[Congressional Record Volume 152, Number 50 (Tuesday, May 2, 2006)]
[House]
[Pages H1923-H1924]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            THE PRICE OF GAS

  Mr. STUPAK. Mr. Speaker, as the ranking Democrat on the Energy and 
Commerce Committee's Subcommittee on Oversight and Investigations, I 
have been calling for hearings on gas price gouging for over 8 months. 
For 8 months I have been asking for consideration of my legislation, 
the Federal Response to Energy Emergencies Act, which is designated to 
crack down on gas price gouging. For 8 months, Republicans in Congress 
have stone walled. When Republicans finally started to feel the 
political heat, they put forth shallow imitations of Democratic ideas 
and returned to their old standby, drilling in the Arctic National 
Wildlife Refuge.
  The simple fact is this: as gas prices climb, the majority party has 
been shamed into doing something, but they still are out of ideas. Our 
legislation, the Democratic legislation, the FREE Act, the Federal 
Response to Energy Emergencies, would instruct the Federal Trade 
Commission to develop a legal definition of gas price gouging, 
predatory pricing and market manipulation. Most people are shocked to 
find that there is no Federal law against gas price gouging. Therefore, 
the Federal Trade Commission has never brought a case to court for gas 
price gouging. Let me repeat that. Never in the history of the Federal 
Trade Commission has it brought a case of price gouging to court. Why 
is this? Because there is no definition of price gouging.
  Well, even if the President and congressional Republicans don't know 
how to define price gouging, consumers know it when they see it. Gas 
costs 70 cents more a gallon right now than it did at the same time 
last year. Profits for refineries are up 255 percent between September 
2004 and September 2005. Last week, Valero, the Nation's largest 
refinery company, posted a 60 percent increase in profit in the first 
quarter alone. That's gouging. And while it happens, unfortunately the 
majority party turns a blind eye.
  In contrast, 125 House Democrats have signed a discharge petition. A 
discharge petition removes our legislation from the committee of 
jurisdiction and brings it to the floor for a vote. More and more 
Members each day are signing their name to the discharge petition. 
These Members are tired of the Republicans' stonewalling. We want 
action on a real price gouging bill with teeth, not a watered-down 
imitation.
  Just as we need to address gouging, Congress should also take a look 
at the way oil futures are bought and sold. Seventy-five percent of the 
multibillion-dollar oil futures industry is completely unregulated, 
without transparency or oversight by the Federal Government or the 
Commodity Futures Trading Commission. This is Enron all over again. 
Without Federal oversight, there is no way to ensure that speculators 
are not manipulating the market to drive up the price of oil.
  Last week, I introduced the PUMP Act, or the Prevent Unfair 
Manipulation of Prices Act. This bill would require all traders to play 
by the same rules, ending the speculation, fear and greed that drives 
today's oil prices. It has been estimated that by stopping this 
speculative trading, we could reduce the price of a barrel of oil by as 
much as $20 per barrel, providing consumers with immediate relief at 
the gas pump.
  These are the kind of ideas that Democrats are promoting to provide 
consumers with immediate relief. But, instead, we get the same thing 
from the majority party: drill in the Arctic National Wildlife Refuge 
and provide big tax breaks to big oil. You don't drill your way to 
energy independence. Tax breaks for the big oil companies don't result 
in lower gas prices.
  Today's USA Today, the Money section, has an article, States Find It 
Tough to Prove Gas Prices Illegal. In California, the Attorney General 
says that in 2006 in the first 4 months of this year, prices have gone 
up 14 percent, but the difference between what oil companies pay for 
crude oil and the price at the pump is up 130 percent. If that's not 
price gouging, I don't know what is. In Arizona, they showed that the 
profit margins realized by every segment of the oil industry were two 
or three times greater than normal. Is that price gouging? I think it 
is. But as Arizona says, the State has no law making price gouging 
illegal, underscoring, the report says, the need for Federal price 
gouging legislation.

[[Page H1924]]

  I would hope, Mr. Speaker, that Speaker Hastert would allow us to 
bring up the FREE Act so we could have a free and full debate on price 
gouging in this Congress.
  Look at this next article: Fuel Costs Ease But Could Climb Higher. 
Why? Money is flowing into direct or indirect purchases of oil futures 
as an inflation hedge. That flow sends futures higher, fueling more 
inflation, and then fueling more money into futures positions as an 
inflation hedge. That is price gouging. That is market manipulation. 
That is why we have the PUMP Act.
  If we would pass the PUMP Act, bring it to the floor for debate, get 
it out of committee and put it before the House here, we could lower 
the price of a barrel of oil by $20.

                            [From USA Today]

            States Find It Tough To Prove Gas Prices Illegal

                  (By James R. Healey and Matt Krantz)

       Arizona's comprehensive investigation into that state's 
     high fuel prices after Hurricane Katrina concludes that while 
     there was ``profiteering'' at all levels of the oil industry, 
     nothing illegal took place.
       Washington's attorney general's office said in a report 
     last week that its more recent investigation of today's high 
     prices ``has not found any evidence so far of illegal 
     activity among gasoline retailers or producers in 
     Washington.''
       Together, the two reports show that it is hard for 
     authorities to prove consumers are being ripped off even in 
     times of extraordinary price increases.
       Attorneys general in at least nine states, responding to 
     outrage by their residents, are investigating whether current 
     high gasoline prices are a result of wrongdoing by the 
     petroleum industry. according to the National Association of 
     Attorneys General
       Arizona's statewide average price is $3.022, still nearly 
     11 cents less than the record $3.131 shortly after Katrina, 
     according to travel club AM's daily survey.
       Washington's average $3.011 Monday set a record for that 
     state.
       The attorney general in California, where the statewide 
     average hit a record $3.251 a gallon Monday, says he will 
     subpoena documents from the state's 21 refineries, including 
     those operated by major oil companies ChevronTexaco, 
     ExxonMobil and ConocoPhillips.
       The attorney general's office said state data for 2006 show 
     that crude oil prices have risen 14%, but the difference 
     between what oil companies pay for crude oil and prices at 
     the pump has soared 130%.
       Gasoline is made from crude oil, which accounts for roughly 
     55% of the pump price for gasoline, the U.S. government says.
       And Washington Attorney General Rob McKenna, in a statement 
     about his investigation, said, ``Gas prices are influenced by 
     the basic laws of supply and demand.''
       Energy-industry veterans wonder if such probes are 
     misleading.
       California's own Energy Commission, for instance, 
     acknowledges in an explanation of fuel prices on its website: 
     ``Rumors and charges of collusion among the oil companies 
     have been raised for decades with nothing ever proven.''
       Charles Swanson, director of Ernst & Young's Energy Center, 
     says, ``Politicians can posture all they want, but there's 
     nothing they can do to help.''
       Some states have made price-gouging cases. Florida sued 
     individual gas stations for overcharging after Katrina.
       But Florida, unlike Arizona, has an anti-gouging law. It is 
     in effect only when a state of emergency is declared. Florida 
     was a hurricane target, making an emergency declaration 
     logical.
       Arizona's report, unveiled last week, says, ``Profit 
     margins realized by every segment of the oil industry were 
     two or three times their normal margins.''
       But the state has no law making that illegal, underscoring, 
     the report says, the need for a federal price-gouging law.
       The Federal Trade Commission is expected to deliver a 
     report by May 22 that will say whether the agency found any 
     price manipulation after Katrina.

                     [From USA Today, May 2, 2006]

                 Fuel Costs Ease But Could Climb Higher

                          (By James R. Healey)

       Gasoline prices have stopped their spring-loaded daily 
     leaps, but it's too soon to say the worst is over.
       The numbers on the pump have declined slightly three 
     consecutive days, to a nationwide average $2.919 a gallon 
     Monday, according to travel club AAA. It's the first time 
     that's happened since late March. But the March respite 
     totaled just 0.8 of a cent over three days and turned out to 
     be only a hiccup that before prices zipped higher.
       AAA warns that might happen again. ``A few days of slight 
     declines does not make a trend,'' spokesman Geoff Sundstrom 
     cautions. ``We may continue to see higher prices between now 
     and Memorial Day.''
       That's the beginning of the warm-weather driving season, 
     when gasoline consumption rises as Americans take more 
     vacations and weekend trips.
       A weekly report by the U.S. Energy Information 
     Administration showed a U.S. average Monday identical to 
     AAA's--$2.919--up a just 0.5 of a cent from a week ago. 
     That's a big slowdown after four weeks of prices jumping an 
     average 10.4 cents a gallon per week.
       On one hand, it should be no surprise that prices are 
     easing. U.S. gasoline supplies are ample. U.S. demand is a 
     little soft. Refineries are mostly through with their routine 
     maintenance and are cranking out generous amounts of 
     gasoline.
       But prices aren't down as far as they should be under those 
     circumstances, energy veterans say. That's partly because 
     petroleum products have become an investment instead of 
     traders' best guess about the value of crude oil, gasoline 
     and heating oil the next few months.
       ``Money is flowing into direct or indirect purchases of oil 
     futures as an inflation hedge. That flow sends futures 
     higher, fueling more inflation, and then fueling more money 
     into futures positions as an inflation hedge,'' says Tom 
     Kloza, senior analyst at the Oil Price Information Service. 
     Oil rose $1.82 to settle at $73.70 Monday.
       Still, ``We can put to rest some of the hyperbole--$3.50 
     average for gasoline, or $4-plus,'' he says.
       Keeping upward pressure on prices:
       Hostility toward the U.S. in oil-producers Iran and 
     Venezuela implies shortages at any minute.
       Indelible memories of disruptions caused by hurricanes in 
     the Gulf of Mexico last year keep petroleum traders jumpy 
     about supplies. That makes them willing to pay more for oil 
     and for the gasoline made from it.
       ``We're heading into the peak demand season and the 
     potenial for refinery outages'' from hurricanes, cautions 
     Thomas Bentz, senior energy analyst at BNP Paribas, a big 
     investment bank.
       The U.S. Minerals Management Service in its latest report, 
     April 19, said that 22.3% of Gulf oil output still hadn't 
     restarted after hurricane damage last year. The MMS plans to 
     update that number Wednesday.

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