In comparison to the events of the 1970s, gasoline consumers today are experiencing very few of the problems associated with an increased scarcity of petroleum. The Iraqi War has had an impact upon the price and availability of petroleum worldwide, and our own regulations have made it harder for the petroleum industry to respond to “oil shocks,” or scarcer oil. But we can be thankful that the world and domestic events affecting the bouncing price of crude oil are showing up in our wallets, and not in the long gas lines and fuel rationing that took place during the 70s. The reason: we didn’t make the mistake of imposing price controls on petroleum this time around.

Events of the 1970s shed some light on the current oil and gasoline situation. The Clean Air Act Amendments of 1970 imposed costly industry standards on gasoline content and on permissible auto emissions. Later, regulation required gas additives, then regional and seasonal adjustments in gasoline formulation, all of which “bottleneck” supply in various ways. When the Arab-Israeli War broke out in 1973, U.S. oil refining was already on a regulation-induced cost upswing. The 1973-74 Arab Oil Embargo added to the upward pressure on prices by making Middle Eastern petroleum more scarce than before.

Together, U.S. energy policies plus the oil embargo should have increased U.S. oil and gas prices enough to allocate the available supply without much problem, but U.S. price controls prevented that from occurring. The Emergency Petroleum Allocation Act of 1973 froze prices of “old” oil, controlled prices for selected buyers and sellers at the refinery, and imposed non-price rationing on the consumer. Laws banned the sale of gasoline on Sundays, and rationed gasoline purchases based on dates and license plate numbers. Retailers set dollar or quantity limits to avoid selling out to a few lucky buyers, and disappointing a potentially angry mob: $2.00 gas sales limits were common. Blocks-long lines for gas, in which one or two cars ran out of gas (and many more potential buyers ran out of patience), were typical.

Since U. S. energy policy in the 1970s held the price of gas at the pump and elsewhere artificially low, there were widespread gas shortages. Long waits, long lines, and rationing replaced the dollar price mechanism. Gas was cheaper than it otherwise would have been. The trouble was, you couldn’t get it.

Why don’t we see gas lines now? Petroleum production is down in the Middle East, and war and political events make future production uncertain. But suppliers, including the Arab states, have learned that oil is “fungible,” and is traded in a world market based in New York. Once oil is loaded on a tanker, there is no controlling its final destination. An embargo would make no sense to the seller—it would simply reduce revenues.

Although large producers can affect oil prices through production, Middle Eastern oil has more competition than it did in the 1970s. The supply “sword” cuts both ways, and few oil-producing nations, particularly the ones in which government is the producer, can afford to cut revenue arbitrarily. For oil and gas consumers, price has been something of a roller coaster, but local markets have exhibited healthy price competition in recent months.

Gas lines in today’s market? Not unless we do something really foolish, like imposing caps on gas prices. Lines at area gas stations have occurred during occasional price wars, in which two or more stations keep undercutting price in order to lure customers. One small gas station even offered to provide breakfast while they pumped, in an effort to attract customers away from the bigger, cheaper stations.

While we are better off by far without price controls than with them, the push to regulate and direct energy policy by government edict is a policy for disruption, not a policy for market or plan coordination. If we want consumer choices to prevail rather than bureaucrat choices, we should keep a watchful eye on the potentially costly and harmful effects of regulatory policy in energy.