Congressman Sandy Levin : We Need Energy Solutions that Work
This web site was copied prior to December 11, 2006. It is now a Federal record managed by the National Archives and Records Administration. External links, forms, and search boxes may not function within this collection. Learn more.   [hide]
Congressman Sandy Levin
Home News Issues Services Legislation About Sandy Community Corner Contact Us
Current News
Johanna's Law Makes Great Leap Forward

Higher Education in Macomb County
Read My Recent Newsletters
Kids Page
We Need Energy Solutions that Work
< Back to Energy and the Environment  
In the wake of Hurricanes Katrina and Rita, Americans have been slammed by sky-high energy costs. A gallon of gasoline costs much more today than it did a year ago, and the price of natural gas remains near an all-time high. Soaring energy costs hurt both American consumers as well as the U.S. economy.

The federal government must act to address the energy supply problem. And most importantly, it is vital that the Bush Administration and Congress focus on real solutions and not use the Gulf Coast hurricanes to advance non-answers to the energy problems confronting the nation.

Last year, the Leadership of the House extended what was supposed to be a five-minute vote for over 45 minutes in order to pressure a handful of House members to change their votes on a controversial bill to assist the refinery industry. As the scheduled five-minute vote was set to end, the refinery bill was losing. Over the next 41 minutes, House Leaders persuaded three Republican lawmakers to change their votes from no to yes, and the refinery bill squeaked by on a vote of 212 to 210. For all the arm twisting, the House-passed refinery bill would do little to lower gas prices in either the short- or long-term.

There is broad agreement that we need additional refining capacity in this country. Even when operating at 100% capacity, the U.S. refining industry does not produce enough gasoline to meet demand. As a result, gas prices routinely go through the ceiling whenever there is a supply disruption. So why don’t we have enough refining capacity? The White House and Congressional leadership say that industry is unable to build new refineries because of bureaucratic red tape, excessive permitting requirements, and environmental laws. There is no evidence that this is the case.

One of the key provisions in the GOP refinery bill directs the President to designate sites on federal land for new oil refineries and stipulates that three of the sites would have to be on closed military bases. But President Bush already floated the idea of allowing refineries to be built on closed military bases. The industry’s reaction was “thanks, but no thanks.”

The truth is that refineries are not being built because the industry has deliberately decided not to build them. Why should they? The industry is making money hand-over-fist by keeping supplies tight and has little incentive to bring refinery capacity in line with demand. Over the last decade, there has been a pronounced consolidation within the refinery industry. Today, more than 60 percent of U.S. refining capacity is controlled by just eight companies. It should come as a surprise to no one that most of the refineries are owned by the large oil companies, including ConocoPhillips, ExxonMobile, BP, and ChervronTexaco. Far from building new refineries, the industry has been buying out competitors and shutting down refineries.

If the Republican refinery bill isn’t the answer, what is?

House Democrats supported a substitute to the GOP refinery bill to give the Federal Trade Commission (FTC) explicit authority to define price gouging and market manipulation. Our plan would strengthen the FTC’s ability to investigate and punish price gouging and market profiteering wherever it occurs. When gouging occurs, the government could impose fines of up to triple damage on all the excess profits gained by the violation. In addition, our energy alternative would create a strategic refinery reserve modeled on the successful Strategic Petroleum Reserve, which holds 700 million barrels of unrefined crude oil. The Energy Department would establish refineries with capacity equal to 5 percent of the total U.S. demand for gasoline that could be tapped during energy emergencies to refine crude oil into gasoline.

Now more than ever, we need energy solutions that work. Americans don’t want any more partisan squabbling in Washington. All they want is not to be taken to the cleaners every time they go to a gas station to fill up. That’s not too much to ask.