As the price of gasoline passed $3 per gallon last week, Senate Democrats continued to push for policies that protect consumers in the short run and move America toward energy independence as soon as possible. Democrats are working to pass legislation that will enhance America’s security by reducing the nation’s dependence on foreign and unsustainable energy sources and the risks of global warming by:
- Requiring reductions in greenhouse gas emissions;
- Diversifying and expanding our use of secure, efficient, and environmentally friendly energy supplies and technologies;
- Repealing tax giveaways to big energy companies;
- Reducing the burdens on consumers of rising energy prices; and
- Preventing energy price gouging, profiteering and market manipulation.
Gasoline prices have passed $3 and are expected to remain high all summer. The summer driving season does not officially begin until Memorial Day weekend, but gasoline prices have already climbed to record levels. The average price nationwide for a gallon of regular gasoline was $3.10 on May 14, 2007, and the average price for the summer is predicted to be $2.95. Gasoline prices in 20 states broke record highs from May 12-13. Transportation costs this year are estimated to be more than double the cost in 2001. (Energy Information Administration, Weekly Retail Gasoline Prices and Short Term Energy Outlook; AAA Fuel Gauge Report; EIA, Household Vehicles Energy Use: Latest Data and Trends)
Refineries are running well below full capacity, while refiners reap profits. Just this week, the Los Angeles Times reported that gasoline supplies are very low for this time of year and three major refineries are operating at only 50 percent of capacity. Refining capacity in the third week of April was 87.8 percent, compared with an average of above 90 percent in the same period between 1994 and 2005, according to the Energy Information Administration. The supply crunch created by reduced refinery capacity is contributing to sky-high gasoline prices. At the same time, refiners are making huge profits. Refining profits in the first quarter of 2007 increased 36 percent over last year, and the U.S. refining margin increased to over $17 per barrel of oil refined. (Los Angeles Times, 5/5/07; Wall Street Journal, 5/2/07; Energy Information Administration, “Financial News for Major Energy Companies,” 1/07 – 3/07)
Oil companies have racked up huge profits and not invested them in alternatives. The five largest oil companies reported almost $120 billion in profits in 2006 alone. From 2000 through 2005, they reported over $383 billion in profits. But according to its own trade association, the American Petroleum Institute, the U.S. oil and gas industry has invested only $1.2 billion in clean, renewable energy sources. Big Oil is also discouraging service stations from offering alternative fuels. (Based on ExxonMobil, Shell, BP, ChevronTexaco, and ConocoPhillips company annual financial reports for 2000-2006; American Petroleum Institute, “Facts on Fuel”; Wall Street Journal, 4/2/07)
Senate Democrats are working to protect consumers from price gouging and move America toward energy independence. On Tuesday, May 8, the Senate Commerce Committee reported a bill that improves fuel economy standards for passenger cars, light trucks, and medium and heavy trucks. The bill would also make gas price-gouging a federal crime, enhance federal authority to prevent and prosecute manipulation of fuel supplies and anti-competitive behavior, and increase the transparency of petroleum markets. On May 2, the Senate Energy Committee reported a bill that would increase our use of homegrown, clean biofuels. Senate Democrats are working to have legislation on the floor soon that will improve the nation’s energy policy in a significant way.