Nelson Seeks Immediate Investigation into Rising Natural Gas Prices

Press Release

NELSON SEEKS IMMEDIATE INVESTIGATION INTO RISING NATURAL GAS PRICES

Following a Senate Commerce Committee hearing on soaring energy prices on Wednesday, Nebraska's Senator Ben Nelson is asking the Government Accounting Office (GAO) for an immediate inquiry into what is causing rising prices for natural gas.

During the hearing, Senator Nelson raised questions about why gasoline price hikes in Nebraska were exceptionally high following Hurricane Katrina and what is causing the record high prices for natural gas.

During questioning of energy experts testifying at the hearing, Nelson talked about a meeting he had with Mayor Skip Edwards of Fremont, Nebraska, which, like many Nebraska communities, operates its own utility system. Nelson said Mayor Edwards had raised the possibility that speculation in the market was could be the reason natural gas prices have risen so quickly recently. The energy experts told Nelson they did not believe speculation is the problem with current high prices for gasoline, which they believe are more likely driven up by weather and supply and demand.

Nelson also raised this issue with a witness from the Federal Trade Commission (FTC) who admitted it is possible there could be collusion in the market. He said the FTC would investigate if they found any indication of antitrust violations.

When pressed by Nelson on rising natural gas prices, the FTC official said he was aware this will be a critical issue this winter and if the FTC finds evidence of anti-competitive behavior they will look into it.

Nelson, not satisfied with the response, pressed the witnesses on conducting an inquiry into natural gas price increases, and today Senator Nelson is asking GAO to conduct an investigation. In a letter to the GAO today requesting the immediate probe, Nelson wrote, "some reports predict rate increases of as much as 70 percent. If these predictions are accurate, the impact on homes, communities and businesses in my state of Nebraska and throughout the nation will be dramatic."

"Mayor Edwards told me that the price before Hurricane Katrina was $9 and following the hurricane it jumped to $12," said Nelson before the hearing. "If nothing is done to correct the situation, the public will be outraged when they receive their utility bills this winter and the economy will suffer as discretionary spending will be severely reduced."

Nelson also filed an amendment to the Senate Agriculture Appropriations bill and has a stand alone bill (S. 1732) to expand an FTC inquiry into gasoline prices to include examining the root causes for natural gas prices.

Wednesday's hearing before the Senate Commerce Committee was separate from an amendment asking for an inquiry on gasoline price increases that was co-sponsored by Nelson and was approved by the full Senate last week on the CJS Appropriations bill.

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