[Congressional Record (Bound Edition), Volume 153 (2007), Part 1]
[House]
[Page 306]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               GAS PRICES

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan (Mr. Stupak) is recognized for 5 minutes.
  Mr. STUPAK. Mr. Speaker, I rise today to commend the new Democratic 
leadership that will finally allow the U.S. House of Representatives to 
address high energy prices. Under prior Republican leadership in the 
House, the oil industry enjoyed years of record profits, record high 
gas prices and minimal oversight and price manipulation.
  Curiously, in September and October of 2006, just before the November 
elections, gas prices dropped an average of $.60 per gallon compared to 
the record high prices of last summer. This $.60 drop in gas prices 
occurred despite the fact that there were pipeline disruptions in 
Alaska and indications that OPEC would cut oil production. Department 
of Energy's statistics show us that while gas prices dropped an average 
of $.60 a gallon in September and October, the crude oil price only 
dropped 10 cents a gallon.
  If you listened to National Public Radio this week, you would have 
heard that there is evidence that the oil companies intentionally 
influence gas price fluctuations, and a $.60 drop was done just before 
the election to influence the November elections.
  For years, the American Petroleum Institute, the oil companies' main 
lobbying group, has spent millions of dollars on public relations 
campaigns to convince the American people that gas prices are a direct 
result of crude oil prices, not oil company practices. But yet we have 
a 60 percent drop in gas prices, but only a 10 percent drop in the 
price of crude.
  Ignoring their own PR, oil companies were able to significantly 
reduce the gas prices in September and October without a corresponding 
decrease in their crude oil price. Some consumer advocates, such as the 
Foundation for Taxpayer and Consumer Rights, have accused oil companies 
of purposefully reducing gas prices in the months before the election 
to help Republican candidates.
  Since November, gas prices have already increased an average of 15 
cents a gallon. This is not the first time the oil companies have been 
accused of attempting to manipulate markets for their benefit.
  Internal memos from several oil companies written in the 1990s have 
revealed that the big oil companies have worked to limit refinery 
capacity here in the United States, allowing these companies to control 
the supply and cost of gasoline.
  In May of 2006, the Federal Trade Commission released its report 
titled Investigation of Gasoline Price Manipulation and Post-Katrina 
Gasoline Price Increases. In this report, the Federal Trade Commission 
found that after Hurricane Katrina refiners, wholesalers and retailers 
charged significantly higher prices that did not result from either 
increased costs or market friends.
  FTC Commissioner John Liebowitz, in a statement on the report, 
acknowledged that, and I quote, ``that the behavior of many market 
participants, on balance, leaves much to be desired.''

                              {time}  1415

  Democrats have repeatedly urged the House Republican leadership to 
protect America's pocketbooks and not that of Big Oil. Nonetheless, the 
Republican leadership refused to take action last fall on high gas 
prices. The American people have now chosen a new direction with 
Democrats in charge.
  During the first 100 legislative hours of this, the 110th Congress, 
the House of Representatives will consider legislation to end the tax 
breaks and special subsidies for oil companies. For too long, oil 
companies have benefited from weak royalty laws, tax breaks and 
subsidies, at the same time making record profits at the expense of the 
American people.
  Rather than helping oil companies' bottom lines, these funds that we 
will recapture will instead be used to promote alternative energy 
sources to end our Nation's addiction to oil.
  Later this year I look forward to having an open and honest debate on 
my legislation, which I plan to reintroduce soon, to end gas price 
gouging.
  Last year over 120 Members cosponsored my legislation to create a 
Federal law against price gouging for gasoline, natural gas, and other 
fuel.
  I look forward to continuing to work towards greater oversight of the 
oil and gas trading, especially off-market trades known as ``over the 
counter'' trades.
  I will be re-introducing my legislation, the Prevent Unfair 
Manipulation of Prices Act, to improve oversight of these trades and 
strengthen the penalties for traders who attempt to illegally 
manipulate markets.
  The Federal Government has a responsibility to protect consumers from 
high gas prices. I look forward to being able to address high energy 
prices, to provide our constituents with the protection they need and 
so desperately deserve.
  Mr. Speaker, if I may, I would like to enter into the Record a one-
page article from National Public Radio about how ``in other words, in 
the run-up to the election, oil companies cut gasoline prices 500 
percent more than their raw material costs fell. And it wasn't because 
refining and distribution costs rose. They were relatively stable. Oil 
companies simply took less profit from their refineries for a short 
period of time.''

                     Gas-Price Conspiracy? You Bet!

       Commentator and consumer advocate Jamie Court says there IS 
     evidence that oil companies intentionally influence gas-price 
     fluctuations.


                           TEXT OF COMMENTARY

       KAI RYSSDAL: The 110th Congress will be sworn in on 
     Thursday. Speaker-to-be Nancy Pelosi has promised a whirlwind 
     first 100 hours of the session. On the Democrats' list of 
     things to do is cut subsidies to the oil industry. Perhaps as 
     a result, the American Petroleum Institute--that's big oil's 
     main lobbying group--is launching a public relations 
     offensive. Complete with Congressional oil patch tours, and 
     contributions to friendly think tanks. It's trying to 
     convince people rising energy prices are simply the result of 
     higher demand and shrinking supply.
       Commentator and consumer advocate Jamie Court says that 
     campaign is too slick by half.
       JAMIE COURT: Say you're an oil executive and you want to 
     keep the Republicans in control of Congress. What can you do 
     prior to an election? Well, you can keep your refineries 
     running at full speed, flood the market with extra fuel, and 
     take less per gallon in profit than usual. And guess what: 
     Department of Energy data suggest that's exactly what the oil 
     companies did this fall. By the second week in October, 
     gasoline prices fell 70 cents from summer's record highs. 
     Refineries were running full throttle and America's gasoline 
     inventories were up nearly 7 percent from the three previous 
     Octobers. The rise in supply came despite BP's major pipeline 
     disruption in Alaska. Ordinarily, that's an industry excuse 
     to shrink supplies and raise prices. Now, the oil industry 
     claimed pump prices fell because crude oil prices dropped. 
     But gas prices dropped far more steeply than crude oil. Crude 
     oil comes in barrels. There are 42 gallons in a barrel and 
     the price of each gallon was down 10 cents this October over 
     last. But gas prices fell 61 cents a gallon over the same 
     time last year.
       In other words, in the run-up to the election, oil 
     companies cut gasoline prices 500 percent more than their raw 
     material cost fell. And it wasn't because refining and 
     distribution costs rose. They're relatively stable. Oil 
     companies simply took less profit from their refineries for a 
     short period of time. Could it have been to influence a 
     political outcome? Well, right after election day, the price 
     of gas suddenly rose after two months of sharp decline. Post-
     election, refineries have slowed down, inventories are 
     shrinking, and gas prices are climbing. It's back to business 
     as usual, unless the new Congress starts to do business 
     differently.

     

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