Study: Price gouging gas bill costly

WASHINGTON – With Congress potentially moving forward on a law to penalize oil and gas companies for price gouging, a new study says doing so would cost the economy about $1.9 billion during a national emergency on the scale of hurricanes Katrina and Rita.

The study, to be released Tuesday by the American Council for Capital Formation, argues that such legislation would cause long lines at service stations and fuel shortages reminiscent of the 1970s energy crisis. Oil companies, worried about being penalized for gouging, would shy away from paying higher prices to bring in more supplies, the study said.

“What we seem to learn from history is that we never seem to learn from history,” said former House Ways and Means Committee Chairman Bill Archer, R-Texas, a lobbyist and member of the group’s board, which includes the oil industry’s main trade group and other business interests. “Every time this has been tried before, it has been counterproductive.”

The study’s authors also warned that price gouging legislation would distort prices, causing energy giants some reluctance about exploring for new supplies.

AP