05-17-07 by dugan
Wish I’d been in Washington this week to watch John Felmy squirm under the jaded eyes of a House antitrust subcommittee.
Felmy is the chief economist (read: mouthpiece) for the American Petroleum Institute, and according to the Reuters account, he did his best. "The contention that higher prices are driven by market failure or market manipulation, including the holding back of supplies, is not credible,” he said with an apparently straight face.
Felmy’s questioners were in the groove with OilWatchdog, however.
"Oil companies today are enjoying record profits, and while they could use those profits to invest in more production capacity, instead they use the money to buy back shares in the market," said Rep. John Conyers, who chairs the antitrust panel.
We do wish that instead of beating up on an industry spokesman, he’d call in the Big Oil CEOs and grill them under oath about refining profits.
"Shrinking refinery capacity and a reluctance to invest in new infrastructure have significantly restrained gasoline supplies, driving refinery profits to record highs," said Rep. Bart Stupak.
Stupak said refiners are earning 70 cents in profits on every $3 gallon of gasoline sold, when energy experts argue about 20 cents is a more reasonable profit margin. Go, Bart!
Stupak has authored legislation that would give the Federal Trade Commission stronger authority to charge refiners with gouging consumers on gasoline prices. Another anti-gouging bill is being introduced in the Senate by Sen. Maria Cantwell.
These are just a few of many bills and scheduled hearings aimed at curbing this year’s orgy of profiteering by refiners and their parent oil companies. The words are right on target, but Congress also said many of those words last year, and in the end did nothing. The composition of Congress has changed, so OilWatchdog will be dogging these bills to help see that they come to something.