[Congressional Record Volume 153, Number 2 (Friday, January 5, 2007)]
[House]
[Pages H90-H91]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GAS PRICES
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Michigan (Mr. Stupak) is recognized for 5 minutes.
Mr. STUPAK. Mr. Speaker, I rise today to commend the new Democratic
leadership that will finally allow the U.S. House of Representatives to
address high energy prices. Under prior Republican leadership in the
House, the oil industry enjoyed years of record profits, record high
gas prices and minimal oversight and price manipulation.
Curiously, in September and October of 2006, just before the November
elections, gas prices dropped an average of $.60 per gallon compared to
the record high prices of last summer. This $.60 drop in gas prices
occurred despite the fact that there were pipeline disruptions in
Alaska and indications that OPEC would cut oil production. Department
of Energy's statistics show us that while gas prices dropped an average
of $.60 a gallon in September and October, the crude oil price only
dropped 10 cents a gallon.
If you listened to National Public Radio this week, you would have
heard that there is evidence that the oil companies intentionally
influence gas price fluctuations, and a $.60 drop was done just before
the election to influence the November elections.
For years, the American Petroleum Institute, the oil companies' main
lobbying group, has spent millions of dollars on public relations
campaigns to convince the American people that gas prices are a direct
result of crude oil prices, not oil company practices. But yet we have
a 60 percent drop in gas prices, but only a 10 percent drop in the
price of crude.
Ignoring their own PR, oil companies were able to significantly
reduce the gas prices in September and October without a corresponding
decrease in their crude oil price. Some consumer advocates, such as the
Foundation for Taxpayer and Consumer Rights, have accused oil companies
of purposefully reducing gas prices in the months before the election
to help Republican candidates.
Since November, gas prices have already increased an average of 15
cents a gallon. This is not the first time the oil companies have been
accused of attempting to manipulate markets for their benefit.
Internal memos from several oil companies written in the 1990s have
revealed that the big oil companies have worked to limit refinery
capacity here in the United States, allowing these companies to control
the supply and cost of gasoline.
In May of 2006, the Federal Trade Commission released its report
titled Investigation of Gasoline Price Manipulation and Post-Katrina
Gasoline Price Increases. In this report, the Federal Trade Commission
found that after Hurricane Katrina refiners, wholesalers and retailers
charged significantly higher prices that did not result from either
increased costs or market friends.
FTC Commissioner John Liebowitz, in a statement on the report,
acknowledged that, and I quote, ``that the behavior of many market
participants, on balance, leaves much to be desired.''
{time} 1415
Democrats have repeatedly urged the House Republican leadership to
protect America's pocketbooks and not that of Big Oil. Nonetheless, the
Republican leadership refused to take action last fall on high gas
prices. The American people have now chosen a new direction with
Democrats in charge.
[[Page H91]]
During the first 100 legislative hours of this, the 110th Congress,
the House of Representatives will consider legislation to end the tax
breaks and special subsidies for oil companies. For too long, oil
companies have benefited from weak royalty laws, tax breaks and
subsidies, at the same time making record profits at the expense of the
American people.
Rather than helping oil companies' bottom lines, these funds that we
will recapture will instead be used to promote alternative energy
sources to end our Nation's addiction to oil.
Later this year I look forward to having an open and honest debate on
my legislation, which I plan to reintroduce soon, to end gas price
gouging.
Last year over 120 Members cosponsored my legislation to create a
Federal law against price gouging for gasoline, natural gas, and other
fuel.
I look forward to continuing to work towards greater oversight of the
oil and gas trading, especially off-market trades known as ``over the
counter'' trades.
I will be re-introducing my legislation, the Prevent Unfair
Manipulation of Prices Act, to improve oversight of these trades and
strengthen the penalties for traders who attempt to illegally
manipulate markets.
The Federal Government has a responsibility to protect consumers from
high gas prices. I look forward to being able to address high energy
prices, to provide our constituents with the protection they need and
so desperately deserve.
Mr. Speaker, if I may, I would like to enter into the Record a one-
page article from National Public Radio about how ``in other words, in
the run-up to the election, oil companies cut gasoline prices 500
percent more than their raw material costs fell. And it wasn't because
refining and distribution costs rose. They were relatively stable. Oil
companies simply took less profit from their refineries for a short
period of time.''
Gas-Price Conspiracy? You Bet!
Commentator and consumer advocate Jamie Court says there IS
evidence that oil companies intentionally influence gas-price
fluctuations.
TEXT OF COMMENTARY
KAI RYSSDAL: The 110th Congress will be sworn in on
Thursday. Speaker-to-be Nancy Pelosi has promised a whirlwind
first 100 hours of the session. On the Democrats' list of
things to do is cut subsidies to the oil industry. Perhaps as
a result, the American Petroleum Institute--that's big oil's
main lobbying group--is launching a public relations
offensive. Complete with Congressional oil patch tours, and
contributions to friendly think tanks. It's trying to
convince people rising energy prices are simply the result of
higher demand and shrinking supply.
Commentator and consumer advocate Jamie Court says that
campaign is too slick by half.
JAMIE COURT: Say you're an oil executive and you want to
keep the Republicans in control of Congress. What can you do
prior to an election? Well, you can keep your refineries
running at full speed, flood the market with extra fuel, and
take less per gallon in profit than usual. And guess what:
Department of Energy data suggest that's exactly what the oil
companies did this fall. By the second week in October,
gasoline prices fell 70 cents from summer's record highs.
Refineries were running full throttle and America's gasoline
inventories were up nearly 7 percent from the three previous
Octobers. The rise in supply came despite BP's major pipeline
disruption in Alaska. Ordinarily, that's an industry excuse
to shrink supplies and raise prices. Now, the oil industry
claimed pump prices fell because crude oil prices dropped.
But gas prices dropped far more steeply than crude oil. Crude
oil comes in barrels. There are 42 gallons in a barrel and
the price of each gallon was down 10 cents this October over
last. But gas prices fell 61 cents a gallon over the same
time last year.
In other words, in the run-up to the election, oil
companies cut gasoline prices 500 percent more than their raw
material cost fell. And it wasn't because refining and
distribution costs rose. They're relatively stable. Oil
companies simply took less profit from their refineries for a
short period of time. Could it have been to influence a
political outcome? Well, right after election day, the price
of gas suddenly rose after two months of sharp decline. Post-
election, refineries have slowed down, inventories are
shrinking, and gas prices are climbing. It's back to business
as usual, unless the new Congress starts to do business
differently.
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