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Free Markets are Great, We Should Try Them Sometime

Some of my best friends in this industry on both the heating fuels and motor fuels sides are lobbyists. I work with them closely on a range of editorial projects, supporting the industry as best I can and we can as a magazine. And, I do so willingly at both a professional and personal level. That’s quite an admission from somebody who is himself, at my core, a strong proponent of small government.

The thing of it is, while I would like our system to be different than it is today—a system that actually is based upon free market capitalism with just the right (but minimal) amount of regulation to keep things honest—we could not be farther from that type of system in the real world. For as long as I’ve been alive our form of capitalism under the leadership of both parties has been about picking winners and losers, with perhaps a different set of winners being highlighted depending upon who happens to hold the most political power at the time.

Typically, the bigger players benefit tremendously from such a system, and the smaller players (just about all small business, for example) end up getting squashed, or if they are lucky the occasional handful of scraps. While you can look at our system and point fingers at lobbyists as being part of the problem, the reality is they just facilitate mechanisms that are currently baked in. And where our industry is concerned I can support them comfortably because I have yet to encounter a major issue receiving a major amount of lobbying effort from the industry where we were trying to push our solution on the rest of the state, region or country.

We spend far more of our time trying to hold our ground against other industrial sectors that have worked very hard within the system to be declared winners in the political market instead of the free market. I suppose the one area where we have pushed for something is actually with low sulfur heating oil and Bioheat throughout the Northeast. Even here, this is more reactive than proactive and represents an honest counter to the long-running effort by natural gas utilities to vilify heating oil on the environmental front. And, the natural gas challenge as it exists today is perhaps the most aggravating example of how our industry is facing a challenge from a picked winner.

On the free market front natural gas has about hit its current limits. Where natural gas is readily available to the customer it can present a strong free-market challenge to its fuel competitors. However, that quickly fades when it comes to extending pipeline service to more rural areas and converting homes from oil or propane to gas. Such an expansion runs into free market hurdles in that it involves considerable capital costs with lower returns for the gas utilities.

Natural gas is not the underdog in this process, looking for something to help them break into the market, but they are largely monopolistic behemoths in their establish marketplaces whose customers enjoy only minor competitive opportunities. They are certainly not poor. Yet, they use every legislative lever they can including their deep pockets in order to have taxpayers or their captive customers cover expenses that they should be covering themselves in a free market environment.

Our columnist Shane Sweet has an excellent piece that covers one fight in this battle on the propane front. It is certainly worth a read, and it shows just how relentlessly these utilities are and are increasingly going to become in the future. Once again in this column I will ask you to strongly consider getting involved with your industry associations of choice, to help them fight the legislative battles that we face. It is a good fight, and an absolutely critical fight for anyone who earns a living selling a heating fuel to a customer.

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