At a time when passports are in record high demand, it would seem that private companies that expedite their processing would be smiling all the way to the bank.

But not when government regulations trump the laws of supply and demand.

Although a new requirement that air travelers have a U.S. passport to re-enter the United States from Mexico, Canada and the Caribbean has created huge lines at post offices and other passport distribution sites, the companies are only allowed to expedite a pre-set number of passports.

“We were functioning at full capacity before the initiative. All passport expediting companies were,” said Porter Briggs, president of A Briggs, a Washington D.C.-based agency that serves Southern California. “We are allowed 15 passports in the Los Angeles bureau and we use all the slots we have every day.”

The tighter requirements under the Western Hemisphere Travel Initiative has caused a passport application backlog of 500,000, lengthening the usual six week waiting time for a passport to far longer.

Passport expediters such as A Briggs, which charge clients a fee to get their passport in as little as 24 hours, are guaranteed by regional passport offices a certain number of passports per day for their clients. People can use passport expediting services for a fee usually exceeding $100 for same-day service.

Briggs estimates that his company could process 500 to 600 passport applications a day nationwide given a few weeks preparation. Ironically, though, the number of passports that the expediting companies are allowed to process has been decreased, Briggs said.

“National demand is up over 200 percent. Supply is nowhere near meeting that,” he said.

Steve Royster, a spokesman for the State Department, said the department recognized the timely services provided by the companies, but wants to make sure that most passport slots are available without an extra fee.

“In alloting passport slots to the couriers, we aren’t going to do so in a way that is going to take away appointments that would be available to the general public,” Royster said. “We all have to make our own time and money calculations.”

Those who have applied for but not received passports can travel in and out of the U.S. by air through September by showing they have applied for one. Those traveling by land or sea face a later deadline, though they could be required to present a valid passport by as early as Jan. 31, 2008, according to the Department of Homeland Security.