This is the Kato Daily Podcast for Tuesday, September 13th, 2022.

I'm Caleb Brown.

The price of gas was the story of this summer for many working Americans,

but some inefficiencies in the gas market are caused by

guess what the Jones Act a century old law that has all manner of negative effects

for average people. Cato's Colin Grabo details the ins and outs of how the Jones Act screws up the markets for oil and gas.

I don't know if you heard, but the United States had this spade of very high gas prices.

I'm familiar.

Okay, so they came down a little bit, but it's worth sort of understanding

where those pressure points are and the degree to which

our own policies are contributing to what otherwise would be a blip in gas prices.

So what does your research tell us? So when we think about gas prices, there are a number of factors that drive these things, number dynamics. One factor that you have to take into account is transportation.

The United States is a big producer of refined products like gasoline,

but there's some distortions in this market that result in a lot of this gasoline instead of being

exported from our refineries on the Gulf Coast to say the East Coast they go to

Latin America instead and the East Coast instead of buying what they need from the Gulf Coast will turn to other sources like Europe.

A big reason for this is the Jones Act.

The Jones Act, the Merchant Marine Act of 1920, which says that only vessels that are

US-built, US-flagged, and mostly US-crued and owned can transport goods within the United States.

These ships are very expensive, their shipping rates are very expensive,

and there's a real disincentive to use them. So this kind of manifests itself in a dislocation and in energy flows. in

energy flows. So we have these distortions where we end up, you know,

...