[Congressional Record Volume 150, Number 74 (Tuesday, June 1, 2004)]
[Senate]
[Pages S6265-S6266]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       IN SUPPORT OF S. RES. 364

  Mr. FEINGOLD. Mr. President, I would like to express my support as a 
cosponsor for S. Res. 364, a sense-of-the-Senate resolution that 
addresses growing concern about oil markets. Over the past few months, 
oil prices have skyrocketed to a high of over $40 per barrel. High 
gasoline prices are inextricably linked to high crude oil prices, and 
these high oil and gas prices hurt Americans across the Nation and from 
all walks of life. Farmers, teachers, and small business owners across 
the country and in Wisconsin in particular, are getting hit hard by 
these outrageous costs. This week the people in my home State of 
Wisconsin are seeing gas prices of over $2.00 a gallon. Making matters 
worse, a recent refinery breakdown in Minnesota may further reduce the 
supply of gasoline in the State.
  I am proud to cosponsor this resolution because it sends a powerful 
message to the administration that it needs to directly, and 
aggressively, confront this oil and gasoline problem now. First, the 
resolution expresses the sense of the Senate that the administration 
should directly confront OPEC and challenge OPEC to immediately 
increase oil production. The eleven countries that make up the 
Organization of Petroleum Exporting Countries, OPEC, produce 40 percent 
of the world's crude oil and control three-quarters of proven reserves, 
including much of the spare production capacity. Ensuring access to and 
stable prices for imported crude oil for the United States and major 
allies and trading partners of the United States is vital to United 
States foreign and economic policy.
  The 2004 OPEC production cuts have resulted in outrageous increases 
in oil prices. OPEC instituted its production cut in February 2004, 
which reduced production by 2,000,000 barrels per day.

[[Page S6266]]

From February to March 2004, crude oil prices rose from $28 to $38 per 
barrel. In April, OPEC announced its commitment to further cut oil 
production by 1, 000,000 barrels a day, and crude oil prices now exceed 
$40 per barrel. We cannot allow this foreign oil cartel to wreak havoc 
on our economy. The administration must use its diplomatic pressure to 
persuade OPEC to increase production. The actions of this cartel have 
real consequences for Americans.
  Second, the resolution states that the administration should direct 
the Federal Trade Commission and the Attorney General to exercise 
vigorous oversight over the oil markets to protect the American people 
from price gouging. Mega-mergers throughout the oil industry have 
resulted in consolidation in the market, and we have, in essence, 
rebuilt the Rockefeller trust through these mergers. The gasoline 
market in Wisconsin and at least 27 other States are now considered to 
be ``tight oligopolies'' with 4 companies controlling more than 60 
percent of the gasoline supplies. In tightly concentrated markets, 
numerous studies have found oil company practices are driving 
independent wholesalers and dealers out of the market.
  Investigations have also found large consolidated oil companies 
control not just the buying choices of local gas stations, but also the 
selling prices of gasoline distributors. As a result, independent 
stations must buy their gasoline directly from the oil company, usually 
at a higher price than the company's own brand-name stations pay. With 
these higher costs, the independent stations cannot compete. The 
company bases prices not on the cost of producing gasoline, but on the 
maximum a neighborhood will pay. The FTC and the Attorney General must 
keep a watchful eye on these anticompetitive practices and use all the 
tools available to them to protect consumers from price fixing and 
other practices that result in escalating gas prices.
  Finally, the resolution calls upon the administration to suspend 
deliveries of the oil to the Strategic Petroleum Reserve and release 
1,000,000 million barrels of oil a day for 30 days. History indicates 
that releasing oil from the SPR provides consumers with relief from 
high gas prices. Within hours of the first air strike against Iraq in 
January 1991, the first President Bush authorized a drawdown of the 
SPR. The day after the plan was approved, crude prices dropped by 
nearly $10 a barrel. During the fall of 2000, the Clinton 
administration decided to release oil from the SPR. The day after the 
oil was released from the SPR, crude prices oil prices fell from $37 a 
barrel to less than $ 31 a barrel. In addition, releasing the oil will 
not affect our security interests because the SPR is almost full. It 
currently holds 659 million barrels, and its capacity of the is 700 
million barrels. The resolution only calls for releasing 30 million 
barrels. American consumers need relief from high gas prices now. I 
urge my colleagues to support this resolution.

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