[Congressional Record (Bound Edition), Volume 152 (2006), Part 7]
[House]
[Pages 9195-9196]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           GAS PRICE GOUGING

  The SPEAKER pro tempore. Pursuant to the order of the House of 
January 31, 2006, the gentleman from Oregon (Mr. DeFazio) is recognized 
during morning hour debates for 5 minutes.
  Mr. DeFAZIO. Well, big surprise, the Bush Federal Trade Commission 
finds out there is no price gouging in the oil industry. No, none 
whatsoever. The oil men in the White House and the vice president, the 
oil man, their political appointees at the Federal Trade Commission 
finds no price gouging. The American people aren't going to believe 
this.
  Now, let's just take one little example with Katrina. I live on the 
west coast of the United States; none of our oil refined products come 
from the southeastern United States, yet on Labor Day weekend in Oregon 
the prices were identical and they had gone up by 60 cents a gallon in 
one day. Now, isn't that interesting.
  Now, how does that work? That is not price gouging? That is market-
based? So they were going to build a pipeline that day and start 
shipping it to the southeast, or they were going to truck it across the 
country? Come on. Totally separated markets. Unbelievable increase in 
profits. $100 million a day for ExxonMobil, the most profitable day in 
the history of the world, and there was no price gouging going on.
  Now, there is one commissioner who has a shred of integrity left, 
Commissioner John Leibowitz. He issued a sharp statement. He said a 
handful of refiners more than doubled operating margins in ways not 
attributable to increased costs after the hurricanes.
  Sounds like price gouging to me. No, the entire Commission determined 
that the firm's conduct in response to hurricane-induced reductions was 
consistent with competition, adding that the Bush-appointed Federal 
Trade Commission doesn't back proposals to create Federal price gouging 
laws. There is no price gouging.
  So then why wouldn't we create price gouging laws? If there isn't 
any, there hasn't been any, we could prevent it in the future. Or maybe 
there really was a little teeny bit of price gouging and the Bush 
appointees don't want us to be able to prosecute that in the future. I 
think we could substitute the word consistent with business as usual.
  This is not a competitive market. There is collusion. It is 
organized. It has been going on for more than a decade when the 
American Petroleum Institute suggested to Big Oil that they shut down 
refineries to squeeze down capacity so that they could drive up 
refinery margins. And, guess what. On average they are up 255 percent 
in 5 years. Now, this is competition according to the Bush-appointed 
Federal Trade Commission. The rest of us might call it collusion, 
market manipulation, and price gouging. The American people are seeing 
it.
  Now, if we took two simple steps. They say, oh, there is nothing 
Congress could do anyway, don't worry about it. That is what the 
President says. Yeah, there are a couple things we could do. The 
experts say that 75 percent of the crude oil market is unregulated. It 
is traded in ways that would be illegal if it was controlled by the 
Commodities Future Trading Commission, like all other commodities and a 
quarter of the oil market. Traders swap back and forth, back and forth, 
back and forth just to drive up the price, no intention of actually 
taking a contract or taking delivery. They say we could squeeze 20 to 
25 percent out of today's cost at the pump if we just regulated that 
market with the same rules as any other traded commodity and part of 
the oil market today.
  Well, that would take us from $3.20 down to $2.56 a gallon. Not bad. 
I think the American people and American businesses would think that 
was pretty good.
  And then we have the collusion to shut the refineries. Now, if we 
just took the refineries back to their previous margins, that was the 
historic margin that they got per gallon, that would knock another 50 
cents a gallon off. But let's say we have got to give them an 
inducement to reopen the refineries that they shut, or build new ones 
because they tore down the ones that they shut to restrict the market 
to drive up the price. So with a little windfall profits tax that says 
these are windfall profits unless and until you invest in production 
and refining capacity; and if you do that, then you won't have to pay 
this confiscatory tax, that would take us down to somewhere around 
$2.26 a gallon. Now, that would be quite a gift for the American 
economy, American consumers, people

[[Page 9196]]

who live in the rural parts of my district who have to commute long 
distances to work.
  But the Republican Congress is silent and complicit with the oil men 
at the White House who have manipulated the Federal Trade Commission 
into trying to fool the American consumers and say, oh, that wasn't 
price gouging, that was a market at work.
  Yeah. Give me a break.

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