or Login to see your representatives.

Access Candidates' and Representatives' Biographies, Voting Records, Interest Group Ratings, Issue Positions, Public Statements, and Campaign Finances

Simply enter your zip code above to get to all of your candidates and representatives, or enter a name. Then, just click on the person you are interested in, and you can navigate to the categories of information we track for them.

Public Statements

Statements on Introduced Bills and Joint Resolutions

By:
Date:
Location: Washington, DC


STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. SPECTER (for himself, Mr. KOHL, Mr. DEWINE, Mr. LEAHY, Mrs. FEINSTEIN, and Mr. DURBIN):

S. 2557. A bill to improve competition in the oil and gas industry, to strengthen antitrust enforcement with regard to industry mergers, and for other purposes; to the Committee on the Judiciary.

Mr. SPECTER. Madam President, I am sending to the desk today legislation captioned as the ``Oil and Gas Industry Antitrust Act of 2006,'' legislation on behalf of myself and Senator DeWine, Senator Kohl, Senator Leahy, Senator Feinstein and Senator Durbin. The Judiciary Committee has held hearings on the escalating price of gasoline, which has risen some 25 percent in the past year, from $1.85 per gallon nationally in January of 2005 to $2.38 a gallon early this year.

We have seen rapid consolidation in the oil and gas industry, with many mergers which are specified in the written statement I will have included in the RECORD and enormous profits characterized by the profits reported by ExxonMobil, which earned over $36 billion in 2005, the largest corporate profit in U.S. history.

The legislation we are introducing will do a number of things. First, it will eliminate the judge-made doctrines that prevent OPEC's members from being sued for violating the antitrust laws. There is no doubt that they take joint action when deciding how much oil to sell, actions would normally constitute unlawful price fixing.

This legislation would make them subject to our antitrust laws.

With fewer players in the industry, anticompetitive acts, including the withholding of supply and information sharing, become easier. The bill would prohibit oil and gas companies from diverting, exporting, or refusing to sell existing supplies with the specific intention of raising prices.

The bill also requires the FTC and the Attorney General to consider whether future oil and gas mergers should receive closer scrutiny. It requires the GAO to evaluate whether the divestitures required by the antitrust agencies for past mergers were adequate to preserve competition. There is significant evidence that the concentration in the industry has been a contributing factor to increasing gasoline and oil prices. There are other factors, but it is not explained simply by the increase in the cost of crude oil. This bill takes a firm stand to protect the American consumer from enormous increases in gasoline prices and in oil prices--something very serious when we have insufficient funds in LIHEAP to take care of people who are unable to pay for the increasing costs of heating oil.

I ask unanimous consent that the full text of my prepared statement be printed in the RECORD.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

Consolidation in the Oil and Gas Industry: Raising Prices?

Mr. President, I have sought recognition to introduce new legislation, the Oil and Gas Industry Antitrust Act of 2005.

Average gasoline prices nationwide have risen by 25 percent in the past year alone, from $1.85 per gallon in January 2005 to $2.38 per gallon at the beginning of this year.

Prices for heating oil, other petroleum products and natural gas--products that are important to the lives of American consumers--have risen to similar heights.

While Americans are paying more for the products they use to get to work and heat their homes, the mammoth integrated oil companies that dominate the industry have earned record profits. ExxonMobil reported that it earned over $36 billion in 2,005, the largest corporate profit in U.S. history.

Although rising crude oil prices are one factor influencing gasoline prices, it is not the only factor. Increased prices simply cannot be entirely explained by higher crude oil prices.

In a hearing last month and another one next week, the Judiciary Committee is I exploring a likely cause for higher prices--the consolidation that has occurred in the industry over the past decade, and that continues today.

Over 2,600 mergers have occurred in the U.S. petroleum industry since the 1990s, including transactions involving the largest oil and gas companies in the nation.

Last summer, the FTC approved Chevron's acquisition of Unocal.

In 2002, Valero acquired Ultramar Diamond Shamrock and Phillips merged with Conoco.

The year 2000 saw the merger of British Petroleum and ARCO.

The largest transaction occurred in 1999 when Exxon merged with Mobil.

Other transactions included British Petroleum's acquisition of Amoco, Marathon's joint venture with Ashland Petroleum and another joint venture that combined the refining assets of Shell and Texaco.

Last month the Department of Justice just approved Conoco-Phillips' acquisition of Burlington Resources, a merger that creates the nation's largest natural gas company and the third largest integrated oil company.

These transactions have resulted in significantly increased concentration in the oil and gas industry, particularly in the downstream refining and wholesale gasoline markets.

Fewer competitors in a market conveys market power on remaining players, and with it, the opportunity to increase prices. As we have learned in Committee, there is some evidence that consolidation in the industry has increased wholesale gasoline prices.

Fewer competitors in a market also makes collusion easier. Recent events suggest that increased concentration may be creating a ``collusive environment'' in the industry.

A number of experts have pointed to limited refinery capacity as a cause for price spikes in recent years. No new refineries have been built in the U.S. for-30 years. While some existing refineries have expanded in recent years, other refineries have closed. From 1998 through 2004, total refinery capacity nationwide grew by less than one percent. Today, U.S. refineries routinely operate at over 90 percent of capacity. Critics have alleged that tacit collusion among industry players has restrained the growth of refinery capacity.

ExxonMobil and British Petroleum were recently sued by the Alaska Gasoline Port Authority for allegedly conspiring to withhold natural gas from customers who wished to transport the gas via pipeline to an Alaskan port. An agreement between Exxon and British Petroleum not to sell their natural gas to the Alaskan project would violate the antitrust laws.

The Judiciary Committee has held two hearings this year to consider the effects of concentration in the industry. The most recent hearing in March considered whether concentration had resulted, in increased prices for gasoline, other petroleum-based fuels and natural gas.

The witnesses at that hearing--two experienced and respected antitrust lawyers, the attorney general of Iowa, an economist from the University of California at Berkeley and the Senior Assistant Attorney General from California--all agreed that there were problems with market power in the industry.

Most of these witnesses testified that there was a serious problem with tacit coordination and information sharing in the industry made possible by having fewer players in the oil and gas industry. Such conduct unquestionably leads to higher prices.

Based on the testimony the Committee heard, it is pretty clear that increased concentration in the industry has led to higher prices. In part, the antitrust agencies need to adjust their enforcement posture to reflect existing conditions in the industry, but I believe there is a need for legislation. The Oil and Gas Industry Antitrust Act of 2006, which I am introducing today, would require the antitrust enforcement agencies, as well as the GAO, to take a close look at their past merger enforcement and whether the standard for reviewing mergers should be changed. The original draft of this legislation would have increased the standard of review for mergers in the industry, but we would like to give GAO and the enforcement agencies a chance to look at how the standard should be changed. The legislation:

Amends the Clayton Act by prohibiting oil and gas companies from diverting, exporting or refusing to sell existing supplies with the specific intention of raising prices or creating a shortage.

Requires the FTC and the Attorney General to consider whether the standard of review for mergers contained in Section 7 of the Clayton Act needs to be modified for mergers in the oil and gas industry to take into account the concentration that has already occurred in this industry.

Requires the Government Accountability Office to evaluate whether . divestitures required by the antitrust agencies in oil and gas industry mergers have been effective in restoring competition. Once the study is complete, the antitrust agencies must consider whether any additional steps are necessary to restore competition, including further divestitures or possibly unraveling some mergers.

Requires the antitrust agencies to establish a joint federal-state task force to examine information sharing and other anticompetitive results of consolidation in the oil and gas industry. Economic studies show that sharing price and production information in a concentrated market will result in increased prices. Oil companies frequently supply each other with gasoline in areas where they have no source of supply through so-called ``exchange agreements.'' Refiners also frequently share terminals and pipelines, which facilitates the exchange of information. These practices alone do not violate the antitrust laws, but parallel conduct in combination with information sharing could be enough to establish a violation of the antitrust laws.

Eliminates the judge-made doctrines that prevent OPEC members from being sued for violating the antitrust laws by conspiring to fix the price of crude oil.

It is my hope that this legislation will help reverse the trend toward less competition and higher prices. The cosponsors of this legislation--Senator KOHL, SENATOR DEWINE, Senator DURBIN, Senator LEAHY, Senator FEINSTEIN--deserve enormous credit for having the courage to take on this issue and for helping to develop this important legislation. I urge other members that are concerned about consolidation in the industry--and about the prices that consumers are paying to drive to work and heat their homes--to support this important legislation.

BREAK IN TRANSCRIPT

By Mr. SPECTER (for himself, Mr. BIDEN, Mr. HATCH, Mr. GRASSLEY, and Mr. LEVIN):

S. 2560. A bill to reauthorize the Office of National Drug Control Policy; to the Committee on the Judiciary.

Mr. SPECTER. Madam President, I further introduce the reauthorization for the Office of National Drug Control Policy Act of 2006. Senators HATCH, BIDEN, and GRASSLEY have worked with me on this issue. This is the office to establish our drug policy. Since 2001, according to the ONDCP--the Office of National Drug Control Policy--the combined use of illicit drugs by 8th, 10th, and 12th graders has decreased by some 19 percent. We have seen a serious problem with methamphetamine. This agency is very important to carry out the administration's policy to try to reduce drug usage.

I ask unanimous consent that the full text of my prepared statement be printed in the RECORD.

Introductory Statement--``Office of National Drug Control Policy Reauthorization Act of 2006''

Mr. President, to reiterate I seek recognition today to introduce the ``Office of National Drug Control Policy Reauthorization Act of 2006'' and ask for the support of my colleagues for this important legislation concerning the war on illegal drugs.

This bill re-authorizes the Office of National Drug Control Policy--(``ONDCP'')--the Administration's office responsible for establishing policy and objectives to reduce illicit drug use, manufacturing, and trafficking, drug-related crime and violence, and drug-related health consequences. Senators Biden, Hatch and Grassley have worked diligently with me in crafting this bill to provide authorization for ONDCP and its programs, and maintain a high level of Congressional oversight. I appreciate their consistent leadership.

Since 2001, according to ONDCP, the combined use of illicit drugs by 8th, 10th, and 12th graders has decreased 19 percent. This amounts to roughly 700,000 students who are not using drugs. ONDCP has prepared a National Drug Control Strategy that seeks to build on this progress and attain the President's goal of a 25 percent reduction in 5 years. I want to see the President's 25 percent reduction goal become a reality, and this bill will assist the Administration meet this objective.

Drug use and abuse--particularly among our youth--has a profoundly negative impact that spreads among our society like ripples made in water. Drug use leads to increased crime and violence, lowers educational standards, and has a destructive impact on the family unit. We need to take affirmative steps to provide the Executive Branch with the tools it needs to confront the problem of drugs and the negative consequences that follow from their abuse. This bill seeks to do just that.

We have seen over the last few years an epidemic involving the abuse of methamphetamine--a highly addictive drug that has been particularly damaging to our youth. This is a drug that can be cooked in low-tech labs with ingredients that can be purchased at most convenience stores. As a result, we included in the USA Patriot Act--which was recently signed into law--provisions that: (1) restrict the sale and distribution of chemical ingredients that make methamphetamine; (2 ) provides critical resources to state and local law enforcement; and (3) enhances international law enforcement of methamphetamine trafficking. Congress affirmatively responded to this problem and acted by passing the Combat Meth Act. We seek to continue these efforts with this legislation.

Once again, the President's 2007 budget seeks to shift funding of High Intensity Drug Trafficking Areas (HIDTA's) from ONDCP to the Department of Justice as a separate entity within the Organized Crime Drug Enforcement Task Force--(OCDETF). The HIDTA program was created by Congress to exist within ONDCP, and has successfully grown from 5 HIDTA's in 1990 to 28 HIDTA's that currently exist across the United States. HIDTA's enhance and coordinate drug control efforts among local, state, and federal law enforcement agencies, and provides agencies with equipment, technology, and additional resources to combat drug trafficking and their harmful consequences in critical regions of the United States. This bill keeps the HIDTA program within ONDCP where Congress intended it to remain.

I am hopeful the provisions in this bill meet the goals set by the President and reduce the overall use and abuse of illegal drugs in our country.

http://thomas.loc.gov/

Back to top