[Congressional Record Volume 150, Number 71 (Wednesday, May 19, 2004)]
[Senate]
[Pages S5736-S5738]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            GASOLINE PRICING

  Mr. WYDEN. Mr. President, I have come to the Senate floor this 
morning to state, in accord with my policy of publicly announcing any 
hold that I

[[Page S5737]]

place on a nominee or a piece of legislation, that I will object to any 
unanimous consent request for the Senate to take up the President's 
nominee, Deborah Majoras, to head the Federal Trade Commission.
  Gasoline pricing is, of course, one of the most important consumer 
protection issues that the Federal Trade Commission is responsible for 
overseeing. The prices for gasoline, of course, are soaring. For years 
now, the Federal Trade Commission has been waging a campaign of 
inaction. In three specific areas--increased oil company mergers, 
refinery shutdowns, and anti-competitive practices--the Federal Trade 
Commission has simply been AWOL.
  Yesterday, after writing to Ms. Majoras, to make sure she knew 
specifically of my concerns, I met with the nominee to head the Federal 
Trade Commission. I asked repeatedly if there was even one area--even 
one area--where she would change existing Federal Trade Commission 
policy with respect to these practices that are sucking the competitive 
juices out of gasoline markets across the country. During that 
conversation not even one example was given of an area that the nominee 
to head the Federal Trade Commission would change in the gasoline 
pricing area. It is for that reason that I publicly state today that I 
am placing a hold on this nominee.
  To me, it is absolutely unacceptable for a nominee to chair the 
Federal Trade Commission to not want to make one specific change in 
gasoline pricing policy. It is certainly unacceptable to me as a 
Senator from a State where the average price of gas is now $2.25 a 
gallon, but it ought to be unacceptable to Senators from every area of 
the country.
  Here are three examples of the record at the Federal Trade Commission 
that I wish to change:
  First, since taking office, the Bush administration has allowed 33 
oil industry mergers, totaling $19.5 billion to go through. Not only 
has the administration not tried to block any of these mergers, they 
simply have taken a pass in every respect. To be fair, the Clinton 
Administration also sat on its hands allowing 21 oil mergers to go 
through while challenging only one.
  The Bloomberg News service recently reported on this issue. It is my 
own view that unchecked oil company mergers are a significant factor in 
the rising price of gasoline in the country. But the Federal Trade 
Commission, in the face of this huge wave of mergers, has simply been 
sitting on their hands, and yesterday, the nominee to head the Federal 
Trade Commission gave me no indication there would be a change in the 
policy of the Federal Trade Commission on the merger issue.
  Second, a handful of refiners now control most of the gasoline in our 
markets. The concentration is especially serious on the west and east 
coasts. Mr. President, 67 percent of the west coast market and 77 
percent of the east coast market is controlled by a handful of 
refiners--just four companies. Along with this increased concentration 
of refiners, we have seen a drop in the number of refineries at a 
critical time when clearly we need more refinery capacity, not less.
  Now, I have documented evidence--it is up on my Web site--that 
refinery shutdowns have been implemented not because of competition but 
to boost profit. Certainly, in my view, the nominee to head the Federal 
Trade Commission ought to be looking at this issue of refinery 
capacity. But yet again, the nominee that I met with yesterday was 
unwilling to state what, if anything, would change with respect to 
refinery practices.
  Third, the Federal Trade Commission has been unwilling to move 
against anti-competitive practices that the agency has even documented. 
Here I am talking about redlining, a tool that is used to wall off a 
community from competition. So, again, as we have seen in the case of 
oil company mergers, as we have seen in the case of refinery shutdowns, 
in this third area, anti-competitive practices such as redlining, the 
Federal Trade Commission is going to stay on the sidelines, apparently, 
with a new chair.

  Most recently, the Federal Trade Commission, through their general 
counsel, has essentially said that oil companies can price gouge with 
impunity. It is an extraordinary statement. It was made in the 
Bloomberg News service, again. But the general counsel of the Federal 
Trade Commission has basically said oil companies can do whatever they 
want. They can move unilaterally, raise prices to essentially any level 
they would want in certain markets.
  So this is what I am concerned about: these questions that are 
specifically under the jurisdiction of the Federal Trade Commission 
with respect to mergers, with respect to refinery shutdowns, with 
respect to anti-competitive practices, such as redlining.
  I had hoped that the nominee to chair the agency would be willing to 
make changes. I provided the nominee in advance--in advance of our 
meeting--the key questions that I went through with her. Yet, despite 
that, and despite the fact that I asked for even one example of a 
policy she would change at the Federal Trade Commission, I was given 
nothing to indicate that the nominee to head the Federal Trade 
Commission would buck the pernicious trend across this country that is 
draining the competition out of gasoline markets across America.
  For example, I asked Ms. Majoras about the Federal Trade Commission's 
lack of response to letters I have sent to the Chair requesting the 
Federal Trade Commission to investigate Shell Oil's plan to close a 
70,000-barrel-per-day refinery in Bakersfield, CA. The Federal Trade 
Commission sent me a two-paragraph response saying they would seriously 
consider it.
  This is an enormously important issue for those of us on the west 
coast. I see my friend from Nevada on the Senate floor, who has been 
eloquent with respect to trying to stand up for the consumer on the 
gasoline issue. The Presiding Officer, who I have the privilege of 
serving with, has been long concerned about gasoline prices. This 
Bakersfield shutdown will have enormous and negative ramifications for 
the people on the west coast.
  But while I have heard repeatedly from the agency--and I heard 
yesterday from the nominee that this ``sounds like a serious issue''--
there was no commitment, none, just like the current FTC Chair, to take 
any specific action. In addition, the nominee pointed out there may 
even be a potential conflict of interest with respect to the 
Bakersfield shutdown because of her current law firm responsibilities 
and the fact that her current firm represents Chevron.
  So, Mr. President, I will say, as I have done in the past, that I am 
going to keep my door open. I am hopeful, in the course of hearings and 
debates about the future direction of the Federal Trade Commission, 
that the nominee will shift course from what I heard yesterday. But I 
will tell you, it is not enough for the agency to continue to say they 
are ``seriously concerned'' or they are ``monitoring the situation'' or 
``they are troubled by the high prices our constituents are paying.'' 
That is not enough.
  When people up and down the west coast of the United States and 
across the country are getting shellacked by these gasoline prices, in 
effect, we are seeing consumers clobbered at the pump with dollars from 
their own pockets, and then taxpayer dollars are used to fill the 
Strategic Petroleum Reserve at record prices when it is essentially 
filled.
  We need some changes, and we need changes at the top with respect to 
gasoline pricing policy in this country. That means the Federal Trade 
Commission has to get off the sidelines. They have to zero in on the 
three specific areas I mentioned this morning: oil company mergers; 
refinery shutdowns; and anti-competitive practices, such as redlining.
  For far too many years, Federal Trade Commission political appointees 
have sat on their hands while the anti-competitive practices of the oil 
industry gouge American consumers at the gas pump. I have given Ms. 
Majoras a number of opportunities to explain to me what she plans to do 
differently as a Commissioner, and she has made it abundantly clear 
that she has no specific plan to energize the FTC to begin fighting for 
consumers. I don't intend to allow yet another FTC Commissioner collect 
a $145,00 salary to do nothing while unnaturally high gas prices 
jeopardize American jobs and American families.
  It is my intention to continue to object to Senate consideration of 
the

[[Page S5738]]

nominee to head the Federal Trade Commission until that agency is 
willing to tell the people of our State and the people of this country 
that there are going to be some changes and there is going to be some 
competition again in the gasoline markets of our country.
  Mr. President, I yield the floor.

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