[Congressional Record (Bound Edition), Volume 152 (2006), Part 5]
[House]
[Pages 7035-7036]
[From the U.S. Government Publishing Office, www.gpo.gov]




                THE OIL CRISIS AND HIGH PRICES OF ENERGY

  The SPEAKER pro tempore (Mr. Price of Georgia). Under a previous 
order of the House, the gentleman from Oregon (Mr. DeFazio) is 
recognized for 5 minutes.
  Mr. DeFAZIO. Mr. Speaker, well, let us talk about the energy crisis 
and the high prices of energy.
  The oil man in the White House and the Vice President and the 
Republican majority say it is just market forces at work. Let us talk 
about the market forces.
  First off, the crude oil market, unlike every other commodity in 
America, is virtually unregulated. About 75 percent of the crude oil 
marketed here is sold off the books, and they are doing trades that 
would be illegal if it was a regulated market, and of course they do 
not want to regulate it. One trader will sell to another who will sell 
back, they sell back, they sell back, they sell back until, guess what, 
they have raised the price and made a lot of money.
  Now, unfortunately, someone is going to pay for that. So it is the 
consumer. In crude oil trading, we have seen a 46 percent increase over 
1 year in the margins there. Quite simply, if we just subjected crude 
oil to the same market controls that are used for all other commodities 
traded in the United States of America, if we took away this exemption 
for big oil, then we could drive down the price, it is estimated, 20 to 
25 percent immediately at the pump. That would be quite an economic 
stimulus for this country and do more for the American people than all 
of George Bush's tax cuts have done for average people, of course, not 
for the millionaires and billionaires.
  Then they say, guess what, prices are high because we do not have 
enough refineries in America. That is interesting. The American 
Petroleum Institute circulated a memo just about 10 years ago this day 
saying, hey, guys out there, they mostly are all guys, guess what, 
there is too much refinery capacity in this country; if you could 
squeeze down refinery capacity, you could drive up profits.
  Have they done that?

[[Page 7036]]

  Of the three bucks you are paying for a gallon of gas, the increase 
in the margin for the refiners has gone up 255 percent in 1 year; and, 
guess what, there are no new refineries under construction.
  Now they want to pretend it is those darn environmentalists. Well, 
no, it was not the environmentalists. Of the 55 refineries closed in 
America in the last 10 years, they were all closed for economic 
reasons, mostly oil company mergers. Not a single one was closed for 
environmental purposes or objections.
  So they are doing a wonderful thing here. Valero, fastest-growing, 
biggest energy refiner, who had a very small company just a few years 
ago, their chief operating officer, when asked about building more 
refineries, he said, why would we want to do that? It is working quite 
well the way it is. Artificial shortage of refinery capacity.
  So perhaps we could impose a windfall profits tax on the likes of 
ExxonMobil, $36 billion of profit last year, largest corporate profit 
for anybody in the history of the world in 1 year, $100 million a day 
of profit.
  Now they did give away 4 days of profit to their CEO when he retired. 
He got a $400 million retirement, but they had the rest of that money 
to spend elsewhere.
  What did they spend it on? New refinery capacity? No. Exploring for 
new oil? No. They bought back a bunch of their stock to increase the 
value of the stock options of the other executives at ExxonMobil. So 
about a windfall profits tax on money that they make that they do not 
invest in new refineries, new production capacity or alternative fuels, 
but the rest of it, it should be taxed at a very high rate to stop 
their price gouging and excess profit-taking.
  Now the Republican answer has been that they want to give everybody a 
$100 rebate. Is that not nice? Well, except we are running a deficit. 
So they would borrow the money, obligating American taxpayers today and 
their kids and grandkids because we will pay it off over 30 years. They 
would borrow the money to give everybody a measly $100 rebate. Because 
God forbid that we should ask the oil companies to rein in the 
profiteering and the speculation in crude oil, that we should have them 
stop creating a false refinery capacity squeeze which has driven up 
their profits tremendously.
  But they do want to investigate price gouging. It was in a bill that 
passed the House last year. Guess who they think is price gouging? 
These little guys down here, the distributors and retailers.
  I just met with the independent distributors today. They are getting 
six cents a gallon. Five years ago, they got six cents a gallon. Five 
years ago, that was 6 percent. Today that is 2 percent. So it is not 
the distributors and retailers here, with the exception of some of the 
company-owned stations, that are making that big profit.
  It is right up here. It is big oil. It is the artificial refinery 
shortage that they have created, and it is this profit-sharing and hot 
money speculation in crude oil. We could take significant steps here to 
fix it, but, guess what, they get a little too much money from them at 
campaign time. It ain't going to happen.

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