GREAT STEPHEN PEARLSTEIN COLUMN: My crazy schedule lately has made me remiss in linking to this great commentary from Stephen Pearlstein on how energy regulation needs a light touch. In his observations on the bloated energy bill proposal from the House, he says:

My guess is that should these provisions be adopted, the volume of regulations would soon rival those of the old regulatory regime. If we’ve learned anything in the past 20 years, it should be that oil and gas markets work pretty well when left to their own devices, while remaining stubbornly resistant to being steered. Despite all the Carter-era incentives, wind and solar have not taken off as major energy sources, while the best incentive for conservation and new production remains that old free-market standby — rising prices.

More significantly, oil and gas prices are at least 50 percent higher than they were when the White House launched its energy initiative two years ago. That should warn Washington that attempts to tinker with energy markets are likely to be overwhelmed by events outside the government’s control.

He then claims that the California electricity crisis was an example of market failure, so his analysis is not perfect (for the thousandth time, markets rely on transparent rules, and institutions matter for determining the incentives and ability of firms to raise prices; CA was a policy failure. Markets are processes, not political constructs). But still.