For similar reasons, I do not believe that government efforts to encourage more refinery capacity and improve the distribution infrastructure would be in the best interests of the country. Refinery capacity has declined because there was too much of it. Industry and the market are much better qualified to determine the right level of refinery capacity than is the government. The ability to import gasoline, albeit at a higher price, provides an important safety net should domestic refinery capacity fall temporarily short. This is a much cheaper solution than needlessly increasing domestic capacity.
Emergency preparedness remains a critical issue.
It is vital that state, local and federal agencies be prepared to ensure adequate supply in the event of an emergency. Contrary to popular belief, gasoline prices have been declining steadily since the '40s, with the only major exception being the period between 1973 and 1981. Adjusted for inflation, nationwide gasoline prices in 1993 were lower than at any time since the 1940s. A temporary increase such as occurred this spring is a very minor blip in a long, downward trend. The real problem is not gasoline prices, but our increasing dependence on petroleum.