[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
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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
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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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