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Thu March 20, 2014
Bill Schuette enforcing popular regulations in an election year
There’s an old joke that says Republicans are the party in favor of local control, except when they aren’t, which is to say when local governments do something Republicans in the Legislature don’t like – for example, providing what they see as excessive health benefits to their employees.
Now it seems that the GOP is also the party which is aggressively in favor of the free market – except when it isn’t. And it is often convenient to be in favor of regulation in favor of the public interest in an election year.
None of this is to say that the Democrats don’t have contradictions of their own. But these days, Republicans control pretty much everything in Michigan politics: the Legislature, all the major state offices, and the state Supreme Court.
And I have to say I am a little amused by the transformation of Attorney General Bill Schuette into a dedicated supporter of regulation.
Earlier this month, he filed criminal charges against two out-of-state oil companies for allegedly collaborating to fix prices to avoid bidding wars for oil and natural gas leases.
As outlined in an excellent story yesterday by Michigan Radio’s Lindsey Smith, when the state held an auction for drilling rights on public land four years ago, there was a bidding frenzy.
The average bid per acre was more than $1,500, which meant a lot of money for Michigan. However, when the state held another public auction for drilling rights later that year, something dramatically changed. The average bid was only $35 an acre.
Well, the Reuters news agency got copies of emails between top executives at the two companies, Chesapeake Energy and Encana Oil and Gas.
Collaboration to fix prices is illegal.
The emails suggest, however, that this is exactly what went on, and now, the attorney general is charging both companies with conspiracy and anti-trust violations.
Everyone is innocent until proven guilty, and the companies both vigorously deny breaking the law. But ironically, even if they are convicted, the maximum penalty is a fine far smaller than the amount they may have saved if they did in fact fix prices.
And Attorney General Schuette is also launching an investigation into what his office calls “suspect business practices related to this winter’s unprecedented price hikes for propane.”
We’ve been hearing incredible stories all year about people who heat their homes with propane, a fuel which is a by-product of oil and gas refining. There are close to a million people who use propane, many in the Upper Peninsula.
Some have had to pay thousands just to stay alive and warm this winter. Some have had difficulty finding propane at any price. One woman in North Dakota froze to death when she ran out.
Michigan’s Consumer Protection Act says retailers may not charge prices “grossly in excess” of the norm.
Now, the attorney general plans to investigate if that’s what happened.
Schuette’s decision to go after alleged wrongdoers in these two cases is likely to be popular – probably far more so than his attempt to regulate same-sex adoptions has been.
I wouldn’t say his actions in the propane and price-fixing cases are politically motivated, but it is, after all, an election year.
The Environment Report
It's Just Politics