[Congressional Record Volume 146, Number 92 (Monday, July 17, 2000)]
[House]
[Pages H6055-H6056]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               GAS PRICES

  Mr. STEARNS. Madam Speaker, I am here to speak on a growing 
controversy, the controversy of who is to blame for the high gas 
prices, particularly in the Midwest, the high spikes. Some say it is 
big oil and others say it is the result of the EPA forcing through 
Phase II formulated gasoline.
  Let us this afternoon analyze the facts and begin to see where the 
responsibility lies. Let me cite from an internal Energy Department 
memo that proves that the administration knew that the new formulated 
gasoline, RFG, as required by EPA was a major reason for the spikes in 
the Midwest.
  The memo was circulated while the administration was publicly 
blasting the big oil companies for gouging Americans. The Washington 
Times obtained the June 5 memo that was written for Secretary 
Richardson of the Department of Energy by the Department's acting 
policy director, Ms. Kenderdine.
  This memo mirrors what analysts and oil companies have been stating; 
the mix of high demand and low supply has led to high prices for all 
gasoline. We all realize that; that makes sense. Of course, that is 
part of the cycle in a free market experience. The disturbing part of 
that memo goes on to say, and let me quote, Madam Speaker, ``the 
Milwaukee and Chicago areas supply situation is further affected by, 
among other things, an RFG formulation specific to the area that is 
more difficult to produce.''
  Despite the clear-cut facts in the memo, the administration has 
claimed that the price hikes and spikes were unexplainable. In fact, 
they have openly speculated that it is probably big business beating up 
on poor citizens again. When, in fact, it is big government beating up 
on the American taxpayers again.
  Refineries have been working to capacity to produce a new EPA-
mandated gasoline and have been strained to meet the summer demands. 
This has left reserve supplies in a dangerous position.
  According to the DOE memo, Chicago refineries do not have the 
capacity to step up production when there is a shortage and the 
specifically formulated gasoline mixed with the ethanol in the region 
could not be imported from other areas because few make the unique 
blend of fuel.
  The most damaging evidence is the conclusion in that memo from June 5 
that supplies were sufficient to meet overall demand at the time. The 
market was ``sufficiently tight,'' he went

[[Page H6056]]

on later to say ``that any disruption in the distribution system could 
contribute to Phase II RFG shortages'' throughout the summer. So there 
we have it, that is where the spikes came from.
  The White House has attempted to rely on a strategy to deflect blame 
from the real culprit, themselves. Considering the gasoline problems 
facing Americans today, I am very surprised at the timing of the EPA 
and this administration to move forward with the implementation of this 
new blend, this RFG Phase II.
  I do not think the administration intentionally did this, but I am 
not sure. Where is their energy plan today? Where are the steps that 
could have prevented this from happening? Why did the EPA simply not 
postpone changing the gas formulas until such a time as the oil market 
had leveled off? Also, why did St. Louis, Missouri receive a waiver 
while, to my knowledge, no other city did?
  Another shocking piece of this show is on Friday, June 30, the EPA 
released in a proposed rulemaking a comment period on whether 
reformulated gasoline is needed to meet the air quality standards. In 
other words, they are saying is this even needed. What? I mean, here 
they are mandating they be put in place, yet now they are issuing a 
memo to say is it needed. You mean to tell me that they insisted on 
moving forward with Phase II of RFG without knowing if they even needed 
to keep the program?
  When will the EPA do their homework before they force regulations 
upon the American people? It appears to me from the evidence that the 
spiked prices in the Midwest were due to the EPA forcing a new 
formulation, a new blend of gasoline, during this time of high OPEC 
prices and low supplies.
  The EPA should accept responsibility for putting the public through 
the expensive process of reformulated gasoline without proof that the 
gasoline would help improve our air and should withhold moving forward 
with any other new RFG regulations in any other cities.
  Madam Speaker, the EPA and Department of Energy must formulate a plan 
and study to make sure their plan is effective before they gouge the 
American people at the pumps.

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