Putting the brakes on runaway fuel prices
By U.S. Representative Tom Allen, 1st Congressional District of Maine
Prices at the pump have risen so fast and so high that Maine families and businesses are furious and suspicious. They have every right to be. The skyrocketing cost of gasoline and heating oil is not a matter of uncontrollable market forces that we are powerless to affect. Big Oil and shady speculators are making obscene profits at the expense of hardworking Americans. We need to elect leaders who will stop the giveaways and impose strict penalties on profiteers by making them pay for the hardship and anxiety they have caused.
Since January 2001, crude oil has risen from between $23 and $25 per barrel to as high as $145 in recent weeks. Heating oil has gone from $1.44 to $4.71 per gallon. In Portland, unleaded gasoline has jumped from $1.54 to $4.13 per gallon and diesel from $1.65 to $4.86 per gallon.
The past seven years have been tough for everyone in Maine with a vehicle, furnace or a livelihood dependent on fuel. Indeed, the impact of runaway fuel prices is spreading to virtually all aspects of the economy. As consumers are forced to cut back on driving, federal gasoline excise tax revenues, that fund the federal highway trust that pays for our nation’s highway infrastructure, will fall. As households struggle to pay their fuel bills, families are spending less on other expenses, such as eating out and entertainment, as well as on basic necessities. Higher fuel costs have pushed prices for everything from plane fares to groceries through the roof. Fuel costs have become an economic catastrophe for Maine farmers, fishermen and other small business people. For some Maine independent truckers, unbridled fuel costs have put them out of business.
Local filling stations and oil dealers are not responsible. Like everyone else, the price crunch hits their bottom lines. Moreover, as prices have risen, gas stations and other fuel dealers have experienced a costly spike in product theft.
One sector of the economy, however, has reaped a bonanza the last seven years. In 2001, the “Big Five” oil companies – ExxonMobil, Shell, Chevron, ConocoPhillips and BP – posted combined profits of over $40 billion. In 2007, their profits topped $123 billion, with ExxonMobil’s $40.6 billion smashing the record for highest profit of any U.S. company in history.
I have written the Chairmen of the Federal Trade Commission (FTC), Commodity Futures Trading Commission and Federal Energy Regulatory Commission, and the Secretary of Energy and the Attorney General of the United States. I requested an immediate investigation of price fixing, manipulation, rampant speculation and other unscrupulous behavior in the petroleum markets. I called for prosecution and punishment to the full extent of the law of inappropriate or criminal behavior by oil companies, their subsidiaries, their agents or their employees.
In 2006, I called for a federal price gouging law with real teeth to identify and throw the book at the culprits and make them feel the pain they inflict on consumers. I cosponsored the Federal Price Gouging Prevention Act to give the FTC explicit authority to investigate and severely punish those who artificially inflate the price of energy, especially those at the top of the chain, like ExxonMobil. The House passed the bill, but Big Oil’s friends have stalled it in the Senate.
It’s now time to go after off-market energy speculators whose high rolling practices are unseen and unregulated, but affect household budgets from Portland, Maine, to Portland, Oregon. These are the greedy crooks behind the California and Enron scandals. I support the Close the Enron Loophole Act, legislation to hold them accountable to the same rules that already govern on-market traders.
The 2005 Cheney energy bill gave Big Oil $14 billion of unjustified tax breaks. It was a disgrace then. Today, with Big Oil’s astronomical profits, it is an outrage to American taxpayers. I voted against the 2005 tax breaks and am pleased that the House, under new leadership, voted to roll them back. But in the Senate, Big Oil’s allies have blocked a rollback vote.
Finally, small business, the engine that drives Maine’s economy, needs relief. Fuel prices have left the balance sheets of truckers, fishermen, loggers and other Maine fuel-dependent small businesses awash in a sea of red ink. I introduced the Small Business Fuel Cost Relief Act after Hurricane Katrina and again this Congress. It would allow businesses to claim a tax credit on the amount they spend on fuel in excess of the price on Labor Day 2004, adjusted for inflation. My bill also raises the IRS Standard Mileage Rate to 60 cents for business owners who use their vehicles for business purposes.
We are winning the battle in the U.S. House of Representatives. It’s time for the Senate to join us and pass these long overdue bills.