Hearing of the Senate Judiciary Committee on "Consolidation in the Energy Industry: Raising Prices at the Pump"
Mr. Chairman, thank you for calling for this important hearing today. As we all know, our energy costs are soaring, and in my home state of Ohio, like most places in the United States, gas prices have been rising steadily. In Lima, Ohio, for example, regular unleaded gas was $2.39 per gallon; in Cleveland, it was $2.35; and in Columbus at some stations, it was over $2.37. Making matters worse, many analysts predict that these prices only will get higher in the coming months. Prices for home heating oil are on the rise, as well.
These price spikes hit all of us in our day-to-day lives, and hit the most vulnerable Americans the hardest. Even more frustrating, it seems that every day another oil company reports record-breaking profits, while American consumers pay higher prices. So, it's critical that we take steps to figure out the problem, and ultimately fix it.
We recently have seen a wave of mergers in the oil industry, and these mergers and their effects on consumer prices have been a priority of the Antitrust Subcommittee. Senator Kohl and I have worked together for years to preserve competition in the petroleum industry. We have conducted investigations into many of these mergers, and raised numerous concerns about them with the FTC. Additionally, back in 2000, we asked the FTC to investigate the gasoline price spikes which hit the Mid-west, and in response, they set up an intensive, ongoing monitoring program within the industry to make sure that they could find and stop illegal price-gouging.
We believe this program has been an effective law enforcement tool, and that it has prevented at least some of the abuse that might have otherwise occurred. Nonetheless, fuel prices continue to rise, and naturally that has led to discussion about whether oil industry mergers have increased prices to consumers. Today's hearing will be a good opportunity to explore that issue, but I think it's important to note that even those who think that these mergers have increased price, such as the GAO, believe that the effect has been relatively small - - usually about a penny or two per gallon. Others argue that the price effect is somewhat higher, but either way, it is clearly not the biggest part of our problem.
Our biggest problem is crude oil. Bluntly, we don't have enough of it, and we rely too much on it. Our country, although blessed with great natural resources, is sorely lacking in crude oil. Try as we might, we can't drill our way out of this crisis. So, we must take a much broader approach to our energy problem and limit our reliance on oil.
We have the ability to do just that. The United States does have one fossil fuel in great abundance -- and that's coal. Of course, coal brings its own challenges. We all have been horrified by the tragic deaths of the miners in West Virginia and Kentucky in the last few weeks.
As a member of the HELP and Appropriations Committees, I have participated in hearings on mine-safety issues, and I can't emphasize enough that we must take aggressive and prompt action to improve mine safety and protect the life and health of our miners. We need to invest the time and money to figure out how to mine coal more safely, burn it more cleanly, and use it to power our economy. Coal can work for America.
But, we need to go further than that. We need to conserve. We need to increase fuel efficiency. And, we need to invest in safer nuclear technology, wind power, solar power, biomass, and especially in fuel cells. Northeast Ohio is a leader in developing fuel cell technology; I have been very supportive of efforts to fund this technology, and it is extremely promising.
Clearly, we have a lot to do on energy policy, generally. In the meantime, however, this hearing is an excellent opportunity to make sure that our antitrust laws are being applied properly and eliminate any opportunities for companies in the petroleum industry to unduly increase the fuel prices we all pay.
On a final thought, Mr. Chairman, I want to say how disappointed I, too, am that the oil executives declined to attend our hearing today. It would be useful for the Committee to hear their views on fuel prices, and I hope we have that opportunity in the future.