Toward A More Energy Efficient Future Withough Being Price-Gouged On Way There

Floor Speech

TOWARD A MORE ENERGY EFFICIENT FUTURE WITHOUT BEING PRICE-GOUGED ON WAY THERE -- (House of Representatives - March 13, 2007)

Mr. DeFAZIO. I thank the Chair.

I am going to continue the discussion the previous Member started with perhaps a little different orientation and, that is, our dependence upon oil. I would agree with the gentleman that we need to break our dependence upon imported oil. We need to look toward a more energy-efficient future. That is going to mean new sources of energy, new technologies. I am on a number of bills to make those investments. But more immediately, I want to talk about the situation we are in today. On the path to that more energy-efficient future, we don't need to be fleeced by the oil cartels, which is what is going on now. I am not just talking about OPEC but I'll get to them in a moment, but I'm getting to the big oil companies--ExxonMobil, record profits last year, $3.2 billion a month, $40 billion for the year, $109 million a day, $4.6 million an hour of profits for one corporation. Throughout the industry, it was repeated.

Now, the President, an oil man, a failed oil man, and the Vice President from Halliburton, another oil man, say there's nothing they can do about it, nothing the government can do about it. This is just market forces. Market forces.

Hmm. Let's see. You make gasoline out of crude oil so if the price of crude oil goes up, the price of gasoline goes up. Yeah, I understand that. That's good. The price of crude oil is up a whopping 3 percent over last year. That is about inflation. That's not too bad. That's today on the market. Unfortunately, the price of gasoline on the west coast is up 20 percent. Now, where did the rest of that market force come into play?

No, what we have here, plain and simple, is price gouging, market manipulation and collusion. A number of years ago there was a famous memo in the industry that said, you know, the refineries are not particularly profitable, but if the industry were to engage in mergers, buy out the independent refiners, close them down and decrease the refinery capacity in America, that could become a very profitable sector. It is. In fact, profits in the refining sector because of collusion by Big Oil are up 250 percent. It isn't the guy at the corner gas station who's making the money. It's the corporate execs in a vertically integrated industry which they're manipulating. The same way that Enron manipulated the energy markets in California to drive up the price, Big Oil is doing it and they're doing it in the western United States right today and across America. They're building up toward that orgy of price gouging that happens every year around Memorial Day and during the summer driving season. And they say, ``Oh, these are just market forces.'' These are not market forces and this government needs to address this in a number of ways.

We need to file a complaint against OPEC. The gentleman before me mentioned them. They get together, they collude, they decide to constrain the price and drive up the price of crude oil. That's where this all starts. Well, it just happens that a number of the major OPEC producers are in the World Trade Organization. Our President, a big free trader, wants rules-based trade. Well, guess what, the rules don't allow OPEC to do that. But will this President file a complaint against OPEC? No. I have written to him a number of times and said, President Bush, they're violating the World Trade Organization. File a complaint. People complain about the United States there all the time. Why don't we use that tool to benefit our consumers. No, the President refuses to do that. My bill would force the President to file legitimate complaints and break up the OPEC cartel. That would help. But then we have got to go after the big oil companies themselves. Impose a windfall profits tax on these companies, unless they are investing in expanding refinery capacity--which they cut in order to increase the profitability--exploration or alternative fuels. Make our vehicles more efficient. Give incentives to consumers to buy more efficient vehicles. Mandate new fleet fuel economy standards. Put a ban on more mergers by the oil industry. In fact, my bill would name a commission to investigate the market power of Big Oil and maybe we have to think about breaking them up and turning this back into a somewhat competitive industry.

Yes, we need to move toward a more energy-efficient future, but we don't need to be price-gouged on the way to that goal. And that's what is happening today.

So I am introducing a package of bills oriented toward market manipulation, price gouging by Big Oil and OPEC, and also bills that would give consumers an incentive and actually help consumers to purchase more efficient vehicles in the interim and also push Detroit and other manufacturers toward making more efficient vehicles. They won't go there until we push them. We had a big fight over fleet fuel economy standards. I am very sympathetic to American workers. I remember the guys in from Ford, and they said, You don't understand. The execs told us, if you make them make more efficient vehicles, they'll lay us off. Guess what: They all got laid off because Ford didn't make more efficient vehicles.

It's time for some action on the part of this Congress and this government to defend American consumers and lead us toward a more energy-efficient future without being price-gouged on the way there.

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