By the OGJ Online Staff
WASHINGTON, DC, May 29 -- Democrats are planning to take a harder look at the oil industry when they take control of the US Senate this June.
Sen. Carl Levin (D-Mich.) Tuesday said he plans to launch an investigation into whether oil companies are gouging consumers at the gasoline pump.
Levin is due to become chairman of the Senate Permanent Subcommittee on Investigations.
"The oil companies need to explain why gas prices have increased so dramatically, given that there has been no comparable increase in the per barrel cost of oil to them," he said.
Levin, as the ranking Democrat on the subcommittee, already had asked the General Accounting Office to investigate whether recent oil industry mergers and consolidations were decreasing competition in gasoline pricing.
Democrats previously had called for a special congressional joint committee to investigate alleged price gouging (OGJ Online, May 10, 2001).
Oil industry groups have denied companies are colluding to raise gasoline prices. Industry maintains that a combination of refinery and pipeline constraints, specialty gasoline blends, and less world oil production have caused prices to rise.
Oil officials also note that the Federal Trade Commission, after a 2-year investigation, found no evidence of gasoline price collusion in the West Coast (OGJ Online, May 8, 2001). Earlier, FTC found no basis for allegations of gasoline market misconduct last summer (OGJ Online, Mar. 30, 2001).
The subcommittee, which is part of the Senate Committee on Governmental Affairs, has broad investigative jurisdiction over government operations and national security issues. It can issue subpoenas and take depositions.
Separately, Sen. Dianne Feinstein (D-Calif.) has urged Sen. Joseph Lieberman (D-Conn.) to hold hearings in the Committee on Governmental Affairs to determine if the Federal Energy Regulatory Commission has skirted its responsibility by not imposing electricity price caps when there has been evidence to that marketers have charged unreasonable rates.
"Since FERC has refused to fulfill its legally mandated function under the Federal Power Act to restore 'just and reasonable' electricity rates, we need to ask whether undue influence by the companies that FERC regulates has resulted in its failure to act," Feinstein said.
She wrote Lieberman, "I know you are aware of the serious economic ramifications of the energy crisis in California, both to my home state and the nation as a whole. In California, the total cost of electricity in 1999 was $7 billion. This climbed to $28 billion in 2000 and is predicted to reach $70 billion this year. At the same time, with FERC refusing to act, power generators and marketers have made record profits. The people of our nation deserve a full investigation."
Lieberman had no immediate comment. Congressional sources anticipate he will call hearings on the issue.
Late Friday, the Senate confirmed Patrick Wood and Nora Brownell as FERC commissioners. The two state regulators, from Texas and Pennsylvania respectively, had bipartisan support.
