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GAS GOUGING: Who's To Blame?
 Editor's Note: The high cost of energy at the gas pump this summer is a pain that every American undoubtedly feels, with the possible exception of Exxon CEO Lee Raymond, who earns $67.9 million per year, and recently walked away with a $400 million retirement package.
The question on everyone's mind in
this election year is what do elected leaders intend to do about
it? Republicans say the answer is simple: drill in the Arctic
National Wildlife Refuge. But 'simple' solutions are not necessarily
effective ones, especially when such moves do little to rid our
nation on its dependency fossil fuels.
Similarly, Democrats say one way to
provide relief is to levy an excess profit tax upon the oil
industry, which could then be given to us poor hapless consumers in
the form of a rebate.
A good idea on the surface, until
you realize that a much more effective approach would be use this
excess profit tax to lower the gasoline tax levied at the pump;
which, government being government, it will never do when each
spiking barrel of oil translates into more tax dollars for highway
funds, schools, and paying off government pensions.
In the following guest editorials,
two of Michigan's Democratic leaders in the House & Senate have
their own ideas on what needs to be done.
The question that now remains to be
answered is whether leaders from both parties have the resolve to
actually do something about this crisis.
Back in the 1970s worldwide
scientists wrote an excellent as the Club of Rome entitled
The Limits To Growth. Basically, it laid a blueprint for
the phenomenon we are witnessing today, which is a fixed commodity
like oil starting to 'peak' from demand, creating price spikes that
could bankrupt the planet.
Their solution to the problem was a
complex (and therefore a relatively sound one) but also quite
radical: governments worldwide needed to re-calibrate their
economies and value of the dollar based not upon consumption, but
conservation. Needless to say, it never moved very far.
However, one point
that both Republican & Democrat leaders need to sink their
collective teeth into, especially in this state, is to make a
conscious and focused effort into weaning ourselves off of oil by
investing in what it takes to bring ethanol plants into the Saginaw
Valley.
President Bush claimed in his
State of the Union address this year that the federal government
would be providing tax incentives for development of alternative
energies. It is well past time to put his claim to the test in
Mid-Michigan.
As a 'future industry', medical
technology is well & good; but in terms of developing an industry
that could easily transform the economic landscape of mid-Michigan
while drawing in fresh minds & talent to assume employment standards
set by Delphi, we need to be focusing ourselves on 'getting off the
grid' and developing ethanol plants NOW, on a massive & ambitious
scale.
The technology has existed for two
decades. The only thing lacking has been the Political Will to fight
energy companies for the same economic incentives they have enjoyed
for years, and continue to enjoy today.
We shall see. If Big Texas Oil can
transform the once proud Automobile Capitol of the World into a
'rust belt'; perhaps the day is not far off where we can return the
favor by turning Texas into the tumbleweed connection.
Or at least give it back to Mexico.
CRACK DOWN ON GAS GOUGING By U.S. Rep. Bart Stupak After eight months of stonewalling, after gas prices broke $3 a gallon, after crude oil reached nearly $75 a barrel and after 129 Democrats signed a discharge petition demanding action on my gas price gouging legislation, Republicans have finally been shamed into taking up a gas price gouging bill.
As the ranking Democrat on the
Energy & Commerce Committee's Subcommittee on Oversight &
Investigations, I have been calling for hearings on gas price
gouging for over eight months. For eight months, I have been asking
for consideration of my legislation, The Federal Response to
Energy Emergencies Act, which is designed to crack down on gas
price gouging.
For eight months, Republicans in
Congress have stonewalled. Up until mid-May, Republicans have simply
put forth shallow imitations of Democratic ideas and returned to
their old standby: drilling in the Arctic National Wildlife Refuge.
My legislation would instruct the
Federal Trade Commission to develop a legal definition of gas
price gouging.
Most people are shocked to find out
that there are no federal laws against gas price gouging. Therefore,
the FTC has never brought a gas price gouging case to court.
Why is this? Because there is no
definition of gas price gouging.
Even if the President and
congressional Republicans don't know how to define gas price
gouging, consumers know it when they see it. Gas costs 70 cents more
per gallon right now than it did at this time last year. Profits for
refineries went up 250% between September 2004 and September
2005.
During the first quarter of this
year, the largest refinery, Valero, saw a 60% profit
increase. That's gouging, and while it happens, congressional
Republicans are turning a blind eye.
In contrast, 125 House Democrats
have signed a discharge petition, demanding that my bill be brought
to the floor. More are adding their names each day.
These Members are tired of the
Republican stonewalling. They want action on a real gas
price-gouging bill with teeth, not a watered down imitation.
Just as we need to address gouging,
Congress should also take a look at the way oil futures are bought &
sold.
Seventy-five percent of the
multi-billion dollar oil futures industry is completely unregulated,
without transparency or oversight by the federal government or the
Commodity Futures Trading Commission.
This is Enron all over again.
Without federal oversight, there is no way to ensure these futures
traders are not manipulating the market to drive up the price of
oil.
I have introduced the PUMP Act, or
the Prevent Unfair Manipulation of Prices Act. This bill would
require all futures traders to play by the same rules - ending the
speculation, fear and greed that drive today's oil prices. It has
been estimated that stopping this speculation could reduce the price
of a barrel of oil by as much as $20, providing consumers with
immediate relief.
These are the kind of ideas that we
should be promoting to provide consumers immediate relief.
But instead, Republicans retreat to
the same refrain: drill in the Arctic National Wildlife and provide
big tax breaks for big oil. You don't drill your way to energy
independence. Tax breaks for the President's big oil friends don't
result in lower gas prices.
It is time for a real energy policy
that alleviates consumers' pain at the pump today and begins to
address the country's problems tomorrow.
WE NEED TO BUY OUR FUEL FROM MIDDLE AMERICA INSTEAD OF THE MIDDLE EAST By U.S. Senator Debbie Stabenow Oil companies continue to post record profits on the backs of Michigan families. High gas prices are killing our jobs in Michigan and take a huge bite out of family budgets. I have proposed action to hold oil companies accountable for their outrageous prices and provide immediate relief for consumers.
The numbers are staggering: Gas
prices in Michigan currently average $2.89 a gallon, and are
as high as $3.10 in some areas. And it's only going to get
worse over the summer months.
The fact is, Michigan families are
going to spend an extra $500 this year on gasoline. For a
working family, that's a house payment, a month of groceries, or a
semester of college textbooks.
High energy costs have a negative
impact on Michigan's economy. Higher fuel costs lead to increased
costs for our manufacturers, putting jobs at risk. According to
General Motor's executives, evry $1 increase in the price of a
barrel of oil adds $4 million to GM's logistics costs.
Gas prices have a negative affect on
tourist & recreation, a driving force in Michigan's economy.
Families are planning shorter trips, or canceling vacations
altogether.
As we did deeper into our pockets to
keep up with gas prices, the oil companies are making
record-breaking profits. Exxon/Mobil recently reported an
annual profit of $36 billion, the largest profit ever
recorded for any company in U.S. corporate history.
Meanwhile, Exxon CEO Lee Raymond
draws a salary of $69.7 million. That breaks down to nearly
$110,000 every day. He makes more in one day than most people in
Michigan make in a year! And to add insult to injury, when Mr.
Raymond announced his retirement, Exxon gave him a $400 million
retirement package - one of the most generous in history.
This situation is outrageous, and we
need to take immediate action, both to provide short-term relief and
to develop long-term solutions.
I have introduced the Oil Company
Accountability Act to close current tax loopholes that give the
oil companies $5 billion in new tax breaks. My bill would put
that money right back into the pockets of consumers, through a
one-time immediate $500 tax rebate for families. If Congress
acts fast and passes my legislation, Americans could receive these
checks by Labor Day.
But short-term solutions aren't
enough. We need to look down the road and reduce our nation's
dependence on foreign oil. The best way to do this for Michigan and
the country is through the development of homegrown renewable fuels,
such as so-based biodiesel and ethanol, made with corn and sugar
beet byproducts.
The biofuels industry can create
good jobs in Michigan, bring fuel prices down, protect the
environment, and help local farmers create new markets. Our state
will have five ethanol plants up and running by the end of this
year. And last September, Biodiesel Industries announced that it
would be building a three million gallon-per-year biodiesel
production facility near Detroit.
If we act boldly and quickly, we can
buy our fuel from Middle America instead of the Middle East.
In the meantime, let's hold the oil
companies accountable and give some relief to people paying the
bill.
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