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Gas Prices

Location: Washington, DC

GAS PRICES -- (House of Representatives - July 25, 2006)

The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Oregon (Mr. DeFazio) is recognized for 5 minutes.

Mr. DeFAZIO. Mr. Speaker, well, today, gas prices since the price gouging post-Katrina climbed back over $3 a gallon average across the country, almost as high as on September 5 of last year during the frenzy of price gouging by the oil industry, using Katrina as an excuse. Now the excuse is unrest in the Middle East, despite very large inventories and no shortages on the horizon.

But it is yielding one tremendous benefit, and the Republicans would have us believe that we all benefit: record profits for the oil industry. And since we are all now shareholders, according to the Republicans' theory of the world, we are all benefiting from the huge run-up in the prices of oil stocks and the dividends that are being paid by the oil companies. Unfortunately, most of the people I represent and I myself and many others I know do not own oil stocks, nor do we receive extraordinarily generous campaign contributions which the Republicans and the President do from the oil industry.

So our reaction is not a collective yawn, and there is nothing that can be done about it, and it is just market forces. Ours is to say let us stop the price gouging of American consumers.

Experts say that about 30 percent of this is pure speculation, that is, self-trading, oil being traded off the books purely to enrich the companies and traders.

Another very significant portion comes from the fact that the oil companies, not the environmentalists, oh, the darn environmentalists, they have just been closing refineries left and right. Well, no. Actually, there has not been a single refinery closed in America, although many have been closed in the last 10 years, by environmental restrictions or litigation. They have been closed for economic purposes.

There was a memo 10 years ago from the American Petroleum Institute that said, hey, guys, wake up, you are not making enough money on refining; if you could shrink down refinery capacity, you would have an excuse to drive up margins and the prices of refining. They have exceeded their expectations. In fact, refinery profits from the last year, 12 months, are up 60 percent, 60 percent.

If we return to the historic average margins for refinery, which were profitable but not wildly, unbelievably profitable, gas would go down by another 40 cents a gallon.

So you take out the speculation, you take out what they have done with the manipulation of refinery capacity and you are back down to $2.30 cents or so a gallon. Now that is not a long-term energy policy, but that is relief for American consumers. That is relief for American business. That gives us the opportunity to begin to invest in a more oil-independent future.

The so-called energy bill that passed the House based on subsidies for the oil, coal and gas industry, you know, they are hurting, they need subsidies from the taxpayers. We need to borrow money to give to them or give them price breaks for their production on Federal lands and not realize those revenues to the Federal Treasury, if that excuse for a so-called energy bill would actually have us more dependent on Middle East oil 10 years from today than we are now.

That is an energy policy? Look at the Middle East. Do we want to be dependent upon the Middle East? Do we want to be filling the coffers of Iran and Saudi Arabia and other OPEC countries? I do not think so.

We need a plan for energy independence in America. We need a plan that is going to develop new technologies here at home that we will market to the rest of the world, that will make Americans energy independent. Somehow Brazil was able to do it, but they tell us it is just not possible here in the United States of America, we cannot figure out a way to get to energy independence like Brazil.

Now, I do not believe that. The President knows the American people are a little upset. So in his State of the Union he talked about how we need to do more about alternative fuels and alternative technologies. Unfortunately, the money did not follow the mouth. If John Fitzgerald Kennedy had applied that same amount of money to his mission to the Moon, we still would not be in the outer atmosphere of the Earth, let alone the Moon.

There is no real commitment there because real commitment would mean that you are starting to threaten the wildly profitable oil industry.

BP announced today, and they are supposed to be the weakest of the announcements this week, that their profits were up a mere 40 percent over the quarter for last year. ExxonMobil is likely to announce either the largest quarterly profit in history for any corporation on the face of the Earth this week on Thursday or maybe only the second largest. They made $100 million a day profit last year. They gave their CEO a $400 million retirement package. They are not investing in new capacity. They are not investing in alternative fuels. They do not care about energy independence for the United States of America. They like the addiction that they have got us on now.

We need an energy policy and we need it soon, and the Republican Party is in thrall with the oil companies.

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