QUESTIONS FTC WITNESS ON LAWS TO CONTROL UNFAIR PRICE INCREASES

Washington, Sep 7, 2005 - "Congress must examine if price gouging and other anticompetitive conduct are factors in the high cost of gasoline," stated Rep. Cliff Stearns (R-Ocala) during the Energy & Commerce Committee's hearing on energy prices.  "If any investigation finds instances of price gouging, we must ensure swift prosecution."  Stearns may hold a future hearing on energy price setting and anticompetitive practices.

The Committee today held a hearing titled "Recovering from Katrina" and heard from witnesses from the U.S. Department of Energy, the Federal Trade Commission (FTC), and the Department of Homeland Security, as well as from representatives of the oil and gas, and the refining industries.  While posing questions to John H. Seesel, Associate General Counsel for Energy, FTC, Stearns examined why there are no federal laws against price gouging, only against collusion, "which entails a conspiracy to raise prices or to lower output," explained Stearns.  Stearns also questioned why individual states have laws against price gouging only during emergency situations and not the federal government.  "Obviously, looking at developing a federal law to end unfair price increases on necessities, especially in a time of emergencies, should be on the agenda.  Also, how do we stop price gouging in those states where there is no emergency?"

Stearns also discussed the lack of diversity in domestic energy production.  "As a result of Hurricane Katrina, 95 percent of daily oil production and over 88 percent of daily natural gas production was shut down," noted Stearns. "Katrina underscores the fact that our nation's energy infrastructure is dangerously centralized, and thus vulnerable.  Almost 30 percent of our oil and 20 percent of our natural gas production is in the Gulf of Mexico - we need to diversify our domestic oil production and expand our refining capacity."