the mayor's comments the latest example of his "late arrival" to the political debater.

"Once again Mayor O'Malley has arrived late, very late, to a discussion about an important issue affecting the pocketbooks of hard working men and women in Maryland," wrote campaign manager Scott Arceneaux.

Arceneaux pointed to a September 2005 new release, that came as prices spiked just after hurrican Katrina, in which Duncan called for such legislation.

John Wagner and Matt Mosk

By Phyllis Jordan  |  April 26, 2006; 3:18 PM ET
 
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Comments

Oh, goody. Surely a new law will solve this problem. It solves all others, after all.

Posted by: Brandon | April 25, 2006 6:04 PM | Report abuse

My understanding is that Arceneaux and another senior staffer were canned by Duncan the other day.

It's funny to see him putting out statements on behalf of Duncan.

At this point, Arceneaux has become sort of the Scott McClellan of Maryland politics -- it's very painful and embarassing to hear him speaking on behalf of the campaign when everyone suspects that he's on thin ice with Duncan and company.

I guess Duncan let him speak to try to quell those rumors -- smart move.

Go Duncan!

Posted by: Is Arceneaux still campaign manager? | April 26, 2006 7:09 AM | Report abuse

Brandon,

When the free markets do nothing but exploit the consumer then, yes, it is the job of government to protect him. Government isn't always the answer, but those who say that it never is are just repeating a simpleminded talking point.

I am less then enthusiastic about a state law, however, as it will no doubt target the individual station owner who has little or nothing to do with this problem.

Posted by: howie | April 26, 2006 8:44 AM | Report abuse

This is all political posturing. I've been reading and hearing (from NPR) that prices are high because of market forces and I tend to agree with that. I can't see all the oil industry conglomerates colluding to scam consumers while other major factors are in play like rising demand from China, India, and other fast developing nations.
Any state law will have virtually no effect and even a federal investigation proposed by our brilliant leader yesterday will do nothing. The answer is working toward energy independence. After all, if Brazil can do it why can't we?

Posted by: Mr. K | April 26, 2006 8:57 AM | Report abuse

Oddly enough Maryland has a law against charging too little for gas.

Posted by: Steve | April 26, 2006 9:16 AM | Report abuse

This is odd, but it seems I'm agreeing with Mr. K. This is not an issue where a federal investigation would do much good. In general, we have high gas prices because demand is high and supply is tight.

Whenever gas prices rise, consumers get outraged and demand that government "do something." Unfortunately, politicians pander to their ignorance. There is litle that government can do about demand, however. People simply want to use more gasoline.

There may be some ways the goverment can help, however. The federal requirements for clean gasoline blends drive up prices as well as prevents gasoline from being a truly national commodity (gas that's blended for L.A., for example, can't be sold in Chicago, which has different requirements -- this leads to artificial shortages in certain areas), federal and state taxes increase the cost significantly (the Maryland state tax is .23 a gallon and the federal tax is over .18 -- compare this to oil companies that make about .9 a gallon. It seems the government, not the "greedy" oil companies, are profiting much more on a gallon of gasoline), and oil exploration is prevented in areas that have good potential for production (off-shore and in ANWR). If our politicians at the state level want to "do something," they should lower the gas tax. At the federal level, they should remove environmental regulations and allow more domestic drilling as well as lower the gas tax. Calling for an investigation that will prove there was no collusion among oil companies (as all such investigations in the past have found) is meaningless.

Posted by: MK | April 26, 2006 9:16 AM | Report abuse

I'd note that one of the best ways to cut prices is to cut demand. You can do that by providing public transit and having land use patterns that help keep people off the roads. I, a Montgomery County resident who lives close to the city and takes the Metro to work every day, associate Duncan more than anything with building the InterCounty Connector that will put more gas guzzlers on the road and put more houses out in areas where they are away from public transit and jobs.

Posted by: KM | April 26, 2006 10:12 AM | Report abuse

MK, I hate to bring our agreement to an end but you lost me on your proposed solutions. If you are suggesting a national standard for gasoline blends, I can agree with that; however, I can't agree with the government being characterized as greedy in this instance. These taxes are necessary to pay for roads and public transportation. Money for these necessary services don't come out of nowhere.

Drilling in ANWR and offshore are questionable at best. Those places have limited supplies and may not bear fruit for years to come which does nothing to help us now. As per lowering environmental standards, that just offsets costs from one place to another. Protecting the environment is a business interest. People may pay slightly lower gas prices, but businesses and the public will then pay more money due to increased illness from bad air and water (healthcare expenses, sick time from work, lost productivity). We need long term solutions that wean us off foreign oil and produce clean energy. These short term measures will only prolong the inevitable while trashing our environment

Posted by: Mr. K | April 26, 2006 10:49 AM | Report abuse

All of this "nibbling around the margins" is going to do little to solve the long term problem. Demand is increasing at a much faster rate than supply , so prices go up.If we want lower gas prices, then either increase supply-something very few of us can do-- or lower demand -something all of us can do. Ironically, the path to lower gas prices may lead us to radically INCREASE prices. These incremental increases are disturbing to most people , but how much has it decreased demand?
No one in Annapolis or washington has the testicular fortitude to propose the kind of radical action that would drop prices within 6-12 months. INCREASE the gas tax by $2-3 dolloars per gallon, use that new revenue for exploring alternative fuels, vehicles, technologies, whatever AND a tax rebate for citizens below a certain income level and those who depend completely on private vehicles to get to or do their work. Demand would drop dramatically and oil companies and oil rich countries would have the bottom drop out of their markets. Indeed it would be painful for a while,but the gradual increase in prices we have seen isn't exactly comfortable. It just hasn't been painful enough for people to make drastic changes. NYTimes columnist Tom Friedman has stated that "The sooner we get to $100 per barrel oil, the sooner we will get to $20 per barrel oil."
This, however, will require a commodity even more scarce than oil---leadership.

Posted by: jmsbh | April 26, 2006 11:32 AM | Report abuse

I somehow thought our honeymoon would end, Mr. K, but it was nice while it lasted.

I realize why we have gasoline taxes and I actually view them as one of the best taxes out there, since they are earmarked for transportation construction and those who use the roads pay for this construction (almost like a user fee). I also recognize that there is a lot of waste in this area, especially at the federal level. At times like this, I don't think it would hurt at all to temporarily lower these taxes to provide some relief. I also find it laughable that we have so many politicians castigating oil executives for their "high profits" when the government makes much more money off a gallon of gas than the oil companies do.

I realize that ANWR won't help us now, but if drilling would have been authorized in 1995 (when the GOP passed legislation allowing this) we might be seeing lower prices.

I know that we need to look for alternative energy sources, but we should not neglect using those resources we have now, including the oil offshore and in ANWR.

Posted by: MK | April 26, 2006 11:47 AM | Report abuse

That's funny. The state of MD takes more in taxes than the oil companies make in profit. Who should be lowering their take?

Posted by: Joel | April 26, 2006 11:58 AM | Report abuse

Ehrlich just weighed in, suspending the use of cleaner fuel additive, and said he is looking at the gas tax...See updated item.

Posted by: Phyllis Jordan | April 26, 2006 12:25 PM | Report abuse

This is actually a problem that has to be blamed on the American people. For the past 20 years people have been warning that this is going to happen, and what did the citizens do, go on an insane SUV bender! I think it falls a little bit more on the shoulders of the GOP who enthusiastically endorsed this short-sighted stupidity and deserve the political hit for it, for that enthusiasm. But the reality is that there is no easy thing that can be done now. The War in Iraq and continued instability in all major oil producing nations has given speculators all the rationale they need to speculate about the supply of oil inflating the price of oil for everyone.

What Bush needs to do is strike a deal with the Chinese, so that they will provide troops in Iraq for a guaranteed supply of oil at a lowered price and we withdraw our troops, disentangling ourselves from that mess. We can spend a $10 billion we spend a month on research into alternative fuel sources, and probably get where we need to go in a fraction of the time. The Chinese have millions of soldiers to deploy and an insatiable appetite for oil thus pulling on supply, they get what they need, we get out of Iraq, and a lessening of the drag on supply that Chinese expansion has caused. This also will deal with the speculation problem as it takes the Chinese away from needing to secure as much oil futures as they need now.

Now I understand that there are a million little issues involved in doing something so drastic, but this ain't a problem that is ever going to be solved without a major change in geo-political realities. Or we could just drive less and build more public transit, but something tells me with the same short-sightedness as before Americans will choose to change the whole dynamics of the world over changing their own personal behavior.

Posted by: RCD | April 26, 2006 1:02 PM | Report abuse

I'm glad to hear Ehrlich is actually doing something that will help lower prices. What he's suggesting is a much better tactic than a wasteful investigation or a "price gouging" law that has no relation to the current situation.

My only complaint is that he seems hesitant to suspend a portion of the gas tax. Suspend it, Ehrlich. The state can do without the extra revenue.

It's unfortunate the legislature isn't in session to repeal the ridiculous law that penalizes companies that sell gasoline at a low price. That's the most ridiculous law I've ever heard of.

Posted by: MK | April 26, 2006 1:05 PM | Report abuse

So the solution is, apparently, to screw air quality and the environment? Nice.

Posted by: corbett | April 26, 2006 1:29 PM | Report abuse

I think what Ehrlich is saying is at a time of extremely high gas prices, the cost of slightly better air quality isn't worth it. It's a very sensible call and I think the people of this state will appreciate it.

Posted by: MK | April 26, 2006 1:33 PM | Report abuse

This is where it starts - temporary measures that lift pollution standards to off-set high gas prices. But is that where it's going to end? And what exactly are going to be the savings consumers will see because of it?

If the solutions to high prices are going to be ducking environmental responsibilities and cutting the gas tax, nothing will be done to cut our reliance on oil. We'll do this today, and six months from now when prices are higher than today, we'll do more of the same. If the problem of higher gas prices was simply due to cleaner burning mixes, I don't have an issue with paying more.

Because there is no such thing as sacrifice, all the talk of alternative fuels is going to remain pie-in-the-sky future-talk. Call me cynical, but none of the measures Ehrlich or Bush are going to take are going to help until we really face up to the facts that we need a fundamental shift away from oil as soon as we can.

The only thing keeping us from energy independence is the lack of will power to do it.

Posted by: corbett | April 26, 2006 1:50 PM | Report abuse

"When the free markets do nothing but exploit the consumer then, yes, it is the job of government to protect him. Government isn't always the answer, but those who say that it never is are just repeating a simpleminded talking point."

The market is based on voluntary interaction. Government is based on coercion and violence. Exactly how many people were killed in the 20th century by governments that were founded on the principle of protecting people from the market? A good deal more than have ever been "exploited" by the free market.

Posted by: Brandon | April 27, 2006 1:45 AM | Report abuse

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