[Congressional Record Volume 149, Number 125 (Thursday, September 11, 2003)]
[Senate]
[Pages S11408-S11409]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                GASOLINE

  Mr. WYDEN. Mr. President, I take a few minutes tonight to talk about 
the issue of gasoline prices. I serve on the House-Senate conference 
committee which is now negotiating over how to pass a good and 
hopefully bipartisan Energy bill. I will talk about an issue that is 
clobbering consumers all across this country. It has been devastating 
across the West--in Oregon, in Washington, Idaho, and California. The 
fact is, this is true all over America.
  In Los Angeles, the average price for regular unleaded gas is $2.10 a 
gallon. In New York City, the average price is $1.95 for a gallon of 
gas. In Phoenix, it is $2. At present, gasoline costs 30 cents more 
than it did at this very time last year, and 15 cents of that increase 
has happened in the last few months. In my home State, Oregon drivers 
are paying a whooping 56 cents more per gallon than they paid for the 
same gas in September of last year.
  I don't think anyone is confused about the implications of these 
skyrocketing increases. When Americans have to spend this additional 
money on gasoline, they do not have money for other essentials at a 
time when millions of our families are hurting. They cannot buy those 
back-to-school clothes and groceries and consumer items when they are 
paying an extra 50 cents for gas all across the West and in numerous 
communities across the country.
  It seems to me with so many people hurting, with so many folks out of 
work, the efforts of the conferees with respect to protecting the 
American people from escalating gasoline prices seems to be especially 
important.
  Artificially inflated gasoline prices shellac our families three 
ways: It takes dollars from their pocketbooks; it slows job creation; 
and it often raises the prices of the goods families need to buy due to 
increased transportation costs.
  When I was home this summer and I held town meetings across Oregon, 
from Elgin in the rural part of our State to the metropolitan areas of 
Portland, I heard again and again: What steps is the Congress going to 
take to promote competition, use free-market principles to help put in 
place policies that will promote competition in the gasoline markets 
and provide relief for our consumers?
  These gasoline price spikes and the escalating cost of gas cannot be 
explained just by the market. Steps ought to be taken to put in place 
real procompetitive market-oriented policies to provide relief for our 
consumers.
  The Secretary of Energy said recently that he is conducting what 
amounts to an informal investigation into this issue. But we have 
examined the law and the Department of Energy does not have any power 
to do anything about gasoline prices. The Federal Trade Commission, 
which we thought could play the role of being on the side of the 
consumer, says they can only prosecute if they find out-and-out, 
blatant collusion, setting out a standard that is virtually impossible 
to prove in the real world. Moreover, the Federal Trade Commission does 
not seem to think that tightly documented cases of anticompetitive 
practices such as redlining and zone pricing is a particularly big 
deal.
  I come to the Senate tonight because the American people deserve 
better and the American people have a right to insist in this House-
Senate energy conference going forward now, that steps are taken to 
actually put in place new policies to put the Government on the side of 
marketplace-oriented procompetitive policies that will provide relief 
for the American consumer who fills the tank at pumps across the 
country and is just getting shellacked right now when they try to 
afford those bills.
  Even the oil companies admit that the market is not going to solve 
the problem by itself. Last month, a report by the Rand Corporation 
revealed that even industry officials are predicting a great deal of 
price volatility in the future. If you look at what the industry is 
saying--and that is the assessment of people within the energy 
industry, not critics--even people within the energy industry are 
saying, for all practical purposes, consumers can expect more frequent 
and larger price spikes in the next few years.
  I am proposing, and I have shared it with members of the conference, 
both Democrats and Republicans, and I intend to do so in the days 
ahead, a proposal so the energy conference does not

[[Page S11409]]

wrap up without a concrete package of procompetitive initiatives to 
help consumers at the Nation's gas pumps.
  It seems to me the focus of such a procompetitive package should be 
for the energy conferees to direct Government regulators to act to 
eliminate anticompetitive practices that right now are siphoning the 
competition out of our gasoline markets.
  Specifically, what we have found is that in my home State, and at 
least 27 other States, there are essentially oligopolies, mini kinds of 
monopolies, where just a handful of companies--maybe three or so, maybe 
four, but a tiny number of companies--are controlling more than 60 
percent of the gasoline supply.
  That is the case in my home State. It is all over the West, where 
four of the top six States for high gas prices are located. So, in 
effect, what you have is more than half of our States very highly 
concentrated as gasoline markets, where, in effect, you have seen the 
competitive juices drained out of the gasoline business. It is those 
competitive juices that I want to restore.
  What happens in these tightly concentrated markets--there have been 
numerous studies to this effect--is that you end up losing a lot of the 
big sources of competition and price restraint. I am talking 
specifically about the independent wholesalers and dealers, and we are 
losing them from these concentrated markets.
  One way that has taken a huge toll on the consumer is that these 
markets often get redlined. In effect, when a market is redlined, you 
have the independent distributor restricted in terms of where they can 
sell their gas. As a result, the independent stations have to buy their 
gasoline directly from those large companies, usually at a higher price 
than the company's own brandname stations pay. With these higher costs, 
the independent stations cannot compete.
  In my home State, we have lost hundreds of gasoline stations in the 
last few years. We know many of them are the independent stations that 
are the biggest source of competition that is so beneficial to the 
consumer.
  So it seems to me, at a minimum, the Federal Trade Commission should 
act to promote competition in these areas, these 27 States, for 
example, that have these quasi-monopolies. I believe these highly 
concentrated markets ought to be designated ``consumer watch zones,'' 
where there would be greater monitoring by the Federal Trade 
Commission, and where the Federal Trade Commission would be empowered 
to issue cease and desist orders to prevent companies from gouging 
consumers.
  I also think that in these particular areas, where you have quasi-
monopolies, the Congress ought to stipulate that redlining and zone 
pricing are anticompetitive practices by their very nature, and that 
companies that engage in redlining and zone pricing in these tightly 
concentrated markets should have to carry the burden of proof that what 
they are doing in those concentrated markets doesn't hurt the consumer.
  In the past--and, as I say, I have shared these proposals with 
Senators of both parties; I have offered ideas to promote competition 
in the gasoline industry--there have been some who have said, and 
vociferously, that these kinds of proposals are unacceptable; somehow 
they would create disincentives to production--this sort of thing.
  Well, I see absolutely nothing here that creates a disincentive to 
production. What I want to do is promote competition and freer markets 
for consumers at the gas pump.

  What I would say to those in the Congress who disagree with the 
procompetitive proposals I am making today is that I want to issue you 
a challenge. To those who think the approach I am offering up today is 
unwise, I would say: Bring your own proposal, give your own proposal to 
the conferees on the House-Senate committee that is meeting now with 
your ideas on how to promote competition in the gasoline market.
  I want people to know I have offered a proposal to colleagues to both 
parties in the conference, but I would like to hear from others who 
have ideas if they happen to agree that my approach is not the way to 
go--unless someone is prepared to say there is no problem for the 
consumer. I defy somebody to say that to people I am hearing from in 
the West and all over the country, who are paying $2 a gallon for gas.
  Unless you are prepared to tell those people there is no problem out 
there, I believe those who disagree with the proposals I am discussing 
today to promote competition ought to come forward and put their own 
ideas on the table.
  There are a couple of other points I want to make with respect to 
this proposal to promote competition in gasoline markets.
  I see my good friend from Virginia here, who wants to address the 
Senate. I will just wrap up with a couple of additional points.
  I also believe, Mr. President, and colleagues, that as part of the 
energy conference, the Congress needs to address the growing gap 
between consumer demand for gasoline and what the oil companies can 
produce. When supplies are tight, and there is no spare gasoline in 
inventories, consumers are especially vulnerable to supply shortages 
and price spikes when refineries shut down unexpectedly or a pipeline 
breaks, as happened this summer.
  Congress ought to take steps to ensure that the consumer is not left 
stalled by the side of the road or fuming at the pump, by taking steps 
to keep supplies available in emergencies. It seems to me that here, at 
a very minimum, steps ought to be taken to ensure there are inventories 
on hand to address unexpected supply crunches. That has been done in 
other areas. Certainly we have a Strategic Petroleum Reserve for 
petroleum and heating oil supplies. I think, given the shellacking 
consumers are taking with respect to gasoline prices, steps ought to be 
taken by the Congress conferees to ensure that adequate inventories are 
on hand to address unexpected supply crunches and the hikes that so 
often accompany them.
  Finally, I hope, as the conferees move to complete their business, 
they look at what is on the record today with respect to 
anticompetitive practices in our gasoline markets. These are practices 
that have driven prices up and have driven consumers crazy at the pump. 
The evidence is very real.
  The fact is, the investigation, as the Department of Energy describes 
it, is toothless. They do not have the authority under current law to 
stand up for the consumer at the pump. The Federal Trade Commission, 
for reasons that are beyond my comprehension, refuses to deal with the 
documented cases of redlining and zone pricing and anticompetitive 
practices.
  So I have come to the floor today, Mr. President, and colleagues, to 
outline specific steps, specific actions that could to be taken on a 
bipartisan basis by the energy conferees to provide real and concrete 
relief to energy consumers at the pump.
  In this conference, the Congress has the opportunity to say that when 
our consumers are facing, as I described, price hikes of 50 cents--50 
cents--for gas, the Government is going to be on their side with 
policies that promote competition in gasoline markets, in particularly 
those 27 States which are, in effect, mini monopolies, where there are 
just a handful of choices for consumers and prices go up as a result.
  I call on the Congress to take up this cause in this House-Senate 
energy conference. This is a chance to go to bat for consumers on the 
issue that is frustrating our consumers and our small businesses every 
single day. They are looking for the Congress to step up and act to 
provide some real relief. The people of this country are asking for 
that kind of advocacy. I believe it is time for the Congress to provide 
that kind of approach.
  With that, I yield the floor.

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