By OGJ Editors
WASHINGTON, DC, Apr. 3 --Sen. Carl Levin (D-Mich.), chairman of the Senate Permanent Subcommittee on Investigations, said he will hold a series of hearings later this month to update the public on his subcommittee's 10-month investigation into gasoline prices. Officials from industry, academia, and state government will also testify on Apr. 30 and May 2, 2002. The average US retail gasoline pump price has risen 25¢/gal since January, the US Energy Information Administration reported yesterday, reaching $1.37/gal Apr. 1—its highest level since Oct. 9, 2001.
Congress returns
Congress returns from a 2-week break next Monday; the Senate is expected to restart debate on a sweeping energy policy bill that includes a provision that streamlines clean fuel rules for the Midwest and other areas of the country.
The energy bill contains a provision to create a renewable fuel standard for motor fuel designed to triple ethanol demand over the coming decade. The American Petroleum Institute and fuel ethanol interest support the clean fuel proposal because they say it will help simplify clean fuel rules and help phase out the fuel additive methyl tertiary butyl ether, which has been linked to groundwater pollution in some states. Gasoline suppliers use MTBE and fuel ethanol to meet existing clean fuel guidelines that were drawn up in the early 1990s as a way to control smog.
But some opponents of the measure, including the National Petrochemical & Refiners Association, say the new measure may exacerbate gasoline distribution networks not designed to handle ethanol-blended gasolines.
Staff investigation
Levin directed his staff to launch an investigation in June 2001 following dramatic gasoline price spikes in the Midwest. This spring, prices are again rising, and there is a concern part of the reason is the growing consolidation of the oil business, congressional staff said. Less competition means companies can more easily manipulate prices in a given region, they maintain.
No hearings on the gasoline price issue have been scheduled yet in the Republican-led House, but industry officials conceded that if prices continue to rise there could be hearings there as well. "It is an election year, after all," said one lobbyist.
Industry, however, refutes the view that a handful of companies conspire to drive up prices, as has been alleged in the past by some consumer groups and environmentalists. Industry argues that prices are influenced by many factors, including international crude oil markets, refinery capacity, shipping bottlenecks, and complex clean fuel guidelines that make it difficult to shift inventory to different regions of the country. Oil company officials also say several federal investigations by the Federal Trade Commission and other regulators have never shown evidence that industry breaks antitrust laws.
Industry witnesses
Levin said that subcommittee staff interviewed executives from all of the major oil companies as well as gasoline station owners and operators and industry experts.
The staff also reviewed thousands of internal documents obtained by subpoenas issued to the major oil companies and one pipeline company.
Industry witnesses expected to testify include executives from BP America Inc., ExxonMobil Corp., Marathon Ashland Petroleum LLC, ChevronTexaco Corp. and Shell Oil Co.