Posted on 09/22/2005 3:01:48 AM PDT by grundle
http://www.thenewstribune.com/news/government/story/5159838p-4693102c.html
Senators seek to rein in gas prices
Cantwell’s bill would focus on preventing price gouging
LES BLUMENTHAL; The News Tribune
Published: September 7th, 2005 12:01 AM
WASHINGTON – Sen. Maria Cantwell is drafting legislation to give President Bush broad powers to investigate whether oil companies are gouging consumers, and to impose price controls if necessary.
“No one now has clear oversight to protect consumers,” the Edmonds Democrat said Tuesday during a congressional hearing on the run-up in gasoline prices.
Cantwell said her bill, to be filed this week, would reinstate many of the powers granted President Nixon to deal with the oil and gas shortages of the 1970s.
That law expired in 1981. There is no federal statute specifically targeting price gouging for gasoline, according to the Congressional Research Service. Twenty-three states have such laws, though not Washington, Cantwell said.
In the week since Hurricane Katrina hit, gasoline prices in Washington have increased an average of 19 cents, even though the state’s five refineries are primarily supplied with crude from Alaska’s North Slope, with some imports from Canada.
Overall, gasoline prices in the state average 90 cents more per gallon than they did a year ago, Cantwell said.
“My constituents are very frustrated,” the senator said. “They want to know who is in charge.”
Tuesday’s hearing before the Senate Energy and Natural Resources Committee signaled Congress’ growing attention to the higher prices at the pump. More hearings are in the works, as are calls by some lawmakers for price controls, a “windfall tax” on oil companies, more investigative powers and even temporarily waiving of the federal gasoline tax. All will face strong opposition.
“Most likely Congress will do little or nothing but talk a great deal and hold hearings,” said Sen. Byron Dorgan (D-N.D.) said.
Industry officials said price controls would be a mistake.
Bob Slaughter, president of the National Petrochemical and Refiners Association, told the committee that price controls in the 1970s resulted in a shortage of gasoline and long lines at the pump.
“Price caps and other forms of price regulation are no more effective in the 21st century than they turned out to be in the 1970s,” Slaughter said. “Interference in market forces always creates inefficiencies in the marketplace and extra costs for consumers.”
Under Cantwell’s bill, the president could declare a national emergency. That would outlaw price gouging and allow the president to impose price caps. The bill would give the Federal Trade Commission, the Department of Justice and the Department of Energy stronger enforcement authority and require that oil companies and energy traders be more “transparent” in their dealings.
Cantwell, speaking to reporters later, stopped short of alleging that oil companies are manipulating the markets.
“I don’t have a document to prove it,” she said. But she added, “Production costs haven’t gone up in Alaska, so why are we paying more? There could be a lot of stuff going on.”
Cantwell likened the situation to the electricity crisis of 2001, when West Coast power prices rose more than tenfold in some cases. The Federal Energy Regulatory Commission capped the price of electricity, but it took several years of investigation to determine that Enron and other energy traders manipulated the market.
The federal government does not have the authority to cap gasoline prices, the senator said.
Cantwell said she was not sure at what point price controls might be needed.
“I don’t know what the level should be,” Cantwell said. “But I know consumers should not be paying $5 a gallon for gas.”
The White House had no immediate comment on Cantwell’s proposal.
Cantwell said she had talked with Senate Minority Leader Harry Reid about her legislation and hopes it will pick up support.
Cantwell, who is up for re-election next year, bristled when asked whether her legislation was politically motivated.
“Why is this about politics?” Cantwell said, explaining she took the lead in calling for a thorough investigation of electricity prices in 2001 even though she wasn’t running for re-election. “I’m trying to take care of Washington state.”
The Associated Press contributed to this report.
Nixon's price controls caused shortages and gasoline lines. After Reagen got rid the price controls, the shortages disappeared.
If price controls save you $10 on a tank of gas, but you have to wait in line for 2 hours, and your time is worth $20 an hour, then the price controls have caused you a net loss of $30.
Prices are based on supply and demand. Just because it still costs the same to make the gasoline doesn't mean the price shouldn't change.
The article says that Nixon's price controls were designed to deal with shortages. That's wrong. It was the price controls that caused the shortages.
The references to "price gouging" show a complete ignorance of economics.
The reporter should have interviewed an economist.
California's not building any new major power plants for over a decade, plus their price controls on the consumer price of electricity, plus their ban on long term contracts for the wholesale purchase of electricity, were the real causes of their electricity crises.
I should have spelled that "Reagan."
"Prices are based on supply and demand. "
Not in this case. Prices are driven by speculation and profiteers who raise gasoline prices as soon as any possibility of a supply disruption is on the horizon, no matter how remote, and then take forever to lower them again, but never to the level they were at formerly.
Unlike corn, oats, or most other commodities, EVERY other economic factor is somehow tied to the price of gasoline and fuel - and if these piggish exploiters aren't called to acount and stopped, the ramifications of the increased costs will have a ripple effect on all other commodities and generate a world-wide recession - just as they did in the mid 1970s.
What the solution to price gouging by these international oil cartels is, I don't know, but something must be done about these thugs.
and if these piggish exploiters
Ad hominem attacks on tradesmen aren't going to make shortages go away either.
Head economist teaching theory to Congress.
If the government would drop some of the federal gas tax a BIG difference would be seen but, we know the politicians will not do anything with their toy, money from the gas tax, money to just throw away.
Bottle that whine. But no one buys it -- it's just dregs and bitters.
Someone should simply ask these Senators, most of whom are lawyers, if their legal fees were based on the cost of their rent, or the price of their furniture. If 33% is usury on a loan, then why not on the cost of legal services?
Wrong. The consumer has it. That sentence is the sand upon which the entire argument is built.
Absolutely.
We should be drilling for oil & gas, onshore, offshore, and in Alaska, like there were no tomorrow.
We should rescind Jimmy Carter's muddle-headed EO forbidding the recycling of nuclear waste-- Europe's done it safely for decades.
We should be building next-generation nuclear plants ( and not just for electricity- any plant that needs heat, steam, or power coud use them ) all over the country. We have a nuclear plant two cities to the west, and it's far safer than the local chemical plants in terms of injury and deaths.
We ought to pursue clean coal technology-- we have a 300-500 year supply of the stuff right under out feet.
There's a lot, we could be doing right now.
NOt suprising, Ask all 100 senators te recite the a.b.c.s and I bet half couldn't do it.
Lots of very ignorant folks in that body.
And who's investigating government for gouging people with their massive taxes? The level of hyporcisy over the so-called gas price gouging has reached unprecedented heights.
Last night I listened to the local news first on a misleading story of an increase in the local stales tax for Cobb county from 5% to 6% First the reporterette girl called it a 1% increase. WRONG. Going from 5% to 6% is a 20% increase. Then they called it a penny tax. 10 seconds later they then stated how many hundreds of millions of dollars it would extort from the serfs for the ever needy county. If it's a penny tax then it only raises a penny. But there was nothing but praise for the tax and a sympathetic interview with some fat trailer trash c..t who worked to pass the increase.
Then there was the bedwetting interview with some (black) single mother (with three chillin) as to how she was going to have to do all sorts of cut backs if gas prices continued to rise.
So I guess limitless increasing of taxes for which you get nothing is good, but increasing the price of a commodity is bad.
" “No one now has clear oversight to protect consumers,”
Yes, the oversight is provided by the market. If you don't like the price, don't buy the gas. Walk, bike. take public transportation or buy a vehicle with better mileage.
If someone can produce a barrel of oil for under $70, go for it.
I pay more for a gallon of milk than I do for a gallon of gas. And I thought cows were renewable.
It excels at that....
Note to Congress: Better high prices than gas lines...
Even illegals have to pay gas tax.
Losers
Here's one, built new refineries further inland and build a pipeline from the gulf. Hell put a refinery anywhere in west Texas and you won't here a peep from the enviro wackos.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.