The Barrel was therefore interested to hear what the organization was going to say May 22 in a conference call with the media about its findings on gasoline prices. Most conference calls on this issue are a dry review of the economics, like those from the American Petroleum Institute, or they are political screeds calling for investigations, price-gouging legislation, and so on. What would a liberal think-tank attempting to become the beacon of left-leaning analysis say about the current price of gasoline? How would it differ from what others have suggested?

On the call, there was not an outcry for the heads of oil companies to be paraded through town, though oil company profitability was invoked several times. An accompanying report tried to measure the impact of higher gasoline prices on the nation's economy, and in the call, two senior fellows of the center, Christian Weller and Daniel Weiss, clearly disagreed with some economists' conclusions that the economy will be able to sustain moderate growth even in the face of higher gasoline prices. "It could make a bad situation worse," Weller said. "You already have growth under 2%. It will remain there wil the housing boom ending and nothing else that replaced it. You layer on top of that gas prices worries. It will make it harder to get back to faster growth."

But The Barrel took note of a few specific issues that it would challenge:

--Weiss made two points back-to-back. First, he said the US has done little to reduce demand for gasoline, and one solution would be E-85, which is almost impossible to find outside the Midwest, and even in that region is not widely available. But he then immediately criticized the fact that there has been no improvement in US fuel economy for many years. The juxtaposition of complaining about reduced fuel economy next to a call for using more ethanol despite its almost 20% reduction in fuel efficiency was notable. (And the economics of selling E-85 are still a challenge, though the falling price of ethanol relative to gasoline is easing that.)

--Given Weller's and Weiss' focus on how higher gasoline prices are impacting the economy, particularly lower-income Americans, it was not surprising that there was no call for a stiff tax on gasoline to reduce demand. But the researchers did note that the volatility of the gasoline market makes it difficult for a car owner worrying about high prices to know whether high prices are here to stay, and the time has come to ditch the gas-guzzler and shift to something smaller. Of course, some analysts might respond that the only answer to that situation would be increased taxes on gasoline that will guarantee the high prices which could lead to longer-term shifts in demand.

--The call for stiffer mileage standards was disappointing in that it never addressed what has been called the conservation conundrum. The conundrum for gasoline goes like this: fuel mileage standards are made tougher; mileage efficiency increases; demand decreases; the price goes down; and suddenly the cost of operating that massive Suburban isn't all that terrible anymore. So the movement toward bigger cars is renewed. Weller and Weiss didn't say this, but if pressed, you got the sense that they would argue that, well, the Suburban of the future is more fuel efficient than that of the present, thanks to the CAFE standards, so we're in a better place. It was clear that they were never going to say anything about the possible benefits of higher prices.

The failure to address the conservation conundrum really left The Barrel wondering if Mr. Podesta's center has
anything significant to say on this issue. Weiss and Weller were the ones that repeatedly brought up the need to reduce demand. But they also seemed to think they can use CAFE standards to get to reduced demand and reduce prices. But lower prices lead to higher demand. That's Economics 101. You can't get around it.

The Barrel also asked a question regarding the researchers' call for new refining capacity to be built. If a new refinery were to be built in the US, one obvious place to put it would be New England. The Barrel remembers NPRA president Bob Slaughter making that observation in a television interview several months ago.

There is no refining capacity in New England. But it has access to steady crude supply from the North Sea, West Africa and eastern Canada. It has miles of shoreline. But the Barrel is going to guess that there might be a tad bit of opposition to a new grassroots refinery in, as they always call it, "bucolic" New England. So we asked Weiss on the call what he thought public reaction would be to a proposal for a new refinery in New England. "I think it would be positive assuming that it's located in a place that's appropriate for that sort of industrial facility" was his response.

Go ask Amerada Hess, the lead developer of the Weaver's Cove LNG project in Fall River, Mass., what it would think of that statement. Fall River is an old industrial town. It has seen its share of smoke-spewing plants, most of which are gone. By any standard, it would meet Weiss' "appropriate" test. And the town is absolutely dead-set against Weaver's Cove. How much better do you think a refinery proposal would fare?

See more of the Center's findings, including the call with reporters and a video.