[Congressional Record Volume 154, Number 105 (Tuesday, June 24, 2008)]
[House]
[Pages H5934-H5940]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FEDERAL PRICE GOUGING PREVENTION ACT
Mr. STUPAK. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 6346) to protect consumers from price-gouging of gasoline
and other fuels, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 6346
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Price Gouging
Prevention Act''.
SEC. 2. UNCONSCIONABLE PRICING OF GASOLINE AND OTHER
PETROLEUM DISTILLATES DURING EMERGENCIES.
(a) Unconscionable Pricing.--
(1) In general.--It shall be unlawful for any person to
sell, at wholesale or at retail in an area and during a
period of an energy emergency, gasoline or any other
petroleum distillate covered by a proclamation issued under
paragraph (2) at a price that--
(A) is unconscionably excessive; and
(B) indicates the seller is taking unfair advantage of the
circumstances related to an energy emergency to increase
prices unreasonably.
(2) Energy emergency proclamation.--
(A) In general.--The President may issue an energy
emergency proclamation for any area within the jurisdiction
of the United States, during which the prohibition in
paragraph (1) shall apply. The proclamation shall state the
geographic area covered, the gasoline or other petroleum
distillate covered, and the time period that such
proclamation shall be in effect.
(B) Duration.--The proclamation--
(i) may not apply for a period of more than 30 consecutive
days, but may be renewed for such consecutive periods, each
not to exceed 30 days, as the President determines
appropriate; and
(ii) may include a period of time not to exceed 1 week
preceding a reasonably foreseeable emergency.
(3) Factors considered.--In determining whether a person
has violated paragraph (1), there shall be taken into
account, among other factors--
(A) whether the amount charged by such person for the
applicable gasoline or other petroleum distillate at a
particular location in an area covered by a proclamation
issued under paragraph (2) during the period such
proclamation is in effect--
(i) grossly exceeds the average price at which the
applicable gasoline or other petroleum distillate was offered
for sale by that person during the 30 days prior to such
proclamation;
(ii) grossly exceeds the price at which the same or similar
gasoline or other petroleum distillate was readily obtainable
in the same area from other competing sellers during the same
period;
(iii) reasonably reflected additional costs, not within the
control of that person, that were paid, incurred, or
reasonably anticipated by that person, or reflected
additional risks taken by that person to produce, distribute,
obtain, or sell such product under the circumstances; and
(iv) was substantially attributable to local, regional,
national, or international market conditions; and
(B) whether the quantity of gasoline or other petroleum
distillate the person produced, distributed, or sold in an
area covered by a proclamation issued under paragraph (2)
during a 30-day period following the issuance of such
proclamation increased over the quantity that that person
produced, distributed, or sold during the 30 days prior to
such proclamation, taking into account usual seasonal demand
variations.
(b) Definitions.--As used in this section--
(1) the term ``wholesale'', with respect to sales of
gasoline or other petroleum distillates, means either
truckload or smaller sales of gasoline or petroleum
distillates where title transfers at a product terminal or a
refinery, and dealer tank wagon sales of gasoline or
petroleum distillates priced on a delivered basis to retail
outlets; and
(2) the term ``retail'', with respect to sales of gasoline
or other petroleum distillates, includes all sales to end
users such as motorists as well as all direct sales to other
end users such as agriculture, industry, residential, and
commercial consumers.
(c) Construction.--As described in this section, a sale of
gasoline or other petroleum distillate does not include a
transaction on a futures market.
SEC. 3. ENFORCEMENT BY THE FEDERAL TRADE COMMISSION.
(a) Enforcement by FTC.--A violation of section 2 shall be
treated as a violation of a rule defining an unfair or
deceptive act or practice prescribed under section
18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C.
57a(a)(1)(B)). The Federal Trade Commission shall enforce
this Act in the same manner, by the same means, and with the
same jurisdiction as though all applicable terms and
provisions of the Federal Trade Commission Act were
incorporated into and made a part of this Act. In enforcing
section 2(a) of this Act, the Commission shall give priority
to enforcement actions concerning companies with total United
States wholesale or retail sales of gasoline and other
petroleum distillates in excess of $500,000,000 per year.
(b) Civil Penalties.--
(1) In general.--Notwithstanding the penalties set forth
under the Federal Trade Commission Act, any person who
violates this Act with actual knowledge or knowledge fairly
implied on the basis of objective circumstances shall be
subject to--
(A) a fine of not more than 3 times the amount of profits
gained by such person through such violation; or
(B) a fine of not more than $3,000,000.
(2) Method.--The penalties provided by paragraph (1) shall
be obtained in the same manner as civil penalties obtained
under section 5 of the Federal Trade Commission Act (15
U.S.C. 45).
(3) Multiple offenses; mitigating factors.--In assessing
the penalty provided by subsection (a)--
(A) each day of a continuing violation shall be considered
a separate violation; and
(B) the court shall take into consideration, among other
factors, the seriousness of the violation and the efforts of
the person committing the violation to remedy the harm caused
by the violation in a timely manner.
SEC. 4. CRIMINAL PENALTIES.
(a) In General.--In addition to any penalty applicable
under section 3, any person who violates section 2 shall be
fined under title 18, United States Code--
(1) if a corporation, not to exceed $150,000,000; and
(2) if an individual not to exceed $2,000,000, or
imprisoned for not more than 10 years, or both.
(b) Enforcement.--The criminal penalty provided by
subsection (a) may be imposed only pursuant to a criminal
action brought by the Attorney General or other officer of
the Department of Justice.
SEC. 5. ENFORCEMENT AT RETAIL LEVEL BY STATE ATTORNEYS
GENERAL.
(a) In General.--A State, as parens patriae, may bring a
civil action on behalf of its residents in an appropriate
district court of the United States to enforce the provisions
of section 2(a) of this Act, or to impose the civil penalties
authorized by section 3(b)(1)(B), whenever the attorney
general of the State has reason to believe that the interests
of the residents of the State have been or are being
threatened or adversely affected by a violation of this Act
or a regulation under this Act, involving a retail sale.
(b) Notice.--The State shall serve written notice to the
Federal Trade Commission of any civil action under subsection
(a) prior to initiating such civil action. The notice shall
include a copy of the complaint to be filed to initiate such
civil action, except that if it is not feasible for the State
to provide such prior notice, the State shall provide such
notice immediately upon instituting such civil action.
(c) Authority To Intervene.--Upon receiving the notice
required by subsection (b), the Federal Trade Commission may
intervene in such civil action and upon intervening--
(1) be heard on all matters arising in such civil action;
and
(2) file petitions for appeal of a decision in such civil
action.
(d) Construction.--For purposes of bringing any civil
action under subsection (a), nothing in this section shall
prevent the attorney general of a State from exercising the
[[Page H5935]]
powers conferred on the attorney general by the laws of such
State to conduct investigations or to administer oaths or
affirmations or to compel the attendance of witnesses or the
production of documentary and other evidence.
(e) Venue; Service of Process.--In a civil action brought
under subsection (a)--
(1) the venue shall be a judicial district in which--
(A) the defendant operates;
(B) the defendant was authorized to do business; or
(C) the defendant in the civil action is found;
(2) process may be served without regard to the territorial
limits of the district or of the State in which the civil
action is instituted; and
(3) a person who participated with the defendant in an
alleged violation that is being litigated in the civil action
may be joined in the civil action without regard to the
residence of the person.
(f) Limitation on State Action While Federal Action Is
Pending.--If the Federal Trade Commission has instituted a
civil action or an administrative action for violation of
this Act, no State attorney general, or official or agency of
a State, may bring an action under this subsection during the
pendency of that action against any defendant named in the
complaint of the Federal Trade Commission or the other agency
for any violation of this Act alleged in the complaint.
(g) Enforcement of State Law.--Nothing contained in this
section shall prohibit an authorized State official from
proceeding in State court to enforce a civil or criminal
statute of such State.
SEC. 6. LOW INCOME ENERGY ASSISTANCE.
Amounts collected in fines and penalties under section 3 of
this Act shall be deposited in a separate fund in the
treasury to be known as the Consumer Relief Trust Fund. To
the extent provided for in advance in appropriations Acts,
the fund shall be used to provide assistance under the Low
Income Home Energy Assistance Program administered by the
Secretary of Health and Human Services.
SEC. 7. EFFECT ON OTHER LAWS.
(a) Other Authority of Federal Trade Commission.--Nothing
in this Act shall be construed to limit or affect in any way
the Federal Trade Commission's authority to bring enforcement
actions or take any other measure under the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) or any other provision
of law.
(b) State Law.--Nothing in this Act preempts any State law.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Michigan (Mr. Stupak) and the gentleman from Texas (Mr. Barton) each
will control 20 minutes.
The Chair recognizes the gentleman from Michigan.
General Leave
Mr. STUPAK. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks and to
include extraneous materials on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. STUPAK. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, today the U.S. House of Representatives has an
opportunity to vote on my legislation, the Federal Gas Price Gouging
Prevention Act, H.R. 6346. Every Member of the House will face a simple
choice: Vote to stand up for consumers, your constituents, who are
paying outrageous gas prices at the pump, or vote to allow oil
companies to go on setting them unchecked.
As of last night, the national average for a gallon of gasoline,
regular gasoline, was $4.07. With rising prices, it makes sense that we
vote on this legislation before the House leaves for the 4th of July
holiday and millions of Americans fill their gas tanks and hit the
road. Or even as we look forward to this winter, with home heating oil
at $3.98 per gallon, it will be impossible for people to heat their
homes this winter.
The high cost of energy produces more opportunities for multiple
opportunities to have price gouging and price manipulation.
Unfortunately, with these high prices, fewer families will be traveling
this year, and that takes an especially hard toll on districts like
mine that rely on tourism.
As I travel my vast northern Michigan congressional district, I have
heard from everyone from clergy to farmers to seniors who are outraged
by prices at the pump. They are shocked to learn that there is no
Federal law against gas price gouging. Just as speculators are driving
up prices on the global energy markets, unscrupulous wholesalers,
retailers and refiners operate without the Federal oversight to ensure
prices are fair and justified.
Twenty-nine States and the District of Columbia have put their own
price gouging laws into place, but there is no uniform standard as to
price gouging. Absent Federal action, Michigan Governor Jennifer
Granholm is pushing State legislation that would give the Michigan
Attorney General full authority to investigate price fixing and gas
gouging at Michigan's gas pumps.
In Michigan, in fact, in my district, we have seen recent evidence of
price gouging. An energy company of Kansas City, Missouri, opted to
settle a class action suit brought under the Michigan's Consumer
Protection Act in May over charges that they charged at least $1 above
the State average over energy this year. I am pleased a deal was
reached that will provide Michigan consumers with recourse, but I have
a hard time believing this is an isolated case. If price gouging is
occurring in my district, I have to believe it is not happening in
other parts of the country and we need a uniform law to prevent it and
enforce penalties on those who violate it.
Because there is no Federal law against price gouging, the Federal
Trade Commission has never prosecuted a case of gas price gouging. Let
me give you an example.
After Hurricane Katrina, the Federal Trade Commission at the request
of Congress examined gas prices and found 23 percent of the refineries
looked at, 9 percent of the wholesalers looked at and 25 percent of the
retailers that were reviewed had increased prices that ``were not
substantially attributed to increased costs'' and ``could not be
attributed to national market trends.''
In other words, they were price gouging after Hurricane Katrina. Yet,
the FTC was still powerless to act because there is no law against gas
price gouging. I hope my colleagues in the other body will take action
and join the House in passing this bill and work toward giving Federal
agencies the tools to provide effective oversight of energy companies.
There is no reason for my colleagues on either side the aisle to vote
against my legislation.
Today, every House Member has a choice: Side with big oil companies
who are making obscene profits, or side with the American consumer.
{time} 1400
A vote against my bill is a vote against consumers and a vote for Big
Oil. I am pleased to be joined by other Members and colleagues who are
here to work very hard on this issue with me.
I reserve the balance of my time.
Mr. BARTON of Texas. Mr. Speaker, I yield myself such time as I may
consume.
(Mr. BARTON of Texas asked and was given permission to revise and
extend his remarks.)
Mr. BARTON of Texas. Mr. Speaker, I rise in opposition to H.R. 6346.
I know it is very similar to a bill that my friend introduced a year
ago, and I think we even had a vote on the House floor a year ago on
the bill, but there are some changes. Let me give the process argument
against it, and then I will give the policy argument against it.
The process argument against it is a bill that is introduced on one
day, is voted out of the House Floor the next day. That certainly shows
a speedy government, but it doesn't show due process under the normal
rules of the House of Representatives.
It would be good to have a legislative hearing on the bill and to
have either a subcommittee and/or, and preferably or, a full committee
markup. We have a number of bills right now that have been introduced
on oil speculation in the futures markets. My friend, Mr. Stupak of
Michigan, has introduced a bill, I have introduced a bill. He and I and
the chairman of the full committee, Mr. Dingell, are on a bill together
on that issue. We had an excellent oversight hearing yesterday that
Chairman Stupak chaired. We have got a commitment from Chairman Dingell
that we are going to have a legislative hearing and go through regular
order on the oil speculation bill. So we will have an oil speculation
bill on the floor hopefully within the month that will have gone
through the process, that will be bipartisan. This bill doesn't meet
that test. It was introduced in its current form yesterday and we are
voting on it on the floor today.
[[Page H5936]]
Now, as to the substance of the bill. Let me read into the record
some information on prices. These are national average gasoline prices
in the United States of America.
In 2006, the average retail price was $2.56 a gallon. This is the
national retail price for self-serve unleaded gasoline. The average
retail margin was 14 cents, and the average credit card fee was a
little over 6 cents. Last year in 2007, the average retail price had
gone up to $2.79. The average retail margin was still 14 cents, and the
average credit card fee had gone up to 7 cents.
So far, for data that we have this year for calendar year 2008, the
average retail price has jumped to $3.37. Now we know as a side note
that as of today the average national retail price is a little over $4,
I believe $4.07. The average retail margin has gone down to 12 cents,
so we have lost 2 cents in retail margin, and the average credit card
fee has gone up 8.4 cents.
So based on, such as there is, the definition of price gouging in
this bill, which if you go over to page 3 of the bill, they don't
directly have a definition of price gouging, but in the factors
considered on page 3 of the bill it does speak about a price that
grossly exceeds--we don't know what grossly means--grossly exceeds the
average price at which the applicable gasoline or other petroleum
distillate offered for sale during the 30 days prior to a proclamation,
which is a presidential emergency proclamation, or grossly exceeds the
price at which the same or similar gasoline or petroleum distillate was
readily obtainable in the same period.
So to the extent we have a definition of price gouging in this bill,
it is based on an average price 30 days prior or an average price in
the same period.
Based on that kind of implicit definition, we don't have price
gouging, as far as I can tell, going on in the United States of America
today. We do have high prices. There is no question that an average
national price of $4.08 a gallon for self-service unleaded is a price
that we should not be having to pay right now. But the reason we have
that price is not because of price gouging at retail. If the average
national price is a little over $4, and that is the average, in some
parts of the country I am told out in California it is up over $4.20.
In my State in Texas, I did not see but I was told that in Dallas near
Love Field they were having a gas price war and you could get a gallon
for $3.62, which is a price that is certainly preferable to $4 or
$4.50. But according to the statistics that I have, we don't have price
gouging going on in the United States of America.
The second point. I am not aware of any pending State action on price
gouging. And almost every State in the Union has State law that gives
the State Attorney General the ability to go after price gougers within
the boundaries of that State. Now, my friend from Michigan may have
information about some price gouging efforts that are going on at the
State level, but I don't have that information. That would indicate
that we don't--again, we have high gasoline prices and high diesel
prices and high fuel oil prices and high aviation fuel prices, but it
is not because of retail or wholesale price gouging.
The second issue with the bill, it requires the declaration of a
Presidential energy emergency. I am going to read that title or that
paragraph:
The President may issue an energy emergency proclamation for any area
within the jurisdiction of the United States during which the
prohibition in paragraph 1 shall apply. The proclamation shall state
the geographic area, the gasoline or other petroleum distillate
covered, and the time period that such proclamation shall be in effect.
The bill doesn't give any definition as to why the President should
declare an energy emergency, but it does say that, in order for the
bill to go into effect, the President has to declare that emergency. It
has the term in the bill unconscionable pricing, but again does not
define it. It just says unconscionably excessive, or the seller is
taking unfair advantage. It doesn't define that.
So here we have a bill that has not been through any kind of a
process, no hearings. My good friend from Michigan did introduce a
similar bill last year, and so it is obviously something that perhaps
at the Federal level--and I say perhaps. I am not saying it should be,
but I will admit that it could be addressed. We passed a price gouging
bill in the last Congress in this body. It went to the other body, it
went to the Senate, and was not passed over there.
So I can't say categorically that I am opposed to any price gouging
legislation. But I do think, on process grounds, it ought to go through
the committee system. And I think on policy grounds, this bill is
undefined, it doesn't state the reasons the President should declare a
national emergency, it doesn't define what unconscionably excessive is.
It appears to base when you would bring a finding based on an average
price that was it in a region 30 days before the current period or a
price in the region in the current period that is grossly excessive.
And, again, it doesn't define grossly excessive.
So Mr. Speaker, I know there is a lot of pressure on the Congress
doing something. I would state we would be better served to look at the
underlying fundamentals, and the underlying fundamental is pretty
straightforward:
Oil is a fungible commodity. It can be produced anywhere in the
world; and once it is produced, it can be shipped and refined anywhere
in the world. We are currently consuming worldwide about 85 million
barrels of petroleum products, and we have the capacity to produce
about 86 million barrels. So we have about a 1 million barrel per day
surplus production capacity. That is less than 1 percent.
Any time you get the oil markets less than 3 percent capacity in
terms of surplus over the demand, you are going to have what is called
a very tight market, and the prices are going to tend to spike because
there is enough uncertainty in the market that people will bid up, not
necessarily in the United States, but in China and India and the
developing countries where demand is high and increasing, they will bid
these high prices to get that marginal barrel of oil.
What we need to do in this Congress on this floor is bring to the
floor bills that address the fundamental supply situation. The United
States of America is a treasure house of energy resources. We have 2
trillion barrels of shale oil reserves. We have a 300-year supply of
coal that we can convert to liquids. We have hundreds of billions of
barrels potentially of oil reserves that are off-limits in the Outer
Continental Shelf and in the State of Alaska and on the Federal lands
and the lower 48 that we have put off-limits from drilling.
Only 6 percent of the Federal lands in the United States have been
made available for leasing under current law. We need to unlock our
treasure house. We need to at least start the process of letting there
be an opportunity to increase American made energy for America's
families. And if we do that, we won't need to depend on false remedies
like price gouging legislation. We can bring to the floor bills that
increase our supply. And as our supply increases, the price we have to
pay will go down, will change domestically and in the world the
fundamental supply/demand equation. That is why we have high prices. We
are not meeting the demand for energy in the United States from
American-made energy, but we could do a lot better.
So I have great respect for my friend from Michigan. I understand it
is difficult to focus on the long term in the mid-term strategy. But
bringing bills like this to the floor, they may be politically
satisfying, but they do not do anything to address the underlying
problems. So I would hope that we would vote against this legislation,
and then work together on substantive issues that will address the
supply and demand inequality.
Mr. Speaker, I reserve the balance of my time.
Mr. STUPAK. Mr. Speaker, before I yield to Mr. Markey of
Massachusetts, if I may just respond a little bit to my good friend,
Mr. Barton.
I agree with him, we need to have a short-term and long-term
strategy. And as the former chairman of the Energy and Commerce
Committee, my friend Mr. Barton knows that this is my third bill we
have had on price gouging. And the reason why we have it is short term,
like in Midland in 2005 where gas went up 75 cents in one day, that is
price gouging. Or in Escanaba, you wake up and it is 30 cents in one
night. What happened in that one night? Or if you take a look at it,
the
[[Page H5937]]
reason why we need a Federal law, because as we see in the bill it is
wholesale. So when refineries increase their prices 255 percent from
September 2005 to September 2006, for a State like mine to enforce a
price gouging legislation we need a Federal law to help them out.
And the Presidential emergency the gentleman brought up; we need that
because, as you know, before Hurricane Katrina gas went up over $5 a
gallon before the hurricane even struck. Therefore, you need a
President who can step forward and say that is excessive, that is not
necessary in this region, we will keep gas prices at a reasonable
price.
As far as the millions of acres and the drilling that should be done,
and I know the Republican Party has been advocating we should drill
more and drill more and drill more, but I would remind the gentleman
that for the last 6 years, when the Republican Party controlled the
House, the Senate, and the Presidency, you never sought to open up
those areas now, because there is about 48 million acres of oil leases
unused. I hope later this week we will have a chance to vote on a piece
of legislation called Use It Or Lose It. It is unfair for oil companies
to tie up our areas and refuse to drill in it when they have leases on
it. So if you don't use that lease, let's give it up to someone who
will drill, who will bring the oil to the surface, and therefore we can
help to address our energy needs.
Mr. Speaker, I yield 3 minutes to the gentleman from Massachusetts
(Mr. Markey).
Mr. MARKEY. Mr. Speaker, I rise in strong support of this
legislation. And I want to commend especially the gentleman from
Michigan (Mr. Stupak) for his historic leadership in bringing this bill
to the floor.
Time and again, the opponents of Mr. Stupak's measure have exhorted
us not to interfere with the free market, not to let the Federal
Government help consumers in the face of price gouging.
{time} 1415
Even as gas prices have sped past $4 a gallon, it is all just a
matter of supply and demand, say the oil companies and Republican
leaders in Washington. Well, it is a matter of supply and demand:
consumers are being forced to supply whatever money the oil companies
demand from them at the pump.
The oil companies have the consumer over a barrel, a barrel of oil,
that the oil companies control and that they price. They tip the
consumer upside down at the pump every single day and shake every bit
of money out of their pockets, which they can.
The Christians had a better chance against the lions than the
American consumer has against the oil companies at the pumps in the
United States today. And all we are saying, all Mr. Stupak is saying is
let's give the Federal Government a sword to get into the battle, to
get into the arena on behalf of the American consumer.
The bill before us today would give the Federal Trade Commission new
authority to investigate and punish the wholesale or retail sale of
gasoline or other petroleum distillates at prices that are
unconscionably excessive, or take unfair advantage of consumers during
any Presidentially declared national or regional energy emergency.
The Republicans think that is terrible. Why would you pass a law
against unconscionably excessive or unfair practices that are tipping
the consumers upside down. Don't give the Federal Government that kind
of authority to take on the oil and gas industry. And President Bush
and Dick Cheney, the oil President and Vice President for 8 years, are
saying that they will veto legislation that gives authority to go after
excessive, unconscionable pricing of gasoline.
Under the bill, the Justice Department could impose criminal
penalties of up to $150 million on corporations, and fines of up to $2
million and jail sentences of up to 10 years for individuals. The
legislation would give the regulators the tools they need to more
aggressively aid consumers when the oil companies are turning them
upside down.
When President Bush took office, the price of oil was $30 a barrel. A
couple of years ago, oil at $100 a barrel was unthinkable. Now we are
up to $135 a barrel.
So the first energy crisis back in 1973-1974, it was an oil embargo;
1979-1980, a revolution in Iran. What has been going on for the last
year? How could the price of oil double and everyone says it is not a
crisis in the White House. How about manipulation. How about fraud. How
about the consumer being taken advantage of at the pump.
I thank the gentleman for his good leadership.
Mr. BARTON of Texas. I would like my good friend, Mr. Markey, to stay
at the microphone and let's have a little colloquy, if he is willing.
I recognize myself for 1 minute just to make an observation.
I don't know, Mr. Speaker, that this is a totally true story, so
that's why I needed Mr. Markey's input. But I am told when he was a
young man, he sold ice cream cones and Popsicles outside of Fenway
Park. I am also told that he bought or purchased those ice cream cones
and Popsicles at a very low price, and he tended to mark the price to
market in a somewhat monopolistic fashion. And so depending on how hot
the day was and how heated the Red Sox nation was, he was known to
price those Popsicles in a way that maximized his profit.
Now my question, if he is willing to answer it, would he consider
what he did selling Popsicles and ice cream cones outside of Fenway
Park as a young lad, would he consider that unconscionably excessive
price gouging, or would he consider that simply being a capitalistic
entrepreneur?
The SPEAKER pro tempore (Mr. Blumenauer). The gentleman's time has
expired.
Mr. BARTON of Texas. I continue to yield myself such time as I may
consume.
I am happy to yield to my friend to give us an explanation of his
pricing scheme selling ice cream cones at Fenway Park.
Mr. MARKEY. I hate to say this because there is a bit of the
capitalist, the unregulated capitalist in all of us. But when I had my
Fudgsicles, my chocolate eclairs, my strawberry shortcakes, my twin
fudges, and Mr. Softie wasn't coming down the same street, there is a
tendency to try to raise the price because there is no one else in the
market and there is no regulator going up and down those streets. And
if you are outside Fenway Park and there are 35,000 fans coming out and
there is no regulator around to say what you can charge as an audience
is coming toward you in desperate need of a Popsicle, of a Fudgsicle or
a Coke, you have a tendency without a regulator to charge
unconscionably high prices.
Now at the time, I didn't think of it that way because, of course,
the capitalist never thinks that way. That is why you need regulators
to protect consumers against anyone who is selling any product in the
marketplace. And that's the lesson I learned.
And I decided early, I was not going to do that any longer, I was
going to move over to the regulatory side to protect consumers against
human nature that sometimes can affect certain corporate chieftains,
especially in the oil industry, to tip consumers upside down and take
advantage of them.
Mr. BARTON of Texas. Reclaiming my time, it seems to me that given
the circumlocutory answer that I got from my friend from Massachusetts,
that he did tend to price somewhat above the market, and he seems to at
the time take glee in it.
Mr. MARKEY. I feel guilty about. I feel very guilty about it.
Mr. BARTON of Texas. The statute of limitations under the
Commonwealth of Massachusetts has expired.
Mr. Speaker, if it is still my time, I want to yield 3 minutes to the
gentleman from Texas (Mr. Hensarling).
Mr. HENSARLING. I thank the gentleman for yielding, and I certainly
regret I didn't have an opportunity to negotiate a Popsicle with the
gentleman from Massachusetts. I am sure that would have been an
interesting experience; about as interesting as this experience is in
debating a bill which I feel has a lot to do with feel-good politics, a
bill that is particularly unworkable, I fear may lead to de facto price
controls, and really takes our attention off of the challenge that we
face, and that is to increase American production of American energy.
As much as Members of Congress might like to do it, in over 200 years
I have yet to see the ability to repeal the laws of supply and demand.
And so
[[Page H5938]]
again, I am sure the gentleman from Michigan is very sincere, and I
know that he has worked on similar legislation for quite some time, but
when we talk about price gouging and an emergency situation, what are
we doing to bring down the price of gas at the pump today.
Instead, we have a piece of legislation that is going to allow
Federal regulators, bureaucrats that according to the gentleman from
Massachusetts, appear to be the savior of the Nation, to tell us what
is, quote, ``unconscionably excessive,'' and ``taking unfair
advantage'' related to ``an energy emergency to increase prices
unreasonably.'' So now we are going to have a Federal bureau come in
and tell us what are reasonable prices and reasonable situations.
The FTC, the Federal Trade Commission, after Katrina researched this
issue. They could find very little evidence of it. We have
unconscionably high gas prices in America, but it has everything to do
with a Congress that wants to put its head in the sand and produce no
energy.
Our friends from the other side of the aisle, the Democrats, since
taking over the energy policy of the Nation, since taking over the
economic policy of the Nation 18 months ago, have overseen gas prices
that are now 75 percent higher. They have attempted to beg their way,
beg OPEC to somehow produce more and bring down the cost of energy.
Well, if we can't beg them, maybe we should sue them. We have had
legislation to sue OPEC. We are going to sue for lower prices at the
pump.
Well, if that doesn't work, maybe we can tax. Let's tax oil
producers. Well, Mr. Speaker, the only challenge with that is once you
tax them, they turn around and put it in the price of the product, and
the poor, beleaguered consumer who is going to the convenience store
trying to decide do I buy a gallon of milk or do I buy a gallon of gas,
he ends up paying for it. I mean, these are policies that are out of
the 1970s. President Carter and a Democrat Congress tried them; they
failed. We became more dependent using these types of policies on
foreign sources of energy.
The SPEAKER pro tempore. The gentleman's time has expired.
Mr. BARTON of Texas. I yield the gentleman an additional 30 seconds.
Mr. HENSARLING. We have tried these policies. It is deja vu all over
again. What our friends on the other side of the aisle won't do is open
up ANWR where we know we have half of the Nation's proven reserves.
Almost 85 percent of our deep sea energy resources have been put out of
bounds.
Listen, we all agree, we need to develop renewables. We need to
develop alternative sources of energy, but people have to go to work
every day and take the children to school every day. This bill does
nothing to help them. We need to produce American energy in America
today.
Mr. STUPAK. I yield 2 minutes to the gentleman from northern New York
(Mr. Hall) who has been a real advocate and a fighter for lower energy
costs since he came to Congress 18 months ago.
Mr. HALL of New York. Mr. Speaker, in my district, my constituents
are complaining and wondering why one day a gas tanker pulls up to a
service station and fills a tank underground at the price of that day,
and 2 days later the world price of crude oil goes up and the guy at
the local gas station goes up on a ladder and changes the numbers,
raising the numbers from $4.17 to $4.29, or whatever it is currently in
the 19th Congressional District. We are well above $4 for regular. Why
is it that gas that is already in the ground goes up on the world price
of crude, but when the world price of crude comes down, the price at
the pump detaches from it and keeps going up or staying up?
They ask me this question, and I ask people down here who supposedly
know what they are talking about, and they tell me: Oh, it's a
commodity. It fluctuates on the commodity market.
Well, I call it the rockets-and-feathers syndrome. The price of gas
goes up like a rocket, and it comes down like a feather. And it never
seems to deviate from that. While American families are scrimping, oil
company profits are soaring. The Big Five's profits jumped a whooping
$37 billion this quarter.
After the Bush administration's drill first and ask questions later
policy has padded oil profits on the backs of working families, it is
time for us here to look out for American drivers.
The Federal Energy Price Gouging Prevention Act, which I strongly
support, will give the government the authority to investigate and
punish anyone who takes advantage of consumers by running up energy
costs with a steep fine and jail time.
After Hurricane Katrina, the FTC found 23 percent of refineries, 9
percent of wholesalers, and 23 percent of retailers had price spikes
that could not be explained by increased costs or market trends.
We need to be aggressively vigilant to ensure that none of that
behavior is going on and consumers are protected. President Bush
threatened to veto this bill the last time Congress tried to take this
action. I hope that this time he and his allies will for once choose to
stand with the American driver and against Big Oil.
Mr. BARTON of Texas. Mr. Speaker, could I inquire as to the time
remaining on each side.
The SPEAKER pro tempore. The gentleman from Texas has 2 minutes
remaining. The gentleman from Michigan has 9\1/2\ minutes remaining.
Mr. BARTON of Texas. Mr. Speaker, I reserve the balance of my time
because I only have one more speaker who is not on the floor.
Mr. STUPAK. Mr. Speaker, it is my pleasure to yield to the gentleman
from New York (Mr. Arcuri), a freshman Member who has been a great
advocate for increased energy, not only supply but lower prices here in
this country, for 2 minutes.
Mr. ARCURI. I thank the gentleman from Michigan for yielding.
Mr. Speaker, traveling across my district, there is one thing I hear
about again and again, and that is gas prices. Whether it is at the
grocery store or at the gas pumps, Americans are feeling the crunch.
Skyrocketing gas prices are hitting hardworking families across my
upstate New York district and across the country.
Today, we will take one more step to bring down gas prices by
cracking down on price gouging by big oil companies. The Energy Price
Gouging Prevention Act would provide relief for consumers by giving the
Federal Trade Commission the authority to investigate and punish
companies that artificially inflate the price of energy.
The largest oil companies have seen record profits and record
paychecks for their CEOs, while middle-class families struggle just to
fill up their tank. It is time to hold them accountable.
Under this bill, the Justice Department could impose criminal
penalties of up to $150 million on corporations and jail sentences of
up to 10 years to crack down on wholesale and retail companies charging
unconscionable and excessive prices. Penalties from price gougers would
go to the Low-Income Home Energy Assistance Program, LIHEAP, to help
families with heating and air conditioning bills. Already this Congress
has fought to increase domestic oil supply and hold OPEC and
speculators accountable for price manipulations.
{time} 1430
We have invested in new alternative energy sources that will decrease
our dependency on finite fossil fuels and create good-paying jobs in
places like Upstate New York.
Mr. Speaker, we owe it to our constituents and to our children and
grandchildren to do everything we can to bring down outrageous gas
prices, put our economy back on track and make sure that this country
is on a new path to energy independence and success.
Mr. BARTON of Texas. Mr. Speaker, I continue to reserve.
Mr. STUPAK. Mr. Speaker, I yield 3 minutes to the gentleman from New
Jersey (Mr. Pascrell) who sits on the Ways and Means Committee and
knows the ins and outs of the oil industry.
Mr. PASCRELL. Mr. Speaker, I'm proud to rise in support of H.R. 6346,
the Federal Price Gouging Prevention Act. And I want to commend the
gentleman from Michigan not only for this legislation but other
legislation he's put forward debunking the theory that this is simply a
supply-and-demand problem. It is not. It is not.
The New York Mercantile Exchange laid it out very clearly. The
speculators have increased their share of oil futures, oil future
contracts to 71 percent this year from 37 percent in 2000.
[[Page H5939]]
At the same time, the contracts held by traditional oil users have
fallen to less than 30 percent from more than 60 percent. So while this
piece of legislation talks about gouging at the pump, there is gouging
going on Wall Street; and if you don't want to recognize it, that's
your problem. The American people want answers.
In these tough economic times, price gouging is a very real problem
for Americans struggling to get to work. How about that for openers. As
prices climb, so does the potential for consumers to be gouged at the
pump. Now, it's $4.07 a gallon; when the President took office in
January of 2001, $1.36. That's a 270 percent increase. The food becomes
more expensive, millions of Americans lose their jobs.
It is shameful that unscrupulous vendors try to make a quick buck by
artificially inflating the price. Just last week, officials in my home
State of New Jersey issued 350 citations for price gouging-related
offenses after surveying 1,000 gas stations. 350 citations. Where is
the urgency? If you don't understand the urgency, then we ought to go
back to 101.
H.R. 6346 will ensure that those who engage in this practice are not
only investigated and found guilty, thoroughly punished, just like what
we should do to those on Wall Street who gouge those prices who have
speculated and speculated and got us to believe at a time when
consumption and supply is just about the same as last year. That's
ridiculous.
This bill directs penalties from price gougers to the Low-Income Home
Energy Assistance Program to help families with their heating and their
air-conditioning bills. Twenty-eight States, Mr. Speaker, have anti-
price gouging laws on the books. And it's time for the Federal
Government to do exactly the same thing.
I urge my colleagues to support Mr. Stupak in his efforts and to
support the Federal Price Gouging Prevention Act.
And I don't sit until I say, Mr. Stupak, the American people say
thank you to you.
Mr. BARTON of Texas. I continue to reserve.
Mr. STUPAK. Mr. Speaker, I think we have the right to close on this
side. So I would ask for their last speaker, and we will close on this
side.
Mr. BARTON of Texas. Well, Mr. Speaker, let me just simply say in
closing that with regards to the last speaker's comment about the
futures market, I tend to agree there may be something that we need to
look at. That's why I'm on a bill with Mr. Stupak and Mr. Dingell to
look at the futures market. But on page 3 of this bill, there is a line
that specifically excludes the futures market from the jurisdiction of
the bill that's before us.
We have a Federal price gouging bill on the floor right now that
deals with retail and wholesale price gouging when there is absolutely
no evidence of States' attorneys general conducting prosecutions of
price gouging anywhere in this country. And as I pointed out in my
opening statement, the average retail price for gasoline is up while
retail margins are down, refineries margins are down.
Retail prices are up because the wholesale price of crude oil is up
over $130 a barrel. We're not doing anything in this bill to address
that fundamental supply problem. We are a treasure house of energy
resources here in the United States. We could produce more American
energy for America's families and factories.
You know, a price gouging bill when you don't have any real evidence
of price gouging and where the States that think there's price gouging
going on in their States have legislation to deal with that seems to me
to be superfluous and symbolic.
So I would ask for a ``no'' vote on this legislation, and let's work
together on issues that would fundamentally address the supply and
balance and bring prices down.
With that, I yield back.
Mr. STUPAK. Mr. Speaker, in closing, let me just once again reiterate
today every Member of the House has a choice. He can side with the big
oil companies and the record profits, or you can side with the American
consumer. A vote against my bill is a vote against consumers and a vote
for Big Oil.
I am pleased so many of my Democratic Members came and joined me.
This legislation is necessary. As I said, this is the third time I have
had legislation on price gouging. As I pointed out earlier, this winter
we experienced price gouging for energy needs, it was a dollar more
than the rest of the region in Michigan and the area was being charged.
The attorney general in Michigan, because we don't have a price gouging
law, had nowhere to go.
Here's the bill that the Michigan legislature--House bill 6249--just
introduced 2 weeks ago, tried new price gouging because we see it going
on and on and on; and it's going to continue as we see these record
prices and further chances to manipulate the market and to charge
excessive prices to support these excessive profits of the oil
companies.
Underneath the Democratic House, and I feel I have to say this, we
have done a number of things in the last 18 months: Renewable Energy
and Jobs Creation Act, which extends tax incentives for renewable
energy. We had the Gas Price Relief for Consumers Act, which combats
record gas prices. We have the energy price gouging bill we're doing
today. We put forth the first new vehicle fuel efficiency standards in
32 years. We have a commitment to affordable American-grown biofuels
which are keeping gas prices down. They are lower now than what they
would have been if we did not pass this legislation. Action for lower
gas prices by suspending oil purchases for the Strategic Petroleum
Reserve. Later, hopefully the next month or two, we will see the bill
on speculation that Mr. Barton has mentioned. That is a piece of
legislation we're looking at for excessive speculation which is driving
up record profits for the price of oil.
But in this Democratic-led Congress, we will continue to invest in
clean American renewable energy. We will boost energy technologies. We
will help Americans struggling with the high energy prices. We will
reward conservation. We will promote efficient vehicles, we will reduce
mass transit fares and build infrastructure. We will further close the
Enron loophole and speculators in dark petroleum markets which is
driving up prices. We will encourage safe domestic drilling by forcing
Big Oil to use it or lose it on Federal drilling permits.
I am perplexed that there's 68 million acres that we are not even
drilling on because the oil companies have them tied up in leases. And
what we are saying is if you're not going to drill to help the American
people, then give up your lease. Let's give it to oil companies that at
least drill. Democrats aren't against drilling. Let's at least go in
these leases, which have been approved, environmentally sound, let's
drill, let's bring that energy to the surface. If you're not going to
use it, then we're going to pass legislation to say you lose it.
And last but not least, Democrats are leading the way to transition
America to a more affordable energy future. But right now, as we go
fill up this 4th of July weekend as we travel our parades in our
districts and enjoy the summer months, can't we at least make sure that
the price we're paying at the pump is based on a reasonable basis,
reasonable factor, reasonable cost for taking that oil out of the
ground, for shipping it, for refining it, for distributing it and
putting it in your gas pump? We should not have to worry about being
gouged tomorrow. We should not wake up on July 3 and find that gas went
up 40 cents overnight for no reason other than someone needs a few more
pennies to pay for their 4th of July. I don't want to pay for the big
oil companies' 4th of July. I want the American people to enjoy this
4th of July and to know when they fill up at the pump, it's based on a
fair, reasonable price.
Let's finally pass, after some 3 years of arguments on this floor, a
Federal price gouging legislation that the other body will take up and
we can present to the President. Let's have a reasonable basis for our
pricing, and let's try to give the American people some relief from
these high excessive energy prices we are experiencing.
Mr. HOLT. Madam Speaker, I rise today in support of H.R. 6346, The
Federal Energy Price Gouging Prevention Act.
Today, my constituents in Central New Jersey are paying on average
$3.98 at the pump, over a dollar more than they were paying at
[[Page H5940]]
the beginning of the year. Increases in gas prices have affected every
sector of the economy. We are paying $2 more whenever we get a pizza
delivered, $10 more for lawn mowing services, $1.70 for shipping
packages, an extra penny for every letter that we send, and these are
just a few examples of the effects of gas price increases on the
economy at large. As American families suffer, oil companies continue
to rake in record profits. It is essential that we prevent price
gouging, speculation, and profiteering by those who would take
advantage of our energy predicament and guard against harm to commuters
and struggling families.
Current law does not have a mechanism for allowing the investigation
and punishment of individuals and corporations that are artificially
inflating the price of energy. H.R. 6346 would grant the Federal Trade
Commission the authority to investigate and punish those who engage in
price gouging. H.R. 6346 would finally provide a clear definition of
price gouging so that the FTC can prosecute the worst offenders,
specifically those companies with more than $500,000,000 in sales per
year. It would strengthen the criminal penalties for price gouging to
up to $150 million for corporations, and fines of up to $2 million plus
jail sentences of up to 10 years for individuals. Finally, it would
redirect the fines assessed to help fund the Low Income Home Energy
Assistance Program (LIHEAP).
Unfortunately, we are seeing examples across the country of
unscrupulous individuals taking advantage of consumers during this
energy emergency. Last week, New Jersey's Attorney General Anne Milgram
released the results of an investigation that uncovered over 350 ticket
worthy instances of gasoline price manipulation after a survey of 1,000
gas stations in the state. Among the citations issued were: 62
violations for the pump not accurately measuring fuel, 46 violations
for per-gallon prices being different on each side of the pump, 37
violations for fuel grades not posted, 26 violations for inaccurate
octane ratings, 19 violations for inaccurate total sale price
calculation and 14 violations for multiple price changes in a 24-hour
period. States like New Jersey are already taking action to prosecute
gas price manipulation on a small scale; however, they do not have the
means necessary to prosecute large-scale offenders. It is past time
that Congress gives the FTC the tools it needs protect American
consumers from these egregious violations at the pump and the
legislation before us today takes an important first step towards
achieving this goal.
Passing H.R. 6346 would help to prevent price gouging and I urge my
colleagues to support this legislation. However this bill is merely a
short term solution to our long term energy needs. There are no easy
answers to the fluctuating gas prices. We are paying at the pump today
for flawed decisions made years ago. That is why we must work to
implement strategies that will lower demand for oil in the long term.
Mr. STUPAK. Mr. Speaker, I yield back my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Michigan (Mr. Stupak) that the House suspend the rules
and pass the bill, H.R. 6346, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. STUPAK. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
____________________