Abstract
Gasoline markets today are dangerously fragmented, the result of almost one hundred years of often-contradictory economic and environmental regulations. In this paper, we analyze that regulatory history, highlighting how the unintended consequences of regulation have been to reverse market pressures toward a broad, deep national market in a commodity, pushing the United States toward a series of loosely connected regional markets. As a result, the American economy is vulnerable to natural disasters, terrorist attacks, and foreign dictators in ways that it need not be. In addition, the weakening of market forces produces higher prices for consumers and reduced innovation by refiners. We conclude by suggesting steps that can be taken to reduce this vulnerability and improve gasoline markets.
Disciplines
Administrative Law | Energy Law | Environmental Law | Law and Economics | Natural Resources Law | Oil, Gas, and Mineral Law
Date of this Version
September 2006
Recommended Citation
Andrew P. Morriss and Nathaniel Stewart, "Why Gasoline Costs So Much (And Why It's Going to Cost More)" (September 2006). University of Illinois Law and Economics Working Papers. Working Paper 62.
http://law.bepress.com/uiuclwps/art62
Included in
Administrative Law Commons, Energy Law Commons, Environmental Law Commons, Law and Economics Commons, Natural Resources Law Commons, Oil, Gas, and Mineral Law Commons