Federal and State Legislators Grapple with the Rising Costs of Gas
WASHINGTON, Sept. 22 – Members of Congress can agree that America has a gas problem, but consensus fractures when discussion turns to solving it.
America’s drivers were grumbling about gas prices even before Hurricane Katrina, but since the rigs and refineries of the Gulf Coast were damaged, prices have gone through the roof. The average price per gallon nationwide passed the three dollar mark, while some areas like Atlanta reported prices above five dollars. Hurricane Rita now threatens to push prices higher.
On Wednesday members of the Senate’s commerce committee heard testimony on ways to ensure the supply of oil for their constituents.
“We can’t supply our way out of this,” Robin West, a former Reagan administration energy adviser told the legislators. “We must deal with the demand.”
That sentiment met with broad bipartisan agreement, but the parties disagreed on how to close the gap.
Republicans complained that United States environmental laws prohibited drilling in areas where there are oil deposits, like the Arctic shelf. Sen. George Allen (R-Va.) applauded President Bush’s decision to temporarily suspend certain environmental regulations while the Gulf Coast oil industry recovers from Katrina, and suggested they be discarded altogether.
Democrats blamed oil companies for not having built a refinery in America for 30 years. Sen. Barbara Boxer (D-Calif.) said that companies were creating artificial shortages, and compared the situation to the California electrical crisis of 2001.
She told the story of an oil company in Bakersfield, Calif., that wanted to close a refinery rather than sell it because, company officials claimed, they could not find a purchaser. The state stepped in and found one easily, she said, adding that the company had only wanted to limit its competition.
Mr. West responded that oil refineries in the United States were “unprofitable,” and that there was plenty of competition in the oil market.
Democrats said they favor empowering the federal government to go after what Sen. Maria Cantwell (D-Wash.) called “predatory pricing.” Ms. Cantwell and Ms. Boxer favored giving the Federal Trade Commission “courage” to investigate and subpoena oil companies if their prices seem to rise excessively over a period of time.
Massachusetts lawmakers also are grappling with the issue of fuel pricing, and some protections are already in place. Massachusetts has price-gouging legislation that goes into effect when the governor declares a state of emergency. Additionally, there are laws against “unfair practices” in the oil industry, and the state government has power to subpoena gas distributors and suppliers.
“We are working with [the] consumer affairs [department] to send inspectors throughout the state” to investigate 60 gas stations alleged to have marked up prices to take advantage of the Katrina crisis, said Corey Welford, a spokesman for the state attorney general’s office.
The Massachusetts House is working on legislation to encourage Bay Staters to buy more efficient appliances and vehicles and also to aid elderly and low-income residents with their home heating costs this winter.
Dick Kennedy of the Worcester Regional Chamber of Commerce said that local businesses would probably deal with the increased price of fuel by offering their employees ride-sharing programs and opportunities to work from home via internet.
“It will clearly have a substantial impact on the price of doing business,” Kennedy said. Ultimately, he said, prices for consumer goods could rise if gas prices remain high.
Brian Allen, business manager for the Worcester School District, said the district had been forced to freeze funds earmarked for books and classroom supplies to help pay $150,000 extra in fuel costs. That money will only pay half that projected amount, but Allen said he is hopeful that the cost of gas will go down and part of the money will still be available for crayons, pencils and the other things Worcester schools need.
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