SBH Sunrise
October 27, 2005
Robert Thomas, Attorney
Pacific Legal Foundation

Tuesday, October 11
East Oahu Breakfast Club
Hawaii Kai Golf Clubhouse
7 - 8 am

Wednesday, October 12
SBH Board Meeting
SBH Office 12 noon

Tuesday, October 18
Aiea-Pearl City Business Assoc.
Pearl Country Club
Noon - 1:30pm

Thursday, October 27
SBH Sunrise Networking
Robert Thomas
Pacific Legal Foundation
Macy's Pineapple Room
7 - 8:30 am

SBH TV
Sundays 7:00 pm
Channel 54

INSIDE THIS ISSUE

Gas Cap Follies: The Worst is Yet to Come


The often photographed Costco gas station line.

By Bill Green, Kahala Shell

Only Hawaii's state Legislature could be so dim witted as to write and pass a bill said to lower gas prices that actually raises prices. I hate to say: "we told you so," but, "we told you so."

For 7 years every expert on economics and petroleum distribution said the law would be a disaster; it is - and the worst is yet to come.

A small group of legislators has forced their misguided opinions on the entire state of Hawaii without any knowledge of basic "Economics 101." They have even less knowledge of the complex distribution system that has for more than 100 years provided petroleum products at reasonable prices to every corner of our remote state.

These lawmakers have achieved their objective of trying to repeal Mother Nature's law of "supply and demand" by implementing the gas cap law effective Sept. 1, 2005.

You can thank these Democrats: (Sen. Ron Menor, Rep. Hermina Morita, Rep. Marcus Oshiro, Senate President Robert Bunda, House Speaker Calvin Say, et al) for the greatest threat to our economy since the OPEC embargo in the 1970s.

After a 27 cent per gallon increase on Sept. 5, 2005, and a 44 cent per gallon increase on Sept. 12, 2005, the free market has turned into a fiasco.

It took them 7 years to write and re-write the law based on untruths, half-truths and facts out of context.

Now, they complain that the oil companies are following the law. One legislator said that the law must be working because we are no longer the highest in the nation. Go figure.

The law was never intended to lower prices but rather, to harass the big oil companies, especially Chevron.

Former Gov. Benjamin Cayetano confirms this attitude and a complete lack of industry knowledge by calling Chevron "an 800 pound gorilla," even though Tesoro's refinery is nearly twice as large. See his op-ed in the Sept. 11, 2003, The Honolulu Advertiser: http://tinyurl.com/dlt7x.

Throwing rocks at big "evil" oil is always a popular sport since they can't fight back and it makes the thrower look like he's fighting Goliath (but using the power of the state instead of a sling shot).

No legislator ever imported a tanker of crude, refined a gallon of gas or paid for or drove a tanker truck. They use the word oligopoly (like a 4th grader who just discovered a new word) and imply that it's somehow evil or criminal.

Although there are two refineries here, Tesoro and Chevron, the other companies have terminals to bring in tankers of product if they aren't given competitive prices.

After years of testimony proving that there is great competition at the retail level, we hoped and quite honestly expected the proponents to cancel the law.

Instead, in their infinite (or infantile) wisdom, they rewrote the law to provide a cap on wholesale prices even though only a minority of stations actually buys at wholesale as the majority are company operated and not covered by the "price cap" law.

They gave the governor the power to override the law but only after damage occurs. Now they want Gov. Linda Lingle to exercise her power so they can criticize her for interfering.

The solution is simple.

Call a special session of the Legislature. Within two hours, lawmakers could have a quorum, repeal the law, and return to a market-based economy, which is what House Speaker Say and Senate President Bunda are now asking the oil companies to do voluntarily.

When a solution is so simple, why do we need to discuss it anymore? The definition of idiocy is to do the same thing over and over again expecting different results.

Bill Green is a former dealer and now consultant to Kahala Shell in Honolulu, Hawaii. Gas cap information can be accessed from http://hawaii.gov/dcca/areas/dca/gascap