It's difficult for lawmakers to ascertain the truth from conflicting testimony by witnesses at a congressional hearing.
It's even harder when lawmakers not only want truth from the hearing but also publicity.
That seemed a major impediment at two recent hearings on last month's runup in heating oil and propane prices.
No doubt some of the congressmen at a House of Representatives hearing were truly angry about the price increases (OGJ, Jan. 15, p. 23). No doubt some also were influenced by the 18 television cameras in the room.
SENATE HEARING
A Senate government affairs committee hearing last week was less raucous because TV coverage was pooled. But like House members, senators appeared determined to uncover concealed wrongs-despite evidence to the contrary.
Sen. Warren Rudman (R-N.H.) declared at one point, "There is no law against price gouging." But that did not dissuade fellow senators from trying to uncover gouging.
The senators were impatient with the Department of Energy's plan to study the price runup, although DOE had worked to alleviate it.
DOE urged Congress to consider making it easier to get waivers from the Jones Act, which requires shipments between U.S. ports to be in U.S. flag vessels. But the Maritime Administration said all but one of the December waiver requests were denied because U.S. flag ships were available.
The Justice Department is investigating the December price spikes but said it lacks hard evidence of antitrust violations.
It was more emphatic about changing the Jones Act, which it called 11 a regulatory intrusion into the marketplace."
Frustrated with the administration's responses, several senators declared that if the executive branch does not conduct a thorough investigation, congressional committees will do so and use their subpoena powers.
Of eight oil companies invited to testify at the Senate hearing, only Texaco accepted. Glenn Tilton, president of Texaco Refining & Marketing Inc., fared well. He stressed that no one industry segment walked away with windfall profits. Each company's position varied.
PRICES AND PROFITS
Helmut Merklein, Energy Information Administration chief, voiced doubts that there had been price gouging. He said December distillate demand was up 1 million b/d, but only half of that was burned. Panicked consumers bought the rest to top off their tanks.
Philip Verleger of the Institute for International Economics, Washington, D.C., said despite an unusual double blow of record demand and refinery shutdowns, the oil industry was able to deliver adequate product.
"It is inappropriate and impossible to assess margins during this episode," he said. "Profits can be examined only by comparing gains from sales of oil and possible losses on hedges. Further, many firms had recorded substantial losses on their inventories in 1988 and early 1989 when warmer than normal weather depressed prices."
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
