[Congressional Record Volume 151, Number 111 (Thursday, September 8, 2005)]
[Senate]
[Pages S9821-S9822]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       INQUIRY ON GASOLINE PRICES

  Mr. NELSON of Nebraska. Mr. President, I appreciate this opportunity 
to speak about S. 1610, a bill requiring the Federal Trade Commission 
to conduct an inquiry into the retail price of gasoline. I thank my 
colleagues, Senators Frist and Harry Reid, for their leadership and 
Senators Landrieu and Vitter and so many others for their efforts in 
working through this time of unprecedented destruction and human 
suffering.
  I am here today to lend my support for giving U.S. gasoline consumers 
a more thorough understanding of the pricing mechanisms that are at 
play at the pump. The legislation I propose calls for the Federal Trade 
Commission to conduct an immediate study into whether rising gas prices 
are the result of a struggling market or whether market manipulation or 
a form of gouging is taking place during this time of tragedy.
  Even before Hurricane Katrina, the Consumer Federation of America 
cited several reasons for the dramatic increase in gasoline prices, 
including tight crude oil inventories, inadequate oil refinery 
capacity, lack of competition and the oil industry's increasing market 
power. These are all plausible reasons for price spikes, but they are 
not enough to stop the questions of people concerned with their tighter 
budgets.
  Between Nebraska and Iowa, more than 500 complaints have been made to 
State officials about high prices. Officials in both States indicate 
they have seen no evidence of market manipulation by retailers. 
Retailers are not singled out as the focus of this bill.
  My bill calls for a 2-week study on the root of rising gasoline 
prices, including both regular gasoline and ethanol-blended gasoline. 
The report would then be forwarded to Congress for further action. If 
the report determines no market manipulation is occurring, the FTC 
would notify the U.S. Secretary of Energy, who would use the 
information to determine whether the Federal petroleum reserve would 
need to be tapped for additional oil.
  But if manipulation is found, we will have the opportunity to act 
quickly.

[[Page S9822]]

The FTC would work with the attorneys general of various affected 
States to take appropriate action.
  I am aware that inquiries as these have been conducted in the past, 
particularly around this time of year. Price surges around the time of 
the Labor Day holiday are common. As the prices fall, interest in 
determining why they reached record level diminishes. I hope this can 
be different. Even if prices begin to fall, which it appears they may, 
we still need to know what happened and why it happened.
  Oil, as we all know, is the most widely used source of energy in the 
world. Facts indicate that world production of oil will start to 
decline. However, demand will not. At what point the production of oil 
will fall below demand cannot be accurately determined, but I believe 
that recent events that have disrupted normal supply and demand 
behavior is an illustration of what consumers can expect once that day 
arrives.

  This is why, after years of delay, it was so important that we were 
able to pass an energy bill, allowing for the development of more 
energy sources. I am hopeful that these energy sources, particularly 
renewable fuels made from farm commodities, will be developed quickly 
enough to prevent price surges at times the oil supply or refinery 
capacity is disrupted.
  According to the American Petroleum Institute, Nebraska has the 
distinct honor of being the only State west of Arkansas to see prices 
jump more than 50 cents per gallon since August 30. Why Nebraska? Let's 
find out.
  In many cases, we saw pump price increases of 20, 30, 40 cents and 
even higher in a single day. Why such a dramatic increase? Let's find 
out.
  We know there exists a very healthy competition between gasoline 
retailers, yet the price range for the same grade of gasoline yesterday 
was $3.19 in Lincoln, Nebraska and $2.99 in nearby Fremont. Why the 
difference? Let's find out.
  What role do speculators play in establishing price? Let's find out.
  These questions, and others, are important. Every part of our 
Nation's economy is impacted by these increases.
  For example, the extraordinary prices of gasoline, diesel fuel, 
natural gas and petroleum derived input products such as fertilizer, 
chemicals and propane add another economic burden, particularly in 
rural areas and for farmers and ranchers who count on a ready and 
accessible energy supply for the production and harvest of their crops 
and livestock.
  We need stable and reasonable gasoline, diesel, and natural gas 
prices to operate farm machinery, dry grain, and transport commodities 
to market, especially during the coming harvest season. The extreme 
volatility of world crude oil and petroleum product prices, according 
to USDA, has already impacted net farm income by over $2 billion.
  When we take a hard look at the facts, we will better understand the 
forces affecting prices at the pump. We'll understand why in Nebraska 
we pay prices that range from $2.89 to $3.61 and higher. We'll 
understand reports of $6.00 gasoline in Atlanta and even higher prices 
at home and abroad. This legislation is nothing but beneficial for 
American gasoline consumers.
  Now, I ask my colleagues to join me in promoting legislation that 
will provide valuable information on our Nation and the world's 
transportation fuels.

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