[Congressional Record (Bound Edition), Volume 154 (2008), Part 5]
[Senate]
[Pages 7063-7064]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               GAS PRICES

  Mr. DURBIN. Mr. President, it is interesting, the issues that touch 
the lives of people to the point where they bring them up to a Senator 
or Congressman. There is an issue now which, whether you live in 
Pennsylvania or Illinois, you are going to hear about--whether you are 
going to shop in a grocery store in Springfield, as I did over the 
weekend, or back home in church--and it is gas prices. It is 
understandable because this is an economic issue which hits you right 
between the eyes every time you drive down the street and hits you 
right in the pocketbook when you go to pay for gasoline. You know what 
is happening with the price of that commodity. You also know when 
something is obviously very wrong.
  In my State, the average consumer is paying a record $3.71 a gallon 
for gasoline. There are many States paying more. Diesel fuels are even 
worse. The Illinois average now is $4.30 a gallon, but in some parts of 
America, diesel fuel costs as much as $5 a gallon.
  Think about the trucker. Many of them have to live on a very slight 
margin, filling up the tank of that truck they are taking down the 
highway and putting out over $900, sometimes $1,000, to do it. For many 
of them, it means work extra hours, extra days, an extra week, to try 
to make enough to get by.
  Fuel costs are approximately 2\1/2\ times what they were when 
President Bush took office in 2001. What a legacy this President will 
leave, when you take a look at energy in America today. We elect 
Presidents to look to the future to plan and guide America. In this 
situation, this administration, which was born in the oil patch, with 
both President Bush and Vice President Cheney having their early roots 
in the business of oil companies--this administration has stood by on 
the sidelines and watched the cost of energy rise to record levels in 
America, creating hardship not just for families and individuals but 
small businesses as well as trucking firms--not to mention airlines, 
which I will mention in more detail in a moment.
  When you take a look at the opportunity for economic growth in 
America, it is tied tightly to the cost of energy. This President has 
failed, in 7 years, to have an energy policy that had any vision. It 
was predictable that demand would increase for petroleum and crude oil 
in countries such as China and India; that limited resources around the 
world would be taxed as these economies grew, as their demand for oil 
grew, and as we had to compete for that oil with those other countries 
such as China and India. The law of supply and demand suggests that 
competition is going to raise the price of crude, and it has risen 
dramatically.
  Many people say: Well, I suppose, because it has now reached $120 a 
barrel--as it did last week--that explains the gasoline prices I am 
paying, the diesel prices, and jet fuel prices. In fact, it does not. 
It is an oversimplification to say that is the reason. Because between 
the crude oil and the product you buy is a refinery, an oil company 
that takes the crude and converts it into the product we purchase. The 
difference in cost between the original barrel of crude oil and the 
ultimate product is called the crack spread--the cracking process at 
the refinery--and that has changed dramatically.
  Not that long ago, the difference in cost was $1 or $2 a gallon, in 
terms of the refining process. Now it is up over $40 a gallon. So the 
refining process--between the crude oil and what you bought at the gas 
station--has risen dramatically in cost. Crude oil, of course, costs 
more. But that has risen dramatically.
  That explains something else, a phenomenon which cannot be ignored. 
This is the week when America learns who is making money off the high 
gasoline costs we find at the pump. I think the answer is obvious: 
ConocoPhillips reported 2008 profits for its first quarter were up 17 
percent, $4 billion in profits for ConocoPhillips in the first 3 months 
of the year.
  This morning, British Petroleum, BP, announced they made $7.6 billion 
in profits in the first quarter of 2008. Royal Dutch Shell announced 
$9.08 billion in the first quarter. We are still waiting for 
ExxonMobil.
  Understand, these are not the biggest profits in the history of the 
oil industry, these are the largest profits in the history of American 
business, some say in the history of all business throughout mankind; 
the largest profit taking ever. At whose expense? At the expense

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of consumers and families, small businesses, truckers, airlines, and 
our economy.
  That is the reality. Would you not expect the President of the United 
States to call in the major leaders of these oil companies and say to 
them: You are destroying the economy we are counting on for America by 
your profit taking; you are making it impossible for this economy to 
grow. We are facing a recession over the housing crisis and now you are 
compounding this misery with your greediness and selfishness and profit 
taking from this economy.
  That is fact. The oil companies say: Well, the problem is we do not 
have enough refineries. If we had more, then we would have more product 
and we might have a smaller spread and we would not be. Let me tell you 
what: Today, the refineries in America are operating at 85 percent of 
capacity. Do not buy this argument that it is about refineries. They 
have more capacity. They are holding back so they can keep their 
product dear and limited and short, and so the consumers will 
ultimately pay more.
  The oil companies have been making money hand over fist as those oil 
prices have gone up. In 2007, the private oil industry pocketed $155 
billion in profits, out of revenues of $1.9 trillion. And the largest 
integrated oil company, ExxonMobil, reported a profit in 2007 of $40.6 
billion, record-breaking numbers.
  Profits for the five largest integrated oil companies have more than 
quadrupled in 5 years. This deluge of profits has been so great that 
companies hardly know what to do with the flood of money filling their 
headquarters.
  Do you think these profits are being reinvested in infrastructure and 
increasing production to ease rising prices? Are the profits being used 
to make it easier for us to use alternative fuel in cars and trucks? 
The answer is no. A good portion of their profits is being accumulated 
as uninvested cash. Cash holdings for the five supermajor oil companies 
in 2007 exceeded $52 billion; money right off your credit card into the 
oil company coffers that sits there earning interest. That is 279 
percent greater than it was in the year 2002. Capital expenditures by 
the same industry for infrastructure and capacity increased by only 81 
percent.
  Now, some people have suggested a gas tax holiday; stop collecting 
the Federal gas tax. I will tell you in the first instance if American 
consumers are bought off with that alone, they ought to take a second 
look. If there is a 3-month gas tax holiday, as has been proposed, it 
will mean savings to consumers on average of about $25 to $30; $25 to 
$30 for the entire summer. Think about what you are paying for a tank 
of gas. If you take off the Federal gas tax, then the money is not 
going into the Federal trust fund to build the highways, to reduce the 
congestion so you do not sit in traffic burning gasoline and get to 
your destination. That is not a very good tradeoff. So the obvious 
question is, if the national gas tax is to come off and give me any 
savings, what am I ultimately going to pay? Who is going to pay for the 
money that is lost in the investment in the Federal highway trust fund? 
That, I think, is critical.
  Last week I called on the Chairman of the Federal Trade Commission to 
launch an investigation into this matter. I should not have had to 
write that letter. The fact that a Member of Congress has to knock on 
the door and get a little stir inside the Federal Trade Commission and 
say: Anybody home? Have you noticed what is going on at gas stations 
across America? Why would a Member of Congress have to ask the Federal 
Trade Commission to do their job? But they should do their job. They 
should be taking a close look at the increase in gasoline prices and 
diesel prices and jet fuel prices.
  This last week, the two biggest airlines in America, American 
Airlines and United Airlines, reported record losses for the first 
quarter because of the cost of jet fuel. In the instance of American 
Airlines, it was around $300 million; United Airlines, around $500 
million. These are serious problems. United is going to lay off 1,000 
people. That is going to hit my home State of Illinois and the City of 
Chicago. It is going to hurt us in terms of employment. Other airlines 
are facing the same squeeze because of jet fuel costs. It is the same 
issue as diesel fuel, the same issue as gasoline.
  If America's economy is going to pull out of this recession and move 
forward, we need real leadership. We need the Federal Trade Commission 
investigating those oil companies and their profit taking. We need 
Congress to stand up on its hind legs and finally say ``enough.'' And 
would it not be a joy to have a President who would wake up in the 
morning and look outside the window of the White House and see 
something other than Baghdad? If he looked outside the window and 
instead saw Chicago or Boston, or Miami, or Philadelphia, he would 
understand this American economy needs his attention.
  As the President comes and asks us for $108 billion more for this war 
in Iraq with no end in sight, he is proud that he is going to leave 
office never changing this failed policy he instituted in Iraq, and he 
ignores the American economy.
  A strong America begins at home. And most Americans will tell you, it 
begins at the gas pump. Give them affordable gasoline so this economy 
can grow and they can afford to meet the costs of living which continue 
to increase dramatically under this administration.
  Unfortunately, this President has ignored it. Born in the oil patch, 
he has been raised to ignore the obvious. When the oil companies are 
taking obscene profits out of the wallets of American consumers, it not 
only hurts our economy, it hurts our security in this world.
  I am glad 51 Senators have joined in asking President Bush to stop 
putting oil in the Strategic Petroleum Reserve for the remainder of 
this year. I wish he would listen, but he has not.
  I hope we are going to move toward more research and development so 
we have cars and trucks that are more fuel efficient. This 
administration is devoid of ideas and devoid of leadership when it 
comes to this energy crisis. If this President would get out of the 
White House and visit any town in America and ask the average person 
what is on their mind, they would tell him: Mr. President, roll up your 
sleeves, focus on this country, bring down the cost of gasoline. Get 
energy prices under control so this economy can prosper.

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