[Congressional Record (Bound Edition), Volume 152 (2006), Part 5]
[Senate]
[Pages 5832-5835]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           FTC INVESTIGATION

  Ms. STABENOW. Mr. President, I rise today to talk about gas prices 
and the energy situation in our country. First, to agree with my 
distinguished colleague from Utah, in fact there are long-term issues 
we have to address. There is no question about that. Alternative fuels, 
the efforts to put forward very aggressive alternatives such as 
ethanol, soy-based biodiesel, and other alternatives that create real 
competition, are critical, but there are short-term actions we can take 
right now that will help the families who are being squeezed on all 
sides by outrageous prices, along with outrageously high profits of the 
oil companies.
  Today our leader on the floor, our Republican leader, said there 
ought to be an investigation going on, and the President said today we 
ought to have an investigation going on as to possible price gouging. I 
come to the floor today, as the author of the amendment that 
successfully passed in the Energy bill last August, to say that we have 
an investigation going on. The Federal Trade Commission was authorized 
and charged with doing an investigation, which they are doing as a 
criminal investigation, into possible price gouging. I was pleased to 
be joined by Senator Dorgan and Senator Boxer and others in that 
effort.
  Since that time, because they began to move extremely slowly last 
year, I was pleased to coauthor an increase of $1 million in the budget 
in order to fund that investigation. We passed that last fall. There 
have been bipartisan letters that have gone to the Chairman of the FTC 
saying let's get going. That occurred last fall, last September. Now we 
are seeing from the Federal Trade Commission that they intend to have 
this report done, this investigation done by May 21.
  It is about time. First I would say: Mr. President, it is your FTC. 
You appoint the majority of the members on the Federal Trade 
Commission. You should know that this is going on.
  I encourage the President to be engaged with what his Federal Trade 
Commission is doing at this very moment. Hopefully, we are going to get 
the right kind of investigation with tough recommendations that will 
tell it like it is. This is already occurring. Right now the 
investigation, as I said, is structured as a law enforcement case. They 
are working with the CFTC, with the States Attorneys General right now. 
I encourage everyone interested in this issue to give their input to 
the Federal Trade Commission that is already doing an investigation.
  In fact, one of the things they found doing this investigation, as 
they sent out 200 investigation demands which are roughly the same as 
subpoenas, ExxonMobil, back in January-February, filed a petition to 
quash the FTC subpoena for tax information. Fortunately, the Commission 
denied the appeal and ExxonMobil had to subsequently comply. But now 
they are looking at manipulation and gouging, whether or not that is 
happening. They are confident, they say, that they found enough 
information for a solid determination in their final report, which is 
expected on May 21.
  I say, first to my Republican colleagues, to the leadership, to the 
President, this investigation is already going on. I am glad you now 
think there ought to be an investigation. But we would appreciate it if 
you would be involved in making sure what the FTC does is tough and 
smart and tells it like it is in terms of what is really going on.
  Gasoline is not a luxury for the families of Michigan or the families 
anywhere across the country. It is a necessity. Families are caught in 
a bind because, on the one hand, this is not a regulated utility like 
electricity, and there is not enough competition with basically five 
different companies. We all know there is not enough competition 
because of the consolidations that have gone on. So what happens? 
American consumers are stuck in the middle, squeezed on all sides.
  Now in Michigan it costs about $42 to fill up a tank. That is $4 more 
than last month; $150 more than last year. We are told by the Energy 
Information Administration there is going to be an average 25-cent 
increase this summer. We already know that numbers are topping $3, in 
some cases around the country $4 a gallon.
  What this means on average to Michigan families is about $500 more in 
the cost of gas for this year--about $500. For the average family that 
is a mortgage payment. That is the rent. That is a car payment. It is 
paying for food. It is the difference between helping your kids buy 
books when they

[[Page 5833]]

need to go to college. This is a big deal. Yet we see comments coming 
from the head of ExxonMobil, Mr. Raymond, who dismissed the concerns 
between Exxon's record profits and out-of-control gas prices when he 
said on CNN that a single quarter or single year's profits is not all 
that significant.
  Mr. Raymond, it may not be significant to you. It is significant to 
the people in Michigan. Five hundred dollars more is significant. It is 
a big deal.
  We also know that according to our businesses--for instance, General 
Motors executives say that every time there is a $1 increase in the 
price of a barrel of oil it adds $4 million to GM's logistical costs. 
So this is an issue of jobs. Petroleum costs equate with what is 
happening on jobs. So this is a big deal.
  It is also a big deal for the oil companies. As we all know, we have 
all been seeing the numbers, the total combined profit for the big five 
oil companies last year was $111 billion. For 2005, ExxonMobil reported 
the highest profits ever recorded in U.S. corporate history.
  What adds insult to injury is when we look at the things like the CEO 
compensation. He is being paid a total compensation package of $69.7 
million. That is about $110,000 a day, by the way. Most people in 
Michigan don't make $110,000 a year, and we have the head of the 
largest oil company making $110,000 a day, with a $400 million 
retirement package. Then we are to expect that this is just the global 
marketplace happening, that there is nothing we can do? I don't accept 
that.
  In the short run we can do one thing and that is go back to the 
drawing board on a bill that is in conference committee right now on 
tax cuts. That has over $5 billion in new tax cuts, tax breaks for oil 
companies, some of it based on their businesses overseas. We can say 
no. This industry does not need taxpayers to subsidize $5 billion-plus, 
plus another $2 billion in the Energy bill that passed last year. We 
are looking at $7 billion in increased tax breaks that American 
taxpayers are subsidizing while we are paying the higher prices? No.
  I have introduced a bill called the Oil Company Accountability Act 
that says no to more tax breaks for oil companies and puts that money 
back into a $500 rebate per taxpayer in this country to pay the cost of 
higher gas prices for the coming year. The average taxpayer is going to 
pay $500 more. I think that is a better use of those dollars than 
putting it into more tax breaks for an industry that is already the 
most profitable, with the most outrageous salaries, and that continues 
to price gasoline at a level that is out of control.
  I am hopeful my colleagues will be offering this in various 
capacities. It would be terrific to get this passed right away because 
families could have their checks in the mailbox before Labor Day to 
help them pay the outrageously high gas increases that we are seeing: 
$500 tax rebate checks for families, no to the oil companies on more 
tax breaks, and that at least gets us on the right track while other 
long-term efforts needed take place.
  Mr. President, I yield.
  The ACTING PRESIDENT pro tempore. The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I want to take 5 minutes to talk a 
little about the energy issues that are affecting us and challenging us 
as a nation and the high price of gasoline more specifically. I am 
persuaded that most of the increase in the price of gasoline that we 
are seeing at the pump is a result of the increase in the price of oil 
and that most of that increase in the price of oil is a result of 
supply and demand factors. Not all of it, necessarily, but the majority 
of the cause is with supply and demand.
  So the question comes down to what can we be doing to come to grips 
with this supply and demand situation? To the extent that there is 
manipulation of the price, what can we do to deal with that?
  Let me talk about the manipulation first. I strongly support putting 
in place a Federal statute that prohibits price gouging. Many States 
have similar statutes, and they have had some success in the 
enforcement of those statutes. But we have no Federal statute to that 
effect. We had a hearing. That was a joint hearing between the Energy 
Committee and the Commerce Committee a couple of months ago. It was in 
November, so it has been more than a couple of months ago. We had the 
head of the Federal Trade Commission, Deborah Platt Majoras, there 
testifying. The Federal Trade Commission is the Federal agency that 
would be the natural agency to have responsibility for enforcement of a 
Federal anti-price-gouging statute. She testified:

       A Federal statute that makes it illegal to charge prices 
     that are considered to be too high as long as companies set 
     those prices independently would be a mistake. The omission 
     of a Federal price gouging law is not inadvertent. It 
     reflects sound policy choices.

  The clear position of the Federal Trade Commission, as articulated by 
the Chairwoman of the Federal Trade Commission of this administration, 
is that they do not want a Federal anti-price-gouging statute, they do 
not believe it would be good policy to have such a statute. They would 
find it difficult to enforce and therefore they urge Congress not to 
proceed.
  I think that is a mistake. I think we should bring an anti-price-
gouging statute to the floor, and we should proceed to pass it as soon 
as possible. So that is on the manipulation issue.
  What about supply and demand and the effect that is having on the 
price of gasoline? Clearly, the supply is not what it needs to be to 
meet demand today. Trying to increase simply over the short term is 
very difficult. The most likely prospect we have for increasing supply 
in the next few years is legislation that I have cosponsored along with 
Senator Domenici to try to open up an area in the gulf coast for 
drilling. That is lease sale 181. That legislation would open up for 
development an area that is estimated to contain 6 trillion cubic feet 
of natural gas, an area that is estimated to contain 1 billion barrels 
of oil. That would help. That is not an immediate fix, but over the 
next few years that could begin to help with the supply situation.
  What about demand? Frankly, that is the area where we could do the 
most good. In the Energy bill we passed last year, we did some things 
to try to reduce demand, to try to encourage additional efficiency, to 
try to encourage additional conservation, but we did too little, in my 
view.
  There is more that can be done, particularly in the transportation 
sector. This is legislation that I am joining with others on in a 
bipartisan group to introduce this week which is called the Enhanced 
Energy Efficiency Act of 2006. This legislation would try to set 
targets and goals and requirements for the various Federal agencies to 
adopt, policies to save oil over the next several years--and it would 
put specific amounts of savings that we would work toward. They could 
do that through a variety of initiatives, a variety of policy changes 
and regulatory changes to encourage more fuel-efficient vehicles, to 
encourage fleet conservation requirements, assistance to State programs 
to retire fuel-inefficient vehicles, assistance to States to reduce 
schoolbus idling.
  There are a variety of provisions in this bill. These are provisions 
which were included in a bill that Senators Bayh, Brownback, Coleman, 
and various other Senators introduced earlier in this Congress. I think 
it was S. 2025. But these are provisions that would be under the 
jurisdiction of the Energy Committee. These are provisions that I 
believe would begin the process of looking more seriously at ways we 
can reduce demand.
  We could encourage efficiency in our use of energy, and particularly 
in our use of oil. These are steps that could be taken--that need to be 
taken.
  I think we should pass a Federal anti-price-gouging law. We could do 
that quickly. We can get that to the President for his signature.
  We can also pass this other legislation. We can pass the legislation 
that opens lease sale 181 for development. That, again, would help 
somewhat with the supply situation. Unfortunately, it is very difficult 
to affect the price of gasoline through legislation in the short term. 
I think we all need to acknowledge that. But I believe there are

[[Page 5834]]

steps we can take. I believe there are policies we can adopt. I hope we 
can work in a bipartisan way to do that.
  I hope we can come to the aid of the American consumers who are 
having to pay these very high prices for gasoline at this time.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Illinois.
  Mr. DURBIN. Mr. President, this morning the President of the United 
States held a press conference and announced the following: Prices at 
the pumps reflect our addiction to oil.
  So it turns out it is our fault. It turns out it is the fault of the 
consumers. It is the fault of families and businesses and farmers that 
the prices have gone so high. I don't think so. I think the prices at 
the pump reflect the oil companies' addiction to greed.
  Let me give you a case to consider. Lee Raymond, CEO of Exxon, 
recently retired. Did he get a gold watch for his service to Exxon? No. 
Mr. Raymond was given a severance package of $400 million. And the 
prices at the pumps reflect the consumers' shortcoming?
  ExxonMobil recorded the highest corporate profits in the history of 
the United States of America. Money went straight from the credit cards 
of American families into the board rooms of ExxonMobil. They realized 
billions of dollars in profit, and they turned around and gave Mr. 
Raymond, as a farewell gift for his fine tutelage over their company, 
$400 million as a going-away gift. And the President says the price at 
the pumps reflects the consumers' addiction to oil? What choice do 
consumers have?
  You go shop around in your hometown, as I did in Springfield and 
Chicago. There is some variation from pump to pump, from gas station to 
gas station. By and large, consumers have nowhere to turn.
  What is happening is the price of gasoline is going up so fast, so 
high, that it is creating a hardship--not just for farmers and 
individuals but for America's economy--for the farmers I represent who 
are trying to put a crop in the field, for businesses that depend on 
the cost of energy as one of their input costs. That is a reality.
  Let me say to the President that the prices at the pumps don't 
reflect our addiction to oil; they reflect a failure in leadership by 
this White House.
  It hasn't even been 1 year--not 12 months--since the President 
ceremoniously signed the Energy bill for America's energy policy last 
August. What a great bill that has been. Since that bill was signed, 
what has happened to the price of energy and heating, and energy and 
gasoline? It has gone up dramatically across America. That bill was a 
failure. It was a failure because this administration believes the 
price at the pump is the fault of the consumers. It isn't. The 
consumers have nowhere to turn. That bill that was passed was an 
outrage. There were some provisions in it that I supported--expanding 
the use of alcohol fuels, alternative fuels--but the bill also 
contained multibillion-dollar subsidies to the oil industry at a time 
when they are enjoying record-breaking profits.
  We are going to take money away from taxpayers and give it to 
industry? What in the world could we be thinking?
  The bill also has had no meaningful conservation effort. How can we 
be serious about an energy policy in America if we aren't moving toward 
more fuel-efficient cars and trucks? We continue to import oil from 
overseas with abandon.
  Why hasn't this administration set as a goal for America what the 
Democrats argued for on the floor; that is, that we would reduce our 
dependence on foreign oil by more than 50 percent over the next 10 
years? We can do it with the vision and leadership of a White House 
that is not wedded to the oil industry but wedded, rather, to an 
economy that is being at this point seriously disadvantaged by the 
terrible increases in gasoline prices.
  When the President wants to blame the consumer pulling up to the pump 
for his addiction to oil, I have to ask the President: What have you 
done? What has Congress done? What should we do?
  Let me say this: Despite my serious misgivings about the energy 
policy of this administration which believes the answer to our prayers 
is to drill for oil in a wildlife refuge in Alaska that we have 
protected for 50 years, a refuge which at best will start producing oil 
in 10 years, and over its lifespan produce 6 months of energy for 
America, as if this is the answer to our prayers, that is very 
shortsighted. We need to come together. We need to understand that when 
the Republican leaders in Congress and the President of the United 
States are saying we had better call the Federal Trade Commission 
because something is going wrong with gasoline stations--America, 
excuse me; the Federal Trade Commission is part of this administration. 
Why are they waiting until this moment in time when all the bells and 
whistles and alarms are sounding to finally realize that we have to 
move on price gouging and price fixing?
  I think it is time to have a windfall profits tax. I introduced that 
bill. When ExxonMobil can realize billions of dollars of profit at the 
expense of American businesses and families, it is time for us to step 
in and say that money is coming back to the Treasury and back to the 
consumers. We have talked for a long time about tax cuts for average 
families. How about a tax rebate from the windfall profits of these oil 
companies going right back to the families who are being flailed by 
these high gasoline prices. That would send a message to the oil 
companies that their price gouging is not going to go without penalty. 
They will pay a price for it. Those who would benefit from the windfall 
profits tax are the very consumers who are paying these high energy 
prices.
  I think that is what we need to do. We need to understand that if we 
are going to have an energy policy in America which keeps our economy 
moving forward, we need to acknowledge the obvious. It is not the 
consumers' fault. The consumer has nowhere to turn at this point but to 
pay these high gasoline prices. It is the fault of leadership--the 
leadership at the oil companies that will take every last penny out of 
every working family they can at the pump, and it is the fault of an 
administration which comes from the oil patch and has been afraid to 
confront their old friends when it comes to these rising gasoline 
prices.
  It is time to start anew. It is time to start on a bipartisan basis 
to understand that this isn't just a temporary inconvenience. It is 
something which can seriously handicap this economy for a long time to 
come.
  I just returned from Illinois. I spent 2 weeks traveling all over the 
State, the city of Chicago, and suburban areas. I tell you that I 
expected to hear a lot about the Iraqi war, a lot about immigration, 
health care, education, and I did hear about those, but the thing that 
is focusing the attention of the people in Illinois is the price at the 
gasoline stations.
  These families understand that this is a hardship they never counted 
on. It is bad enough in this country when these families struggle to 
try to make a living, to put their kids through school, make that 
mortgage payment, but then to have these oil companies and their 
rapacious greed charging higher and higher prices for their product and 
taking $400 million so Mr. Raymond can have a sweet retirement from 
ExxonMobil, that is unconscionable.
  It is time for the President to speak out. It is not a question of 
whether our addiction to oil has caused this problem. It is not the 
consumers' fault. No. It is the fault of the oil company executives and 
this administration which needs to show real leadership so this economy 
doesn't stall.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Oregon.
  Mr. WYDEN. Mr. President, I would very much like to work on an energy 
policy in a bipartisan way. I think we all understand that the only way 
to get anything important done in Washington, DC, is to work in a 
bipartisan way. Unfortunately, the same Bush administration that so 
tragically bungled the response to Hurricanes Katrina and Rita has now 
bungled its way to $3-a-

[[Page 5835]]

gallon gasoline. And in particular, I am concerned that all of the 
evidence showed that this spring we would have these problems.
  The administration, for example, has given Congress a variety of 
reports about how post-Katrina we would have evidence of a supply 
problem. With respect to the changeover from MTBE to ethanol, all the 
evidence was available many months ago. The Wall Street Journal was 
warning about it--that there would be huge logistical problems for 
service stations and others to make that changeover.
  We know that ethanol--and the Senator from Illinois has been one of 
the leaders in this effort--is going to play an important role in 
America's gasoline future. Given that, this should have been an all-
hands-on-deck approach at the administration trying to watchdog the 
transition from MTBE to ethanol. This is an administration with 
enormous expertise in the oil area. For all practical purposes, this is 
an administration that is almost marinated in oil. One official after 
another has a history and a background in this sector. Yet where was 
the Department of Energy? Where was the Environmental Protection 
Agency? Where was the Commodity Futures Trading Commission at a key 
time in our country's energy future?
  With all the problems overseas--Nigeria, Venezuela, and Iraq 
producing a tiny fraction of what they were able to produce before the 
war--we knew that this was going to be a difficult time this spring.
  I talked to a gasoline station owner last night. I pulled up and was 
faced with the prospect of $3.25 a gallon. That station owner said: 
Nobody gave us any information at all about how to proceed in this 
significant switchover from MTBE to ethanol.
  They have to clean their tanks. There are tremendous logistical 
problems and a different role for transportation with respect to trucks 
and rails versus pipelines. Normally, you would have taken a much 
longer period of time to make this changeover. That wasn't done.
  So the administration should have been there working with the service 
station owners and the oil companies and a variety of parties to try to 
minimize the problems when you are having this massive transition in 
the energy area. So we are going to see instances where people try to 
exploit the situation. I hope we can get the Federal Trade Commission 
off the dime and finally go out and take the steps to protect the 
public from this exploitation.
  It was known a year ago that this was a time when we would have a 
perfect energy storm. We knew we were going to have the equivalent of 
what amounts to a level 5 hurricane in the gasoline market. Yet the 
folks in the administration sat on their hands. It did not have to be 
that way.
  I want to work in a bipartisan way to turn this around. 
Unfortunately, the same kind of bumbling and bungling approach that was 
taken in responding to Hurricanes Katrina and Rita has driven our 
gasoline prices over $3 a gallon. We ought to come together. I 
recommended yesterday in a lengthy speech a variety of steps we could 
take in the short term--for example, helping the States to make this 
transition to ethanol easier. We can do it in a bipartisan way. If it 
were not for the bungling of this administration over the last year and 
its failure to take the steps that could have prevented much of what we 
have seen, we would not have to come to this point. That is 
unfortunate. The American people have been gratuitously hammered again. 
It didn't have to be.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Texas.
  Mrs. HUTCHISON. Mr. President, I have been listening to the debate in 
the Senate. Senator Cornyn is going to respond in a little more detail. 
Honestly, it is very important we address the energy issue in a way 
that suggests what we can do. The people of America are not interested 
in Democratic charges against Republicans and Republican charges 
against Democrats. They want more resources so the price of gasoline at 
the pump will come down.
  In my hometown of Dallas, there are shortages now in addition to the 
high prices. We need to do some things that diversify our resources so 
we depend on our own resources for oil and natural gas. That means 
drilling for oil in our country and trying to make sure we have 
conservation and alternative sources of energy, which is exactly what 
Congress has been trying to do. We have been held up in doing it.
  I appreciate very much this opportunity. I am very pleased to work 
with my colleague, Senator Cornyn.
  Mr. CORNYN. Mr. President, I will use a few minutes to respond to 
some of the voices that have been raised regarding the fuel prices. Of 
course, this is an issue that affects everyone. It is ironic that those 
who have railed the loudest against high gasoline prices are the ones 
who indeed are responsible for obstructing rational energy policy in 
this country that would bring down the price of gasoline itself.
  For example, we all know that the global competition for oil and gas 
is greater with the industrialization and growth of countries such as 
China, with 1.3 billion people, with the growth and industrialization 
of countries such as India. But notwithstanding the need to diversify 
our energy sources to nuclear energy and use the 300 years of coal we 
have in this country in a clean and environmentally sensitive way, we 
have been met with nothing but obstruction when it comes to trying to 
both diversify our energy sources and to undertake policies that would 
literally bring down the price of gasoline at the pump.
  It is no secret the single greatest factor in high gasoline prices is 
high oil prices. We have simply been denied every opportunity we have 
tried to undertake to expand domestic production at home by exploring 
places such as the Arctic Wildlife Refuge in an environmentally 
responsible way and drilling offshore in America in a way that can 
preserve both the environment but also increase the supply of oil and 
help bring down the price of gas.
  Congress can do a lot of things, but we cannot repeal the laws of 
supply and demand. Without additional supply, we know with additional 
demand, prices will continue to go up. Because of obstruction and 
unreasonable regulation we have not seen a new refinery built in this 
country in the last 30 years.
  Our time would be used more productively if our colleagues across the 
aisle would work with us to diversify and expand the sources of 
domestic energy so we can help bring down the price at the pump. It 
would be much more constructively used if we work together rather than 
attempting to score political points and to place the blame in a 
political season.
  I yield the floor.

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