The House approved by a vote of 389 to 34 a plan to impose criminal penalties and fines of up to $150 million for refiners and wholesalers for "gouging," with a fine of $2 million for retailers. It is pitiable that 389 members of the House were so eager to make a public spectacle of their economic illiteracy. It is revealing that they totally exempted congressional moonshine -- otherwise known as ethanol.

The measure "calls on the Federal Trade Commission to develop a definition of price gouging," noted The Associated Press. The House is threatening stern penalties for a crime it cannot even begin to define.

"Gouging" is a meaningless word. Charging more than others do for the same fuel is inconceivable at the wholesale level because fuel is traded on global markets and the going price is instantly visible online.

At the retail level, if one gas station tried to charge 10 cents more than others, consumers would buy their gas somewhere else. But what if that was the only gas station for a hundred miles, or the only station willing to stay open on Sunday night? In such cases, a higher price is an essential incentive to move fuel to where it is most acutely needed, to encourage station owners to provide fuel at non-peak hours, and to discourage wasteful use and stockpiling in areas faced with episodic scarcity from a transportation bottleneck or hurricane.

"Addicted to oil" is another meaningless phrase. Passenger cars and light trucks account for only 40 percent of all United States oil consumption. And commuting and shopping are not just frivolous "addictions." Nearly as much oil (32 percent) is used by all the addicts who operate buses, airplanes, railroads, trucks, farm machinery and ships. About 17 percent goes into petrochemicals used to make plastics, pharmaceuticals, polyester, paint and many other addictive products. And 4 percent goes to feeding the nation's addiction to paving over dirt roads.

All this sleazy silliness about "addiction" and "gouging" and "robber barons" is just a ruse to prevent us from noticing that Congress and the president worsened this international energy squeeze by (1) prolonged warfare in Iraq and threats of war with Iran and (2) a pork-laden "energy bill."

The energy bill had nothing to do with easing regulatory obstacles to the production of natural gas, crude oil or gasoline, or alleviating the federal government's socialist claims of ownership of energy lands. It was all about giving away more billions to the windmill lobby, the hybrid lobby and the politically generous ethanol lobby.

That law, plus threats of lawsuits about a previously mandated gasoline additive, compelled the addition of ethanol to gasoline at a technically arduous pace. That is now causing big problems for those who have to stir some ethanol into numerous state-mandated varieties of gasoline, while refiners make the seasonal switch from heating oil to gasoline.

It takes a lot of petroleum in the form of diesel fuel, fertilizer, plastic and pesticides to produce and distribute corn and turn it into moonshine -- about 7 barrels of oil to produce 8 barrels of corn-based ethanol. Making ethanol from sugar would be worse because formidable U.S. trade barriers push the cost of sugar far above the world price (making Brazil's ethanol industry irrelevant). Making ethanol from waste is hypothetical for now, as is the uncertain cost. Because ethanol can't flow through pipelines, it is twice as expensive as oil to transport -- by fuel-burning truck or rail.

Unfortunately, there is much less energy in 8 gallons of ethanol than in the 7 gallons of gasoline-equivalent needed to produce it. The Energy Department estimates the highway mileage of a Nissan Titan drops from 18 mpg to 13 mpg by switching to E85 (85 percent ethanol). That is why lavish subsidies to auto companies to produce flexible fuel vehicles are useless -- a disguised bailout at best.

A few more thoughts on these matters: Continued...