Price-gouging bill heads for US House amid protests

Nick Snow
Washington Correspondent

WASHINGTON, DC, May 23 -- Rep. Bart Stupak (D-Mich.) convened a US House subcommittee hearing May 22 to examine rising gasoline prices amid record oil company profits. Republicans used most of their opening statements instead to protest the scheduled May 23 arrival on the floor of Stupak's gasoline price-gouging bill.

The bill, HR 1252, would empower the US Federal Trade Commission to investigate gasoline or other petroleum product price manipulation allegations at the wholesale and retail level. It would ban sales at prices that are "unconscionably excessive" or take "unfair advantage" of consumers.

The bill is scheduled to arrive on the floor under a rules suspension, which requires a two-thirds majority to pass but prevents the bill's being amended. Republicans protested that it was moving forward without a full hearing and markup by the Energy and Commerce Committee. Democrats responded that Republicans used a similar tactic in 2006, when they were in the majority, to bring Rep. Heather Wilson's (R-NM) competing price-gouging bill to the floor for a vote.

The House approved Wilson's bill last year, but the US Senate did not act on it. However, this year the Senate Commerce Committee added Maria Cantwell's (D-Wash.) price-gouging bill as an amendment to a fuel economy bill it passed on May 8.

"The American public is paying record high gas prices while Big Oil companies are reaping record profits. Across our nation, people are struggling to fill their gas tanks, and their frustration with gas prices is boiling over," said Stupak as he began the Energy and Commerce Committee's Oversight and Investigations Subcommittee's May 22 hearing.

When Rep. Marsha Blackburn (R-Tenn.) warned against demonizing retailers, saying 95% of convenience stores and gas stations across the country are independently owned, Stupak countered that his bill gives priority to prosecuting businesses with more than $50 million/year in revenues.

Vague language
But the subcommittee's chief minority member Ed Whitfield (R-Ky.) said the bill's language was too vague. "The FTC has notified Congress that if it passes a price-gouging bill, the language in it must clear and easy to enforce. I favor Rep. Wilson's bill [which Wilson reintroduced early in 2007] because it leaves the definition to the FTC."

Joe Barton (R-Tex.), the full committee's chief minority member, opposed the rules suspension and how witnesses for the hearing were obtained. "We're not going to hear from the people who explore for oil, who refine oil, who distribute oil products, and who sell products at the retail level. They told the minority staff that they'd be willing to testify, but not one of them is here as a witness," he said.

Stupak responded that he invited ExxonMobil Corp., Chevron Corp., Shell Oil Co., and Valero Energy Corp. to testify, but they declined. So did the American Petroleum Institute and the National Petrochemical & Refiners Association, he said. The chairman of President George W. Bush's Council of Economic Advisors expressed interest in appearing but could not fit it into his schedule, the subcommittee chairman said.

Noting that Barton last year sent Wilson's bill to the floor under a rules suspension, John D. Dingell (D-Mich.), the full committee's chairman, said, "I'm doing the same with Rep. Stupak's bill. I look forward to replicating Mr. Barton's effective leadership in other ways," he said.

Growing opposition
But groups outside the House and Senate have become vocal in their opposition to any legislation aimed at stopping alleged manipulation of gasoline and other oil product prices because it could lead to mandatory controls and allocations.

The National Association of Manufacturers ran a full-page advertisement May 22 in the Washington Post expressing its disapproval, while the National Association of Convenience Stores had one in Congress Daily. NPRA and the Competitive Enterprise Institute each distributed information to reporters covering the hearing.

Hours earlier the Alliance for Energy & Economic Growth, a coalition of more than 1,200 energy producers and consumers, raised its concerns over legislation aimed at alleged gasoline price-gouging and other bills in the 110th Congress that would roll back provisions in the 2005 Energy Policy Act, authorize prosecutions of foreign oil-producing countries for violating US antitrust laws, and cancel alternative energy research and development.

Following the AEEG briefing API Pres. Red Cavaney said: "People are every bit as upset this year as they were in 2006. They see there have been no hurricanes, but there have been refinery breakdowns and significantly lower product imports. Add to that what's going on in Nigeria, what could happen in Venezuela, and what's uncertain in Iran and Iraq, and you have a very unsettled situation. But I hope people will understand that gasoline price-gouging legislation could lead to controls, which were the most horrific experience we had to undergo in the last 25 years."

Jay Inslee (D-Wash.) said Congress should give FTC the authority it needs to act in the consumer's interest, and it should increase consumer choices of fuels such as electricity, cellulosic ethanol or biodiesel.

'A bottleneck'
Rep. Charlie Melancon (D-La.) said continued heavy reliance on fossil fuels poses environmental impact questions, but it will be necessary in the short term. "We have a bottleneck in the process. We can't pump oil out of the ground and refine it fast enough to meet the growing demand," he said.

Rep. Jim Murphy (R-Pa.) said: "One thing we should not do is adopt policies that establish artificial controls. We did that during the Nixon and Carter administrations, and the results were shortages and long lines," he said. "When we refuse to commit support to building more refineries, we increase costs by buying products that are refined overseas. It's the same with crude oil and natural gas. When are we going to recognize that we have supplies at home and start producing them?"

Witnesses included FTC commissioner William E. Kovacic, US Energy Information Administration chief Guy F. Caruso, Michigan Dept. of Environmental Quality deputy director Stanley F. Pruss, Thomas J. McCool of the US Government Accountability Office, W. David Montgomery of CRA International, Geoff Sundstrom of the American Automobile Association, and Tyler Slocum of Public Citizen.

Contact Nick Snow at

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