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• The Indonesia Argument
The Indonesia Argument
I agree with Frank Barich that the gas cap law is a fundamentally flawed policy.
However, I must disagree with his contention that it is unreasonable for the PUC to look to mainland prices in determining each week’s cap.
Although our oil comes to Hawai’i from Indonesia, it is still being sold to a global marketplace. Competition is not regionalized, and if we as a state decline to pay the going price than that oil will be shipped elsewhere to someone who will.
Remember that even before Katrina gas prices were climbing worldwide, due to rising demand (particularly from China) and a decrease in the growth rate of Russia’s oil output. As the developing countries continue to expand, and the world’s proven reserves are tapped to full production, demand for oil will increasingly outstrip its supply. The attempts of the Hawaiian legislature to artificially fix the price of gas in this environment are not only short-sighted, but a waste of resources.
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