Is $3.80 gas too low? Washington thinks so

They're trying to pass a bill that would raise pump prices. Why? Because they think it would force people to use less. The America's Climate Security Act, sponsored by Sens. Joseph Lieberman and John Warner, would also increase electricity and natural gas costs, all in the name of supposedly fighting global warming.

The bill, scheduled to be debated in the Senate on June 2, essentially places limits on the amount of gasoline and other fossil fuels Americans can use. The aim is to cut our emissions of carbon dioxide, which is blamed for warming the planet.

Once the provisions take effect in 2012, prices would have to rise to reduce demand and meet these restrictions. The only question is by how much.

A recent study by The Heritage Foundation estimates a cost increase of at least 29 percent by 2030, or $1.10 per gallon based on current gasoline prices. The Environmental Protection Agency is a bit less pessimistic, estimating a price boost of 53 cents per gallon by that year. But others predict an earlier impact--a National Association of Manufacturers study projects as much as $1.07 more per gallon by 2014.

And these estimates are in addition to everything else that may drive prices higher in the years ahead. The impact could be far worse.

Consider Western Europe, which already has similar global-warming measures in place. Fuel there costs more than $8 a gallon, yet even at that level, usage is still rising. As a result, few European Union nations are in compliance with their emissions-reductions targets.

If $8 isn't high enough to reduce emissions there, what will it take here? In truth, nobody knows for sure how much prices would rise here if we adopted the European-style energy regulations in the Lieberman-Warner bill. But if it passes, we'll find out the hard way.

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Date published: 5/29/2008