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They dont have to collude, they dont have to form a cartel, they dont have to be monopolists, Stanford University economist Roger Noll said about oil refiners in California a few years back. All they have to do is take advantage of the crazy rules.

The crazy rules are the environmental regulations and clean fuel mandates imposed by state and federal lawmakers. The regulations crowd out smaller competitors, drive consolidation, and keep out new entrants.

If that sounds bad to you, it sounds great to the large refiners. Make no mistake about it, said Thomas OMalley, a refinery executive who lobbied for stricter clean fuel rules. "The more stringent you make specifications, those become barriers to entry. Strong companies would have an advantage.

We are today reaping the bitter fruit of environmental regulations that have driven massive consolidation in the refining industry. President Joe Biden now claims to be upset about that.

The Biden administration scolded oil refiners. While mostly blaming Vladimir Putin for high gas prices, he said, Historically high refinery profit margins are worsening that pain.

Biden isnt wrong that refineries are a bottleneck on fuel production and that refinery capacity has been higher in the past.

Reduced refinery capacity, notes liberal journalist David Dayen at the American Prospect, in large part triggered by industry consolidation, has been a major factor in high gas prices.

But what is behind that industry consolidation? Barriers to entry, especially regulations that drive out small players and protect the large incumbents from competition. These are exactly the sort of barriers to entry that the Biden administration continues to support that Joe Biden has spent his career erecting.

One small example is the federal ethanol mandate. Although it allows exemptions for small oil refiners, the Biden administration regularly denies applications for such exemptions he denied 65 such petitions just this winter.

Had Biden set out explicitly to cause refinery consolidation, he probably wouldnt have governed any differently as a senator or as president. Now, hes pretending to be upset that this concentrated industry is protected from competition and has high costs and high profits.

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Democrats created the refinery bottleneck - Washington Examiner