As the price of gasoline
passed $3 per gallon this 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 $3.05 on May 7, 2007, and the
average price for the summer is predicted to be $2.95. Gasoline prices in
21 states broke record highs on Monday, May 7. 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, 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. Last week, 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.
